judgement
stringlengths 593
808k
| dataset_name
stringclasses 3
values | summary
stringlengths 0
158k
|
|---|---|---|
Appeal No. 1312 of 1967.
Appeal by special leave from the judgment and decree dated ' October 22, 1962 of the Kerala High Court in Appeal Suit No.804 of 1969.
B. R. Naik and K. Rajendra Chowdhary, for the appellant.
The respondent did not appear.
The Judgment of the Court was delivered by Khanna, J.
This is an appeal by special leave against the judgment of Kerala High Court affirming an appeal, the order of the Lower Court whereby the appellant Bank 's application for execution of an award made under the Bombay Co operative Societies Act, 1925 (hereinafter referred to as the Bombay Act) was dismissed.
The appellant is a Co operative Society registered in Bombay under the Bombay Act.
The Head Office of the appellant is in Bombay and it has a branch in Mangalore.
As the objects of the appellant were not confined to one State, it was governed by Multi Unit Co operative Societies Act of 1942 (herinafter referred to as the Central Act).
The appellant made a claim under section 54 of the Bombay Act in respect of a transaction which took place in Mangalore against the respondent who is a resident of Kasaragod, and was a member of the appellant society.
Both Mangalore and Kasaragod were at the relevant time in Madras Presidency.
The Deputy Registrar of Co operative Societies, Bombay gave an award regarding that claim.
The award was sought to be executed as a decree in the Court of Subordinate Judge, Kasaragod.
An objection to the execution of the decree was raised by the respondent on the ground that the Deputy Registrar of Co operative Societies, Bombay had no jurisdiction to pass the award and the same could not be executed as a decree in the Courts in Kerala.
This objection was upheld by the Subordinate Judge and he dismissed the execution application.
On appeal, the decision of the learned Subordinate Judge was affirmed by the High Court.
It was not disputed before the High Court that the appellant was governed by the provisions of the Central Act. 164 The contention raised on behalf of the appellant was that the passing of an award came within the expression 'control ' occurring in .sub section (1) of section 2 of the Central Act.
This contention ,did not find favour with the High Court and in the result, the appeal was dismissed.
We have heard Mr. Naik on behalf of the appellant.
No one has appeared on behalf of the respondent.
Before dealing with the argument advanced on behalf of the appellant, it would be apposite to reproduce section 2 of the Central Act.
The same reads as under : "2.
(1) A co operative society to which this Act applies which has been registered in any State under the law relating to co operative societies in force in that State shall be deemed in any other State to which its objects extend to be duly registered in that other State under the law there in force relating to co operative societies, but shall, save as provided in sub sections (2) and (3), be subject for all the purposes of registration, control and dissolution to the law relating to co operative societies in force for the time being in the, State in which it is ac tually registered.
(2) Where any such co operative society has established before the commencement of this Act or establishes after the commencement of this Act a branch or place of business in a State other than in which it is actually registered, it shall, within six months from the commencement of this Act or the date of establishment of the branch or place of business, as the case may be, furnish to the Registrar of Co operative Societies of the State in which such branch or place of business is situated a copy of its registered by laws, and shall at any time it is required to do so by the said Registrar submit any returns and supply any in formation which the said Registrar might require to be submitted or supplied to him by a co operative society actually registered in that State.
(3) The Registrar of Co operative Societies of the State in which a branch or place of business such as is referred to in sub section (2) is situated may exercise in respect of that branch or place of business any powers of audit and of inspection which he might exercise in respect of a co operative society actually registered in the State".
According to sub section (3) of section 1, the Central Act "applies to all co operative societies with objects not confined to one State incorporated before the commencement of this Act under 165 the , or under any Act relating to co operative societies in force in any State, and to all co operative societies with objects not confined to one State to be incorporated after the commencement of this Act.
" As the objects of the appellant society were not confined to one State, it was not disputed before the High Court that it is governed by the previsions of the Central Act.
Plain perusal of sub section (1) of section 2 reproduced above makes it manifest that if the objects of a co operative society registered in State 'A ' extend to State 'B ', the Society shall be deemed to be registered in State 'B ' under the law in force in State 'B ' relating to co operative societies.
Despite this deemed registration in State 'B ' for, three purposes, namely, registration, control and dissolution,, the society shall be subject to the law relating to co operative, societies in force in State 'A '.
Sub section (2) makes it obligatory on a co operative society which establishes a branch or place of business in a State other than that in which it is actually registered to furnish within the prescribed time to the Registrar of the cooperative societies of the State in which such branch or place of business is situated, a copy of its by laws and to submit such return and supply such information as the Registrar might require in respect of a co operative society actually registered in that State.
Sub section (3) gives a limited control to the Registrar of Co operative Societies of the State in which a branch or place of business of a co operative society is established by authorising him to exercise in respect of that branch or place of business any powers of audit and of inspection which he might exercise in respect of a co operative society actually registered in that State.
The contention which has been advanced on behalf of the, appllant society by its learned counsel, Mr. Naik, is that as the appellant was registered in Bombay, it is the Bombay Act which govern the appellant society for purposes of registration, control and dissolution.
It is not disputed that the adjudication of a claim by the appellant against its members does not fall, under the head 'registration ' or "dissolution".
What is, however, urged is that the word 'control ' comprehends within itself the adjudication of a claim made by the society against its members.
Such a, claim having been made by the appellant against the respondent, the same could, according to the learned counsel, have been adjudicated upon under section 54 of the Bombay Act.
The award made by the Deputy Registrar of Co operative Societies, Bombay in the circumstances, the counsel submits, did not suffer from any legal infirmity.
166 There is, in our opinion, no force in the above contention because we do not agree with the underlying assumption of the above argument that the word 'control ' comprehends within itself .the adjudication of a claim made by a co operative society against its members.
The appellant society, as would appear from the resume of facts given above, established a branch in Mangalore ,and had dealings there with the respondent who was a resident of Kasaragod.
As the objects of the appellant society were extended to the Presidency of Madras, it should, in view of subsection (1) of section 2 of the Central Act, be deemed to have .been registered under the law in force in the Presidency of Madras relating to co operative societies.
The law which was then in force, according to Mr. Naik, was the Madras Co operative Societies Act, 1932 (hereinafter referred to as the Madras Act).
Clause, (f) of section 2 of that Act defines a registered society to mean a society registered or deemed to be registered under that Act.
Section 51 of the Madras Act provides inter alia that if .,any dispute touching the business of a registered society between a member and the society arises, such dispute shall be referred to the Registrar for decision.
Registrar has been defined in clause (g) of section 2 of the Madras Act to mean "a person appointed to perform the duties of a Registrar of Co operative Societies under this Act and includes a person on whom all or any of the powers of a Registrar under the Act have been conferred".
It would, therefore, follow that a dispute between the appellant and the respondent in respect of its dealings relating to its Mangalore branch would normally have to be adjudicated upon by the Registrar appointed under the Madras Act.
The fact that for the purpose of control, the appellant society was .governed by the Bombay Act would not, in our opinion, justify a departure from the above normal rule.
The word 'control ' is ,synonymous with superintendence, management or authority to direct, restrict or regulate (See p. 442 of Words and Phrases (Vol 9) Permanent Edition).
Control is exercised by a superior authority in exercise of its supervisory power.
Adjudication of disputes is a judicial or quasi judicial function and it would, in our opinion, by unduly straining the meaning of the word 'control ' to hold that it also covers the adjudication of disputes between a co operative society and its members.
There is a clear distinction between jurisdiction to decide a dispute which is a judicial power and the exercise of control which is an administrative power and it would be wrong to treat the two as identical or equate one with the other.
Reference has been made on behalf of the appellant to the case of Panchshila Industrial Co operative Societies (Mult Unit) 167 vs The Gurgaon Central Co operative Bank Ltd., Gurgaon(1).
In that case, Deputy Registrar of Co operative Societies, Rohtak had given an award in favour of the respondent bank which was a co operative society governed by the provisions of Punjab Cooperative Societies Act.
The appellant filed an appeal against that award before the Central Registrar.
The Central Registrar dismissed the appeal on the ground that he was not the appropriate appellate authority in respect of the said award.
On appeal to this Court, the decision of the Central Registrar was affirmed.
It was held that the dispute between the parties fell within section 55 of the Punjab and those provisions were not affected by the Central Act.
It would appear from the above that the question involved in that case was entirely different and the appellant can derive no assistance from it.
Argument has also been advanced that there was no inherent lack of jurisdiction in the Deputy Registrar appointed under the Bombay Act for adjudicating upon the dispute between the parties and that it was at the best a case of lack of territorial jurisdiction.
We find ourselves unable to accede to this contention because we are of the opinion that there was inherent lack of jurisdiction in the Registrar appointed under the Bombay Act for dealing with the dispute arising out of the dealings of the Mangalore branch of the appellant society with the respondent.
The dispute between the parties as would appear from what has been discussed above, could only be adjudicated upon in accordance with the provisions of the Madras Act.
The appeal consequently fails and is dismissed.
As no one has appeared on behalf of the respondent, we make no order as to costs.
G.C. Appeal dismissed.
(1) [1971] (2) 2.S.C.C. 500.
| IN-Abs | The appellant was a co operative society registered in Bombay under the Bombay Co operative Societies Act, 1925.
The head office of the appellant was in Bombay and it had a branch in Mangalore.
As the objects of the appellant were not confined to one State it was governed by MultiUnit Cooperative Societies Act, 1942 a Central Act.
The appellant made a claim under section 54 of the Bombay Act in respect of a transaction which took place in Mangalore against the respondent who was a resident of Kesaragod and was a member of the appellant society.
Both Mangalore and Kesaragod were at the relevant time in Madras Presidency.
The Deputy Registrar of Co operative Societies Bombay gave an award regarding that claim.
The award was sought to be executed as a decree in the Court of Subordinate Judge, Kesaragod.
The respondent took an objection to the execution on the ground that the Deputy Registrar of Bombay bad no jurisdiction to pass the award and the same could not be executed as a decree in the courts in Kerala.
Upholding the objection the Subordinate Judge dismissed the execution application.
The High Court affirmed the decision.
In appeal by special leave before this Court the appellant contended that since it was registered in Bombay State it was the Bombay Act which would govern the appellant society for purposes of registration, control and dissolution as laid down in section 2(1) of the Central Act.
The word 'control it was urged comprehends within itself the adjudication of a claim made by the society against its members, and in the circumstances the award under, section 54 of the Bombay Act made by the Deputy Registrar Co operative Societies Bombay did not suffer from any legal infirmity.
HELD, : As the objects of the appellant society were extended to the Presidency of Madras it should in view of sub section (1) of section 2 of the Central Act be deemed to have been registered under the law in force in the Presidency of Madras relating to co operative societies.
The law which was then in force was the Madras Co operative Societies Act, 1932.
Under section 51 of that Act a dispute between the appellant and the respondent in respect of its dealings relating to its Mangalore branch would normally have to be adjudicated upon by the Registrar appointed under the Madras Act.
The fact that for the purpose of control the appellant society was governed by the Bombay Act would not justify a departure from the above normal rule.
[166 B E] The word 'control ' is synonymous with superintendence, management, or authority, to direct restrict or regulate.
Control is exercised by a superior authority in exercise of its supervisory power.
Adjudication of disputes in a judicial or quasi judicial function and it would be unduly straining the meaning of the word 'control ' to hold that it also covers the adjudication of disputes between a co operative society and its members.
There is a clear distinction between jurisdiction to decide a dispute which is a judicial power, and the exercise of control which is an administrative power, and it would be wrong to treat the two as identical or equate one with the other.
[166 F G] 163 Panchshila Industrial Co operative Societies (Multi unit) vs Gurgaon Central Co operative Bank Ltd., Gurgaon, , distinguished.
Since, as held above, the dispute between the parties could only be adjudicated upon in accordance with the provisions of the Madras Act the Registrar under the Bombay Act lacked inherent jurisdiction to decide the dispute and it was not a case of lack of territorial jurisdiction only [167 D E]
|
Appeal No. 91 of 1953.
Appeal from the Judgment and Decree dated the 12th day of June 1951 of the High Court of Judicature at Calcutta in Appeal from Original Decree No. 56 of 1951 arising out of the Decree dated the 8th day of March 1951 of the said High Court exercising its Ordinary Original Civil Jurisdiction in Suit No. 3993 of 1950.
H.J. Umrigar, Rameshwar Nath and Rajinder Narain for the appellant.
A.N. Sinha and P. C. Dutta for the respondent.
December 6.
The judgment of the Court was delivered by JAGANNADHADAS J.
This is an appeal, by leave of the High Court of Calcutta under article 133 (1) (c) For these two sections 45 B and 45 G (inserted by Act XX of 1950) two now sections 45 B and 45 U wore inserted by section 10 of Act LII of 1953.
1099 of the Constitution, from its judgment in its appellate jurisdiction confirming that of a Single Judge of the Court.
The point involved is a short one and arises on the following facts.
The respondent before us, Associated Bank of Tripura Ltd., went into liquidation on the 19th December, 1949.
A month prior to the liquidation, i.e., on the 19th November, 1949, the appellant before us and the Bank entered into an agreement whereby the appellant became a tenant of the Bank in respect of a certain parcel of land.
One of the terms of the tenancy agreement was that the appellant should vacate the land demised on 24 hours ' notice.
After the Bank went into liquidation the Liquidator served on the appellant on the 18th April, 1950, a notice terminating his tenancy and calling upon him to vacate the land and to hand over possession by the end of April, 1950.
This not having been done, the Liquidator filed an application on the original side of the High Court under section 45 B of the Banking Companies Act for ejectment of the appellant and obtained an ex parte decree against him on the 10th July, 1950.
On the 28th August, 1950, the appellant applied for setting aside the ex parte decree but the application was dismissed on the 7th September, 1950.
Consequently the appellant filed the present suit on the 12th September, 1950, in the original side of the High Court, asking for a declaration that the ex parte decree against him was made without jurisdiction and was a nullity and that he continued to be a tenant notwithstanding the said ex parte decree.
The plaint does not specifically mention the reason for claiming the decree to be without jurisdiction or nullity.
But the point taken at the trial was that the Court had no power to deal with a question relating to the ejectment of the appellant from the demised land, in a summary proceeding initiated on an application but could pass the decree only on a suit regularly instituted.
This contention was raised on the basis of a judgment of the Calcutta High Court given on the 24th August, 1950, that in respect of such a relief under section 45 B a summary proceed 141 1100 ing is not maintainable but that a suit has to be filed.
This decision has since been reported in Sree Bank vs Mukherjee(1).
The learned trial Judge before whom the present suit came up was of the opinion that though the ex parte decree for ejectment was obtained on a wrong proceeding, there was no inherent lack of jurisdiction in the Court and that the fact of the decree having been obtained in a wrong proceeding did not render it a nullity.
This view of the learned Judge was affirmed by the Appellate Bench.
It has not been disputed before us that the relief by way of ejectment.
of the appellant from the land demised is one which would fall within the scope of section 45 B of the Banking Companies Act and that the Liquidator could obtain the said relief by an appropriate proceeding in the High Court.
Indeed, the learned appellate Judges specifically held that the Court had by virtue of section 45 B, jurisdiction over the subject matter of the dispute and this view has not been challenged having regard to the wide and comprehensive language of the section.
But what is urged is that the Court having followed the view taken in the Sree Bank Case (supra) (whose correctness was not challenged before it) that the appropriate proceeding to obtain such a relief was only a suit, it should have, consistently therewith, held the decree obtained on a mere application to be invalid.
In the Court below the question as to whether the decree obtained on a wrong proceeding was one so wholly without jurisdiction as to be a nullity or whether it was vitiated only by a mere irregularity in the mode of obtaining the relief, and hence not open to attack in collateral proceedings was the subject matter of elaborate consideration.
It appears to us, however, that it would be more satisfactory to consider and decide whether the basic assumption which gave rise to this argument, viz. that the appropriate proceeding under section 45 B was only a suit and not an application, is correct.
It is necessary for this purpose to notice the relevant sections.
Section 45 A of the Banking Companies Act, 1949, as amended by Act XX of 1950 (1) 1101 defines 'Court ' for the purposes of Part III and Part III A of the Act as "the High Court exercising jurisdiction in the place where the registered office of the Banking Company concerned, which is being wound up, is situated".
The said section also provides that "notwithstanding anything to the contrary contained in the Indian Companies Act, 1913, or in any notification, order or direction issued thereunder or in any other law for the time being in force, no other court (i.e. a court other than the one as above defined) shall have jurisdiction to entertain any matter relating to or arising out of the winding up of a banking company".
Next is section 45 B (1) which is in the following terms: "Notwithstanding anything to the contrary contained in the Indian Companies Act, 1913, or in any other law for the time being in force, the Court shall have full power to decide all claims made by or Against any banking company and all questions of properties and all other questions whatsoever, whether of law or fact, which may relate to or arise in the course of the winding up of the banking company coming within the cognizance of the Court".
Section 45 G authorises the Court to make rules consistent with the Act concerning the mode of proceedings for the decision of claims and other proceedings under the Act.
This group of sections in Part III A constitute a wide departure from the corresponding provisions of the Indian Companies Act.
Under various sections thereof the liquidator, after an order for winding up of a company is made, can approach a Company Court for exercising certain powers in aid of and to expedite the process of liquidation.
The procedure normally adopted for the purpose is by way of application.
But the scope of matters in respect of which the liquidator can obtain the help of the Company Court by summary procedure is rather limited.
In respect of other matters and particularly in the matter of collecting assets or recovering properties from third parties, (not covered by sections 185 and 186) the liquidator has to invoke the help of the 1102 appropriate Court in the ordinary way.
This as is wellknown leads to a great deal of inevitable delay and expense.
When in 1949 special legislation in respect of Banking Companies was taken up, it was one of the stated objects, to provide a machinery by which proceedings in liquidation of Banking Companies could be expedited and speedily terminated.
It was found, however, that the Act of 1949, as originally enacted, was inadequate to achieve that purpose.
It is in this situation that the Amending Act of 1950 introduced into the Act of 1949 an entire Chapter, Part III A, consisting of sections 45 A to 45 H under the heading "Special provisions for speedy disposal of winding up proceedings".
It appears to us that, consistently with this policy and with the scheme of the Amending Act, where the liquidator has to approach the Court under section 45 B for relief in respect of matters legitimately falling within the scope thereof, elaborate proceedings by way of a suit involving time and expense, to the detriment of the ultimate interests of the company under liquidation, were not contemplated.
In the absence of any specific provision in this behalf in the Act itself and in the absence of any rules framed by the High Court concerned under section 45 G, the procedure must be taken to be one left to the judgment and discretion of the Court, having regard to the nature of the claim and of the questions therein involved.
In the Sree Bank Case (supra), the question that arose for direct consideration was one of limitation.
But in considering it and when pressed with the argument that, if the appropriate proceeding was by way of an application and not a suit, difficulties might arise as to the question of limitation, the learned Judges felt it unnecessary to consider whether or not the Limitation Act applies to the applications under section 45 B and if so what would be the period which would govern such applications.
They proceeded to decide the particular case before them, viz. a case relating to a debt due to the Bank, on the view that "there is nothing in the Companies Act or the Banking Companies Act which permits a 1103 liquidator to recover debts from debtors of a Banking Company by a summary proceeding such as an application to the Company Judge" and therefore held that no application for recovery would lie and that only a suit should have been brought for which the period of limitation was the ordinary period provided in the Limitation Act.
It appears to us, with great respect to the learned Judges, that this approach as to the nature of the proceeding required or permitted under section 45 B of the Banking Companies Act was not correct.
The question is not whether section 45 B permitted summary proceedings but the question is whether the section prescribed definitely a particular method of proceeding and whether consistently with the policy of the Act it was not to be presumed that a speedy and cheap remedy was to be available to the Liquidator, unless the Court in its discretion thought fit to direct or the rules of the High Court provided that a claim of a particular nature had to be pursued by a suit.
It is to be remembered that section 45 B is not confined to claims for recovery of money or recovery of property, moveable or immoveable, but comprehends all sorts of claims which relate to or arise in the course of winding up.
Obviously the normal proceeding that the section contemplated must be taken to be a summary proceeding by way of application.
We are clearly of the opinion that in the present case the Court which passed the ex parte decree was fully competent to decide the matter raised before it on summary application and to pass the ex parte decree which has been challenged by the suit and that the decree of the Courts below dismissing the suit is correct.
We are not to be supposed to have expressed any opinion on the question of limitation which was raised before the High Court in the Sree Bank Case (supra).
That is a question which may have to be decided in an appropriate case when it is raised directly.
The appeal is accordingly dismissed with costs.
| IN-Abs | The object of the Banking Companies Act, 1949 is to provide a machinery for expeditious and speedy termination of proceedings in liquidation and in the absence of any specific provisions of the Act to the contrary or any rules framed by the High Court under section 45 G of the Act (inserted by Act XX of 1950) the normal procedure for deciding all claims under section 45 B of the Act (inserted by Act XX of 1950) should be a summary proceeding originating with an applica tion.
But the court in its discretion may think fit to direct or the rules of the High Court may provide that a suit is the proper remedy in view of the nature of claim made and the questions involved in such claim.
Sree Bank vs Mukherjee ([1950] , referred to.
|
Appeals Nos. 240 and 241 of 1969.
Appeals from the judgment and decree dated December 18, 1968 of the Allahabad High Court in Civil Misc.
Writ No. 4697 of 1968.
J. P. Goyal and Sobhag Mal Jain, for the appellant (in both the appeals).
L. M. Singhvi and O. P. Rana, for the respondents ( in both the appeals).
The Judgment of the Court was delivered by Hegde, J.
These are appeals by certificate.
They are by the same appellant and they raise common question of law.
Hence they are considered together.
Two questions of law were urged on behalf of the appellant in support of the appeals.
The first contention urged was that 147 Section 3 D(1) of the U.P. Sales Tax Act, 1948 (to be hereinafter referred to as the Act) is ultra vires the Constitution, firstly because that under that section excessive legislative power had been delegated to the State Government and secondly on the. ground that it discriminates between the registered dealers who made their purchases through licensed dealers and the registered .
dealers who made their purchases through dealers who are not licensed.
The second contention taken was that notification No. ST 7122/X 900(16)64 dated October 1, 1964 issued under section 3 D(1) of the Act imposing purchase tax on oil seeds is invalidas it contravenes section 3AA of the Act.
We have considered the first ground of attack in Civil Appeals, Nos. 362 and 1692 of 1969 (Mls.
Sita Ram Bishambhar Dayal etc.
vs State of U.P.) in which we have delivered judgment just now.
For the reasons mentioned therein, the contention that section 3 D(1) is ultra vires the Constitution fails.
The only surviving question is whether the notification re ferred to earlier is violative of section 3AA of the Act.
Before examining that contention, it is necessary to set out the, relevant facts.
The appellant is a partnership firm.
It carries on business as dealers in roundnuts, oil seeds and Arhar.
For the assessment years 1965 66, 1966 67, the Sales tax Officer, Rampur assessed ' the appellant to sales tax on the turnover of the groundnuts oil manufactured by the appellant and to purchase tax on the turnover of the oil seeds and foodgrains.
The appellant unsuccessfully appealed against the assessment orders.
Thereafter it took up the matter in revision before the revising authority.
There, again it substantially failed.
Aggrieved by that decision, he moved ' the High Court of Allahabad for a writ of certiorari quashing the levy of purchase tax imposed on him in respect of his purchases of oil seeds.
The High Court rejected those petitions.
Hence these appeals.
We shall now extract the impugned notification to the extent,: it is material for the purpose of this appeal.
It reads thus: "Not.
No. ST 7122/X 99(16)64 dated October 1, 1964.
In exercise of the powers under sub section (1) of section 3 D of the Uttar Pradesh Sales Tax Act, 1948 (U.P. Act No. XV of 1948), the Governor of Uttar Pradesh is pleased to notify that with effect from October 1, 1964, the turnover of first purchases in respect 148 of goods mentioned below shall be liable to tax under Section 3 D of the said Act.
Name of goods Rate of tax.
Foodgrains including cereals and pulses1 .5 paisa per rupee 2.
Gur 3 paisa per rupee 3.
Oilseeds 2 paisa per rupee As per this notification a purchase tax of 2 paise per rupee ,,on the turnover of the first purchase of oil seeds is leviable.
It is contended that this notification violates section 3AA of the Act.
Section 3AA says: "Notwithstanding anything contained in section 3 or 3A, the turnover in respect of the following goods shall not be liable to tax except at the point of sale by a dealer to the consumer, and the rate of tax shall be such, not exceeding the maximum rate for the time being specified in section 15 of the , as may be declared by the State Government by notification in the Official Gazette: (i). . (ii). . (iii). . (iv). . (v). . (vi) oil seeds, that is to say, seeds yielding non volatile oils used for human consumption, or in industry, or in the manufacture of varnishes, soap and the like, or in lubrication, and volatile oils used chiefly in medicines, perfumes, cosmetics and the like.
Unless the dealer proves otherwise, every sale 'by a dealer shall, for the purposes of sub section (1) be presumed to be to a consumer.
Explanation.
A sale of any of the goods specified in sub section
(1) to a registered dealer who does not purchase them for resale in the same condition in which he has purchased them, or to an unregistered dealer shall, for pur poses of this section, be deemed to be a sale to the consumer.
" 149 This section was incorporated into the Act on April 1, 1956.
Under this section, on the goods specified therein, sales tax not, exceeding the maximum rate for the time being specified in section 15 of the can be levied by the StateGovernment on the turnover in respect of sales by dealers to the consumers.
From an analysis of this provision, we get the following: 1.
that tax to be levied is a sales tax; 2. levy in question is a single point levy; 3.
the point of levy is the sale by the dealer to the consumer and 4.
the rate to be fixed by the State Government is not to exceed the maxi mum rate for the time being specified in section 15 of the .
If we hold that provisions contained in section 3AA continue to be in force in respect of dealing in oil seeds then the appellant 'section contention that the impugned levy is an invalid levy succeeds, But the question is whether that contention is correct.
This takes us to section 3 D.
That section reads: "1.
Except as provided in sub section (2), there shall be levied and paid, food each assessment year or part thereof, a tax on the turnover, to be determined in such manner as may be prescribed, of first purchases made by a dealer or through a dealer, acting as a pur chasing agent in respect of such goods or class of goods, and at such rates, not exceeding two paisa per rupee in the case of foodgrains, including cereals and pulses, and pulses, and five paisa per rupee in the case of other goods and with effect from such date, as may, from time to time, be notified by the State Government in this behalf.
Explanation.
In the case of a purchase made by a registered dealer through the agency of a licensed dealer, the registered dealer shall be deemed to be the first purchaser, and in every other case of a first purchase, made through the, agency of a dealer, the dealer who is the agent shall be deemed to be the first purchaser.
x x x x 3.
x x x x 150 4.
On the issue of a notification under this section no tax shall be levied under any other section in respect of the goods so notified.
The provisions of the second and third proviso to Section 3 and of Section 18, shall mutatis mutandis apply in relation to the tax payable under this Section.
x x x x 7.
Unless the dealer proves otherwise to the satisfaction of the assessing authority, every purchase by or through a dealer shall, for the purposes of sub section (1), be presumed to be the first purchase by such dealer and every sale through a dealer shall, for the purposes of sub section (2), be presumed to be sale to a first purchaser.
" For our present purpose, it is not necessary to refer to the second and third provisos to section 3 and section 18.
It may be noted that section 3 D was incorporated into the, Act on August 1, 1958.
The contention on behalf of the appellant was that section 3AA is a special provision regarding certain specified class of goods including oil seeds whereas section 3 D is a general provision.
Hence dealings in respect of oil seeds must be held to be governed exclusively by section 3AA.
In support of his contention, the learned ,Counsel for the appellant called into, aid the rule of construction that a special provision excludes the application of a general provision.
On the other hand, it was contended on behalf of the Revenue that power was conferred on the State Government to levy purchase tax in place of sales tax in respect of any goods ' that may be notified under section 3 D(1) subject only to the conditions mentioned therein.
According to Dr. Singhvi, learned 'Counsel for the Revenue, the legislature left the questions whether in respect of a class of goods, the appropriate levy is sales tax or purchase tax as well as what is the appropriate point of levy, to the State Government because a decision on that question has to be taken on an assessment of various factors, some of which are not constant.
According to him in view of the language employed in sub section
(4) of section 3 D, it is not possible to apply the rule of construction that special legislation in respect of any particular topic should exclude the application of general legislation.
It may be noted that section 3 D was incorporated into the Act much later than section 3AA.
As seen earlier section 3AA was incorpo rated into the Act on April 1, 1956 whereas section 3 D was added 151 on August 1, 1958.
At the time the legislature incorporated into the Act section 3 D, it must have been aware of the existence of section 3AA but yet in sub section
(4) of section 3 D, it declared that on the issue of a notification under that section, no tax shall be levied under any other section in respect of the goods so notified.
The ambit of this provision is very wide and it clearly takes in goods mentioned in section 3AA.
Now turning to section 3AA, it is important to note that it begins by saying "notwithstanding anything contained in section 3 or 3 A".
The non obstante clause does not take in section 3 D.
If the legislature intended to exclude the operation of section 3 D, in respect of matters covered by section 3AA, nothing would have been easier than to say so.
It could have said "notwithstanding anything contained in section 3, 3 A and section 3 D".
But it did not choose to do that.
Therefore there are no grounds to cut down the amplitude of the power conferred on the State Government under sub section
(4) of section 3 D.
The High Court of Allahabad has consistently taken the view that it is open to the State Government to levy purchase tax in exercise of its powers under section 3 D even in respect of goods covered by section 3AA.
We are in agreement with that view.
In the result these appeals fail and they are dismissed with costs.
One set.
K.B.N. Appeals dismissed.
| IN-Abs | Under section 3AA of the Uttar Pradesh Sales Tax Act, 1948 "not withstanding anything contained in section 3 or 3A" tax on the turnover of the goods specified therein was not leviable except at the point of sale by a dealer to the consumer.
Section 3D, incorporated into the Act later, authorised the imposition of a tax on the turnover of first purchase and on the issue of a notification under the section no tax could be levied under any other section in respect of the goods so notified.
On the question whether the notification dated October 1, 1964 imposing a purchase tax on oil seeds was invalid for the reason that it contravened section 3AA of the Act, HELD : It is open to the State Government to levy purchase tax, in exercise of its powers under section 3D, in respect of goods covered by section 3AA.
At the time the legislature incorporated into the Act section 3D it must have been aware of the existence of section 3AA, yet, in sub section
(4) of section 3D it declared that on the issue of a notification under the section, no tax shall be levied under any other section in respect of the goods so notified.
The ambit of this provision is very wide and it clearly takes in goods mentioned in section 3AA.
Further, the non obstante clause does not take in section 3D, and if the legislature intended to exclude the operation of section 3D, in respect of matters covered by section 3AA nothing would have been easier than to say so.
Therefore, there are no grounds to cut down the amplitude of the power conferred on the State Government under sub section
(4) of section 3 D. [150 H 151 D]
|
Appeals Nos. 62 and 1672 of 1969.
Appeals from the judgments and orders dated May 17, 1968 of the Allahabad High Court in Writ Petitions Nos. 310 and 627 of 1968.
J. P. Goyal and Sobhag Mal Jain, for the appellants (in both the appeals).
L. M. Singhvi and O. P. Rana, for the respondents (in both the appeals).
The Judgment of the Court was delivered by Hegde, J.
These are appeals by certificate.
They raise a common question of law for decision.
The only contention arising for decision in these appeals is as to the vires of section 3 D(1) of the U.P. Sales Tax Act, 1948 (to be hereinafter referred to as the Act).
The validity of that section has been assailed on two different grounds viz. (1) that the power delegated to the executive under section 3 D(1) is excessive and as such bad in law and (2) Section 3 D infringes article 14 of the Constitution in as much as it discriminates between the registered dealers who purchase through the agency of licensed dealers and the registered dealers who purchase through other dealers, The appellants are dealers in Rab.
In respect of their dealings in Rab, they have been levied purchase tax as per the notification issued by the Government under section 3 (D) (1) of the Act.
They are challenging the validity of the levy on the grounds mentioned above.
The High Court has repelled both the above contentions.
The High Court has come to the conclusion that the power con ferred on the State Government under section 3 D is a valid power.
It opined that the conferment of power on the executive to fix the rate of tax within the limits laid down in the section is not impermissible.
Further it held that the section is not hit by article 14 of the Constitution.
143 Before proceeding to consider the correctness of the conten tions advanced on behalf of the appellant, it is necessary to read section 3 D(1).
It says: "Except as provided in sub section (2), there shall levied and paid, for each assessment year or part thereof, a tax on the turnover, to be determined in such manner as may be prescribed, of first purchases made by a dealer or through a dealer, acting as a purchasing agent in respect of such goods or class of goods, and at such rates, not exceeding two paisa per rupee in the case of foodgrains, including cereals and pulses, and five paisa per rupee in the case of other goods and with effect from such date, as may, from time to time, be notified by the State Government in this behalf.
Explanation.
In the case of a purchase made by a registered dealer through the agency of a licensed dealer, the registered dealer shall be deemed to be the first purchaser, and in every other case of a first purchase, made through the agency of a dealer, the dealer who is the agent shall be deemed to be the first purchaser.
" It is true that the power to fix the rate of a tax is a legislative power but if the legislature lays down the legislative policy and provides the necessary guidelines, that power can be delegated to the executive.
Though a tax is levied primarily for the purpose of gathering revenue, in selecting the objects to be taxed and in determining the rate of tax, various economic and social aspects, such as the availability of the goods, administrative convenience, the extent of evasion, the impact of tax levied on the various sections of the society etc.
have to be considered.
In a modem society taxation is an instrument of planning.
It can be used to achieve the economic and social goals of the State.
For that reason the power to tax must be a flexible power.
It must be capable of being modulated to meet the exigencies of the situation.
In a Cabinet form of Government, the executive is expected to reflect the views of the legislatures.
In fact in most matters it gives the lead to the legislature.
However, much one might deplore the "New Despostism" of the executive, the very complexity of the modern society and the demand it makes on its Gov enment have set in motion forces which have made it absolutely necessary for the legislatures to entrust more and more powers to the executive.
Text book doctrines evolved in the 19th Century have become out of date.
Present position as regards delegation of legislative power may not be ideal, but in the absence of any better alternative, there is no Escape from it.
The legisla 144 tures have neither the time, nor the required detailed information nor even the mobility to deal in detail with the innumerable problems arising time and again.
In certain matters they can only lay down the policy and guidelines in as clear a manner as possible.
In State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd.(1) this Court observed : "Now, the authorities are clear that it is not unconstitutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be levied, the rate at which it is to be charged in respect of different classes of goods and the like".
It was not contended before us that the power delegated to the executive to select the goods on which the purchase tax is to be Ievied was an excessive delegation nor was it contended that the power granted to the executive to determine the rate of tax by itself amounts to an excessive delegation.
All that was said was that in empowering the Government to levy tax on goods other than foodgrains at a rate not exceeding 5 paise in a rupee, the legislature parted with one of its essential legislative functions as the power given to the executive is an unduly wide one.
We are unable to accede to this contention.
Whether a power delegated by the legislature to the executive has exceeded the permissible limits in a given case depends on its facts and circumstances.
That question does not admit of any general rule.
It depends upon the nature of the power delegated and the purposes intended to be achieved.
Taking into consideration the legislative practice in this country and the rate of tax levied or leviable under the various sales tax laws in force in this country, it cannot be said that the power delegated to the executive is excessive.
In Devi Dass Gopal Krishnan and ors.
vs The State of Punjab and ors(2) this Court ruled that it is open to the legislature to delegate the power of fixing the rate of purchase tax or sales tax if the legislature prescribes a reasonable upper limit.
We are unable to accept the contention of Mr. Goyal, Iearned Counsel for the appellant that the maximum rate fixed under section 3 D is unreasonably high.
At any rate there is no material before us on the basis of which, we can come to that conclusion.
This takes us to the contention that section 3 D is ultra vires article 14 of the Constitution.
The argument on this question proceeds thus : The explanation to section 3 D provides that in 'the case of (1) ; (2) 20 S.T.C. 430.
145 purchase made by a registered dealer through the agency of a licensed dealer, the registered dealer would be deemed to be the first purchaser whereas in every other case of a first purchase made through the agency of a dealer, the dealer who is the agent would be deemed to be the first purchaser.
This difference according to Mr. Goyal is discriminatory in character.
He urged that there was no justification for making an agent liable to pay sale tax merely because he is an unlicensed agent.
According to him there is no rational distinction between the purchases made through licensed dealers and those made through unlicensed dealers.
The power to levy tax includes within itself the power to provide against evasion of tax.
A licensed dealer has to function according to the conditions of his licence.
He is bound to maintain true and correct accounts of his day to day transactions Of sales and purchase of goods notified in sub section
(1) of section 3 D in an intelligible form and in such manner, if any, as may be prescribed and further he must furnish to the assessing authority the details of the aforesaid transactions together with the name and parti culars of the purchaser and the number and date of the registration certificate filed by the purchaser under section 8A and such other information regarding the transactions as may, subject to rule, if any, in this behalf be required.
Hence whenever a purchase is made through a licensed agent, the authorities have the opportunity to know what purchases have been made and from whom those purchases were made but that would not be the case when purchases are made through dealers who are not licensed.
They are not required by law to maintain any accounts or submit any returns.
Hence if registered dealers are permitted to make purchases through dealers who are not licensed and those dealers themselves are not liable to be taxed then opportunity for evasion becomes larger.
The rule of discrimination does not rule out classification.
The power of classification under a fiscal law is larger than in the case of other laws.
Hence there was nothing wrong in the legislature making a classification between licensed dealers and dealers who are not licensed.
Even when a dealer who is not licensed is liable to pay purchase tax, the ultimate burden falls on his principal.
For these reasons, we do not see any basis for the contention that section 3 D is violative of article 14.
For the reasons mentioned above these appeals fail and they are dismissed with costs one set.
S.N. Appeals dismissed.
| IN-Abs | The appellants are dealers in Rab.
The State Government under section 3D(1) of the U.P. Sales Tax Act, 1948, levied purchase tax in respect of their, dealings in Rab.
Section 3D(1) of the Act, inter alia, provides that for each assessment year, there shall be levied and paid a tax on the turnover of first purchases made by a dealer or through a dealer in respect of such goods, at such rates not exceeding 2 paise per rupee in the case of foodgrains and 5 paise in respect of other goods and in the explanation it is provided that "in the case of purchase made by a registered dealer through a licensed dealer, 'the registered dealer shall be the, first purchaser and in every other case of fresh purchase, the dealer through whom the first purchase is made shall be deemed to be the first purchaser.
The appellants challenged the vires of section 3(d)(1) of the Act before the High Court but the High Court held against the appellants.
In appeal this Court, it was contended by the appellants that in empowering the Government to, levy tax on goods other than foodgrains at a rate not exceeding 5 paise in a rupee, the legislature had given an unduly wide power to the executive.
Such a delegated power was, therefore, excessive and bad in law and secondly, section 3D(1) infringed article 14 of the Constitution because it discriminated between registered dealers who purchased through licensed dealers and the registered dealers who purchased through other dealers.
Dismissing the appeals, HELD: (i) The power to fix the rate of tax is a legislative power, but if the legislature lays down the legislative policy and provides the necessary guidelines that power can be delegated to the executive.
, Though a tax is levied primarily for the purpose of gathering revenue, in selecting the objects to be taxed and in determining the rate of tax, various social and economic factors are to be considered and since the legislatures have very little time to go into details, they have to delegate certain powers to the Executive.
This Court has ruled that if a reasonable upper limit is prescribed, the legislature can always delegate the power of fixing the rate of purchase 'tax or sales tax.
[143 E] Devi Days Gopal Krishnan vs State of Punjab, 20 S.T.C. 430, followed.
In the present case, taking into consideration the legislative practice in this country and the rate of tax levied or leviable under the various sales tax laws in force in this country, it cannot be said that the power delegated to the.
executive is excessive and in the absence of any material, it cannot be said that the maximum rate fixed under section 3D(1) is unreasonably high.
144 E F] (ii) Section 3D is not violative of article 14 of the Constitution.
In the present case, there is nothing wrong for the legislature to make a classification between licensed dealers and dealers who are not licensed.
A licensed dealer has to maintain true and correct accounts and other particulars of 142 purchasers whereas dealers who are not registered are not required to maintain any accounts.
Hence, if registered dealers are permitted to make purchases through dealers who are not licensed and those dealers are themselves not liable to be taxed, then opportunity for evasion of tax becomes larger.
Under the circumstances, the classification is not unjustified.
[145 G] State of Madras vs Gannon Dunkerlay & Co. (Madras) Ltd., ; and Devi Deo Gopal Krishna vs State of Punjab, 20 S.T.C. 430, referred to.
|
Appeals Nos. 2459 and 2460 of 1968 and 1161 and 1162 of 1971.
Appeals by certificate/special leave from the judgment and order dated April 1, 1968 of the Calcutta High Court in Income tax Reference No. 163 of 1964.
N. A. Palkhivala, T. A. Ramachandran and D. N. Gupta, for the appellant (in all the appeals).
Jagadish Swarup, Solicitor General, B. B. Ahuja, R. N. Sach they and B. D. Sharma for the respondent (in all the appeals).
The Judgment of the Court was delivered by Hegde, J.
The first two appeals have been brought by certi ficate and the other two by special leave.
The later two appeals came to be filed because the certificates on the basis of which the earlier appeals were brought, were found to be defective inasmuch as the High Court had not given any reason in support of those certificates.
Hence it is sufficient, if we deal with the later two appeals.
The appellant is a non resident British Shipping Co. whose ships ply in waters all over the world including the Indian waters.
For the assessment years 1960 61, and 1961 62 (the relevant accounting years being calendar years 1959 and 1960), the Income tax Officer computed its total income taxable under the 12 L 256 Sup CI/72 170 Indian Income tax Act, 1922 (which will hereinafter be referred to as the, Act) by taking into account the ratio certificates issued by the Chief Inspector of Taxes, U.K. which were based on the assessments made on the appellant in U.K. During the relevant period, there was in U.K. "investment allowance" corresponding to "development rebate" under the Act.
The certificates issued by the Chief Inspector contained the percentage ratio of the total world profits of the appellant to its world earnings and similarly the percentage ratio of the wear and tear allowance and the investment allowance to its total world earnings.
In making the assessment the Income tax Officer purported to proceed on the basis of rule 33 of the Indian Income tax Rules 1922.
The said rule reads : "In any case in which the Income tax Officer is of opinion that the actual amount of the income, profits or gains accruing or arising to any person residing out of the taxable territories whether directly or indirectly through or from any business connection in the taxable territories, or through or from any property in the taxable territories or through or from any assets or source ,of income in the taxable territories, or through or from any money lent at interest and brought into the taxable territories in cash or in kind cannot be ascertained, the amount of such income, profits or gains for the purposes of assessment to income tax may be calculated on such percentage of the turnover so accruing or arising as the Income tax Officer may consider to be reasonable, or on an amount which bears the same proportion to the total profits of the business of such person (such profits being computed in accordance wi th the provisions of the Indian Income tax.
Act), as the receipts so accruing or arising bear to the total receipt of the business, or in such other manner as the Income tax Officer may deem suitable.
" The Income tax Officer proceeded to assess the appellant assessee on the second of the three bases mentioned in rule 33; but in computing Indian earnings, he did not include the destination earnings ' received in India ie.freight received in Indian ports in respect of cargo loaded at non Indian ports nor did he take into account the investment allowance granted to the appellant in its U.K. assessments.
Aggrieved by the order of the Income tax Officer, the assessee took up the matter in appeal to the Appellate Assistant Commissioner.
The Appellate Assistant Commissioner accepted the contention of the assessee as regards the inclusion of the desti 171 nation earnings in the computation of the *Indian earnings of the assessee but rejected its contention as regards the investment allowance.
Aggrieved by the order of the Appellate Assistant Commissioner both the assessee as well as the Revenue appealed to the income tax Appellate Tribunal.
The Tribunal allowed the appeal of the assessee and dismissed that of the Revenue.
Thereafter at the instance of the Revenue, the following two questions of law were referred to the High Court under section 66(1) of the Act.
Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the destination earnings collected in India should be considered as part of the Indian earnings in determining the assessee 's Indian income under Rule 33 of the Income tax Rules ? Whether, on the facts and in the circumstances of the case, the Tribunal was right in allowing the claim of the assessee for the investment allowance under the U.K. Act (corresponding to the development rebate under the Indian Income tax Act, 1922) in the compu tation of its total world income for the purpose of determining the assessee 's Indian income under rule 33 of the Income tax Rules, 1922 ?" The High Court answered the first question in favour of the, assessee and the second in favour of the Revenue.
Hence these appeals by the assessee.
The Revenue has not appealed against the decision of the High Court as regards Question No. 1.
Hence we have only to consider whether the decision of the High Court relating to Question No. 2 is in accordance with law.
At the commencement of his arguments Mr. Palkhivala, learned Counsel for the assessee indicated that rule 33 may not be applicable to the facts of the case; but he said that for the purpose of this case, he was prepared to proceed on the basis that the said rule is the governing provision.
The authorities under the Act as well as the High Court have examined the facts of this case on the basis of rule 33.
The second question referred to the High Court requires the High Court to express its opinion whether on the facts and in the circumstances of the case, the Tribunal was right in allowing the claim of the assessee for the investment allowance under the U.K. Act in the computation of the total world income for the purpose of determining the assessee 's Indian income under rule 33.
Under these circumstances, it would not be appropriate for, us at this stage to ignore the ,earlier proceedings and examine the case afresh on a wholly diffe 172 rent basis.
Hence we have not gone into the question whether rule 33 is applicable to the facts of the case.
We are proceeding on the assumption that it applies.
An mentioned earlier, the assessee is a non resident.
Its liability to pay tax arises under sections 3 and 4 of the Act.
The total income that arose or accrued or deemed to have arisen or accrued to it in this country in the relevant previous years is liable to be taxed in this country.
Section 10(2) provides for certain allowances to be deducted while computing the taxable income.
Section 10 (2) (vib) deals with the development rebate.
The material part of that section reads: "In respect of a new ship acquired or new machinery or plant installed after the 3 1st day of March, 1954 which is wholly used for the purposes of the business carried on by the assessee, a sum by way of development rebate in respect of the year of acquisition of the ship or of the installation of the machinery or plant, equivalent to, (i) in the case of a ship acquired after the 3 1st day of December, 1957, forty per cent of the actual cost of the ship to assessee, and (ii) in the case of a ship acquired before the 1st day of January, 1958 and in the case of any machinery or plant, twenty five per cent.
of the actual cost of the ship or machinery or plant ,to the assessee.
" The proviso to that clause says "Provided that no allowance under this clause shall be made unless (a) the particulars prescribed for the purpose of clause (vi) have been furnished by the assessee in respect of the ship or machinery or plant; and (b) except where the assessee is a company being a licensee within the meaning of the (54 of 1948), or where the ship has been acquired or the machinery or plant has been installed before the 1st day of January, 1948 an amount equal to seventy five per cent of the development rebate to be actually allowed is debited to the profit and loss account of the relevant previous year and credited to a reserve, account to be utilised by him 173 during a period of ten years next following : or the purposes of the business of the undertaking except (i) for distribution by way of dividends or profits, or (ii) for remittance outside India as profits or for the creation of any asset outside India, and if any such ship, machinery, or plant is sold or otherwise transferred by the assessee to any person other than the Government at any time before the expiry of ten years from the end of the year in which it was acquired or installed, any allowance made under this clause shall be deemed to have been wrongly allowed for the purposes of this Act.
" It may be noted that in the case.
of a shipping company like the appellant before us, whose ships ply all over the world, it may not be possible to strictly comply with the provisions contained in section 4 of section 10(2).
The provisions dealing with the levy of Income tax are not identical in all countries.
It may well nigh be impossible for a shipping company like the appellant to rigidly comply with the requirements of the laws in force in the numerous countries where it can be said to have earned income.
Possibly to get over such a difficulty rule 33 was enacted.
That is how the Revenue had proceeded in assessing the appellant.
Evidently in exercise of its power under section 5(8) of the Act, which says that "all officers and persons employed in the execution of this Act shall observe and follow the orders, instructions and directions of the Central Board of Revenue.
", the Central Board of Revenue had issued the notification dated February 10, 1942.
Under that notification instructions had been issued to the assessing authorities, laying down the principles to be applied in assessing the foreign shipping companies.
As regards the British Shipping Companies, they were directed to permit those companies "to elect to be assessed on the basis of a ratio certificate granted by the U. ' K. authorities regarding the income or loss and the wear and tear allowance".
At the time that notification was issued the Act did not provide for a development rebate.
Therefore that notification does not refer to any development rebate.
But it is made clear by that notification that a British Shipping Company can elect to be assessed on the basis of a ratio certificate granted by the U.K. authorities regarding the income or loss which means the net income or net loss.
During the relevant previous years, the Act 174 provided for deduction of the development rebate in the computation of the taxable income.
During those years the U.K. Income tax Act provided for a similar allowance; but that allowance was known as investment allowance.
We were informed at the bar that in those years, the percentage of devlopment rebate allowed under the Act was the same as that allowed under the U.K. law as investment allowance.
In about the beginning of 1964 M/s. Turner Morrison & Co.which was the a agent of several British Shipping Companies in India appears to have written to the Board of Revenue seeking its advice as to how the British Shipping Companies could claim development rebate.
In reply to that letter, the Board of Revenue wrote to them as follows "Sub: Assessment of British Shipping Companies on the basis of ratio certificates Treatment of investment allowance granted in the U.K.
I am directed to reply your letter dated 8th Feb. 1957 on the above subject and to state that as the development rebate which corresponds to the investment allowance granted in the U.K. is allowed under the In dian Income tax Act from the assessment year 1956 57, there is no objection to allow the investment allowances for the purpose of the computation of the Indian Income of British Shipping Companies.
This would, however be subject to the condition that the investment allowance would be permitted as a deduction only to the extent to which the rate of the allowance granted in the U.K. is not greater than the rate of development rebate allowed under the Indian Income tax Act.
" We were informed that the copies of that letter were sent to the Income tax Commissioners in the various States.
From this letter, it is clear that the Board of Revenue had instructed the taxing authorities to take into consideration the investment allowance granted by the U.K. authorities in computing the taxable income of the British Shipping Companies.
At this stage, it is necessary to mention that the proviso to cl.
(vib) of section 10(2) referred to earlier was incorporated into the Act sometime after the above instructions were issued by the Board of Revenue.
The authorities under the Act have proceeded on the basis that the computation of the income of the assessee has to be made on the second of the three bases mentioned in rule 33.
This assumption appears to be incorrect.
Admittedly the profits of the assessee company were not computed in accordance with the provisions of the Act.
That being so, the second basis mentioned 175 in rule 33 cannot be applied.
This aspect was brought to the notice of the High Court.
But the High Court refused to consider the same on the ground that both the Revenue as well as the assessee had proceeded before the authorities under the Act on the assumption that the second basis mentioned in rule 33 is the relevant basis.
In our opinion the High Court erred in adopting that approach.
The fact that the authorities under the Act as well as the parties were under a mistaken impression cannot alter the true position in law.
It is obvious that that basis could not have been applied.
That being so the computation of the appellant 's income had to be made either under the first basis viz. the calculation of the profits and gains on such percentage of the turnover accruing or arising as the Income tax Officer may consider to be reasonable or on the third basis i.e. 'in such other manner as the Income tax Officer may doom suitable '.
From the assessment orders made by the Income tax Officer, it does not appear that in computing the taxable income of the assessee, he adopted the first basis.
The most appropriate basis under which he could have computed the income was the last basis viz. "in such other manner as the Income tax Officer may deem suitable.
" While adopting that basis, the Income tax Officer is not required to rigidly apply the various conditions prescribed in the Act in the matter of granting one or the other of the permissible allowances.
He may adopt any equitable basis so long as that basis does not conflict either with rule ' 3 or with the instructions or directions given by the Board of Revenue.
The power given to the Income tax Officer under that basis is a very wide power.
That power is available not only to the Income tax Officer but also to the Appellate Assistant Commissioner and the Tribunal.
As the Tribunal had determined the tax due from the appellant on the basis of the ratio certificate given by the U.K. authorities, it cannot be said that the decision reached by the Tribunal was an unreasonable one.
The Tribunal 's decision accords with the instructions given by the Board of Revenue.
The fact that the Proviso to section 10 (2) (vib) was incorporated into the Act after the Board issued its instructions cannot affect either the validity of rule 33 or the force of the instructions issued by the Board of Revenue because neither rule 33 nor the instructions issued were strictly in accordance with section 10(2).
They merely lay down certain just and fair methods of approach to a difficult problem.
The learned Solicitor General appearing for the Revenue at one stage of his arguments contended that the instructions issued 176 by, the, Board of Revenue cannot have any binding effect and those instructions cannot abrogate or modify the provisions of the Act.
.But he did not contend that the Rule 33 is ultra vires the Act.
The instructions, in question merely lay down the manner of applying rule 33.
Now coming to the question as to the effect of instructions issued under section 5 (8) of the Act, this Court observed in Navnit Lal C. Javeri vs K. K. Sen Appellate Asstt.
Commissioner Bombay : (1) "It is clear that a circular of the kind which was issued by the Board would be binding on all officers and persons employed in the execution of the Act under section5(8) of the, Act.
This circular pointed, out to all the officers that it was likely that some of the companies might have advanced loans to their share holders as a result of genuine transactions of loans, and the idea was, not to affect such transactions and not to bring them within the mischief of the new provison." The directions given in that circular clearly deviated from the Provisions of the Act, yet this Court held that the circular was binding on the Income tax Officer.
For the reasons mentioned I above, Civil Appeals Nos. 1161 and 1162 of 1971 are allowed and in substitution of the answer given by the High Court to question No. 2, we answer that question in the affirmative and in favour of the assessee.
The assessee is entitled to its costs in those appeals both in this Court as well as in the High Court costs one set.
Civil Appeals Nos. 2459 and 2460 of 1968 are dismissed as being not maintainable.
In those appeals, there will be no order as to costs.
G.C. C.A.s Nos.
1161 and 1162/71 allowed.
C.A.s Nos.
2459 and 2460/68 dismissed.
| IN-Abs | Under a circular issued in 1962 by the Central Board of Revenue under section 5(8) of the Indian Income tax Act, 1922 the assessing authorities were directed to permit British Shipping Companies to elect to be assessed on the basis of a ratio certificate granted by the U.K. authorities regarding the income or loss and the wear and tear allowance.
In 1964 the Board instructed the taxing authorities to take into consideration the investment allowance granted by U.K. authorities in computing the taxable income of the British Shipping companies.
The appellant was a non resident British ' Shipping company whose ships plied all over the world including Indian waters.
For the years 1960 61 and 1961 62 the Income tax Officer computed it,, total income under the Indian Income tax Act, 1922 by taking into account the ratio certificates issued by the Chief Inspector of Taxes U.K. which were based on the assessments made on the appellant in U.K.
In making assessment the Income tax Officer purported to.proceed on the basis of r. 33 of the Indian Income tax Rules, 1922.
One of the points considered by the Income tax Officer and the Appellate Assistant Commissioner was whether the investment allowance was to be taken into account in assessing the Indian income.
Both of them rejected the contention of the appellant that it should be taken into account.
The tribunal decided in favour of the appellant but the High Court in reference took the oppo site view.
In appeal to this Court by special leave.
HELD : (i) The authorities under the Act proceeded on the basis that the computation of the income of the assessee had to be made on the second of the three bases mentioned in r. 33.
Admittedly the profits of the assessee were not computed in accordance with the provisions of the Act.
That being so, the second basis mentioned in r. 33 could not be applied.
This aspect was brought to the notice of the High Court.
But the High Court refused to consider the same on the ground that both the Revenue as well as the assessee had proceeded before the authorities under the Act on the assumption that the second basis mentioned r. 33 was the relevant basis.
The High Court erred in adopting this approach.
The fact that the authorities under the Act as well as the parties were under a mistaken impression could not alter the true position in law.
[174 H 175 B] (ii) The computation of appellant 's income had to be made either under the first basis viz. the calculation of the profits and gains on such percentage of the turnover accruing or arising as the income tax Officer may consider to, be reasonable, or on the third basis i.e. 'in such other manner as the Income tax Officer may deem suitable '.
[175 C] 169 From the assessment orders it did not appear that the first basis was adopted.
The most appropriate basis under which the income could have been computed was the last basis viz. "in such other manner as the Income tax Officer may deem suitable".
While adopting that basis the Income tax Officer is not required to rigidly apply the various conditions prescribed in the Act in the matter of granting one or the other of the permissible allowances.
He may adopt any equitable basis as long as the basis does not conflict either with r. 33 or with the instructions or directions given by the Board of Revenue.
The power given to the Income tax Officer on that basis is a very wide power.
That power is available not only to the Income tax Officer but also to the Appellate Assistant Commissioner and the Tribunal.
[175 D F] As the Tribunal had determined the tax due from the appellant on the basis of the ratio certificate given by the U.K. authorities, it could not be said that the decision reached by the Tribunal was an unreasonable one.
The Tribunal 's decision was in accord with the instructions of the Board of Revenue.
[175 F] The fact that the proviso to section 10(2) (vib) was incorporated into the Act after the Board issued its instructions could not affect either the validity of r. 33 or the force of the instructions issued by the Board of Revenue because neither r. 33 nor the instructions issued by the Board were strictly in accordance with section 10(2).
[175 G H] Navnit Lal C. Javeri V. K. K. Sen, Appellate Asstt.
Commissioner, Bombay, , applied.
|
Appeals Nos.
1343 and 1473 of 1971.
Appeals by special leave from the judgments and orders dated September 3, 1971 and August 6, 1971 of the Delhi High Court in I.A. No. 1170 of 1971 in Election Petition No. 1 of 1971 and Election Petition No. 2 of 1971.
C. K. Daphtary, M. C. Bhandare and C. M. Oberoi, for the appellant (in C.A. No. 1343 of 1971).
D. D. Chawla, B. P. Nanda and J. B. Dadachanji, for the appellant (in C.A. No. 1473 of 1971).
section V. Gupte, U. M. Trivedi, section N. Marwah, R. P. Bansal,B. R. Sabarwal, N. M. Ghatate and K. C. Dua, for respondent No. 1 (in C.A. No. 1343/71).
C. B. Agarwala, section N. Marwah, B. P. Bansal A. K. Marwah and K.C. Dua, for respondent No. 1 (in C.A. No. 147 3 of 1971) V. P. Joshi, for respondent No. 6 (in both the appeals).Respondent No. 8 appeared in person (in both the appeals).
The Judgment of the Court was delivered by Hegde, J.
These appeals by special leave arise from the decision of Andley J. (Delhi High Court) permitting inspection of the ballot papers polled during the last general election to the Lok Sabha held last March in the South Delhi Constituency and the Delhi Sadar Constituency.
179 The appellants are the successful candidates.
They con tested in the two constituencies mentioned earlier on behalf of the ruling Congress party.
Their symbol was cow and calf.
Their nearest rivals were the Jan Sangh nominees whose symbol was Deepak.
The appellants were declared elected.
The unsuccessful Jan Sangh candidates have challenged the validity of the election of the appellants.
The main ground pleaded in support of the election petition was that the ruling party had rigged the election.
The process adopted in rigging the election, according to the election petitioners is a somewhat complicated one.
That process was explained to us thus : Millions of ballot papers were chemically treated; the symbol of the congress candidates in those ballot papers was mechanically stamped by using invisible ink.
As a result of the chemical treatment of those ballot papers, the mark put at the time of the polling disappeared after a few days and the stamping mechanically placed earlier emerged.
The suggestion was that this was done as a result of a conspiracy between the ruling party and the Election Commission.
To carry out the design in question, we were told that quite contrary to the earlier practice, the Election Commission instructed the Returning Officers to forward to Delhi a substantial number of ballot papers of each constituency, ostensibly for the purpose of scrutiny but really for the purpose of carrying out the design mentioned earlier, According to them in place of the ballot papers received, the Returning Officers were supplied with the ballot papers chemically treated and mechanically stamped.
Those ballot papers formed a part of the ballot papers used at the election.
It was further said that in furtherance of the above design, the Eelection Com mission made two alterations in the practice followed earlier.
Firstly it provided a larger interval between the date of polling and the date of counting and secondly by precipitate alteration of a rule, it provided for mixing up of the ballot papers of various.
booths and rotating them in drums.
We were further told that these innovations were introduced so that the chemical treatment of the ballot papers may have the desired effect.
The election petitioners do not claim to have any direct evidence to support their version.
They seek to prove their version primarily on the basis of the examination of the ballot papers.
But to probabilise their version, they have put forward various circumstances.
They have filed affidavits of two persons who claim to have been present at the time of counting.
They supported the allegations in the petitions seeking inspection regarding the facts said to have been observed at the time of counting In those petitions it was alleged that at the time of the counting, it was noticed that the colour of a large number of ballot papers 180 was different from the colour of the other ballot papers, stamping of, the symbols in those ballot papers was uniform, at an identical spot in each of those ballot papers, the stamps were uniform in density and they looked bright and fresh.
Those features were quite dissimilar to those found in the other papers including those containing votes in favour of the defeated candidates.
The election petitioners in this connection referred to the rumours prevailing about the rigging of the election, the landslide victory of the ruling party which according to them was wholly unexpected and finding of huge quantity of unused ballot papers in a godown in Chandigarh.
The, material facts supporting the allegation of rigging are those said to have been observed at the time of the counting.
In addition they also pointed out the changes made by the Election Commission in the counting procedure and tried to draw an adverse inference therefrom.
Whether the, observations said to have been made are true or whether they were merely the figment of imagination of some fertile brains has yet to be examined.
The only effective way of checking the correctness of those allegations is by inspecting the ballot papers.
We are free to admit that we are unable to comprehend the theories propounded by the election petitioners.
But we are conscious of our limitations.
The march of science in recent years has shown that what was thought to be impossible just a few years back has become an easy possibility now.
What we would have thought as wild imaginations some years back are now proved to be realities.
Hence we are unable to reject the allegations of the election petitioners without scrutiny.
We shall accept nothing and reject nothing except on satisfactory proof.
We are approaching the allegations made in the election petition in that spirit.
The learned trial judge did not hold that the allegations made by the election petitioners were not bona fide allegations.
We see no reason to come to a contrary conclusion.
He took the view that those allegations were of serious character and the material facts stated in suport of those allegations were such as to call for investigation into the truth of those allegations.
We are of the same opinion.
The allegation that our electoral process has been fouled is a very serious allegation, That allegation is a challenge to the integrity and impartiality of the Election Commission.
Those allegations if believed are sure to undermine the confidence of our people in our democratic institutions.
Herein we are not merely concerned about the validity of elections in two constituencies.
They are no doubt important but in the context of things their importance pales into insignificance.
What is more important is the survival of the very democratic institu tions on which our way of life depends.
181 It was said, on behalf of the appellants that those allegations were nothing but propaganda stunts and they were wholly devoid of truth.
If that is so, it is in public interest that the falsity of that propaganda should be exposed.
The confidence in our electoral machinery should not be allowed to be corroded by false propoganda.
It is of utmost importance that our electorate should have full confidence in the impartiality of the Election Commission.
Even the very best institutions can be maligned.
In all countries, at all times, there are gullible persons.
The effectiveness of an institution like the Election Commission depends on public confidence.
For building up public confi dence, public must be given the opportunity to know the truth.
Any attempt to obstruct an enquiry into the allegations made may give an impression that there might be some truth in the allegations made.
From the records we gather that the allegations with which we are concerned are.
being made in several places in this country with some persistency.
It is not unlikely that a section of our people, rightly or wrongly, have persuaded themselves to believe in those allegations.
Such a situation should not be allowed to remain.
The strength of a democratic society depends on the knowledge of its ordinary citizens about the affairs of the institutions created to safeguard their rights.
It is dangerous to, allow them to feed themselves with rumours.
It was urged on behalf of the appellants that the scrutiny of ballot papers is a very serious thing; the secrecy of the ballot is of utmost importance; except on very good grounds, inspection of ballot papers should not be allowed and the petitioners have failed to make out a case for inspection.
It was further urged that at the time of counting, the attention of.
the Returning Officer was not invited to the strange features mentioned earlier nor was the acceptance of any of those ballot papers objected to on the ground that they were spurious ballot papers.
According to the election petitioners, they did invite the attention of the Assistant Returning Officer to the various features mentioned by them.
It is not necessary for us to go into that controversy at this stage.
Assuming that the persons concerned did not inform the Assistant Returning Officer of what they had observed, it does not estop the Election petitioners from taking the pleas in question in the election petitions though undoubtedly it is a circumstance to be considered on the question of the value to be attached to the allegations made regarding the observations said to have been made at the time of the counting.
Assuming that the conclusion reached by the election petitioners was the result of not merely observing certain facts at the time of the counting but on the basis of various circumstances, some of 182 which came to their notice before the election, some at the time of the counting and some after the counting, that by itself is not sufficient to brush aside the allegations.
It is true that merely because someone makes bold and comes out with a desperate allegation, that by itself should not be a ground to attach value to the allegation made.
But at the same time serious allegations cannot be dismissed summarily merely because they do not look probable.
Prudence requires a cautious approach in these matters.
In all these matters, the court 's aim should be to render complete justice between the parties.
Further, if the allegations made raise issues of public importance.
greater care and circumspection is necessary.
These cases have peculiar features of their own.
No such case had come up for decision earlier.
Hence decided cases can give little assistance to us.
In a matter like allowing inspection of ballot papers, no rigid rules have been laid down, nor can be laid down.
Much depends on the facts of each case.
The primary aim of the courts is to render complete justice between the parties.
Subject to that overriding consideration, courts have laid down the circumstances that should weigh in granting or refusing inspection.
Having said that much let us now examine the cases read to us on behalf of the appellants.
In Ram Sewak Yadav vs Hussain Kamil Kidwai and ors.(1), ,one of the defeated candidates challenged the election of the appellant, the returned candidate, inter alia, on the ground that there had been improper reception of invalid votes and rejection of valid notes at the time of counting and that on a true count he would have received a majority of valid votes.
Hence he claimed that he was entitled to be declared duly elected.
He claimed that by inspection of the ballot papers, he will be able to establish his case.
He averred that on the aforesaid allegations, the Tribunal was bound to grant an order for inspection, because he had tendered the sealed boxes of ballot papers in evidence, and on that account all the ballot papers were part of the record.
The Tribunal in its order stated that nothing was brought to its notice which would justify granting an order for inspection.
It further observed "if in future from the facts that may be brought to the notice of the Tribunal, it appears that in the interests of justice inspection should be allowed, necessary orders allowing an inspection could always be passed".
Thereupon another application was submitted by the election petitioner asking for inspection but no additional materials were placed before the Tribunal and no oral evidence was led at the trial.
The Tribunal rejected the application for inspection.
On appeal the High Court (1) 183 held that ballot papers had actually been called for from the Returning Officer and were before the Tribunal and there was nothing in the Code of Civil Procedure which prevented the Tribunal from allowing inspection of the ballot papers in the custody of the Court.
In the opinion of the High Court the Tribunal rejected the application for inspection without any adequate reasons.
On a further appeal, the question for determination before this Court was whether the election Tribunal erred in declining to grant an order for inspection of the ballot papers which had been, pursuant to an order in that behalf, lodged before the Tribunal in sealed boxes by the Returning Officer.
This Court ruled that by the mere production of the sealed boxes, the ballot papers did not become part of the record and they were not liable to be inspected unless the Tribunal was satisfied that such inspection was in the circumstances of the case necessary in the interests of justice.
The ratio of that decision is that the inspection of ballot papers should be allowed only when the court thinks that it is necessary in the interests of justice to do so.
In that case this Court did not lay down any hard and fast rule as to when an inspection of the ballot papers can be allowed.
The next case relied on is, the decision of this Court in Dr. Jagjit Singh vs Giani Kartar Singh(1).
Therein the question of inspection of ballot papers was dealt with in paragraph 31 of the judgment.
This is what the Court observed : "The true legal position in this matter is no longer in doubt.
Section 92 of the Act which defines the powers of the Tribunal, in terms, confers on it, by cl.
(a), the powers which are vested in a Court under the Code of Civil Procedure when trying a suit, inter alia, in respect of discovery and inspection.
There fore, in a proper case, the Tribunal can order the inspection of the ballot boxes and may proceed to examine the objections raised by the parties in relation to the improper acceptance or rejection of the voting papers.
But in exercising this power the Tribunal has to bear in mind certain important considerations.
Section 88 (1) (a) of the Act requires that an election petition shall contain a concise statement of the material facts on which the petitioner relies, and in very case, where a prayer is made by a petitioner for the inspection of the ballot boxes, the Tribunal must enquire whether the application made by the petitioner in that behalf contains a concise statement of the material facts on which he relies.
Vague or general allegations that valid votes were improperly rejected, or invalid votes were (1) A.I.R. 1966 S.C. 773.
184 improperly accepted would not serve the purpose which section 8 8 (1) (a) has in mind.
An application made for the inspection of ballot boxes must give material facts which would enable the Tribunal to consider whether in the interests of justice, the ballot boxes should be inspected or not.
In dealing with this question, the importance of the secrecy of the ballot papers cannot be ignored, and it is always to be borne in mind that the statutory rules framed under the Act are intended to provide adequate safeguard for the examination of the validity or invalidity of votes and for their proper counting.
It may be that in some cases, the ends of justice would make it necessary for the Tribunal to allow a party to inspect the ballot boxes and consider his objections about the improper acceptance or improper rejection of votes tendered by voters at any given election but in considering the requirements of justice, care must be taken to see that election petitioners do not get a chance to make a roving or fishing enquiry in the ballot boxes so as to justify their claim that the.
returned candidate 's election is void.
We do not propose to lay down any hard and fast rule in this matter indeed, to attempt to lay down such a rule would be in expedient and unreasonable.
" The above observations succintly bring out the circumstances under which an inspection can be ordered.
The overriding test laid down there is the interests of justice.
Facts naturally differ from case to case.
Therefore it is dangerous to lay down any rigid test in the matter of ordering an inspection.
It is no doubt true that a judge while deciding the question of inspection of the ballot papers must bear in mind the importance of the secrecy of the ballot papers.
The allegations in support of a prayer for inspection must not be vague or indefinite; they must be supported by material facts and prayer made must be a bona fide one.
If these conditions are satisfied, the court will be justified in permitting inspection of ballot papers.
Secrecy of ballot is important, but doing justice is undoubtedly more important and it would be more so, if what is in stake is the interests of the society.
The last decision relied on by the appellant is Jitendra Bahadur Singh vs Krishna Behari and ors.
To this decision one of us was a party.
There an elector (1st respondent in that appeal) challenged the election of the appellant to the Lok Sabha.
He alleged, inter alia, in the election petition that there were improper rejection and improper reception of votes.
In the (1) ; 185 Schedule to the petition, he gave some figures of votes improperly rejected,, as well as accepted.
In the verification to the election petition, he stated that the concerned allegations were made on the basis of information received from his workers and counting agents.
It was, however, not stated who those persons were and what was the basis of their information.
No written objection was filed during the counting either to the acceptance or to the rejection of any vote.
Nor was any application made for re counting.
Before the trial of the election petition, the election petitioners filed an application to inspect the ballot papers.
In the affidavit filed in support of the petition, the election petitioner claimed to have been present on one of the days when counting went on and thus came to know about the improper acceptance and rejection of ballot papers.
This was not a claim put forward in the election petition.
The High Court allowed the inspection and permitted the scrutiny solely on the basis of the allegations in the election petition and the affidavit filed by the petitioner.
This Court reversing the decision held that on the facts established, the High Court was not justified in allowing the inspection of the ballot papers.
This Court came to the conclusion that relevant allegations were vague and indefinite; they were not supported by material facts and there was no basis for coming to the conclusion that inspection of the ballot papers was necessary for doing justice between the parties.
At the hearing of the appeals we enquired with the Counsel for the appellants whether the allegation regarding the chemical treatment of the ballot papers can be proved in any other manner than, by inspecting the ballot papers.
We got no satisfactory reply to our querry.
In the very nature of things the allegations in question can be proved or disproved only by inspecting the ballot papers.
The next question is whether it is necessary to inspect all the ballot papers as has been ordered by the trial judge.
We think that a general inspection should not be permitted, until there is satisfactory proof in support of those allegations.
For finding out whether there is any basis for those allegations, it would be sufficient if some ballot papers, say about 600 out of those polled by each of the returned candidates are selected from different bundles, or tins in such a way as to get a true picture.
He may also select about 200 ballot papers cast in favour of the election petitioners for comparison.
All the selected ballot papers at the first instance be examined by the learned judge with the assistance of the Counsel for the parties as well as the parties.
If the learned judge comes to the conclusion that the matter should be further probed into, he may take evidence on the points in issue including evidence of expert witnesses.
Thereafter it is open to 13 L 256 Sup CI/72 186 him to direct or not to direct a general inspection of the ballot papers.
But in doing so he 'will take care to maintain the secrecy of the ballot.
Subject to the directions given above, these appeals are dismissed but in the circumstances of the case we make no order as to costs in these appeals.
V.P.S. Appeals dismissed.
| IN-Abs | In the last general election to the Lok Sabha the appellants were declared elected and the respondents, who were the unsuccessful candidates challenged the validity of the election on the ground that the ruling party had rigged the election.
According to the respondents many ballot papers were chemically treated so that the mechanically stamped marks in favour of the successful candidates by using invisible ink emerged and the mark actually put at the time of polling disappeared after a few days.
It was alleged that this was done as a result.
of conspiracy between the ruling party and the Election Commission, and that the Election Commission took certain unusual steps for facilitating the substitution of chemically treated ballot papers.
There was no direct evidence of the allegations and the respondents sought to probabilise their version by alleging that the colour of a large number of ballot papers was different from the colour of the original ballot papers, and that at the time of counting, it was noticed that the marking was uniform and at an identical spot in each of the ballot papers in favour of the appellants.
The trial Judge permitted inspection of all the ballot papers polled.
In appeal to this Court it was contended that : (1) that the allegations of the respondent were propaganda stunts wholly devoid of truth; (2) that the attention of the Returning Officer was not invited to the alleged strange features at the time of counting, and (3) that the scrutiny of ballot papers could not be allowed as it violates the secrecy of the ballot.
Dismissing the appeals, HELD: (1) Assuming that the allegation made was mere propaganda it was in the public interest that the allegations are required into the propaganda exposed.
Merely because allegations made are difficult to accept they cannot be dismissed summarily.
In all such matters the court 's aim should be to render complete justice between parties.
If the allegations made raise issues of public importance greater care and circumspection is necessary.
The allegation that the electoral process has been fouled is a very serious allegation and is a challenge to the integrity and impartiality of the Election Commission and a challenge to the survival of democratic institutions.
[180 G H; 181 A B; 182 B C] (2) Assuming that the persons concerned did not inform the Returning Officers of what they observed at the time of counting, it does not estop the respondents from taking the pleas in the election petitions.
It is only a circumstance to be considered on the question of value to be attached to the allegation.
Even assuming that the respondents made the allegations as a result of not merely observing certain facts at the time of counting but on the basis of various rumours, that by itself is not sufficient to brush aside the allegations.
[181 G H] (3) No rigid rules have been laid nor can he laid down for allowing inspection of ballot papers.
The overriding test is the interests of justice, depending on the facts of each case.
A judge while deciding the question 178 of inspection of ballot papers must bear in mind the importance of the secrecy of ballot.
Secrecy of ballot is important but doing justice is more important and it would be more so if what is at stake is the interests of society.
The allegations in support of the prayer for inspection must not be vague or indefinite.
They must be supported by material facts and the prayer made must be a bona fide one.
Further, the allegations regarding the chemical treatment of ballot papers in the present case, cannot be proved in any other manner than by inspection.
[182 C D; 184 E G] But the High Court erred in permitting a general inspection of the ballot papers.
It would be sufficient if some substantial number of ballot papers polled by each of returned candidates are selected from different bundles and compared with the ballot papers cast in favour of the respondents.
If the trial Judge thereafter comes to the conclusion that the matter should be further probed into he may take evidence on the points in issue including the evidence of expert witnesses, and thereafter, decide if it was necessary direct a general inspection of the ballot papers.
[185 F H] Ram Sewak Yadav vs Hussain Kamil Kidwai & ors.
, , Dr. Jagjit Singh vs Giani Kartar Singh, A.I.R. and Jitendra Bahadur Singh vs Krishna Behari & Ors., ; , referred to.
|
Appeal No. 1768 of 1969.
Appeal by special leave from the judgment and order dated October 8, 1968 of the Mysore High Court in Writ Petition No. 657 of 1968.
189 M. C. Setalvad, Ram Punjwani and section P. Nayar, for the appellants.
R. B. Datar and M. section Narasimhan, for the respondent.
M. K. Ramamurthi, Shyamala Pappu and J. Ramamurthi, for intervener No. 1.
section Ramasubramanian and J. Ramamurthi, for intervener No.2.
The Judgment of the Court was delivered by Vaidialingam, J.
In this appeal, by special leave, the question that arises for consideration is regarding the validity of the new Note substituted in place of the old Note on December 23, 1967 to cl.
(b) of rule 2046 (F.R. 56) of the Indian Railway Fundamental Rules.
The High Court by its judgment and order, under appeal, dated October 8, 1968, has struck down the new Note as dis criminatory and violative of article 14 of the Constitution.
The respondent was originally an employee of the Madras and Southern Mahratta Railway Company (hereinafter to be referred as the Company) having joined the service on August 16, 1927 as Clerk Grade 1.
His date of birth, there is controversy, was April 15, 1910.
The Company was amalgamated with the Indian Railway Administration in the year 1947 and on .such amalgamation, the respondent became the employee of the Indian Railway Administration.
There is also no controversy That he came within the classification of a "ministerial railway servant" within the meaning of that expression, occurring in rule 2046.
Rule 2046 deals with retirement of a railway servant At the time of amalgamation, under cl.
(1) of the said rule, the date of retirement of a railway servant, other than a ministerial railway servant was the date on which he attained the age of 55 years.
It was also provided therein that the said railway servant, ,after attaining the age of retirement, may be retained in service with the sanction of the competent authority on public ground to be recorded in writing.
But there was a prohibition regarding retention of such a railway servant after the age of 60 years except in very special circumstances.
Clause (2) of the said rule, which deals with a ministerial railway servant, under which category the respondent falls, at the time of amalgamation was as follows : "2046 (2) (a) A ministerial servant, who is not governed by sub clause (b), may be required to retire at the age of 55 years, but should ordinarily be retained in service, if he continues efficient up to the age of 60 190 years.
He must not be retained after that age except in very special circumstances, which must be recorded in writing, and with the sanction of the competent authority.
(b) A ministerial servant (i) who has entered Government service on or after the 1st April, 1938, or (ii) who being in Government service on the 31st March, 1938 did not hold a lien or a suspended lien on a permanent post on that date.
shall ordinarily be required to retire at the age of 55 years.
He must not be retained after that age except on public grounds which must be recorded in writing,, and with the sanction of the competent authority and he must not be retained after the age of 60 years except in very special circumstances.
" It will be noted that under sub clause (a), quoted above, a ministerial servant, who is not governed by sub clause (b) may be required to retire at the age of 55 years; but if he continues to be efficient, he should ordinarily be retained in service upto the 'date of 60 years.
Retention in service after the age of 60 years, can only be under very special circumstances, to be recorded in writing and with the sanction of the competent authority.
There was a further special provision made under cl.
(b) in respect of a ministerial servant who had entered Government service on or after April 1, 1938 or being in Government service on that date, did not hold a lien or a suspended lien on a permanent post oh that date.
On December 5, 1962, the Railway Board addressed a com munication to the General Managers of All Indian Railways that the Government were considering the question for some time whether the age of compulsory retirement of railway servants should be raised above 55 years.
It is further stated that the President is pleased to direct that the age of compulsory retirement of railway servants should be 58 years subject to the three exceptions mentioned in the order.
The only relevant exception is Exception No. 1 relating to ministerial railway servants, which was as follows : "(i) The existing rule 2046 (F.R. 56) (2)(a) RII, under which ministerial railway servants who held a lien or suspended lien on a permanent post on 31st March, 1938 are to be retained in set vice upto the age 191 of 60 years subject to their continuing to be efficient and physically fit after attaining the age of 55 years, will remain in force.
It will be seen from the decision,of the Government, as com municated in the above letter, that the age of retirement of railway servants was raised from 55 to 58 years.
But this was subject to the restriction regarding the continuance of a ministerial servant after 55 years upto the age of 60 years as provided for under sub clause (b) of cl.
(2) of rule 2046.
On January 11, 1967, the old rule 2046 as amended in 1962 was substituted by the new rule.
The new rule consisted of four clauses, but we are not concerned with clauses (c) and (d) The material part of the said rule relevant to be noted are clauses (a) and (b) together with the note to clause (b) which ran as follows : "2046 (FR. 56) (a) Except as otherwise provided in this rule, every railway servant shall retire on the day he attains the age of fifty eight years.
(b) A ministerial railway servant who entered Government service on or before the 31st March, 1938 and held on that date (i) a lien or a suspended lien on a permanent post, or (ii) a permanent post in a provisional substantive capacity under Clause (d) of Rule 2008 and continued to told the same without interruption until he was confirmed in that post,shall be retained in service till the day he attains the age of sixty years.
NOTE : For the purpose of this Clause, the expression "Government Service" include service rendered in ex company,, and ex State Railways, and in a former provincial Government." Two aspects broadly emerge from the above new rule : (a) every ministerial railway servant who had entered Government service on or before March 31, 1938 and who satisfied the conditions mentioned in sub clause (i) or (ii) of clause (b) had a right to continue in service till he attained the age of sixty years; and (b) under the Note, the expression "Government Service" in clause (b) takes in service rendered in ex company, ex State Railways and in a former provincial Govern 192 ment.
There is no controversy that the respondent held a permanent post in the Company on March 31, 1938.
Therefore,, under this new rule, he would be entitled to continue in service till he attained the age of sixty years, as provided in cl.
(b) read with the Note thereto.
On December 12, 1967, the Note to cl.
(b) of rule ' 2046 defining the expression "Government Service" as per the order dated January 11, 1967 was deleted, and a new Note was substituted in its place.
The order dated December 23.
1967 together with the new Note is as follows : "For the existing note, substitute the following For the purpose of this clause the expression "Government Service" includes service rendered in a former provincial government and in ex.
Company and ex.
State Railways, if the rules of the Company or the State had a provision similar to Clause (b) above.
" From the new Note, extracted above, it will be seen that the definition of the expression "Government Service" was changed.
The effect of the new Note, so far as the respondent is concerned, is that whereas he was entitled to continue in service upto 60 years, as per clause (b) read with the note thereto under rule 2046 as substituted on January 11, 1967, now he can get service upto 60 years only if the Company had a provision similar to cl.
(b) of rule 2046.
There is no dispute, that under the service conditions applicable to the respondent, when he was an employee of the Company, he had no right to continue in service till he attained the age of sixty years.
On the other hand, under the service conditions of the Company he had to retire at the age of 55 years.
It appears, that after the introduction of the new rule 2046 on January 11, 1967, the Divisional Accounts Officer, Hubli, passed an order on March 31, 1967 that the respondent was entitled to continue in Office till he attained the age of 60 years.
But after the new Note to cl.
(b) to rule 2046 was substituted on December 23, 1967, the Divisional Accounts Officer, Hubli, passed an order on January 17, 1968 to the effect that the respondent is to retire from service on April 14, 1968 on which date he would be attaining the age of 58 years.
The said order also states that this action was being taken in view of the new Note substituted on December 23, 1967 to cl.
(b) of rule 2046.
The respondent filed on March 6, 1968 in the Mysore High Court, Writ Petition No. 657 of 1968 challenging the legality and validity of the order dated January 17, 1968 retiring him from service with effect from April 4, 1968.
In the writ petition 193 he had referred to his previous service in the Company and to the latter being amalgamated with the Indian Railway Administration in 1947.
According to him, after such amalgmation he has become a ministerial railway servant under the Indian Railway Administration and all the rules applicable to the employees of the latter became applicable to him.
In particular, he pleaded that he was entitled to continue in service, until he attained the age of sixty years, as per the new rule 2046 introduced on January 11, 1967, as he satisfies all the conditions prescribed under cl.
(b) thereof.
He particularly attacked the new Note to cl.
(b) substituted on December 23, 1967 as discriminatory and violative of article 14 of the Constitution.
According to him, the members of the Indian Railway Service, similarly situated like him, will be.
entitled to continue in service till 60 years, whereas that right has been denied, to persons like him, under the new Note.
He also referred to the order passed on March 31, 1967 by the Divisional Accounts Officer, Hubli in and by which it was directed that he was entitled to continue in service till 60 years.
According to the respondent, the Railway Administration was not entitled to go back on this order.
On these grounds, the respondent challenged the validity of the order directing him to retire on the basis of the new Note.
The appellant contested the writ petition on the ground that the order dated March 31, 1967 was passed on the basis of the rule 2046, read with the Note, as it existed on January 11, 1967 But the position was changed by the deletion of the original Note to cl.
(b) and its substitution by the new Note on December 23, 1967.
The appellant claimed that the service conditions of persons, like the respondent, have always been different from those serving under the Railway Administration and that by the introduction of the new Note, no discrimination has been practised on any officer.
On the other hand, according to the appellant, the new Note only gave effect to the conditions of service, which obtained in the Company, where the respondent originally joined service.
The appellant further pleaded that the new Note does not violate article 14 of the Constitution.
The High Court, by its judgment and order dated October 8, 1968 has accepted the contentions of the respondent and held that the new Note substituted to cl.
(b) of rule 2046 on December 23, 1967 is discriminatory and violative of article 14 of the Constitution.
In this view, the said Note was struck down.
In consequence, the High Court set aside the order dated January 17, 1968 and gave a declaration that the respondent was entitled to continue in service till he attained the age of sixty years.
Mr. M. C. Setalvad, learned counsel for the appellant, Rail way Board, has strenuously attacked the finding of the High 194 Court that the new Note, substituted on December 23, 1967 to cl.
(b) is discriminatory and violative of article 14 of the Constitution.
On the other hand, he urged that a distinction has always been made in the case of ministerial railway servant who is governed by cf.
(b) and those who are not so governed by that clause of rule 2046.
Different provisions regarding the age of retirement have been provided in respect of those two classes of ministerial railway servants.
The new Note, Mr. Setalvad pointed out only gives recognition to the practice that has been obtain ing in respect of the ministerial railway servants under their previous employers.
He further pointed out that the Note to cf.
(b) of rule 2046, incorporated on January 11, 1967 gave the benefit of the expression "Government Service ' 'to persons, like the respondent, who have previously been working in ex Company, provincial Government or ex State Railways.
The new Note keeps the same categories of employees within the expression "Government Service", but adds a qualification that in order to have the benefit of a longer period of service, they should have had such benefit under their previous employers.
Mr. Setalvad further pointed out that a government servant has no right to continue in service till the age of 60 years and that the option to so continue him upto that age, vests exclusively within the discretion of the authority concerned.
For this proposition the counsel relied on the decision of this Court in Kailash Chandra vs Union of India(1) interpreting clause (2) of rule 2046 as it existed prior to the amendment in 1962.
In any event, Mr. Setalvad pointed out, that the officers who had worked under a former provincial Government, Ex Company or Ex State Railways and who have been dealt with under the new Note substituted on December 23, 1967 form a class by themselves and therefore there is a reasonable classification of such officers, and that satisfies the requirement of article 14 of the Constitution.
On all these grounds, Mr. Setalvad urged that the new Note is not discriminatory and it does not violate article 14 of the Constitution.
Mr. R. B. Datar, learned counsel for the respondent and M/s M. K. Ramamurthi and J. Ramamurthi, who appeared for the two interveners have supported the reasoning of the High Court for holding that article 14 is violated by the new Note to cl.
(b) of rule 2046.
We are of the opinion that the contentions of Mr. Setalvad cannot be accepted.
No doubt, the counsel is justified in his contention only to this limited extent, namely, that under cl.
(2) of rule 2046, as it existed prior to its amendment on January 11, 1967 that ministerial railway servant falling under that clause, has no right to continue in service beyond the age of 55 and that (1) ; 195.
the appropriate authority has the option to continue him in service after his attaining the age of 55 years, subject to the condition that the servant continues to be efficient.
This Court in Kailash Chandra 's case(1) had an occasion to consider rule 2046 (2) (a) as it originally stood.
It was held that the ministerial railway servants falling under the said clause may be compulsorily retired on attaining the age of 55 years.
But when the servant is between the age of 55 and 60 years, the option to continue him in service, subject to the servant continuing to be efficient, exclusively vests with the appropriate authority.
It was further laid down that the authority is not bound to retain a railway servant after the age of 55 years, even if the continues to be efficient.
It was.
further emphasised that the rule gave no right to a ministerial railway servant to continue in service beyond the age of 55 years.
It is in view of the above principles laid down by this Court,.
we have observed, earlier, that Mr. Setalvad 's contention in respect of the rule 2046, as it originally stood, is well founded.
But this Court, in the above decision, had no occasion to consider the problem that now arises, by virtue of the new Note added to, cl.
(b) of rule 2046.
There is no controversy that after the amalgamation of the Company with the Indian Railway Administration, the respondent has become an employee of the latter.
If so, in our opinion, the respondent is entitled to be given the same rights and privileges that are available to the other emplo yees employed by the Indian Railway Administration.
That exactly was the position under the rule 2046, as it originally stood; after its amendment on December 5, 1962 increasing the age of retirement to 58 years; as also under the new rule 2046, incorporated on January 11, 1967.
All these rules upto and inclusive of January 11, 1967 treated the former employees of the Ex Company, Ex State Railways and former provincial Governments, who were amalgamated with the Indian Railway Administration in 1947, on a par the other original employees of the Indian Railway Administration.
In fact, the Note to cl.
(b) of rule 2046 incorporated on January 11, 1967, reinforced this position, by making it clear that the expression "Government Service ' 'in cl.
(b) will include service under the various employers referred to therein.
Mr. Setalvad placed reliance on the fact that rule 2046, as it existed upto and inclusive of January 11, 1967, dealt differently with the age of retirement in respect of : (i) a railway servant coming under cl.
(a) and (ii) a ministerial railway servant coming under cl.
He further pointed out that even in respect of a ministerial railway servant coming under cl.
(b), the latter, in order to be eligible to have a longer age of retirement should be one who complies with the conditions mentioned there 1. ; 196 in.
These conditions are as per el.
(b) existing on January 1 1, 1967, that the officer should have entered government service on ,or before March 31, 1938.
The said officer should also have the ,one or the other of the qualifications mentioned in sub clauses (i)and (ii).
That is, according to the learned counsel, if a ministerial railway servant has not entered government service before March 31, 1938, he will not be eligible for the longer age ,of retirement.
These circumstances will clearly show, according to Mr. Setalvad that the rule has been through out maintaining a distinction even amongst the ministerial railway servants working under the Indian Railway Administration.
This argument, may on the face of it appear to be attractive; but in our opinion, it cannot be accepted.
The point to be noted is that though a distinction has been made in the rule between a railway servant coming under el.
(a) and a ministerial railway servant coming under el.
(b), those clauses will apply uniformly to all members of the Indian Railway Administration depending upon whether .they are railway servants coming under el.
(a) or a ministerial railway servant coming under el.
(b), as the case may be.
To all railway servants coming under el.
(a) the age of retirement is the same.
Similarly to all ministerial railway servants coming under el.
(b), the age of retirement is again the same.
Further .if a ministerial railway servant does not satisfy the requirements of cl.
(b) he will not be eligible to get the extended period Of retirement.
That again will apply to all ministerial railway servants, who do not satisfy the requirements of el.
We are emphasising this aspect to show that no distinction has been made either in el.
(a) or el.
(b) regarding the uniform application in respect of the age of retirement to the officers mentioned ,therein and who are governed by those clauses.
That is, there is no inter se distinction made.
The distinction made in el.
(b) regarding the ministerial railway servants who entered government service on or before March 31, 1938 is again of uniform application.
That rule only makes a broad distinction between the ministerial railway servants who entered government service on or before March 31, 1938 and who entered government service after that date.
As per the Note to el.
(b) to rule 2046, incorporated on January 11, 1967, the respondent is a person who has entered government service on or before March 31, 1938 .and satisfies also the requirements under sub cl.
(ii) or el.
(b) Similarly, another railway servant may have entered government service under the Indian Railway Administration on or before March 31, 1938.
He also, under el.
(b) will be a ministerial railway servant who has entered government service on or before March 31, 1938 and if he satisfies one or other of the conditions mentioned in sub clauses (i) and (ii) of el.
(b), he will be entitled to continue in service till 60 years.
That means both persons, like the respondent, and the officers who have straight 197 joined the service under the Indian Railway Administration, prior March 31, 1938 and who satisfy the requirements under sub clause (i) or sub clause (ii) of clause (b) will be equally entitled continue in service till they attain the age of 60 years.
These acts clearly show that cls.
(a) and (b) of rule 2046 had uniform application to all the employees of the Indian Railway Administration.
Coming to the new rule 2046, incorporated on January 11, 1967, the conditions of service of persons, like the respondent, have been better crystalised.
Read with the Note, under cl.
(b), the respondent is a ministerial railway servant, who had entered government service on or before March 31, 1938.
By virtue of cl.
(b), he was entitled to be retained in service till he attains the age of 60 years.
It is to be noted that there is no option left with the employer, but to retain such a ministerial railway servant upto 60 years.
In other words, if the ministerial railway servant satisfies the requirements of cl.
(b), he is, as of right, entitled to be in service, till he attains the age of 60 years.
Similarly, cl.
(a) introduced on January 11, 1967, gives a right to a railway servant to continue in office, till he attains the age of 58 years.
Here again, there is no option vested with the authorities except to continue him till that age.
The option to extend the period of service of the officers mentioned in cls.
(a) and (b) is dealt with under sub,, clauses (d) and (c) respectively, which we have not quoted.
Sub clauses (c) and (d) deal with the granting of extension of service beyond the period mentioned in sub clauses (b) and (a).
The option to extend the service beyond the period mentioned in sub causes (a) and (b) may be with the authorities; but they have no voice in a railway servant coming under cl.
(b), continuing upto 60 years.
That the authorities also understood the position in the manner mentioned above, is clear from the order dated March 31, 1967, of the Divisional Accounts Officer, Hubli declaring the right of the respondent to continue in service upto 60 years.
in fact, this order was passed in consequence of the new rule 2046 substituted on January 11 1967.
Therefore, from what is stated above, it is clear that upto and inclusive of January 11, 1967, no distinction inter se apart from that made by clauses (a) and (b), between the officers of the Indian Railway Administration, from whatever source they may have come, was made.
Even at the risk repetition, we may state that under cl.
(b) of rule 2046, as introduced on January 11, 1967, the original employees of the Indian Railway Administration, as well as persons, like the respondent, who came into the Indian Railway Administration in 1947, were both entitled, as of right, to continue in service till they attained the age of 60 years.
This position admittedly has been changed, by altering the definition of the 198 ,expression "Government Service" by the new Note to cl.
(b) introduced on December 23, 1967.
Under that Note, it cannot be gain said, that a distinction has been made between the original employees of the Indian Railway Administration, and the new ,employees, who were amalgamated with the Indian Railway Administration in 1947, but who had their previous service, with either a former provincial Government, or an Ex Company or Ex State Railways.
In the case of such employees, the benefit ,of the extended age of retirement, that has been given to the other employees of the Indian Railway Administration, was made available, only if the new 'employees had the same benefit under their previous employers.
Therefore, the position is that on and after December 23, 1967, though all the employees are under the Indian Railway Administration, there will be two sets of rules relating to the age of retirement, depending upon the fact whether they were in the original employment of the Indian Railway Administration or on the fact of their coming from one or , the ,other of the employers mentioned in the new Note.
It is in consequence of the new Note, that the order dated January 17.
1968 was issued by the Divisional Accounts Officer, Hubli, that the respondent has to retire at the age of 58 years, on April 14, 1968.
The question is whether the distinction made under the new Note to cl.
(b) substituted on December 23, 1967 valid? In our opinion, such a rule, which makes a distinction between the employees working under the same Indian Railway Administration is not valid. The position, after the new Note was added, is that the employee who had through out been under the Indian Railway Administration is entitled to continue in service till he attains the age of 60 years; whereas the persons, like the respondent, who are also the employees of the Indian Railway Administration, but whose previous services were with the Company, will have to refire at the age of 58 years, because a provision similar to cl.
(b) did not exist in the service conditions of the Company.
Discrimination, on the face of it, is writ large in the new Note, which is under challenge.
Mr. Setalvad, no doubt, urged that the ministerial railway servant, who was originally employee of a Company, Ex State Railway or a former Provincial Government dealt with under the new Note are a class by themselves, and, therefore, there is a reasonable classification.
Once the employees dealt with under the new Note, have taken up service under the Indian Railway Administration and have been treated alike upto January 11, 1967, it follows, in our opinion, that they cannot again be classified separately from the other employees of the lndian Railway Administration.
Therefore, we are not inclined to accept the 199 contention that the classification of these officers, under the new Note, is a reasonable classification and satisfies one of the essential requisites of article 14 of the Constitution, as interpreted by this Court.
We will assume, that in dealing with the types of employees under the new Note, there is a reasonable classification.
Nevertheless, the further question arises whether the reasonable classification, with the added condition in the Note incorporated on December 23, 1967, can be said to have a nexus or a relation to the object sought to be achieved by cl.
(b) of rule 2046 ? The object of rule 2046 itself is to provide for the age of retirement of the two types of officers coming under cls.
(a) and (b).
Where there is no indication that any further distinction inter se is sought to be made amongst the officers mentioned in cls.
(a) and (b) and when an uniform age of retirement has also been fixed in respect of the officers coming under these two clauses, the classification, carving out the ex employees of the three authorities mentioned therein, with the added condition that the rules of the Company or the State should have a provision similar to clause (b), has, in our opinion, no nexus or relation to the object of the rule.
For the reasons given above, we are of the view that the High Court was justified in striking down the order of the Divisional Accounts Officer, Hubli, dated January 17, 1968 directing the respondent to retire from service on April 14, 1968, on which date he will attain the age of 58 years.
However, it is not clear from the judgment of the High Court whether the entire new Note substituted under cl.
(b) of rule 2046 on December 23, 1967 has been struck down or whether it has struck down only the new condition incorporated in the said Note.
Even as per the Note under cl.
(b), incorporated along with the new rule 2046 on January 11, 1967, the expression "Government Service" included service rendered in Ex Company, Ex State Railways and in a former provincial Government, and such a provision is beneficial to the employees like the respondent.
In the new substituted Note dated December 23, 1967.
the first part of the Note including in "government service" any service rendered in a former provincial Government, Ex Company and Ex State Railways is more or less identical with the original Note of January 11, 1967, though in the new Note the order of the former employees has been slightly changed.
In our opinion, that part of the new rule providing that for the purpose of cl.
(b) the expression "Government Service" includes service rendered in a former provincial Government and in a Ex Company and Ex State Railways can be allowed to stand to this extent.
Therefore, the offending part in the new Note are the further words "if the 200 rules of the Company or the State had a provision similar to Clause (b) above".
This offending part can be deleted without doing violence to the definition of the expression "Goverment Service" even under the new Note.
Therefore, it is only necessary to strike down the offending part in the Note, namely, "if the rules of the Company or the State had a provision similar to Clause (b) above" and this part of the Note alone is struck down as discriminatory and violative of article 14 of the Constitution.
Subject to the above directions, the judgment and order of the High Court are confirmed and this appeal dismissed.
Special leave to appeal has been granted on August 7, 1969 subject to the conditions that the appellant is to pay the costs of the respondent in any event.
The respondent, accordingly, will be entitled to his costs in the appeal.
K.B.N. Appeal dismissed.
| IN-Abs | Rule 2046 (F.R. 56) of the Indian Railway Fundamental Rules was substituted on January 11, 1967, by a new Rule.
Undo cl.
(b) of the new Rule 2046 every ministerial railway servant who had entered government service on or before March 31, 1938 and who satisfied the conditions mentioned in sub cls.
(i) and (ii) of cl.
(b) had a right to continue in service till he attained the age of 60 years.
The Note to the Rule, defined the expression 'government service ' as including service rendered in ex company and ex State Railway, and in a former provincial government.
On December 23, 1967 a new Note was substituted which stated that the expression "government service" ' included "service rendered in a former provincial government and in ex company and ex State Railways, if the rules of the company or the State had a provision similar to cl.
(b) above".
The respondent joined the service of the Madras and Southern Mahratta Railway company on August 16, 1927.
The company was amalgamated with the Indian Railway Administration in 1947 and on such amalgamation the respondent became the employee of the Indian Railway Administration He was a "ministerial servant" within the meaning of that expression in r. 2046.
On March 31, 1938, he held a permanent post in the company.
After the introduction of r. 2046 on January 11, 1967, the Divisional Accounts Officer passed an order that the respondent was entitled to continue in office till he attained the age of 60 years.
But, after the new Note to cl.
(b) to r. 2046 was substituted on December 23, 1967, another order was passed to the effect that the respondent was retired from service on April 14, 1968, on attaining the age of 58 years.
The order also stated that this action was being taken in view of the new Note substituted on December 12, 1967.
The respondent filed a writ petition in the High Court challenging the legality of the order retiring him from service.
The High Court struck down the order and gave a declaration that the respondent was entitled to continue in service till he attained the age of 60 years, on the ground that the order was discriminatory and, therefore, violative of article 14 of the Constitution.
Dimissing the appeal to this Court, HELD : The High Court was justified in striking down the order directing the respondent to retire from service.
(1) Rule 2046 as it stood originally and on January 11, 1967 treated the former employees of the ex company, ex State Railway and former provincial Government 188 who were amalgamated with the Indian Administration in 1947 on a par with the other original employees of the Indian Railway Administration.
In fact the Note to cl .
(b) of r. 2046 incorporated in January 11, 1967 only reinforced this position.
Read with the Note, under el.
(b), the respondent is a ministerial servant who had entered government service on or before March 31, 1938 and, therefore, by virtue of el.
(b) he was entitled to be retained in service till he attained the age of 60 years.
C] (2) Up to and inclusive of January 11, 1967, no distinction, inter se, apart from that made by cls.
(a) and (b) between officers of Indian Railway Administration, from whatever source they may have I come, was made.
The position admittedly has been changed by altering the definition of the expression "government service" by the new Note to el.
(b) Thus on and after December 23, 1967, though all the employees are under the Indian Railway Administration, there will be two sets of rules relating to the age of retirement, depending upon the fact whether they were in the original employment of Indian Railway Administration or on the fact of their coming from one or the other employers mentioned in the new Note.
Discrimination, is writ large on the face of the new Note.
Once the employees dealt with under the new Note have taken up service under the Indian Railway Administration and have been treated alike up to January 11, 1967, if follows that they cannot again be classified separately from the other employees of the Indian Railway Administration.
Therefore the classification of these officers under the new Note is not a reasonable classification.
[197 G, 198 F] (3) Assuming there is a reasonable classification, the classification cannot be said to have a nexus or relation to the object sought to be achieved by el.
(b) of r. 2046 which is to provide for the age of retirement of the two types of officers coming under cls.
(a) and (b).
Where there is no indication that any further distinction inter se is sought to be made amongst the officers mentioned in cls.
(a) and (b) and when a uniform age of retirement has also been fixed in respect of officers coming under these two clauses, the classification carving out the ex employees of the three authorities mentioned therein with the added condition that the rules of the company or the State should have a provision similar to el.
(b) has no nexus or relation to the object of the Rule.
[199 B] (4) Though a distinction has been made in the Rule between a railway servant coming under el.
(a) and a ministerial railway servant coming under el.
(b) in regard to age of retirement, those clauses will apply uniformly to all members of the Indian Railway Administration depending upon whether they are railway servants coming under el.
(a) or ministerial railway servants coming under el.
The distinction made in el.
(b) regarding the ministerial railway servants who entered government service on or before March 31, 1938, is again of uniform application.
[196 H] (5) It is only necessary to strike down the offending part in the Note, namely, "if the rules of the company or the State had a provision similar to el.
(b)," and this part of the Note alone is struck down as discriminatory and violative of article 14 of the Constitution.
[200 B]
|
l Appeals Nos. 1494 to 1498 of 1971.
Appeals by special leave, from the judgment and order dated November 15, 1967 of the Calcutta High Court in Income tax Reference No. 13 of 1963.
section T. Desai, section K. Aiyar, R. N. Sachthey and B. D. Sharma, for the appellant (in all the appeals).
N. A. Palkhivala, T. A. Ramachandran and D. N. Gupta, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Khanna, J.
This judgment would dispose of five Civil Appeal Nos. 1494 to 1498 of 1971 by Special Leave filed by the ,Commissioner of Income tax, West Bengal against the judgment of Calcutta High Court whereby the question referred to that ,Court under section 66(1) of the Indian Income tax Act, 1922 (hereinafter referred to as the Act) for five assessment years was answered in favour of the assessee respondent Coal Shipments (P) Ltd.
During the pendency of the appeals, the name of the respondent was changed to Heilgers Investment Ltd. The matter relates to the assessment years 1951 52, 1952 53, 1953 54, 1954 55 and 1955 56, the corresponding accounting years for which ended on 31 3 1951, 31 3 1952, 31 3 1953, 31 3 1954 and 31 3 1955 respectively.
The respondent was one of the companies which exported coal from India to Burma before the Second World War.
Amongst the other exporters were Messrs. Karamchand Thaper & Bros. Ltd., Messrs" Macheill Barry Ltd., Messrs. Andrew Yule & Co. Ltd. and Messrs. R. V. Low & Co. Ltd. The shipment of coal to Burma Railways before the war was the subject of open tender.
After the cessation of hostilities in 1946, it became possible to resume the export of coal to Burma.
In order to overcome the difficulties in the conduct of the trade following the war, the members of the coal trade in Bengal formed an association styled Coal Exporters and Charters Association.
The respondent company as well as M/s. H. V. Low & Co. Ltd. were two of the major members 1091 of the said association.
When M/s. H. V. Low & Co. learnt of the, resumption of coal export to Burma by the respondent in 1946, they also expressed intention to export coal to Burma.
Thereupon the two companies came to an understanding and arrived at a mutual arrangement or agreement on the following lines : (i) M/s. H. V. Low & Co. Ltd. would not export coal to Burma during the subsistence of the agreement.
(ii) M/s. H. V. Low & Co. Ltd. would assist the respondent in procuring coal for shipment to Burma.
(iii) The respondent would carry on the coal shipping business and pay M/s. H. V. Low & Co. Ltd. Rs. 151 per ton (subsequently raised to Rs. 1 5 per ton) of coal shipped to Burma.
According to the respondent, the last shipment of coal under the above arrangement was made in June, 1954 after which the arrangement came to an end automatically and the Government of Burma made some other arrangement for its coal requirement.
The assessee respondent claimed to have made the following payments to M/s. H. V. Low & Co. Ltd. or their nominees in pursuance of the aforesaid agreement during the period of five accounting years from 1st April, 1950 to March 31,1955: Rs. 1951 52. . . . 91,149 1952 53. . . .
1,77,898 1953 54. . . . 3,03,631 1954 55. . . . 2,32,355 1955 56. . . . . 79,917 The amounts mentioned above were taxed in the hands of M/s. H. V. Low & Co. Ltd. The respondent claimed the payment of the above amounts as admissible business expenditure for the assessment years in question.
The Income tax Officer held that the expenditures claimed could not be allowed, as there was no written agreement in proof of the alleged arrangement and it was not possible to say that the payments were made for the purpose of the assessee 's business.
The Income tax Officer further held that even assuming that the payments were made to keep off M/s. H. V. Low & Co. Ltd. from the Burma trade, they were payments to secure a monopoly and were not, therefore, allowable as revenue expenditure.
The Appellate Assistant Commissioner on appeal upheld the order of the Income tax Officer.
When the matter came up in second appeal before the Income tax Appellate Tribunal, the Tribunal found that there was some 1092 discrepancy in the facts stated on behalf of the assessee and the Revenue.
The Tribunal thereupon required the respondent company to swear an affidavit in support of the facts relied upon by it.
In pursuance thereof, Sir Walter Michelmore, Director of Managing Agents of the respondent company filed an affidavit.
Sir Walter was also examined orally before the Tribunal.
The case was thereupon remanded to the Income tax Officer to verify the facts as stated in the affidavit of Sir Walter and report back to the Tribunal.
The Income tax Officer after making further investigation submitted his report.
In deciding the appeal, the Tribunal formulated two points for its decision : (1) Were the payments made for the purpose of the assessee 's trade in terms of the alleged agreement? (2) If the answer to the above question is in the affirmative, did the assessee acquire a monopoly by such payment ? Both the questions were answered in favour of the respondent by the Tribunal.
It was held that the payments were made in pursuance of the alleged agreement in the interest of the respondent 's trade.
The version of the respondent about its agreement with M/s. H. V. Low & Co. Ltd. was accepted.
According to the agreement, M/s. H. V. Low & Co. Ltd. agreed to assist the respondent in procuring coal for export to Burma whenever asked to do and further agreed not to export coal to Burma during the subsistence of the arran gement.
The agreement was found to have been acted upon and it was held that M/s. H. V. Low & Co. Ltd. supplied varying quantities of coal to the respondent for shipment to Burma.
It was further held that the respondent company did not acquire any monopoly rights to carry on Burma trade and the impugned payments were made to carry on the trade in a more facile and profitable manner.
The Tribunal found that the arrangement arrived at verbally between the respondent and M/s. H. V. Low & Co. Ltd. was a temporary measure liable to be terminated ,at will and the respondent company did not derive any advantage of an enduring character by such payments.
The expenditures in question were, in the opinion of the Tribunal, attributable to revenue and not to capital.
As such, they were held to be permissible expenditures under section 10(2) (xv) of the Act.
On application filed by the Revenue, the following question was referred to the High Court "Whether on.
the facts and in the circumstances of the case, the payments made by the assessee to M/s. H. V. Low & Co. Ltd. or their nominees were of a capital nature and as such not allowable under section 10(2) (xv) of the Income tax Act, 1922 ?" 109 3 .lm0
It was not disputed before the High Court that there was an.
agreement between the respondent and M/s. H. V. Low & Co. Ltd. on terms stated by the respondent and that the payments in question were made under that agreement.
The High Court held that the arrangement entered into by the respondent with M/s. H. V. Low & Co. Ltd. was not such as was likely to have an enduring beneficial effect.
In the opinion of the High Court, there was no cert ainty of duration and the arrangement could be terminated or revoked at any time.
The consideration of the arrangement, it was observed, was not paid once for all but was related to uncertain shipments to be made.
The arrangement, it was further held, did not create any monopoly or bring about any capital advantage to the assessee.
The respondent was held entitled to claim the deduction of the expenditures under section 10 (2) (xv) of the Act.
In the result, the question referred to the Court was answered in the negative and in favour of the assessee.
We have heard Mr. Desai on behalf of the appellant and Mr. Palkhiwala on behalf of the respondent and are of the opinion that there is no merit in these appeals.
The Tribunal has found that the amounts in question were paid by the respondent to M/s. H. V. Low & Co. Ltd. in pursuance of the agreement according to which M/s. H. V. Low & Co. Ltd. were to assist the respondent in procuring coal for shipment to Burma and were themselves not to export coal to Burma during the subsistence of the agreement.
The above findings of fact are, for the purpose of these proceedings, binding upon the appellant and consequently no attempt was made either in the High Court or in this Court to assail them.
The payments which were made by the respondent to M/s. H. V. Low & Co. Ltd., it would thus appear, were because of the assistance rendered by them for shipment of coal to Burma and for abstaining from exporting coal to Burma during the subsistence of the agreement.
So far as the payment is concerned which was made to M/s. H. V. Low & Co. Ltd. for assistance to the respondent in procuring coal for shipment to Burma, it was admittedly an item of revenue expenditure.
The controversy between the parties has centered on the point as to whether that part of the payment which was made because, of M/s. H. V. Low & Co. Ltd. having agreed riot to export coal to Burma during the subsistence of the agreement constituted capital expenditure or revenue expenditure.
Mr. Desai on behalf of the appellant contends that as the payment was made for warding off competition by rival coal exporter, that payment should be held to be a capital expenditure.
The fact that there was no certainty of the duration of the arrangement between the respondent and M/s. H. V. Low & Co. and the same could be terminated at any time, according to the learned counsel, 1094 is wholly immaterial.
As against that, Mr. Palkhiwala argues that in order to constitute capital expenditure, the object of the expenditure should be to secure an advantage of enduring nature.
When there is no certainty of the duration of the arrangement and the same can be revoked at any time, the advantage cannot be said to be of an enduring character and the expenditure cannot be held to be of a capital nature.
Further.
as the payment was related to the quantum of coal shipped to Burma in the course of trading activity and was not connected with the capital value of the assets, the payment, Mr. Palkhiwala submits, should be considered to be revenue expenditure.
In our opinion, there is considerable force in Mr. Palkhiwala 's submission.
Judicial decisions have, from time to time, laid down some broad principles in order to determine whether an expenditure is of a capital nature or revenue nature.
Despite the enunciation of those principles, it is not always easy to decide the question in the context of the circumstances of an individual case.
Considerable difficulty is experienced in border line cases.
It was in this connection that Hidayatullah, J. (as he then was) observed in Abdul Kayoom vs Ccommissioner of Income tax(1) that "none of the tests (laid down in various authorities) is either exhaustive or universal.
Each case must depend on its own facts, and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect.
In deciding such cases, one should avoid the temptation to decide cases . by matching the colour of the one case against the colour of another".
It may be apposite at this stage to refer to some of the broad tests which have been.laid down to distinguish the capital expenditure from revenue expenditure.
In the case of Atherton vs British Insulated and Helsby Cables Ltd.(2) , Lord Cave, L.C. laid down the following criterion which has been referred to in most of the subsequent cases : "But when an expenditure is made, not only once and for all, 'but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade, I think that there is very good reason (in the absence of the special circumstances leading to an oppo site conclusion) for treating such an expenditure as properly attributable not to revenue but to capital." The Courts have to bear in mind, according to the dictum laid down in the above case, whether it was an expenditure forming " part of the cost of the income earning machine or structure" as (1) .
(2) 1095 opposed to part of "the cost of performing the income earning operations".
In that case, the House of Lords dealt with a fund which had been created by the respondent company as a nucleus of a pension fund for its employees.
After handing over the money to trustees for the employees, the company claimed that the money should be charged to revenue.
The claim of the company was rejected by the House of Lords on the ground that the payment of money created for itself an enduring benefit or advantage which was of a capital nature.
In the case of Robert Addie and Sons ' Collieries Limited vs The Commissioners of Inland Revenue(1), Lord President Clyde gave the following test: "It is necessary accordingly to attend to the true nature of the expenditure, and to ask one 's self the question, is it a part of the Company 's working expenses ? is it expenditure laid out as part of the process of profit earning ? or, on the other hand, is it a capital outlay ? is it expenditure necessary for the acquisition of property or of rights of a permanent character, the process of which is a condition of carrying on its trade at all ? The expression 'once and for all ' used in the dictum laid down in Atherton 's case (supra) was referred to by Bhagwati, J. speaking for this Court in the case of Assam Bengal Cement Co. Ltd. vs Commissioner of Income tax, West Bengal(2) and it was observed that the expression was used to denote an expenditure which is made once and for all for procuring an enduring benefit to the business as distinguished from a recurring expenditure in the nature of operational expenses.
The character of the payment can be determined, it was added, by looking at what is the true nature of the asset which has been acquired and not by the fact whether it is a payment in a lump sum or by instalments.
It is also an accepted proposition that the words 'permanent ' and ' enduring ' are only relative terms and not synonymous with perpetual or ever lasting.
There are some other tests like those of fixed capital and circulating capital for determining the nature of the expenditure.
An item of disbursement can be regarded as capital expenditure when it is referable to fixed capital.
It is revenue when it can be attributed to circulating capital.
It is not the case of any party that this test of fixed and circulating capital can be invoked in this case nor has reference been made to some of the other tests.
The case which has been set up on behalf of the revenue is that as the object of making the payments in question was to eliminate competition of a rival exporter, the benefit which enured to the respon (1) (2) 109 6 dent was of an enduring nature and as such, the payment should be treated as capital expenditure.
We find ourselves unable to accede to this contention because we find that the arrangement between the respondent and M/s. H. V. Low & Co. Ltd. was not for any fixed term but could be terminated at any time at the volition of any of the parties.
Although an enduring benefit need not be of an ever lasting character, it should not, at the same time,, be so transitory and ephemeral that it.
can be terminated at any time at the volition of any of the parties.
Any other view would have the effect of rendering the word 'enduring ' to be meaningless.
No cogent ground or valid reason has been given to us in support of the contention that even though the benefit from the arrangement to the respondent may not be of a permanent.
or enduring nature, the payments made in pursuance of that arrangement would still be capital expenditure.
Such a contention indeed was repelled by the Judicial Committee in the case of Commissioner of Taxes vs Nchanga Consolidated Copper Mines Ltd.(1).
The respondent company in that case together with two other companies Rhokana Corporation Ltd. and Bancroft Mines Ltd. formed a group for carrying on the business of copper mining.
Following a steep fall in the price of copper in the world market the group, in common with other producers, decided voluntarily .to cut their production by 10 per cent.
In effecting the cut, it was agreed that Bancroft Mines Ltd. should cease production for one year and that the respondent company and Rhokana Corporation Ltd. should undertake between them the whole group programme for the year reduced by the overall cut of 10 per cent.
It was further agreed to pay a sum of Bancroft Mines Ltd. to compensate it for the abandonment of the production for the year.
,Question arose whether the compensation which the respondent company had paid to Bancroft Mines Ltd. was expenditure of capital nature ? The Judicial Committee held that the compensation paid was an allowable deduction in determining the respon dent company 's taxable.
, income.
The expenditure, in the view ,of the Judicial Committee, had no analogy with expenditure for the purpose of acquiring a business or a benefit of long term or enduring contract.
Viscount Radcliffe who delivered the judgment while dealing with the question of expenditure observed: "It bought one right only, the right to have Bancroft out of production for 12 months.
While, no doubt, money paid to a cquire a business or to shut a business down for good or to acquire some contractual right to last for years may well be capital expenditure, it seems a contradiction in terms to speak of what Nchanga thus acquired, which exhausted itself and was created (1) 1097 to exhaust itself within the 12 months ' period within which profits are ascertained, as constituting an enduring benefit or as an accretion to the capital or incomeearning structure of the business.
If the expenditure is to be treated as capital expenditure at all, it cannot be for any reason such as that".
Although we agree that payment made to ward off competition in business to a rival dealer would constitute capital expenditure if the object of making that payment is to derive an advantage by eliminating the competition over some length of time, the .same result would not follow if there is no certainty 'of the duration of the advantage and the same can be put to an end at any time.
How long the period of contemplated advantage should be in order to constitute enduring benefit would depend upon the circumstances and the facts of each individual case.
In the case of Assam Bengal Cement Co. Ltd.(1) the appellant company acquired from the Government of Assam a lease of certain lime stone quarries for a period of twenty years for the purpose of carrying on the manufacture of cement: In addition to the rent and royalties, the appellant agreed to pay the lessor annually a sum of Rs. 5,000/ during the whole period of the lease as a protection fee and in consideration of that payment the lessor undertook not to grant to any person any lease, permit or prospecting licence for lime stone in a group of quarries without a condition that no limestone should be used for the manufacture of cement.
The appellant also agreed to pay Rs. 35,000/ annually for five years as a further protection fee and the lessor in consideration of that payment gave a similar undertaking in respect of the whole district.
It was held by this Court that as a result of the annual payment of the amounts of Rs. 5,000/ and Rs. 35,000/ , there enured an advantage to the appellant for the whole period of the lease and as such it was capital expenditure.
Apart from the above, we find that the payments made to M/s. H. V. Low & Co. Ltd. were related to the actual shipment of coal in the course of the trading activities of the respondent and had no relation to the capital value of the assets.
The payments were not related to or tied up in any way to any fixed sum agreed between the parties.
The dictum laid down by this Court in Travancore Sugars and Chemicals Ltd. vs Commissioner of Income tax, Kerala(2) in the circumstances is attracted.
The appellant company in that case was to take over the assets of sugar manufacturing concern, a distillery and a tincture factory of the Government of Travancore.
The promoters of the appellant company in that connection entered into an agreement with (1) (2) 18 LI 19 Sup Cl/72 1098 the Government.
The cash consideration for the sale of the assets of the ' sugar manufacturing concern was Rs. 3.25lakhs, that for the sale of the distillery was agreed to be arrivedat as a result of joint valuation and that for the sale of the assets of the tincture factory was the book value.
The Government agreed to recognise the transfer of the licence for the distillery to the appellant company and to secure the continuance of the licence for a period of 5 years after the termination of the existing licence.
The Government also agreed to purchase the pharmaceutical products manufactured by the appellant company.
Apart from the cash consideration, clause 7 of the agreement provided that the Government would be entitled to 20 per cent of the annual net profits subject to a maximum of Rs. 40,000/ after providing for depreciation and remuneration of the secretaries and treasurers.
Clause 7 was amended in January, 1947 to the effect that the Government would be entitled to 10 per cent of the annual net profits.
Question arose whether an amount of Rs. 42,480/ which was, payable under clause 7 of the agreement was a permissible expenditure under section 10 of the Incometax Act.
It was held that the above payment was in the nature of revenue expenditure and not capital expenditure.
Ramaswami, J. speaking for the Court dealt with the matter in the following Words : "Examining the transaction from this point of view, it is clear in the present case that the consideration for the sale of the three undertakings in favour of the appellant was : (1) the cash consideration mentioned in the principal agreement, viz. clauses 3, 4(a) and 5(a) and (2) the consideration that Government shall be entitled to twenty per cent of the net profits earned by the appellant in every year subject to a maximum of Rs. 40,000/ per annum.
With regard to the second part of the consideration there are there importan t points to be noticed.
In the first place, the payment of commission of twenty per cent on the net profits by the appellant in favour of the Government is for an indefinite period and has no limitation of time attached to it.
In the second place, the payment of the commis sion is related to the annual profits which flow from the trading activities of the appellant company and the payment has no relation to the capital value of the assets.
In the third place, the annual payment of 20 per cent commission every year is not related to or tied up, in any way, to any fixed sum agreed between the parties as part of the purchase price of the three undertakings.
There is no reference to any capital sum in 1099 this ' part of the agreement.
On the contrary, the very nature of the payments excludes the idea that any connection with the capital sum was intended by the parties.
The above observations, in our opinion, have a direct bearing on the present case.
Mr. Desai has referred to the following observations of Lord Greens in Henriksen (Inspector of Taxes) vs Grafton, Hotel Ltd.(1) : "It appears to me that there can be no difference in principle between a payment out and out for monopoly value and a payment in respect of a term.
Each licence granted for a term must stand by itself since an application for its renewal falls to be treated as an application for a new licence.
This is what I mean when I say that there is a false appearance of periodicity about these payments.
Whenever a licence is granted for a term, the payment is made as on a purchase of a monopoly for that term.
When a licence is granted for a subsequent term, the monopoly value must be paid in respect of that term, and so on.
The payments are recurrent if the licence is renewed; they are not periodical, so as to give them the quality of payments which ought to be debited to revenue account.
The thing that is paid for is of a permanent quality, although its permanence, being conditioned by the length of the term, is short lived.
A payment of this character appears to me to fall into the same class as the payment of a premium on the grant of 'a lease which is admittedly not deductible".
Particular reliance has been placed by Mr. Desai upon the concluding part of the above observations.
The portion relied upon, in our opinion, has to be read in the context of the preceding lines and the facts of that case.
The lessees of the licenced premises in that case, under.
a covenant in their lease, paid annually certain sums imposed by the licensing justices as instalments of the monopoly on the grant and renewal of the licence for three years period.
It was contended that those sums were not capital payments but should be regarded as revenue payments.
It was held that monopoly value payments were imposed for the term of the licence on grant or renewal though the fact that permission was given to pay by yearly instalments gave a false appearance of periodicity.
Such payments.
in the opinion of the Court, fell into the same class as a premium paid (1) 1100 on the grant of a lease and as such should be regarded as of capital nature.
It is obvious that the question involved in that case was different and the appellant can derive no assistance from it.
The appeals consequently fail and are dismissed with costs.
One set of costs.
V.P.S. Appeals dismissed.
| IN-Abs | In pursuance of an agreement between the assessee respondent and another firm L & Co., by which, L agreed to assist the respondent in procuring coal for export whenever asked to do so and not to export any coal during the subsistence of the agreement, L supplied various quantities of coal to the respondent and the respondent made payments as pet the agreement.
The respondent claimed the payments as admissible expenditure under section 10(2)(xv) of the Income tax Act, 1922, during the relevant assessment years.
The Department held that they were payments.
to secure a monopoly and were therefore not allowable as revenue ex penditure.
The Tribunal found that the respondent did not acquire any monopoly rights, that the payments were only made to carry on trade in a more facile and profitable manner, that the arrangement was a temporary measure liable to be terminated at will, that the respondent did not derive any advantage of an enduring character and that therefore.
the expenditure was attributable to revenue and not to capital.
and held in favour of the assessee.
The High Court, on, reference, agreeing with the findings of the Tribunal and holding that the consideration was not paid once for all but was related to uncertain shipments to be made, decided in favour of the assessee.
In appeal to this Court it was contended that though the payment for assistance to the Respondent in procuring coal was an item of revenue expenditure, that part of the payment which was made because of L agreeing not to export coal during the subsistence of the agreement constituted a capital expenditure and not a revenue expenditure.
Dismissing the appeal, HELD : Although payments made to ward off competition in business, to a rival dealer would constitute capital expenditure if the object of making that payment is to derive an advantage by eliminating the competition over some length of time, the same result would not follow if there is no certainty of the duration of the advantage and the same can be put to an end at any time.
How long the period of contemplated advantage should be in order to constitute an enduring benefit would depend upon the circumstances and facts of each individual case.
An enduring benefit need not be of an everlasting character, but it should not, at the same time, be so transitory and ephemeral that it can be terminated at any time at the volition of any of the parties.
[1096 B; 1097 B C] Further, the payments were related to the actual shipments of coal in the course of the trading activities of the respondent and had no relation to the capital value of the assets.
The payments were not related to or tied up in any way to any fixed sum agreed between the parties.
It was not a case of monopoly value payments being permitted to be paid in instalments giving a false appearance of periodicity.
[1097 F G; 1099 G H] 1090 Travancore Sugars and Chemicals Ltd. vs C.I.T., Kerala , followed.
Atherton vs British Insulated and Halaby Cables Ltd. 10 T.C. 155, Robert Addie and Sons ' Collieries Ltd. vs Commissioners of Inland Revenue, 1, Assam Bengal Cement Co. Ltd. vs C. I. T., West Bengal, , Commissioner of Taxes vs Nchanga Consolidated Copper Mines Ltd. 58 I.T.R. 241 and Hanrikesen (Inspector of Taxes) vs Grafton Hotel Ltd., , referred to.
|
Civil Appeal No. 1331 of 1966.
Appeal by special leave from the order dated January 20, 1966 of the Bombay High Court in Special Civil Application No. 54 of 1966.
D. V. Patel and L N. Shroff for the appellant.
G. P. Pai, Bhajan Ram Rakhiani and R. K. Khanna, for respondent No. 1.
The Judgment of the Court was delivered by Mitter, J.
The question involved in this appeal by special leave from an order of the Bombay High Court rejecting summarily a petition under Art.227 of the Constitution for the issue of a writ of certiorari or other appropriate writ for examining the legality of the award made by the Industrial Tribunal, Maharashtra on July 27, 1965 and published in the Maharashtra Gazette on August 19, 1905 and for quashing the same appears to be one of first impression so far as this Court is concerned.
The appellant before e this Court is an institution which came into existence as far back as 1834.
It originated in the desire of certain Hindu and Parsee gentlemen of the City of Bombay to put a stop to the practice of killing of stray dogs by the stray dogs by the sepoys of the East India Company.
the deed of October 18, 1834 shows that certain Hindus , Parsees and Mahajuns had resolved to start a Panjrapole with suitable.buildings by raising subscription and also by promising to pay certain fees on stated mercantile commodities to the Panjrapole to be established for the keeping of stray cattle and other animals and for protecting their lives.
This was followed by a deed of declaration of trust executed on 2nd November, 1850.
This shows that the institution mentioned in the earlier document had 204 been established and the management of its funds had been placed in the hands of certain Banians.
under the superintendence of Sir Jamshedjee Jeejeebhoy and that out of the surplus funds collected Rs. 75,057/ had been invested in the purchase of Government Promissory notes.
The trustees were to stand possessed of the said notes and interest and dividends thereof upon trust for the use and benefit of the said institution.
On 2nd November, 1850 a deed of assignment and declaration of trust in favour of panjrapole was executed by Sir Jamshedjee Jeejeebhoy to Khimchand Motichand.
This document shows that a part of the surplus funds had been invested in the purchase of several pieces or parce Is ,of lands, houses etc.
and the new trustees were to stand possessed of the same upon trust for the use and benefit ,of the said institution.
Another trust deed was executed ,on 5th September, 1851 by Khimchand Motichand, Sir Jamshedjee Jeejeebhoy and others.
This document shows that the institution was then possessed of considerable wealth comprising of Government promissory notes, houses, lands and other immovable estate in the Islands of Bombay, besides cash balances.
The funds of the institution appear to have been augmented further under a deed of 10th June, 1871.
According to this document certain charitably disposed persons, Hindus and Parsees, had raised a fund for releasing animals in Surat meant for slaughter on the occasion of Bakrild and Id E Kurbani.
The trustees of the said fund being desirous of transferring the sums in their hands with all accumulations of interest, income etc.
and also the trust thereof to the trustees of the Bombay Panjrapole had requested the trustees of the said Panjrapole to become the trustees of Surat Bakri Id fund to which the latter had a in Surat meant for slaughter on the occasion of Bakrild and Id E Kurbani.
The trustees of the said fund being desirous of transferring the sums in their hands with all accumulations of interest, income etc.
and also the trust thereof to the trustees of the Bombay Panjrapole had requested the trustees of the said Panjrapole to become the trustees of Surat Bakri Id fund to which the latter had agreed.
This document shows further that the trustees of the Bombay Panjrapole had agreed to use the said funds towards the purchasing, releasing and redeeming from slaughter some of the cows, sheep and other animals intended or likely to be sacrificed at Surat on the Bakrid or Id Kurbani occasions and for conveyance of the animals so purchased to be kept there according to the custom and rules of that institution.
In 1915 the Government 205 declared the institution as an infirmary under the Preven tion of Cruelty to Animals Act (IX of 1890).
it would appear that the Bombay Panjrapole expanded its activities considerably over the years and had besides its original seat at Bombay, branches at three other places viz., at Raita, Bhiwandi and Chembur Cattle, birds and other animals were kept and maintained at all these places.
A very large number of persons was pursuing manifold acti vities at the said places.
Latterly the workers of the institution were not satisfied with their wage scales and other service conditions.
On the basis of the report submitted by the Conciliation Officer under sub s.(4) of s.12 of the Industrial Disputes Act the Government of Maharashtra referred the dispute for adjudication to the Tribunal constituted under a Government notification.
An order of reference was made on 25th June, 1963 and the heads of disputes were, the wages, privilege, sick and casual leave, bonus, gratuity and reinstatement of certain workmen.
In the written statement filed by Panjrapole it was stated inter alia (a) The main aims and objects of the institution were purely charitable.
Whatever income the institution had was not all to be distributed either to the donors or the trustees.
It was wholly and solely for the maintenance and treatment of animals of the Bombay Panjrapole.
To aehieve the above objects the means to be adopted were (i) maintenance of a shelter house for aged and unserviceable animals; (ii) the feeding and treatment of all animals entrusted to the institution either by the owners anxious to pension their old animals or rescued by philanthropic persons from the hands of butchers and the protection of animals remanded by magistrates; (iii) the breeding of bulls under ideal and sanitary conditions; (iv) the maintenance of a dairy farm with special attention to proper feeding, accommodation and water supply, the proceeds to go to the benefit of other animals of the Panjrapole; and 20 6 (v) bringing up of calves of the young cows under healthy conditions.
(b) The Managing Committee of trustees of the institution was advised that in fulfilment of their primary and only object of maintaining sick and infirm cattle and dogs etc.
it was necessary that they should have healthy food and nutrition.
Since milk from outside would not fulfil that condition it was decided to upgrade the infirm cattle and rear them into good animals so as to get good and pure milk for the inmates of the Panjrapole.
Thus the milk that was produced and remained surplus after feeding the old cows, motherless calves and dogs and other such animals was sold to members of public instead of being thrown off.
The income derived therefrom was again utilised only after maintenance of the Panjrapole animals.
The sale proceeds of the milk was never utilised nor meant for the benefit or the profit of the donors of of trustees nor was it produced and sold for the purpose or satisfying human needs or desires or with any object of rendering material service to the community.
The cows which yielded milk were kept by the Panjrapole till the end of their lives.
The milk derived from them could only be considered as natural and incidental product in the maintenance of cows.
It was submitted on the basis of the above that essentially object with which the institution received animals was not for doing service to their owners or others but to the animals themselves.
The Tribunal examined meticulously the activities of the institution over a number of years.
The workers served various interrogatories on the trustees to elicit from the various facts relating to the income by way of rent from building etc.
the income from milk and milk products, the income from sale of other commodities, the number and categories of animals in the Panjrapole, the number of animals, if any, purchased, the number of dry and wet cows owned by the Panjrapole and the number of stud bulls either purchased by or bred at the Panjrapole for the last ten years.
The society answered all the particulars.
The chart below prepared by the respondent shows the total cattle strength of the Panjirapole in all its four branches comprising of productive animals (whether milch cows milch buffaloes, 207 stud bulls and working bullocks), the number of unpro ductive animals, including cows, buffaloes, buffalo calves, heifers and calves and bullocks.
The chart was compiled from the documents disclosed by the appellant and contains the figures for the years 1958 to 1962 Total strength in the following years.
1958 1959 1960 1961 1962 Total strength Bombay 149 117 150 201 214 Raita 833 595 508 604 538 Bhiwandi 501 653 503 408 426 Chambur 191 233 272 275 281 Total 1,674 1,598 1,533 1,4881,459 Sick, old and infirm Bombay.
Raita 32 19 10 16 31 Bhiwandi 424 364 132 150 171 Chambur.
Total 466 25 % 383 20% 142 10% 166 10% 202 15% Young animals Bombay Raita 181 44 120 50 36 Bhiwandi 6 47 5 99 59 Chambur 56 87 79 93 100 Total 243 178 204 242 185 Other cattle not sick Bombay 149 117 150 201 214 Raita 620 532 488 538 471 Bhiwandi 71 242 366 159 196 Chambur 135 146 193 182 181 Total.
975 1,037 1,197 1,080 1,602 The following chart was pared by the respondents showing the values of the milk supplied to the animals as 208 also the amounts fetched by sale of the surplus milk for the same years.
Chart.
Year Own consump Sale Total Percentage tion.
Rs. Rs. Rs. of sale approxima tely 1 2 3 4 5 1958 2,681 1,49,854 1,314 3,995 1,53,849 2.
6% 1959 5,256 6,716 5,475 17,447 1,69,465 1,86,912 9. 5% 1960 1,755 6,570 2,686 11,011 2,13,117 24,1185% 1961 2,046 3,286 3,504 8,836 2,23,095 2,31,9314 4% 1962 1,954 4,555 3,650 10,159 2,30,043 2,40,2024% The facts found by the Tribunal may be summarised as follows (1) At the end of the year 1962 there were altogether, 445 cows, 48 bulls, bullocks and oxen, other cattle (cows and bullocks) 508, calves 495, dogs 160, goats and sheep 32, horses 12, hares 18, cocks, hens and ducks ' 18 and parrots 8 : the total number was 1754.
(2) The total income for the year was Rs. 6,64,043 including the amount of Rs. 1,73,583 received by way of donation.
The income proper was thus Rs. 4,90,459.
, 20 9 (3) Some lands of the institution were under its personal cultivation.
The sale proceeds of the yield thereof was Rs. 6,492.
The rent fetched by the immovable property was Rs. 2,20.549.
The milk vielded by the cows was regularly collected and sold, the sale proceeds for the year being Rs. 4,30,034.
A large number of workmen was employed to attend to the cows and to feed them, to.
milk the cows and to carry and sell the milk to the public.
(4) The number of cows yielding milk at the end of the year was 242.
At that time there were 75 pregnant cows.
There were 57 other cows, 101 grown up calves (female) and 91 other small calves (female) all described as "reserved".
In the opinion of the Tribunal all these calves would in course of time grow into cows.
(5) The institution maintained some stud bulls.
Besides there were bullocks which were used for plying the carts or for cultivation of the lands of the institution.
(6) There were 36 heads of cattle described as arrivals from Bombay.
There were another 87 cows described as "danger"; the rest of the cattle (cows and bullocks) were 57 lame and blind, 177 weak, 51 infirm, quite infirm 80 and sick 108, the total of this category being 473; including the "danger" cows the total was 560.
These animals depended entirely on the charity of the institution.
The Tribunal found the activities of the institution in connection with its movable property and collection and sale of milk to be an industry while the maintenance of danger cows, blind, lame, infirm and sick, the dogs and other animals did not constitute an industry.
As already noted, the application under article 227 by the Panjrapole to the Bombay High Court was dismissed summarily and therefore we do not have the benefit of a judgment of the High Court.
As the records stand we must proceed one the facts found by the Tribunal and such light as is thrown thereon by arguments of counsel.
Before looking into the relevant authorities on the subject, we may note the points canvassed in support of or against the appeal by learned counsel on either side.
Referring to the trust deeds it was argued on behalf of the appellant that the essential purpose of the institution was 210 to keep and foster animals which were either rejected by their owners as old and infirm or of no use to them as suckling calves, dry cows etc.
It is not necessary to take into account the other animals which were maintained by the institution.
Leaving out of account the number of dogs kept, the number of other animals was insignificant.
It was argued that although the sale of milk produced a fair amount of income, certain portion of it was necessary for the maintenance of the sick and infirm animals and the sale of the balance of the milk ought to be regarded as incidental to the keeping of cows thrown on the hands of the institution and ought not to lead to an inference that the institution was pursuing an industry.
With regard to the immovable properties, it was said that they had been purchased out of surplus funds in the hands of the insti tution over 50 years back and on a conspirator of the acti vities of the institution it should be held that it was merely doing charity to animals and it was not producing food or giving service to humans to constitute its activity as an industry within the meaning of s.2(1) of the Industrial Disputes Act.
Learned counsel for the respondent drew our attention to certain facts which according to, him went to show that so far as the activity of keeping cattle, specially cows and she buffaloes was concerned, there could be little doubt that it was pursued as an industry.
He handed over two charts containing analysis of the cattle population as culled from the documents placed before the Tribunal by the institution itself.
The total strength of cattle in all the four branches of the institution in the year 1958 was 1674, 1598 in the year 1959, 1533 in the year 1960 and 1488 in 1961 and 1459 in 1962.
The sick, old and infirm cattle for the year 1958 was 456 or roughly 25 per cent of the total strength.
Young animals numbered 243 and other cattle which were not at all sick was 975 in number.
The percentage of sick, old and infirm cattle in the year 1959 was roughly 20 % in.
the year 1960 and 1961, 10 per cent and in the year 1962 15%.
The rest of the cattle according to counsel were neither old nor infirm but were either producing milk or being put to use immediately or capable of yielding milk or work in the future.
Another chart handed over by him went to show that the total value of milk produced in the year 1958 was Rs. 1,53,849 and 211 leaving out of account of Rs. 3,995 being the value of milk supplied to the sick cattle, the institution derived an in come of Rs. 1,49,854/ from the sale of milk.
The corres ponding figures for 1959 were total sales Rs. 1,86,912, value of milk consumed Rs. 17,447, income from milk, Rs. 1,69,465.
The figures for 1960 were Rs. 2,24, 118, Rs. 11,011 and Rs. 2,13,117/ ; those for 1961 were Rs. 2,31,931, Rs. 8,836 and Rs. 2,23,095/ .
The figures for the last year 1962 were Rs. 2,40,202, Rs. 10,159 and Rs. 2,30,043.
Thus according to the above figures, the percentage of milk given to the animals out of the total production was 2 6 in 1958, 9 5 in 1959, 5 in 1960 and 4 in the years 1961 and 1962.
Learned counsel drew our attention to the figures of expenses of tending the sick and infirm cattle either by employment of hospital workers or medical expenses and compared the same with the total expenses of the institution and the number of men employed.
The value of medical relief to animals either by way of salary to workers, dearness allowance paid to them, medical expenses and feeding of milk to the animals for the Bombay Panjrapole in the year 1961 was Rs. 11,762, 'for Raita Rs. 5,551, for Chembur Rs. 5,028 and for Bhiwandi Rs. 28,805.
The expenses of feeding and maintenance of sick animals for the said branches were Rs. 1,825, 13,596, 7,554 and 81,464.
But it is pertinent to note that medical expenses accounted for very small sums, namely, Rs. 1,267 for Bombay, Rs. 559 for Raita, Rs ' 1,696 for Chembur and Rs. 552 for Bhiwandi.
The figures of medical expenses for the year 1962 were equally negligible.
The number of people employed for giving medical relief at the Bombay Panjrapole in the year 1961 was only 7, namely, a doctor, a dresser, 4 coolies and other workers and a sundry worker.
Their total salary came to Rs. 6,000 besides dearness allowance of Rs. 2,448.
Similarly at Raita there were a doctor, two coolies, two dressers and sundry workers and expenditure was only Rs. 552 out of the total expenditure on all these items Rs. 4,992.
It was argued oil the basis of these figures that if the object of the Panjrapole was only to maintain and treat the old, diseased or infirm or rejected cattle on its hands acquired from different sources, the number of men employed would be very small and the milk required for the sick and infirm cattle could be had from only a few milch 212 cows and she buffaloes.
It was urged that the fact that a large number of milch cattle were to be found every year among the cattle population yielding milk regularly of the value of over Rs. 2,00,000 for the last 3 or 4 years went to show that the institution was pursuing an activity mole or less like that of, a dairy farm.
It was maintaining a number of stud bulls and had actually purchased one, the obvious object behind it being improving the cattle wealth of the institution by the production of good and healthy cattle, the females of which would come to yield milk in future.
It was said that the value of milk sold could not be as high as disclosed by the figures unless the institution was getting a number of milch cattle every year to replace those which were going dry for the time being.
This could only be possible if the institution was in a position to keep up its number of milch cattle from the young ones either given to the Panjrapole or those which were bred at the Panjrapole.
The only difference between the Panjrapole and a well organised dairy farm was that the Panjrapole was not buying milch cattle of good quality nor destroying or getting rid of any which were found to become useless.
As the objects of the institution did not permit it to get rid of any cattle it undoubtedly had to maintain whatever cattle came to it but nevertheless the activities displayed by the facts were enough to show that it was being run on the lines of a business or an undertaking, though not of the normal type of a well organised dairy business.
In our view the arguments of learned counsel for the respondent have considerable force.
The main heads of the income of the institution were income from immovable properties, donation from charitably disposed members of the public and the sale of milk.
No doubt the immovable property had been acquired many years back from the surplus funds in the hands of the trustees.
These were old houses and buildings but the Panjrapole was maintaining them in tenantable condition by incurring considerable expenses every year over the repairs.
The more significant factor was the steadily growing income from the sale of milk derived from milch cows and buffaloes, the number of which though not steady was always considerable.
Regard must also be had to the written statement of the institution itself before the Tribunal showing 213 that the Managing Committee of the trustees had decided some time back to upgrade the infirm cattle and rear them into good animals so as to get good and pure milk for the inmates of Panjrapole.
In fact however the upgrading was to such an extent that the milk yielded always was far in excess of the needs of the inmates of the Panjrapole.
Although the sale proceeds of the milk was never utilised nor was ever meant for the benefit or profits of the donors or trustees, the very production of it in such large bulk wholly unrelated to the needs of the sick cattle showed that the institution was pursuing an activity with the central idea of obtaining a steady income therefrom.
In our view, the facts justifiably lead to the conclusion that the institution deliberately diversified its objects from only tending to the sick, infirm or unwanted cattle by adopting the policy of keeping cattle not merely for their own sake but for the sake of improving the cattle population committed to its care with an eye to serve human beings by making large quantities of good milk available to them and thereby getting an income which would augment its resources.
It pursued its policy just as any dairy owner, would by having a few good quality bulls to impregnate the cows and thereby ensuring a steady production of milk and also improve the quality of the progeny.
We have then to consider whether on the above facts an inference ought properly to be drawn that the activities of the Panjrapole constituted an industry.
It is not necessary to go through the plethora of cases decided by this Court to find out whether the Tribunal had come to a proper conclusion.
Although there is no decision of this Court arising out of the affairs of a Panira Dole, there are several dealing with the question as to whether hospitals constituted industries.
The contention of learned counsel for the appellant W. as that the main and chief object of the appellant institution being the keeping and fostering of ' animals incidental activities ought to be disregarded and the institution ought to be considered as a hospital.
If the activities relating to the production of milk could be said to be incidental to the maintaining of sick, infirm and diseased or rejected cattle, the argument would, in our opinion, rest on solid foundation.
2 1 4 At the time when the application under article 227 of the Constantine was presented before the Bombay High Court, the decision of this Court in State of Bombay vs The Hospital Mazdoor Sabha (1) held the field and it can be assumed that it was on the strength of this decision that the Bombay High Court did not feel called upon to examine the merits of the case by issuing a rule.
In the 'Hospital Mazdoor Sabha 's case (supra) the dispute arose out of the retrenchment of respondents 2 and 3 before this Court who ' had been engaged as ward servants in the J.J. Group of Hospitals, Bombay under State control and management without payment of compensation as required by section 25 F(b) of the Industrial Disputes Act.
The decision of this Court shows that there was a group consisting of five hospitals under the administrative control of the Surgeon General of the appellant and its day to day affairs were conducted and controlled by a Superintendent who was a full time employee of the appellant.
The residential staff including the Resident Medical Officers, Horsemen, Nurses etc. were all full time employees of the appellant and their salaries were drawn on the establishment pay bills of the appellant and paid entirely by the appellant.
According to this Court : "This group serves as a clinical training ground for students of the Grant Medical College which is a Government Medical College run and managed by the appellant for imparting knowledge of medical, sciences leading to the Degrees of Bachelor of Medicine and Bachelor of Surgery of the Bombay University as well as various Post Graduate qualifications of the said University and the College of Physicians and Surgeons, Bombay; the group is thus run and.
managaed by the appellant to provide medical relief and to promote the health of the people of Bombay.
" On the question as to whether the activities of this group of hospitals would be covered by the definition of 'in dustry ' in s.2(j) of the Industrial Disputes Act, the Court ,observed (see at p. 878) "In considering the question as to whether the group of Hospitals run by the appellant undoubtedly (1) ; 21 5 for the purpose of giving medical relief to the citizens and for helping to impart medical education are an undertaking or not, it would be pertinent to enquire whether the activity of a like nature would be an undertaking if it is carried on by a private citizen or a group of private citizens.
There is no doubt that if a hospital is run by private citizens for profit it would be an undertaking very much like the trade or business in their conventional sense. .
Trust the character of the activity involved in running a hospital brings the institution of the hospital within s.2(j).
Does it make any difference that the hospital is run by the Government in the interpretation of the word "undertaking" in s.2(j)? In our opinion, the answer to this question must be in the negative.
It is the character of the activity which decides the, question as to whether the activity in question attracts the provision of s.2(j); who conducts the activity and whether it is conducted for profit or not do not make a material difference.
" As to the attributes which made the activity an under taking it was stated (see at p. 879) : "It is difficult to state these possible attributes denitely or exhaustively; as a working principle it may be stated that an activity systematically or habitually undertaken for the production or distribution of goods or for the rendering of material services to the community at large or a part of such community with the help of employees is an undertaking.
Such an activity generally involves the co operation of the employer and the employees; and its object is the satisfaction of material human needs.
It must be organised or arranged in a manner in which trade or business is generally organised or arranged.
It must not be casual or must it be for oneself nor for pleasure.
Thus the manner in which the activity in question is organised or arranged, the condition of the co operation between the employer and the employee necessary for its success and its object to render material service to the community can be regarded as some, of the features which are distinctive of activities,, 5 Ml 1245 Sup.
Cl/71 216 to which s.2(j) applies.
Judged by this test, there would be no difficulty in holding that the State is carrying on an undertaking when it runs the group of Hospitals in question.
" The recent decision of this Court in Safdar Jung Hospital, New Delhi vs K. section Sethi and Management of M/s T.B. Hospital, New Delhi vs The Workmen (1) is a pointer in the contrary direction.
There was also another appeal relating to the Kurji Holy Family Hospital.
The Court proceeded to consider the general proposition whether a hospital could be considered to fall within the concept of industry in the Industrial Disputes Act and whether all hospitals of whatever description could be covered by the concept or only some hospitals under special conditions.
According to this Court in Safdar Jung Hospital case , '(see p.1412 paragraph 1.3) "an industry is to be found when the employers are carrying on any business, trade , under taking, manufacture or calling of employers.
If they are not, there is no industry as such.
" The Court referred to the decision of this Court in Gymkhana Club Union vs Management (2) and the conclusion therein that : "Primarily, therefore, industrial disputes occur when the operation undertaken rests upon co,operation 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 reduce 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 or manufacture.
" With regard to trade and business it was said : "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 defi (1) A. I.R. 1970 S.C. 1407.
(2) [1968] 1 S.C.R. 742.
217 nitions these terms have a definite economic content of a particular type and all 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.
" With regard to the Hospital Mazdoor Sabha case (1) was remarked (see p. 1414) "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 private individuals or group of individuals? ' 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.
This 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 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.
" This Court held that the Hospital Mazdoor Sabha case(1) "took an extreme view of the matter which was not justi fied".
With regard to the activities of the individual hospitals it was said the Safdar Jung hospital had not embarked on an economic activity which could be said to be analogous to trade or business.
There was no (1) [1960] 2 section C. R. 866, 218 evidence that it was more than a place where persons could get treated.
This was a part of the functions of Government and ,the hospital was run as a Department of Government and could not therefore be said to be an industry.
Again, with regard to Tuberculosis hospital it was found not to be an independent institution but a part of the Tuberculosis Association of India.
The hospital was wholly charitable and was a research institute.
The dominant purpose of the hospital was research and training, but as research and training could not be given without beds in a hospital, the hospital was run.
According to this Court, treatment is thus a part of research and training.
In these circumstances the Tuberculosis hospital could not be described as an industry.
With regard to the Kurji Holy Family Hospital again it was found to be entirely charitable.
It carried on the work of training, research and treatment; its income was mostly from donations and distribution of surplus as profit is prohibited.
It could not therefore be an industry as laid down in the Act.
Reference may also be made to the case of Lalit Hari Ayurvedic College Pharmacy vs Its Workers ' Union (1).
In this the appellate Tribunal found that the pharmacy run by the appellant sold medicines in the market and realised about Rs. one lakh per annum whereas in the hospital run by it about 30% of the medicines manufactured by it were consumed and about 70% were sold in the market.
This judgment was delivered on the same date by the same Bench which decided the Hospital Mazdoor Sabha case (supra).
On the facts found this Court held that there could be no doubt "that the activity of the appellant in running the pharmacy and the hospital was an undertaking under s.2(j) and was an industry".
The only case of Panjrapole which appears to have come before the High Courts was that of the Madras Panjrapole vs Labour Court(2)which was the subject matter of an industrial dispute referred to in the year 1958 by the State Government for adjudication by the Labour Court, Madras.
This was decided after the Hospital Mazdoor, Sabha case.
The facts referred to by the High Court were that the Madras Panjrapole was a charitable society (1) A.I.R. 1960] S.C. 1261.
(2) 219 registered under the Societies Registration Act occupying an area of about Ac.
12 00 of land within the city of Madras on which the munificence of several donors had enabled the construction of shelters for animals as well as sanctuary for birds.
The objects of the society, as stated in the memorandum of association, are protection, care and treatment of old, infirm and injured cows, calves, bullocks etc.
and affording freedom to such animals from being slaughtered unnecessarily and to guarantee old age relief to the old, infirm and unserviceable animals till they die of natural causes.
To achieve these objects, the means envisaged to be adopted were : (a) maintenance of shelter house for aged and unserviceable animals ' (b) the feeding and treatment of all animals entrusted to the care of the society either by the owners anxious to pension their old animals or rescued by philanthropic persons from the hands of butchers and the protection of animals remanded by magistrates; (c) the breeding of bulls under ideal and sanitary conditions (d) the maintenance of a dairy farm with special attention being paid to proper feeding, accommodation and water supply, the proceeds of which will go to the benefit of the other animals of the Panjrapole; and (e) the bringing up of the calves of the young cows under healthy conditions.
The Court observed (see p. 689): " It is a matter of common knowledge that a number of dry cows in the City of Madras are sold away to butchers by the poor milkmen who could not support them.
Butchers themselves offer tempting prices for such cows, a temptation which the poverty of the milkmen could not but lead him to succumb.
Dry cows were admitted into the Panjrapole to prevent them from going into the slaughter house.
Maintenance of the dry cows called for stud bulls Stud bulls were presented to the society by the Government.
In the course of time, the dry cows brought forth their progeny and began to yield milk.
220 The Panjrapole was, therefore, in a position to sell milk yielded by the cows which were received by it with a view to protect them from the slaughter house details of the sale amounts in respect of the milk produced shows that the institution had been receiving substantial sums every year by sale of milk." So for as the activities of the Madras Panjrapole and Bombay Panjrapole are concerned they are Practically identical except that in the present case the maintenance, of a dairy farm is not explicitly referred to anywhere but the facts as culled from the evidence makes the same only too obvious.
There was however a certain difference in the case of the Madras Panjra pole inasmuch as the Madras High Court found that (see p. 691) "During certain years, it even went a step further.
The Panjrapole purchased cows, maintained a dairy farm and supplemented their own production of milk with out side milk and sold them.
These activities would certainly partake the character of a business, though the profit of such business might have gone to the humanitarian activities undertaken by the society.
But the activities have long ago ceased.
What the society is now having is the milk yielded by its own cows.
Those cows are admittedly kept by the Panirapole till their lives.
They are not sold.
They are the property of the Panjrapole.
The milk yielded by those cows could only be considered as an incidental product in the maintenance of the cows.
The sale of cowdung cakes and menure and of the calves after the mother cows become dry are also incidental.
It cannot be held that a trade or business is conducted by the institution.
" According to the learned single Judige who heard the peti tion the activities of the Panjrapole had nothing to do with human needs.
They were solely devoted to the needs of helpless animals; though incidentally such activities have a business tinge about them it cannot be said to be for human need or material welfare.
The objects were mainly religious and humanitarian.
Following the test laid down in the Hospital Mazdoor Sabha case the learned Judge was of opinion that there was no industrial dispute which could be referred by the State Government to the 221 Labour court for adjudication.
The case went in appeal to a Letters Patent Bench : Workmen Employed in Madras Panjrapole vs Madras Panjrapole (1).
The Bench took a somewhat different view from that of the learned single Judge.
It demurred to the observations of the trial Judge that "there is no element of trade or business involved in the various activities of the society".
According to the Bench : "These observations, however, do not extend to subsequent developments, the result of the growth of the institution, and its attempt to achieve self sufficiency.
There were (1) purchase and sale of milk, a fairly wide upon scale, (2) the maintenance of a dairy farm during a period of the history of the institution, and (3) similarly, the maintenance of stud bulls, to enable dry cows to conceive and bear calves." The Bench felt compelled to allow the appeal to the extent of modifying the writ of certiorari and laying down that the actual decision would have to be arrived at after the record of adequate evidence by the Labour court in the light of the principles formulated, the available evidence being both inadequate and contradictory.
For the guidance of the Labour court the Bench observed Even if the institution at the inception, and as basically defined, be purely humanitarian,.
non industrial and not amenable to any of the tests.
upon which the definition has been applied,, it cannot be gainsaid that, if the.
institution had largely altered its complexion through the years, so as to have become a focus of economic production, the definition again night be applicable.
" The Bench also examined the question whether the activity of the Panjrapole was in essence religious, or spiritual, as according to it a temple or a church could not be considered to be an industry.
(1) [1962]2 L.L.J. 472.
222 The net result of the above seems to be that although the Bench was inclined to hold that the Madras Panjrapole at its inception was not an industry the complexion of its activities might have been altered by later developments so, as to render the institution as then organised an industry within the meaning of, the Act.
Further according to the Bench individual units of the Organization (like the dis trict dairy farm) might constitute an industry though the society itself may not be one.
The matter came up again before the Madras High Court (see , The Tribunal held in favour of the workmen and the learned Judge dismissed the application for the issue of a writ by the Panjrapole.
The learned Judge referred to the reports of the institution in several years past from 1937 to 1957.
He found that the object of the society had been amended in 1937 to enable it to receive young cows and charge fees from the owners.
The idea of starting a dairy farm was for supporting the infirm cows, bullocks and horses and in pursuance of that idea stud bulls were acquired for improving the cattle breeding.
, The income from the sale of milk rose phenomenally reaching the figure of Rs. 60,000 in the year 1957.
The learned Judge found himself unable to hold that maintaining cows and stud bulls and selling milk were only Subsidiary in nature to the humane the society, namely, to provide Shelter for the de CrePit and useless and infirm animals.
The learned Judge held that "if the Madras Panjrapole had confined itself to the objectives at its inception, namely, to give protection to the old, infirm and decrepit animals, it could well be con tended that it was only for the purpose of satisfying purely spiritual needs, as it is common knowledge that Hindus 'consider cow protection.
as one of their religious duties.
If the Madras Panjrapole had not extended its activities, following 'the, authorities cited above, would have had no hesitation in holding that it is not an industr) A reading of the annual reports show that a large number of high milk yielding cows and buffaloes were pur ,chased, by the society and due to the successful working of the dairy farm the Panjrapole was able to supply milk to various institutions .
The reports show that considerable profits were made by the Panjrapole, the sale of milk fetching a sum of Rs. 60,000 in the year 1957".
In the 223 result the petition was dismissed and the labour court was directed to determine the other issues.
We have referred at some length to the Madras Panjle case to show the analogy of the activities of the radoras Panjrapole to the.
Bombay Panjrapole.
Save for the fact that the Madras Panjrapole definitely and expressly changed its objective by starting a dairy farm and purchasing mulch cows and stud bulls there is very little difference between the facts of the case before us from those in the Madras Panjrapole case.
In the present case only one stud bull w s purchased but the activities pursued by the Bombay Panjrapole make it clear that they were pursuing the same kind of activity, namely, that of using ,stud bulls for the purpose of breeding healthy cattle including cows so as to be able to make a very sizable income from the sale of milk.
For the last few years, from 1958 to 1962 the number of milch cows was always Considerable which could only be accounted for by the fact that from time to time the place of cows which had become dry was being taken up by cows fecundate by the bulls maintained for the purpose of keeping up a steady supply of milk.
We have already referred to the fact that ' the value of milk supplied to the sick and infirm cattle was infinitesimal compared to that sold in the market.
The expenses incurred in connection with the treatment of sick and infirm animals was also negligible compared to the total expenses of the institution.
The number of men employed for such treatment was very small at all times.
The mere fact therefore that the Panjra pole never purchased milch cows and never purchased stud bulls except once makes no difference to the question as to whether their activity of maintaining cows and bulls could only be considered as an investment.
It was certainly carried on as a business although it was not pursued in the same way as astute businessmen only out to make profit would, namely, get rid of the animals which were no longer fit for any Use.
The value of the milk supplied for the last 3 or 4 years was well in excess of Rs. 2 lakhs per annum and this could only be possible if the cows and buffaloes had been kept and maintained not merely to keep them alive but with the idea of getting as much production out of them as possible.
224 In this view of the matter, it is hardly necessary to consider the other cases which were cited at the Bar, namely, Gymkhana Club Union case (1), Cricket Club vs Labour Union (2) and Harinagar Cane Farm vs State of Bihar (1).
It was remarked in the Gymkhana Club case that the activity of the club is conducted with the aid of employees, who follow callings or avocations and that the activities of the club was not a calling or business of its members, of Managing Committee and there was no undertaking analogous to trade or business.
In the Cricket Club 's case (2) the Court examined the different activities of the club and came to the conclusion that they did not lead to the inference that the club was carrying on an industry.
On the facts of this case we hold that the activities of the Panjrapole as disclosed in this case constituted an industry within the meaning of section 2(j) of the Industrial Disputes Act and the appeal must therefore be dismissed with costs.
S.C. Appeal dismissed. (1) [1968] 1 S.C.R. 742.
(2) ; (3) ; 225.
| IN-Abs | The appellant Panjrapole was started in 1834 as a charitable institution for the care and protection of animals.
it expanded its activities considerably over the years.
The institution gradually diversified its objects from only tending to the sick, infirm and unwanted cattle by adopting a policy of keeping cattle not merely for their own sake but for the sake of improving the cattle population in order to get large quantities of milk for sale and there by get an income which would augment its sources.
The institution was using stud bulls for the purpose of breeding healthy cattle including cows so as to be able to make a sizable income from the sale of milk.
The value of the milk sold was considerable compared to the value of milk supplied to the sick and infirm cattle of the institution.
The expenses for treating the sick animals was also very little compared to the total expenses of the Institution.
A large number of workers were employed at the institution.
They raised an industrial dispute in relation to their wages and other service benefits.
The dispute was referred for adjudication to the Industrial Tribunal.
It was contended by the Appellant that the Institution was a charitable institution and therefore was not an 'industry ' within the meaning of section 2(j) of the Industrial Disputes Act.
The Tribunal found that the activities of the institution in connection with its movable property and collection and sale of milk to be an "industry" while the maintenance of lame, infirm and sick cows, dogs and other animals was held not to constitute an "industry".
A petition under article 227 was moved in the High Court for quashing the award of the Industrial Tribunal but the same was summarily rejected.
Dismissing the appeal, HELD:On the facts and circumstances of the case, the Bombay Panjrapole is an "Industry" within the meaning of Sec.
2(j) of the Industrial Disputes Act.
The activities of the Panjrapole, though charitable at the.
beginning, was not exclusively so in later years, and the later activities show that it was carried on as a business concern.
Even the value of the milk supplied for the last 3 or 4 years itself was well in excess ,of Rs. 2 lakhs per annum and this could only be possible if the cows ,and buffaloes had been kept and maintained not merely to keep them ,alive but with the idea of getting as much production out of them as possible and the Panjrapole was run like a dairy firm.
[223H] State of Bombay vs The Hospital Mazdoor Sabha, ; , Safdar Jung Hospital, New Delhi vs K. section Sethi & Management of M/s T. B. Hospital, New Delhi vs The Workmen, A.I.R. 1970 'S.C. 1407.
Gynmkhana Club Union vs Management, [1968].
1 S.C.R. 742, Lalit Hari Ayurvedic College Pharmacy vs
Its Workers Union, A.I. R. , Madras Panjrapole vs Labour Court, , Worknien Employed in Madras Panjapole vs Madras Panjropole , Cricket Club vs Labour Union, ' [1969] 1 S.C.R. 60, Harinagar Cone Firma vs State of Bihar, [1964] 2 S.C.R. 458, referred to.
|
Appeals Nos. 174 and 175 of 1967.
Appeals by special leave from the judgment and order dated June 16, 1966 of the Mysore High Court in exhibit Regular Appeals Nos.
33 34 of 1961.
V.S. Desai, Naunit Lal and Swaranjit Sodhi, for the appellant (in both the appeals).
D.V. Patel, O. P. Malhotra, P. C. Bhartari, for the respondent (in both the appeals).
The Judgment of the Court was delivered by Mathew, J.
These two appeals, by special leave, are from the common judgment passed by High Court of Mysore on 16 6 1966 confirming the order of the District Court, Bangalore, allowing an application for execution of the compromise decree passed on 24 6 1959 in appeal from the decree in O.S. 85 of 1949 50 of that court.
The appellant was the defendant in the suit and the respon dent the plaintiff.
As matter in controversy between the parties in the appeal turns upon the construction of the compromise decree, it is necessary to set out its terms : (i) The defendant agrees to receive from the plaintiff a lakh of rupees paid as consideration for the sale of the property No. 44, Mahatma Gandhi Road, Bangalore, together with stamp charges of Rs. 3,300/ (rupees three thousand 517 and three hundred only) with interest at six per cent per annum of the above two sums from 16 3 1947 up to date together with Rs. 7,000/ (rupees seven thousand only) deducted by the Corporation minus the rent received viz., Rs. 22,500/ (rupees twenty two thousand and five hundred only) and give up all rights to the said property.
The plaintiff will be entitled to the materials lying on the premises.
(ii)The period of time fixed for the payment by the plaintiff to the defendant of this amount stated above is till 1 1 1960.
(iii)The plaintiff agrees to deposit the amount in court for payment to the defendant.
(iv)On failure of the plaintiff to deposit the amount in court by 1 1 1960 his suit now in appeal will be dismissed with costs throughout.
(v) It is agreed by the parties that time is the essence of the contract and no further extension of time would be allowed and the dismissal of the suit with costs would be automatic.
The respondent applied for challan on 22 12 1959 to deposit the amount and a challan was issued to him on 24 12 1959, the last working day before the court closed for Christmas holidays.
December 31, 1959 and January 1, 1960, were holidays.
Neither the lower courts nor the banks were open on these days.
The respondent made the deposit on 2 1 1960 and sought to enforce his right under the decree by compelling the appellant to execute the conveyance in terms of the compromise decree by filing execution case No.25/1960.
The appellant also filed execution case No. 45 of 1960 for cost on the basis that the suit stood dismissed as per the provision in the decree on the failure of the respondent to deposit the amount by 1 1 1960, These two petitions were heard together, and the court passed an order holding that the respondent had made the deposit in substantial compliance with the decree and allowing execution case No. 25 of 1960 and dismissing execution case No. 45 of 1960.
Against this order, the appellant filed appeals 33 and 34 of 1960 before the High Court of Mysore.
A Division Bench of the High Court, by its judgment dated 16 6 1966, dismissed the appeals with costs.
The short question for consideration in these appeals is whether the deposit made by the respondent on 2 1 1960 was within the time specified in the compromise decree and would 518 enable him to compel the appellant to execute the sale deed in accordance with the provisions of the compromise decree.
It was argued on behalf of the appellant that the respondent had practically six month 's time to deposit the amount, that he should not have waited for the last day of the period allowed to him by the decree to deposit the amount and if he was not diligent to deposit the amount earlier, he must suffer the consequences if the court happened to be closed on the last.
day on which he should have made the deposit.
Counsel said that there is a distinction between a case where under a decree an act has to be performed by a party on a day certain and a ease where the party has the liberty to perform the act within a certain time a certain day .
that in the former case, if the act cannot be pet formed by reason of circumstances beyond his control, he will be relieved against the consequences of his default by reason of the maxim Lexnon cogit ad impossibility (the law does not cornpel a man to do that which he cannot possibly perform) if he performs the act at the next available opportunity, but where he has to per form an act within a certain period or by a certain date, as in this case, the law will not take notice of the circumstance that the act became incapable of performance by reason of circumstances beyond his control on the last day of the period.
Whether there is any logical or reasonable basis for making the distinction, we clear that in this case the respondent had the right or, perhaps, more accurately, the liberty to deposit the amount in court till and including 1 1 196O.
In Halsbury 's Laws of England vol.
37, 3rd Edition, page 96, :it is observed "Subject to certain exceptions, the general rule is that, when an ,let may be done or a benefit enjoyed benefit enjoyed upto the last moment of the last of that period.
" if the respondent had the right or liberty to deposit the amount III court on 1 1 1960 under the compromise decree the fact that he did not choose 'Lo make the deposit earlier would not affect his right or liberty to deposit the amount in court on 1 1 1960.
In Fateh Khan and another vs Chhajju and others(1), an argument similar to the one addressed by counsel for the appellant was advanced but was not countenanced by the court.
That was a case where a pre emptor was unable to deposit the purchase money in court on the last day of the period allowed by the decree; the period expired when the court was closed for the vacation and he deposited the amount on the reopening day.
It was argued that the decree allowed the preemptor a period of time within which to deposit the amount, that he could have deposited (1) A.I.R. 1931 Lahore 386.
519 the amount earlier, that he should not have waited till the last day of the period and that if the last day happened to be a holiday, he can take no advantage of that circumstance.
The court repelled the argument by saying that if the argument is accepted it will have the effect of curtailing the days allowed to him by the decree without any reason.
It was next contended for the appellant that it was open to the respondent to pay the amount to the appellant either on December 31, 1959, or January 1, 1960, and that he should not have waited till the 2nd to deposit the amount in court.
Counsel submitted that under Order XXI Rule 1, the respondent could have paid the amount to the appellant on January 1, 1960, or earlier, that he should not have waited till the 2nd to deposit the amount in court and if the last day of the period happened to be a day on which the court was closed, that is not a circumstance which would relieve the respondent from his obligation to pay the amount within the time specified.
In support of this argument counsel referred to Kunj Bihari and others vs Bindeshri Prasad and others(1), Roshan Lal vs Ganpat Lal (2), Indal vs Chaudhary Ram Nidh(3), and Ram Kinkar Singh and another vs Smt.
Kamal Basini Devi(4), Kunj Behari and others vs Bindeshri Prasad and others(1) was a case where an installment decree provided that the first installment was payable on a certain date; the date specified expired during the vacation of the court and the amount was deposited in court on the re opening day.
It was held that the judgment debtors had the power to make the payment direct to the decree holder, that depositing in court was not the only course open to them and so they could not take advantage of the fact that the court was closed on the specified date and the payment made by them was not made in time.
The other cases cited are to the, same effect.
The Principle underlying these decisions is that when the judgment debtor has the option to pay the decree amount to the decree holder or to deposit it in court, he cannot choose one of them and act in a manner so as to prejudice the rights of the other party.
Although under Order XXI, Rule 1.
it is open to a judgment debtor to pay the amount direct to the decree holder or to deposit in court, he cannot choose the alternative when that will prejudice the decree holder.
Even here there is a conflict of opinion among the High Courts.
In Chatlapali Suryaprakasa Rao vs Polisetti Venkataratnam and others(5), the compromise decree there in question provided that the decretal amount should be paid in certain yearly (1) I.L.R. Vol.
51, 1929 Allahabad 527.
(2) A.I,R, 1938 Allahabad 199 (3) A.I.R. (33) 1946 Oudh 156.
(4) A.I.R. 1938 Patna 451.
(5) A.I.R. 1938 Madras 523.
520 instalment on certain fixed date in each year.
The decree further provided that in case of default of two successive instalments the whole amount would be recovered.
The decree however did not provide to whom the money was to be paid.
The judgment debtor failed to pay the first instalment.
On a day previous to that on which the second instalment was due he obtained a challan.
The day on which the instalment was due being a holiday, he paid the instalment next day in the Bank.
It was held by the Madras High Court that the judgment debtor did not commit default in payment of the second instalment and consequently there was no default of two successive instalments.
This is also the view that was taken in Premchand Bhikabhai vs Ramdeo Sukdeo Marwadi(1).
It is not necessary to resolve the conflict of opinion on this aspect; as we are concerned with a decree which specifically provided that the respondent should deposit the amount in court.
He had, therefore, no option to pay the same to the appellant and the appellant, perhaps, would have been within his right if he refused a tender of the amount to him.
Ile parties, for obvious reasons, agreed that the amount should be deposited in court and that was made a rule of the court and, therefore, the principle of the decision in Kunj Behari and others vs Bindeshri Prasad and others and the other cases cannot be applied here.
The question then arises as to what is the principle which should be applied in a case where a party to a consent decree is given time to do an act within a specified day or by a specified (lay and fails to do it on the ground of impossibility of performance on the last day specified but does it on the next practicable day.
This question arose for consideration in Muhammad Jan vs Chiam Lal(2).
There a decree in a pre emption suit gave the plaintiff a period of one month within which to deposit the purchase money in order to obtain the benefit of the decree in his favour, and the period expired on a date on which the court Was closed for the vacation and the plaintiff made the deposit on the day on which the court re opened.
Piggott, Lindsay and Sulaiman, JJ.
held that the deposit was in time under the terms of the decree.
They said that there is a generally recognised principle of law under which parties who are prevented from doing a thing in court on a particular day, not by an act of their own but by the court itself, are entitled to do it at the first subsequent opportunity.
The court quoted with approval the decision in Shooshee Bhusan Rudro and another vs Gobind Chunder Roy(3) where it was observed that the broad principle is that although the parties themselves cannot extend the time for doing an act in court, yet (1) A.I.R. (36) 1949 Nagpur 141.
(2) I.L.R. Allahabad Series, Vol.
XLVI, 1924, p. 328.
(3) I.L.R. Calcutta, Vol. XVIII (1891) p. 231.
521 If the delay is caused not by any act of their own, but by some act of the court itself such as the fact of the court being closed they are entitled to do the act on the first opening day.
In Satnbasiva Chari vs Ramasami Reddi(1), the Madras High Court held that there is a generally recognised principle of law under which parties who are prevented from doing a thing in court on a particular day, not by any act of their own, but by the court itself, are entitled to do it at the first subsequent opportunity.
We have already referred to Fateh Khan and another vs Chhajju and others where the Lahore High Court applied this principle to a pre emption decree.
Mayor vs Harding(2) is a case in point.
In that case the appellant had applied to justices to state a case under the Summary Jurisdiction Act, 1857.
He received the case from them on Good Friday, and transmitted it to the proper court on the following Wednesday.
It was held that he had complied sufficiently with the requirement of the Act directing him to transmit the case within three days after receiving it, as it was impossible for him to transmit the case earlier than he did because of the closure of the offices of the court from Friday till Wednesday.
Mellor, J., dealt with the matter as follows : "Here it was impossible for the appellant to lodge his case within three days after he received it.
As regards the conduct of the parties themselves, it is a condition precedent.
But this term is sometimes used rather loosely.
I think it cannot be considered strictly a condition precedent where it is impossible of performance in consequence of the offices of the court being closed, and there being no one to receive the case.
The appellant lodge the case on Wednesday, that is, he did all that it was practicable for him to do." In Halsbury 's Laws of England, Vol. 37, 3rd Edition, page 97, para 172, it is observed : "172.
The fact that the last day of a prescribed period is a Sunday or other non juridical day does not as a general rule give the person who is called upon to Act an extra day; it is no excuse for his omission to do the act on some prior day.
This general rule does not hold good where the effect of it would be +Lo render performance of the act impossible.
This would be the case if the whole of the prescribed period consisted of holidays, in Which case the act may lawfully be done on the next possible day.
(1) I.L.R. 22 Madras (1899) p. 179 (2) 522 Again the general rule does not hold good where the last day is a Sunday and the act be done is one the performance of which on a Sunday is prohibited by the Sunday Observance Act, 1677, or where the act has to be done, not by the party only, but by the court or by the party in conjunction with the court.
In such cases the act may, when the last day limited for the performance of it happens to be a day when the court or its office is closed, be done on the next practicable day.
" We think that the second exception to the general rule stated in the passage and in effect followed in the rulings cited above must apply to the facts here.
But counsel for the appellant argued that the compromise decree provided that on default of the respondent to deposit the amount in court on 1 1 1960, there was to be an automatic dismissal of the suit by virtue of clause (v) thereof and the execution court had no right to alter or modify the terms of the decree and hold that the deposit made on 2 1 1960 shall be deemed to be a deposit made on 1 1 1960, and order the execution of the decree on that basis.
A court executing the decree shall execute it as it stands.
It cannot modify or vary the terms of the decree.
No exception can be taken to that general principle.
But the execution court has the right to construe a decree in the light of the applicable provisions of law and if in this case on a construction of the decree in the light of the applicable provision of law, it found that the deposit made by the respondent on 2 1 1960 was according to law a deposit in compliance with the terms of the decree, then the execution court was not varying the terms of the decree but executing the decree as it stood after considering the effect of the deposit in the light of the relevant law.
Counsel then contended that a compromise decree is none the less a contract, notwithstanding the fact that an order of court is super added to it and, a provision in a contract that an act shall be done within a certain period or by a particular day by a party is absolute.
In other words counsel said that duties are either imposed by law or undertaken by contract and the ordinary rule of law is that when the law creates a duty and a party is disabled from performing it without any default of his own, the law excuses him, but when a party by his own contract imposes a duty upon himself, he is bound to make it good not withstanding any accident by inevitable necessity .
Counsel in this connection referred to the passage in Halsbury 's Law, , of England Volume XIV, page 622, para 151, which reads as under 523 " 1151.
Where under a contract, conveyance, or will a beneficial right is to arise upon the performance by the beneficiary of some act in a stated manner, or a stated time, the act must be performed accordingly in order to obtain the enjoyment of the right, and in the absence of fraud, accident or surprise, equity will not ,relieve against a breach of the terms".
Although a contract is not the less a contract because it is embodied in a judge 's order, or, as said by Parke J. in Went worth vs Bullen(1) B. & C. 840, 850 "the contract of the parties is not the less a contract, and subject to the incidents of a contract.
because there is super added the command of a judge".
still we think it is something more than a contract.
The Judicial Committee of the Privy Council in Charles Hubert Kinch vs Edward Keith Walcott and others (2) observed " 'An order by consent, not discharged by mutual agreement and remaining unreduced is as effective as an order of the court made otherwise than by consent and not discharged on appeal.
A party bound by a consent order must when once it has been completed, obey it, unless and until he can get it set aside in proceedings duly constituted for the purpose.
The only difference in this respect between an order made by consent and one not so made is that the first stands unless and until it is discharged by mutual agreement or is s et aside by another order of the court : the second stands unless and until it is discharged on appeal.
" In Govind Waman vs Murlidhar Shrinivas and others(3), the Bombay High Court held that a consent decree passed by a court of competent jurisdiction cannot be treated on the same footing as a contract between the parties, that although it is true that before a court passes a consent decree, it can and should examine the lawfulness and validity of the terms of the proposed compromise, but when once that stage is passed and a decree follows, different considerations arise and therefore, where I compromise decree contains a term against alienating certain property and gives the other party right to its possession on such alienation, the decree is not a nullity in spite of the fact that the term is opposed to section 10, T.P. Act.
And the fact that it is contrary to law would not affect its binding character, unless it is set aside by taking proper proceedings.
That different conside (1) English Law Reports, (2) A.I.R. 1929 journal & Privy Council, P. 289.
(3) A.I.R. 1953 Bombay 412.
524 ration would apply when a contract is embodied in a judge 's order is also clear from Morris vs Barret(1).
In that case by a consent order it was provided that, upon payment of 341.
, the debt and costs as agreed, in installments on the 28th of May, on the 25th of June and on the 25th of every succeeding month until the whole is paid, all further proceedings in the cause be stayed.
The order further provided that, in case default be made in any payment as aforesaid, the plaintiff be at liberty to sign final judgment for the said sum of 341., and issue execution for the amount unpaid.
The first and two following installments were duly paid.
The 25th of October, the day on which the fourth installment became payable, being a Sunday, the defendant called at the office of the planitiff 's attorney on Monday the 26th, and offered to pay it, but was told he was too late, and that judgment had been signed.
No judgment, however, was signed until the following morning.
The defendant took out a summons to set aside the judgment, on the round that under the circumstances he had the whole of Monday to pay the money, and that the judgment signed after the money was offered was irregular.
The court held that the defendant had the whole of Monday to pay the money.
One of the arguments advanced in that case was that as the judge 's order was a consent order, the principle governing contract must regulate the rights of parties and therefore the defendant was not excused from performing the contract by the accident of the day being a Sunday.
In repelling this contention Erle, C.J. said : "I desire not to be understood as giving any decision as to the rights of parties under a contract : but, in arriving at the conclusion I come to, I seek only to give effect to the duty which the law imposes upon a party who is directed by a judge 's order to pay money.
The defendant was ready and offered to pay it on Monday; but the plaintiff, conceiving that the offer came too late.
declined to receive it, and on the following day signed the judgment for the balance due.
Confining myself to the judge 's order and the remedy and duty thereon and to what ought to be the fair meaning and understanding of the instrument, I find no authority for saying that the defendant was bound to search for his creditor and pay him the money on the Sunday.
" Crowder, J. said : "This is not like the case of an ordinary contract; and I de sire not to be understood as at all interfering (1) English Law Reports 141, p. 768.
525 with any of the cases which have been referred to with reference to contracts.
The cases upon the construction of statutes are also founded upon an entirely different consideration.
" We may also state that there is no evidence in this case that at the time when the compromise was entered into, either of the parties knew that the 31st of December, 1959 and the 1st of January, 1960, would be holidays.
In these circumstances we think that the deposit made by the respondent on 2 1 1960 was in substance and in effect a deposit made in terms of the compromise decree and that the High Court was right in its conclusion.
We dismiss the appeals but in the circumstances without any order as to costs.
K.B.N. Appeals dismissed.
| IN-Abs | Under a compromise decree the respondent plaintiff agreed to deposit in court the sale amount by January 1, 1960.
December 31, 1959 and January 1, 1960 were holidays.
The respondent made the deposit on January 2, 1960 and sought to enforce his right under the decree compelling the appellant defendant to execute the conveyance.
The appellant filed execution for cost on the basis that the suit stood dismissed as per the provision in the compromise decree on the failure of the respondent lo deposit the amount by January 1, 1960.
, The Court held that the respondent had made the deposit in substantial compliance with the decree.
appeals against this order were also dismissed.
In appeals to this Court it was contended (i) where a party had to perform an act within a certain of by a certain date, the law would not take notice of the circumstance that the act became incapable of performance by reason of circumstances beyond his control on the last day of the period; (ii) the executing court had no right to alter or modify the terms of the decree and hold that the deposit made on January 2, 1960 had to be deemed to be a deposit made on January 1, 1960 and (iii) a compromise decree was a contract notwithstanding the fact that an order of court was superadded to it and a provision in a contract that an act had to be done within a certain period or by a particular day by a party was absolute dismissing the appeal.
HELD : (i) The respondent had the right or the liberty to deposit the amount in court till and including January 1, 1960.
That being so, the fact that be did not choose to make the deposit earlier would not affect his right or liberty to deposit the amount in court on January 1, 1960.
[518 F G] Halsbury vol.
37 3rd Edn.
p. 96; Fateh Khan vs Chhajju & Ors., A.I.R. 1931 Lah. 386, referred to.
It is a generally recognised principle of law that parties who are prevented from doing a thing in court on particular day, not by an act of their own, but by the court itself, are entitled to do it at the first subsequent opportunity.
[520 G] Halsbury Vol.
37, 3rd Ed.
p. 97, para 172, Muhammad Jan vs Shiam Lal; I.L.R. XLVI All. 328 (1924); Shooshee Bushan Rtidro vs Gobind Chander Roy, I.L.R. Cal.
XVIII (1891) 231, Sambasiva Chari vs Ramasaini Reddi, I.L.R. 22 Mad.
(1899) 179 and Mayor vs Harding, , referred to.
The present case is concerned with a decree which specifically provided that the respondent should deposit the amount in court.
He had, therefore, no option to pay the same to the appellant [520 C D] Kunj Bihari vs Bitndeshri Prasad, I.L.R. vol.
51, 1929, All.
527, Roshan Lal vs Ganpat Lal.
A.I.R. 1938 All.
, Indal vs Chaudhary 516 Ram Nidh, A.I.R. 33 [1946] oudh.
156 and Rain Kinkar Singh V. Smt.
Kamal Basini Devi, A.I.R. 1938 Pat. 451, distinguished.
Chatlapali Suryaprakasa Rao vs Polisetti Venkataratnam, A.I.R. 1938 Mad.
523, referred to.
(ii)The executing court has the right to construe the decree in the light of the applicable provisions of law, If in this case, on such a construction.
the court found that the deposit made by the respondent on January 2, 1960, was according to law a deposit in compliance with the terms of the decree, then, the executing court was not varying the terms of the decree but executing the decree as it stood.
[522 E] (iii)Although a contract is not the less a contract because it is embodied in a Judge 's order, it is something more than a contract.
Different considerations would apply when a contract is embodied in a Judge ' .; order [523 C] Wentworth vs Bullen, E.L.R. 141 769, Charles Hubert Kinch vs Fdward Keith Walcott, A.I.R. 1929 Journal & P.C. 289, Govind waman vs Murlidhar Shrinivas, A.I.R. 1953 Bom, 412 and Morris vs Barret, E.I.R. 141, 768, referred to.
|
Appeal No. 1543 of 1970.
Appeal from the judgment and order dated September 18, 1969 of the Delhi High Court in Civil Writ No. 851 of 1968.
V. M. Tarkunde, C. D. Dewan, 0.
N. Mohindroo and R. N. Sachthey, for the appellants.
M. K. Ramamurthi, P. P. Rao and T. V. section Narasimhachari, for the respondent.
The Judgment of the Court was delivered by Vaidialingam, J.
This appeal by the State of Haryana, the Chief Minister of the State and the Registrar Co operative Societies, on certificates is directed against the judgment and order of the High Court of Delhi dated September 18, 1969 allowing Civil Writ No. 851 of 1968 and quashing the order of the State Government dated October 31, 1968 terminating the services of the respondent.
Before we proceed to set out the facts leading up to the filing of the writ petition by the respondent, it is necessary to deal with a preliminary objection to the maintainability of the appeal that has been raised by Mr. M. K. Ramamurthy, learned counsel for the respondent.
The objection is that the order dated October 31, 1968 terminating the services of the respondent, which was quashed 455 by the High Court and which order again is sought to be can vassed in the appeal has been cancelled by the State on December 5, 1969.
In consequence of the latter order, the counsel pointed out, the respondent has been reinstated in service.
It is the contention of Mr. M. K. Ramamurthy that in view of the fact that the officer has now been reinstated in service, the question of the validity of the original order passed on October 31, 1968 terminating the services of the respondent no longer survives for consideration in this appeal.
This preliminary objection has been contested by Mr. V. M. Tarkunde, learned counsel for the appellants.
We are satisfied that the preliminary objection, raised on behalf of the respondent, to the maintainability of the appeal, cannot be sustained for the reasons stated below.
The order of termination was passed on October 31, 1968.
The respondent filed Civil Writ No. 851 of 1968, before the High Court, challenging the said order.
The judgment of the High Court setting aside the said order and allowing the writ petition was rendered on September 18, 1969.
It is no doubt true that on December 5, 1969, the State Government passed an order canceling the previous order of termination dated October 31, 1968 and posted the respondent as Deputy Director (Publicity) at Narnaul.
The said order further directed the payment to the respondent full pay and allowances that he would have been entitled, if his services had not been terminated.
But there is a very significant recital in the order to the effect that the State is canceling the previous order dated October 31, 1968, in view of the, acceptance by the High Court of the writ petition filed by the respondent.
A copy of the order dated December 5, 1969, was also forwarded by the Government to the Assistant Registrar of the High Court of Delhi.
The State filed on December 19, 1969, an application S.C.A. No. 1 of 1970 in the High Court praying for grant of certificate to enable the State to file an appeal in this Court against the decision in Civil Writ No. 851 of 1968.
On the next day, i.e. December 20, 1969 the State filed a petition C.M. No. 15 of 1970 in S.C.A. No. 1 of 1970 praying for restraining the respondent from claiming arrears of salary and allowances for the period he was out of service from October 31, 1968 or in the alternative to direct the respondent to furnish sufficient bank guarantee before recovering those amounts from the State.
This request was made to enure till the disposal of the application filed by the State for grant of certificate.
Both in the petition C.M. No. 15 of 1970 as well as in the affidavit filed in support thereof, it was specifically mentioned that the copy of the judgment of the High Court was received by the Chief Secretary to the Government on November 25, 1969 456 and that in compliance with the judgment of the High Court, the respondent had been posted as Deputy Director (Publicity) at Narnaul by order dated December 5, 1969.
A copy of this order was also annexed to the petition.
It was further stated that the amount payable to the respondent being very large, there will be considerable difficulty in obtaining restitution in case the judgment of the High Court is set aside by this Court.
After setting out the above facts, the State prayed for a stay of payment of the amounts or the respondent being asked to draw the amounts on furnishing bank guarantee pending the disposal of S.C.A. No 1 of 1970.
The respondent filed counter affidavits, both to the main application S.C.A. No. 1 of 1970 as well as to the stay petition No. 15 of 1970.
In his counter affidavit to the stay petition he bad referred to the decision of the High Court in his favour and to the order dated December 5, 1969 passed by the State reinstating him in service.
No doubt, he has averred that this order was passed without any reservation or qualification.
He also opposed the said application on merits.
In his counter affidavit opposing S.C.A. No. 1 of 1970, the respondent had again stated that the previous order of termination, which was set aside by the High Court, was cancelled on December 5, 1969 by the State without any reservation or qualification.
In view of this the respondent averred that the position in law is that the order dated October 31, 1969 should be considered to have never existed at any time and therefore there was nothing further for the State to agitate in this Court.
After hearing both the parties, the learned Judges of the High Court, who were fully aware, of the averments made by the respondent as well as the order dated December 5, 1969, passed by the State, by their order dated February 13, 1970, granted the certificate of fitness.
Regarding the stay petition, the High Court has stated that as the respondent herein, has been reinstated and also been paid his full salary and allowances, no further question of staying the payment or directing the respondent to furnish bank guarantee arises for consideration.
In this view, while granting the certificate and allowing S.C.A. No. 1 of 1970, the stay petition C.M. No. 15 of 1970 was dismissed.
In view of what is stated above, it is clear that the order dated December 5, 1969 was passed by the State in obedience to the judgment of the High Court setting aside the previous order dated October 31, 1968.
It has been specifically stated by the State in the order dated December 5, 1969 as well as in the various affidavits and applications, referred to above, that the State had taken steps to come to this Court against the decision of the High Court of Delhi.
The order dated December 5, 1969 read in the context 457 in which it was made and taking into consideration the other circumstances, mentioned above, it will be seen that the State was not unconditionally canceling the order dated October 31, 1968 with a view to take back the respondent in service for all times.
If the intention of the State was to cancel the order dated October 31, 1968 and reinstate the respondent in service with ail the attendant benefits that he will be entitled to, then it was totally unnecessary on the part of the State to have filed an application for grant of certificate and also pray for stay regarding payment of arrears of salary and allowances.
The State was bound to comply with the judgment passed by the High Court.
In this case, it must be stated that the State acted quite properly in so complying with the judgment of the High Court when the order dated December 5, 1969 was passed.
Therefore, the order dated December 5, 1969 must, in the circumstances, be considered to be a purely provisional one pending the ultimate decision of this Court.
Therefore, the circumstances that the respondent was reinstated in service by the order dated December 5, 1969 cannot and does not debar the State from challenging the judgment of the High Court.
In fact, immediately after passing the order dated December 5, 1969, the State has been taking very active steps to challenge the decision of the High Court.
In view of all these above circumstances, it follows that the State is entitled, in this appeal, to challenge the decision of the High Court setting aside the order dated October 31 1968.
The preliminary objection, in consequence, is over ruled.
Having disposal of the preliminary objection, we will now proceed to state the facts leading up to the filing by the respondent of the writ petition in the High Court.
His averments in the writ petition were as follows : He joined the services of the composite State of Punjab on June 22, 1957 as States Press Liaison Officer in Delhi on a starting salary of Rs. 600/ p.m. in the grade of Rs. 500 25 650/30 800 in the Public Relations Department of the State.
By order dated June 28, 1957 the Governor of Punjab created a post of State Press Liaison Officer at Delhi in the scale mentioned above with effect from June 22, 1957 till February 28, 1958 in the Public Relations Department, Punjab and also approved his appointment to the said post.
This order further directed that the expenditure is to be met from within the budget grant under the head stated therein for the year 1957 58.
A copy of the order was also communicated to the Accountant General, Punjab for information.
By order dated August 1, 1957, dealing with the appointment, posting and 'transfer, the Governor of Punjab appointed him as State Press Liaison Officer at Delhi, in the grade mentioned in the order, in the Public Relations Department.
The order further referred 458 to the fact that the officer has taken charge of his duties with effect from June 22, 1957 afternoon.
The creation of the post of the State Press Liaison Officer as well as his appointment to the said post were done simultaneously by one and the same order dated June 28, 1957.
In July, 1962, the Governor of Punjab, ,created the Punjab Public Relations Service and the post of State Press Liaison Officer in Delhi was included in the said service as a cadre post.
He went on leave for about six months from November 21, 1959 to May 18, 1960 with permission to act in Pakistan as a Special Correspondent of the Hindustan Times, New Delhi, on a salary of Rs. 1500/ p.m.
On return from leave, he was posted in the same service in the post of Deputy Director (Field) from July 19, 1960 to September 19, 1960.
Later on, he was again posted as Officer on Special Duty, which was also an equivalent post, from September 20, 1960 to June 26, 1962.
When he crossed the efficiency bar in 1960, his salary was raised with effect from December 24, 1960.
He was appointed as Deputy Director (Press), which posit was held by him from June 27, 1962 to June 14, 1966.
By order dated June 24, 1966 the Governor of Punjab appointed him as State Press, Liaison Officer with effect from June 14, 1966 and was posted to Delhi.
The order states that his appointment in Delhi to his original post is "consequent upon the revival of the State Press Liaison Officer, Delhi.
" This post of 'State Press Liaison Officer had been held in abeyance during the period when he was Deputy Director (Press).
On the reorganisation of the composite State of Punjab and its bifurcation into the States of Punjab and Haryana, the post of State Press Liaison ,Officer, Delhi, held by him, was allocated to the State of Haryana with effect from November 1, 1966.
He was also allotted to the State of Haryana.
He remained on deputation with the Punjab Government from December 1, 1966 to March 24, 1967 and again resumed his duty as State Press Liaison Officer, New Delhi, from March 25, 1967 under the Government of Haryana.
He continued to work in the said post till October 31, 1968, on which date the impugned order terminating his services was passed by the State Government.
The respondent claimed that since his appointment in June, 1957, no fault has been found in his work by the successive Chief Ministers and other superior officers, under whom he worked.
Even when he was working under the State of Haryana, his duties were to maintain liaison between the State and the press in Delhi and to explain the policies of the State Government to leading public men in Delhi.
It was also part of his duty to arrange interviews to the Chief Ministers with the gentlemen of the "fourth Estate" and other authorities and agencies at Delhi.
The second appellant was elected on May 19, 1968 as the leader of the Haryana Congress Legislative Party and was due to be sworn in as Chief 459 Minister of the State at New Delhi on May 21, 1968.
The respondent refers to a series of incidents which took place between him and the second and the third appellants.
In view of these circumstances, both the Chief Minister and the third appellant, who was the Head of the Department, mala fide passed the order dated October 31, 1968 terminating his services with effect from the date of the receipt of the order.
The order itself is dated October 31, 1968 passed by the Governor of the State of Haryana terminating the services of the respondent from the date of the receipt of the order.
One month 's salary in lieu of notice was also ordered to be paid.
The respondent was directed to relinquish charge of his post at once on receipt of the order.
The order was delivered to the respondent on November 1, 1968.
The respondent filed a writ petition in the High Court chal lenging the order dated October 31, 1968 on various ,rounds.
According to him, the order is one by way of punishment imposed upon him and passed in violation of article 311(2) of the Constitution.
The order has been passed mala fide and vindictively by or at the instance of the Chief Minister, the second appellant, in collaboration with the third appellant, who was the Head of the Department, and both of whom had become hostile and inimical to him without any fault of his.
The post of State Press Liaison Officer, which was held by him, being a permanent post included in the Public Relations Service of the State, his appointment enured for the duration of the post and as such the termination of his service on October 31, 1968, when the post was still in existence, was illegal and void.
Under the Service Rules, governing the Public Relations Department, in which the post held by him was included, no person appointed to a post shall continue to remain on probation for more than three years.
He having worked for over II years, is to be deemed to be a permanent employee under the Government of Haryana.
On all these grounds, he prayed for quashing the order dated October 31, 1968 as illegal and void.
It will be seen from the averments, noted above, that the respondent attacked the order dated October 31, 1968 on the round that he was a permanent employee of the State having been in the service of the, Public Relations Department for over II years and as such the termination of his services contravened article 311 (2 ) of the Constitution.
His further case is that the post of State Press Liaison Officer, which post he was occupying, was a permanent, post included in the Public Relations Service of the State and hence he was entitled to hold the said post so long as the post itself was in existence.
He has also attacked the order as one passed mala fide by the Chief Minister in collusion and collaboration with the Head of the Department, the third appellant.
The point 6 L500SuP. CI/72 460 to be noted is that the respondent rested his case almost entirely on the post, that he was holding, namely, that of State Press Liaison Officer.
Both the Chief Minister as well as the Head of the Department (third appellant) filed separate affidavits.
While the Chief Minister, (second appellant) mainly controverted the allegation of mala fides made in the petition against him, the third appellant, apart from controverting the allegation of mala fides, also referred to the various other averments made in the writ petition regarding the nature of the right in respect of the post occupied by the respondent.
As we have not set out the allegation of mala fides made in the writ petition, we are, also not referring to the averment made in these two affidavits with regard to those allegations.
The question of mala fides will be dealt with by us later.
But, it must be noted that the Chief Minister, in his affidavit had stated that the decision to terminate the services of the respondent was taken by him on October 29, 1968 and not on October 31, 1968, as alleged by the respondent.
After the decision was taken, necessary action was also taken by the Administrative Department in consultation with the Law Department and the order was actually issued on October 31, 1968 .
He has further stated that after he had taken a decision to terminate the services of the respondent on October 29, 1968, the file did not come to him thereafter, nor did he have any occasion to talk to the Chief Secretary or to the third appellant in connection with the same.
The Chief Minister has further stated that the respondent was a temporary employee and as such his services could be terminated under the rules without assigning any reason of giving one month 's notice or one month 's salary in lieu thereof.
It is further stated by him that the impugned order is valid and does not contravene article 311(2) of the Constitution, as no punishment has been inflicted on the respondent.
It has been further stated that the impugned order has been made bona fide and for purely administrative reasons.
The second appellant, who had by then become the Registrar of Co operative Societies and Deputy Secretary to the Government in the Panchayat Department, very strenuously controverted the allegation of mala fides made against him.
He further denied that he was in collusion or collaboration with the Chief Minister, resulting in the passing of the impugned order.
In his counter affidavit he has stated as follows : The post of State Press Liaison Officer in the Public Relations Department was created by the Punjab Government with effect from June 22, 1957 and it was to last till February 28, 1958.
By the gazette notification of July, 1962 the said post was not included 461 in the cadre of Public Relations Service.
By the said order no new service was created, nor was the post in question, included in the cadre of post in the Service.
Even the initial appointment of the respondent as State Press Liaison Officer was irregular, as it had been made in violation of rules relating to recruitment to Government Service.
Though there was only one post of State Press Liaison Officer and the respondent was appointed.
thereto, the said post was being continued by the Government on annual sanctions.
The respondent, as long as he held the said post, was holding the same, on purely temporary basis as the post itself was a temporary post and continued from time to time.
The respon dent 's statement that he had been in service for more than 11 years is correct, but his further averment that he has been all these years holding the post of State Press Liaison Officer is not correct.
The respondent had gone on leave and on return he joined as Deputy Director in the Public Relations Department.
The post of Deputy Director is a cadre post.
The Public Service Commission took exception to his appointment to the cadre post of Deputy Director.
The decision to terminate the respondent 's services had been taken by the Chief Minister as early as October 29, 1968, though the orders were passed only on October 31, 1968.
As the orders had to be served urgently on the respondent, it was sent for service through a special messenger on November 1, 1968.
The respondent was a temporary employee, inasmuch as the post occupied by him was itself temporary, having been created initially for one year and later extended from time to time.
The said post was held in abeyance for four years from June 1962 to June 1966.
, during which period the respondent was occupying the cadre post of Deputy Director.
As the Public Service Commission objected to his appointment as Deputy Director, the post of State Press Liaison Officer was revived and the respondent was appointed to that post in June 1966.
At no time was he ever made permanent by any order of the Government.
His appointment to the post of State Press Liaison Officer was initially made for one year and no special terms or conditions were stipulated.
The Government has got absolute power under the Service Rules to terminate the services of a temporary employee on giving one month 's notice without assigning any reason.
Equally, the Government has got full power to so terminate the services of a temporary employee by giving one month 's salary in lieu of notice.
The impugned order has been passed bona fide and due to administrative reasons.
In particular, it is further stated that the allegation of the respondent that the post of State Press Liaison Officer was permanent and that the same was included in the Public Relations Service of the State, is not correct.
The respondents further averment that he was appointed to the said post for the duration thereof is baseless.
On the other hand, the respondent wag a temporary emplo 462 whose services could be terminated in, the manner in which it has been done.
The rules relied on by the respondent are not applicable either to him or to the post held by him.
As the respondent was not appointed against any permanent vacancy, rule 10 of the Punjab Public Relations Department (Gazetted) Service Rules, 1958 (hereinafter to be referred as the Gazetted Service Rules) do not apply.
The respondent in his reply affidavit dated February 19, 1969 reiterated that the post of State Press Liaison Officer had been included in the cadre of the Punjab Public Relations Service by the gazette notification No. 6244 IPP 62/14270 dated July 11, 1962 and he also filed a copy of the said notification.
He denied the allegation of the appellants that the post, he was holding, was a temporary one and that he was holding the said post on a temporary basis.
On the other hand, by a reference to an order bear ing on 'the same, he averred that his appointment was for the duration of the post of State Press Liaison Officer at Delhi and the post having been continued without any break, and his appointment also having been automatically continued against that post without any interruption, he had a right to hold the same so long as the post existed.
As the said post had been included in the Gazetted Service Rules, in 1962 he also automatically became a permanent member of the Service under r. 10(3) of the said Rules, which applied to the cadre created by the notification.
He further denied that he was holding a temporary post and stated that he was not aware of any orders passed extending the duration of the post on the basis of annual sanction.
He was also not aware of any objections raised by the Public Service Commission to his appointment as Deputy Director.
As he was not a temporary employee, the State has no power to summarily terminate his services in violation of article 311(2) of the Constitution.
It is seen that on February 24, 1969, the High Court permitted the respondent 's counsel to inspect the note file titled as "termination of services of Rajindra Sareen" leading to the passing of the impugned order.
On the same day, the respondent, along with his counsel, inspected the file in the presence of an officer of the Public Relations Department of the Government of Haryana.
After inspection the respondent filed a supplementary affidavit dated March 10, 1969.
In this affidavit he refers elaborately to the various notes made by different officers in the said note file and averred that his allegations in the writ petition that the order has been passed mala fide by the Chief Minister in collusion and collaboration with the third appellant are fully borne out.
On March 25, 1969 the High Court passed an order directing this supplementary affidavit of the respondent to be placed on 463 record without prejudice to the rights of the appellants 'lo object that the note file is not relevant.
By the same order the Court gave the appellants time to file their counter affidavits, if any.
There is no controversy that the, Chief Minister did not file any further counter affidavit, though allegations of mala fides have been repeated by the respondent in his affidavit dated March 10, 1969.
The third appellant filed a counter affidavit on April 12, 1969.
He also refers to the order passed by the High Court on March 25, 1969 taking on record the supplementary affidavit filed by the respondent on March 10, 1969 on the 'oasis of the inspection of the note file as per order, dated February 24, 1969.
The third appellant very elaborately again controverted the allegations of mala fides made against him and the Chief Minister.
On April 12, 1969 the third appellant again, filed an affidavit regarding the copy of the notification dated July 11, 1962 filed by the respondent along with his reply affidavit dated February 19, 1969.
The third appellant also averred that the said notification did not make the post of State Press Liaison Officer a cadre post nor did it include the said post in the Punjab Public Relations Service.
The applicability of the Gazetted Service Rules to, ',lie post held by the respondent was also denied.
It was further averred that the post of State Press Liaison Officer, held by the respondent was an ex cadre post and his appointment had not been made with the concurrence of the Public Service Commission.
The appointment of the respondent to the said post having been made la 1957, his service conditions are not governed by the Gazetted Service Rules, which came into existence only in 1968 and more specially when the said post was not mentioned in the appendix A of the said Rules.
There was a further reply affidavit filed by the respondent on May 26, 1969 regarding the matter mentioned in the two affidavits dated April 12, 1969 filed by the, third appellant.
The respondent reiterated his plea that the post of State Press Liaison Officer, New Delhi, is a cadre post and it has been treated as such ever since the notification dated July 11, 1962.
He also made certain further allegations against the third appellant to support his plea of mala fides.
He again pointed out that he was appointed to, the post of Deputy Director (Press) in a permanent vacancy.
Even assuming that any objections have, been raised by the Public Accounts Committee or the State Public Service Commission to his appointment to the post of Deputy Director (Press), they have no bearing when the State had appointed him to the said post.
Obviously, in view of the conflicting stand taken by the respondent and the third appellant, in several affidavits, referred to above, regarding the effect of the notification dated July 11, 1962, in 464 respect of the post of State Press Liaison Officer, New Delhi, the Division Bench of the High Court, during the course of the hearing of the writ petition passed an order on July 21, 1969.
In the said order the High Court had referred to the fact that the writ petition had been heard on several occasions.
But, nevertheless, regarding the point urged 'by the writ petitioner that he holds the status of a permanent government employee, in view of the fact that the post of State Press Liaison Officer, has been made a cadre post and included in the cadre of Punjab Public Relations Service as per notification dated July 11, 1962, requires, according to the High Court, clarification, specialty when the writ petitioner had filed a copy of the gazetted notification.
The High Court prima facie is of the view that the said notification created a new service entitled Punjab Public Relations Service and that it refers to the various posts in the said Service, one of which is that of the State Press Liaison Officer, New Delhi.
The High Court adverted to the contention raised on behalf of the State that the said notification has not created any new Service nor has it made the post in question a cadre post.
, The High Court, in the circumstances, felt that sufficient material has not been placed before it to enable it to give a finding whether a new Service called Punjab Public Relations Service was created by the notification dated July 11, 1962, and also as to the effect of the notification about the nature of the post of State Press Liaison Officer.
In view of these circumstances, the High Court gave an opportunity to the writ petitioner.
as well as to the State, to file supplementary affidavits in support of their respective contentions and also to file documents, if any, on which the parties proposed to rely.
In particular, the High Court indicated that the counter affidavits, that may be filed on behalf of the State should include the affidavit of the then Chief Secretary who dealt with the matter at the material time leading up to the issue of the notification dated July 11, 1962.
The High Court has also expressed the opinion that if necessary they will have to examine the officer, who was at the material time, the Chief Secretary in the State.
In pursuance of the above direction given by the High Court, the respondent, the third appellant as well as certain officers including the then Chief Secretary filed various affidavits.
But it is rather strange that though the directions of the High Court related only to the post of State Press Liaison Officer, the controversy was unfortunately enlarged, in the first instance, in the affidavit filed by the writ petitioner on July 21, 1969 as also in the affidavits filed on behalf of the State, even regarding the nature of the appointment of the writ petitioner to the post of Deputy Director (Press) held by him from June 27, 1962 to June 14, 1966.
We are particularly referring to this aspect as a contention 465 has been raised by Mr. Tarkunde, learned counsel for the appellants that the writ petitioner has made a shift from the stand originally taken by him in the writ petition which related almost exclusively to the post held by him as State Press Liaison Officer.
According to the learned counsel, in the affidavits filed in pursuance of the order of the High ',Court dated July 21, 1969, the writ petitioner made a further claim that he is entitled to be treated as a permanent government servant in view of his appointment to the post of Deputy Director (Press) which post was occupied by him from June 27, 1962 to June 14, 1966 and on this basis lie had laid a claim to have become a permanent employee of the government on the basis of Rule 10 of the Gazetted Service Rules.
The High Court has also ultimately granted relief to the writ petitioner on the basis of his appointment to the post of Deputy Director (Press).
We understood the counsel to urge that the High Court should not have permitted the writ petitioner to claim permanency on the basis of his having been Deputy Director (Press) during the period mentioned above.
Mr. Ramamurthy, learned counsel for the respondent, however, drew our attention to the averment made even in the original writ petition as well as to the claim made by the writ petitioner of being a permanent government servant on the basis of Rule 10 of the Gazetted Service Rules.
This stand was only clarified by him in his affidavit filed on July 21, 1969.
The State also did raise any objection at any stage before the High Court regarding the averment made by the writ petitioner in the said affidavit.
On the other hand, the officers of the State had filed very elaborate and detailed affidavits after July 21, 1969 dealing with the nature of the appointment of the writ petitioner ' to the post of Deputy Director (Press).
The State was well aware of the foundation of the claim of being a permanent government servant even on the basis of the post of the post of Deputy Director (Press) held by the writ petitioner and that explains why no objection, similar to the one that is now being raised before, this Court, was raised at any time before the High Court.
Though we see considerable force in the contention of Mr. Tarkunde that the original claim made by the writ petitioner has been enlarged by the affidavit filed by him on July 21, 1969, there is nothing on record to show that the State raised any objection in the various affidavits filed by its officers after this date, that the writ petitioner was not entitled to base a claim of being a permanent servant on the basis of his having held the post of Deputy Director (Press) for over four years.
On the other hand, they also very elaborately controverted the claim made by the writ petitioner and gave their own versions regarding the nature of the right of the writ petitioner in respect of the said post also.
That 466 clearly shows that they have also met the claim made by the writ petitioner on the basis of his having been a Deputy Director (Press) in the service of the then State of Punjab.
It is further seen from the judgment of the High Court that very elaborate arguments were advanced by both the parties even in respect of this post.
Therefore, under those circumstances, we are of the opinion that the State cannot have any real grievance that the High Court was not justified in granting any relief to the writ petitioner on the basis of his having held 'he post of Deputy Director (Press), if he was otherwise entitled to make such a claim.
As to whether the High Court 's view on the interpretation of Rule 10 of the Gazetted Service Rules in relation to the writ petitioner 's appointment as Deputy Director is correct or not, is a totally different matter and that aspect will be considered by us in the later part of the judgment.
To resume the narration of facts, the respondent filed an affidavit on July 21, 1969 on the basis of the High Court 's order of the same date, referred to earlier.
In this affidavit, for the first time, he raised the contention that he was appointed on June 27, 1962 as Deputy Director (Press) which is a permanent post included in the appendix A of the Gazetted Service Rules.
His claim was that the order of appointment dated June 6, 1962 made no mention that his appointment as Deputy Director Press was ,on a temporary or officiating basis.
He further averred that on the date of his appointment as Deputy Director the then incumbent of that post Mr. Rajendra Nath had been promoted as Joint Director Public Relations, a new post created by the order dated June 21, 1962.
As Mr. Rajendra Nath had been promoted to a permanent post of Joint Director, the respondent claimed that his appointment as Deputy Director on June 27, 1962 was against a permanent vacancy, in a permanent post in the Punjab Relations Service.
As he continued in the said post for over 4 years, he had acquired the status of a permanent employee by virtue of Rule 10(3) of the Gazetted Service Rules.
The respondent further averred that by the notification dated July 11, 1962 a new service by name Punjab Public Relations Service was created and the post of State Press Liaison Officer was made a cadre post and included in the said Service Cadre.
It will be seen from the above affidavit that for the first time he specifically made a claim of having become a permanent government servant by virtue of his having occupied the post of Deputy Director (Press) for over 4 years and for this purpose he relied on Rule 10(3) of the Gazetted Service Rules.
Mr. E. N. Mangat Rai, I.C.S., who was the Chief Secretary to the Government of Punjab at the time when the notification 467 dated July 11, 1962 was issued, filed an affidavit on August 7, 1969.
He had set out the circumstances under which the said notification was issued.
But he had admitted that the original draft of the notification was not available in the concerned file.
According to the Chief Secretary, the notification dated July 11, 1962 did not create any new service but it only changed the name of the service from Punjab Public Relations Department (Gazetted Service) to Punjab Public Relations Service and the notification only classified the posts in the said service into Classes 1 and 11.
It added also certain other posts in the service including that of the.
State Press Liaison Officer.
He has further referred to the fact that a particular service may contain posts, both temporary as well as permanent and that the post of State Press Liaison Officer was a temporary post.
Another officer Mr. K. D. Vasudeva, I.A.S., who was the Deputy Secretary, at the time when the above notification was issued, also filed an affidavit dated August 8, 1969.
Broadly, he adopted as correct the averments made 'by the Chief Secretary in his affidavit and reiterated that no new service was created by the said notification and that the post of State Press Liaison Officer was not made a cadre post.
The third appellant also filed a detailed affidavit on August 8, 1969.
He controverted the allegations of the respondent that the latter had been appointed to a substantive vacancy as Deputy Director (Press) and that he had thus acquired the status of a permanent government servant having been in that post for over four years.
He averred that the respondent so 'on,, as he occupied the post of Deputy Director (Press) held the same only in an officiating capacity.
In this connection he relied on the pay slips issued by the Accountant General authorising disbursement of salary to the respondent describing him as an officiating Deputy Director (Press).
It was further averred by the said officer the the respondent could not have been appointed as Deputy Director (Press) against a permanent vacancy as Rajendra Nath, who was holding the said post had been promoted as Joint Director, Which was a temporary post.
The post of Joint Director, which was created on temporary basis on June 21, 1962 continued to be so till September, 1968.
During the period when Rajendra Nath was working in the temporary post of Joint Director he was retaining his lien on his permanent post, namely, Deputy Director (Press) to which the respondent was appointed on June 27, 1962.
The, third appellant further averred that in the year 1962 there were only two permanent posts of Deputy Directors; one incharge of Press and another of field.
The post of Deputy Director (Press) was then held by Rajendra Nath on permanent basis since September 3, 1958 and he was promoted as Joint Director, which was a 468 temporary post.
The post of Deputy Director (field) was occupied by Mrs. A. Mardhekar since March 2, 1960.
Therefore, in June 1962, when the respondent was posted as Deputy Director (Press) there was no permanent vacancy in the said post.
In view of these circumstances, it was further averred that the appointment of the respondent was only on a purely officiating or temporary basis and he was not entitled to invoke Rule 10 of the Gazetted Service Rules.
Dealing with the post of State Press Liaison Officer, the third appellant, adopted the stand taken by the Chief Secretary that the notification of July, 1962, did not create any new service and that, it did not also make the post of State Press Liaison Officer a cadre post.
He further averred that the respondent cannot claim to have become a permanent government servant by having occupied the post of State Press Liaison Officer, which was a temporary post.
In fact he further averred that the notification dated July 11, 1962 was not in accordance with the proposals made by the Director or the decision taken by the Government.
Mr. R. section Verma, I.A.S., Deputy Secretary to the Government of Haryana, Public Relations Department, filed an affidavit dated August 27, 1969.
In this affidavit he has stated that he has examined the files connected with the posts included in the cadre shown in Appendix A of the Gazetted Service Rules.
He has referred to the fact that though the post of Administrative Officer is shown in the said Appendix as a cadre post, that post continued to be temporary till September 25, 1964, on which date it was made permanent.
Regarding the notification dated July 11, 1962, he again referred to the fact that the post of State Press Liaison Officer had all along been temporary and it was held in abeyance from June 1962 till June 1966 and that there was no order of the Government making the post a permanent one.
He has again reiterated that there was no permanent vacancy of Deputy Director (Press) in 1962 when the respondent was appointed as Mr. Rajendra Nath had a lien on the said post.
In particular, he has stated that at the time of the, appointment of the respondent as Deputy Director (Press) in June, 1962 by notification dated June 6, 1962, there were two other posts of Deputy Directors; one for Deputy Director (Field) and the other for Deputy Director (Publicity Material).
The post of Deputy 'Director (Field) was held by Mrs. A. Mardhekar.
The post of Deputy Director (Publicity Material) was a temporary post and it was made permanent only in 1964.
The respondent filed his reply affidavit on August 29, 1969.
Naturally he took advantage of the averment contained in the affidavit of Mr. R. section Verma to the effect that there were three 469 posts of Deputy Directors, namely, of Press, Field and Publicity Material at the time when he was appointed as Deputy Director (Press) in 1962.
He has also taken advantage of the further fact stated by Mr. R. section Verma that the post of Deputy Director (Publicity Material) was made permanent from April 1, 1964.
Based upon these facts, the respondent pleaded that he having been appointed to the post of Deputy Director (Press) on June 27, 1962, and having completed three years of service on June 27, 1965 in the said post, he became a permanent employee of the Government as Deputy Director in the Punjab Public Relations Service, under the proviso to Rule 10(3) of the Gazetted Service Rules.
He relied on this rule in support of his plea that at any rate, there was a clear permanent vacancy in the third permanent post of Deputy Director, with effect from April 1, 1964, in which vacancy he could be confirmed on June 27, 1965, having completed three years of service as Deputy Director.
In particular, he relied on the proviso to Rule 10(3) of the Gazetted Service Rules.
He further averred that the fact that Mi.
Rajendra Nath had a lien on the post of Deputy Director (Press) is of no consequence so far as he was concerned as he could be made permanent in the third post of Deputy Director, namely, Deputy Director (Publicity Material) .
We have elaborately referred 'to the various affidavits filed on behalf of the State as well as by the respondent as full particulars regarding the claim made by the respondent and the stand taken on behalf of the State has been fully dealt with in those affidavits.
Before the High Court it was conceded by the learned counsel appearing for the State that if the plea of mala fides alleged against the Chief Minister and the third appellant herein, was accepted, 'the impugned order should be quashed straightaway.
Therefore, the High Court considered the question regarding the impugned order being vitiated by mala fides, in the first instance.
So far as the Chief Minister was concerned, the respondent had alleged four incidents which caused misunderstanding between him and the Chief Minister and, therefore, the order was passed by him in collusion with the third appellant mala fide.
But so far as the fourth incident was concerned, that related to the respondent 's alleged failure to arrange for publication of a declaration made by Shri Nijalingappa, the Congress President, at Faridabad on October 30, 1968, assuring his support to the Ministry headed by the second appellant.
According to the respondent, the Chief Minister was greatly upset over the absence of the declaration of Shri Nijalingappa in the Delhi newspapers on October 31, 1968.
In view of this the Chief Minister rushed to Chandigarh the same day and passed the order removing him from service.
470 The Chief Minister denied This allegation and has stated that the decision to terminate the service of the respondent, had been taken by him even as early as October 29, 1968 and that the formal order was issued by the concerned Department on October 31, 1968.
This statement of the Chief Minister has been accepted by the High Court and therefore, the allegation of mala fides regarding this fourth incident is groundless, because whatever may or may not have happened on October 31, 1968 between the respondent and the Chief Minister, the decision to terminate his services had been taken as early as October 29, 1968.
The respondent then relied on three other incidents, in which, according to him, he had come into conflict with the Chief Minister.
The High Court has considered the explanation given by the Chief Minister.
Though the High Court has stated that the explanation given by the Chief Minister is disingenuous and that it is prepared to place more reliance on the version as spoken to by the respondent, ultimately the High Court has held that the plea of mala fides is not established.
In coming to this conclusion, it has no doubt taken each incident 'by itself and recorded a finding against the plea of mala fides.
Regarding the third appellant, there was only one incident, which, according to the respondent, brought him into conflict with the third appellant who was then Head of the Department.
Even here, the High Court is of the view that there is a substratum of truth in the version of the respondent regarding the incident, which must have prejudiced the mind of the third appellant.
But, according to the High Court that incident by itself does not lead to the conclusion that the third respondent has colluded with the Chief Minister in passing the impugned order.
On the above grounds, 'the High Court rejected the plea of 'he respondent that the impugned order has been passed mala fides.
The High Court then considered the claim of the respondent that he had become a permanent member of the Service by virtue of his appointment as Deputy Director (Press) with effect from June 27, 1962.
The High Court relied on the Proviso to, Rule 10(3) of the Gazetted Service Rules and is of the view that inasmuch as even according to the State, the third post of Deputy Director (Publicity Material) had become a permanent post on April 1, 1964, , the respondent on completion of three years of service from June 27, 1962, had become a permanent Deputy Director and as such a permanent employee of the Government.
It is the further view of the High Court that the fact that at the time when the respondent was appointed as Deputy Director (Press) on June 27, 1962, Mr. Rajendra Nath, who had been promoted as Joint Director, had a lien on his former post, was not relevant 471 as 'the third post of Deputy Director (Publicity Material) was available and to that post the respondent had acquired, a right at the end of three years from June 27, 1962.
As he had become a permanent employee of the Government, the termination of his services was in violation of article 311(2) of the Constitution.
Regarding the claim of the respondent that his appointment to the post of State Press Liaison Officer is co terminus with the existence of the post, the High Court is of the view that as the post itself was being renewed from year to year, the respondent can.
at the most be held entitled to continue in that post till February 28, 1969.
According 'to the High Court the State has no power to terminate the services of the respondent, when the post was still in existence.
For the above reasons, the High Court quashed the order dated October 31, 1968.
From the facts stated above, as well as the findings of the High Court, the following questions arise for consideration in the appeal : (1) whether the impugned order is vitiated by mala fides; (2) whether the respondent became a permanent Government servant on his appointment as Deputy Director (Press) with effect from June 27, 1962 on the expiry of three years, namely, June 27, 1965; and (3) the nature of the right that the respondent had as State Press Liaison Officer.
We are aware that if once the respondent is able to establish that the impugned order is vitiated by mala fides, on the part of the second and the third appellants, no further question will arise.
Therefore, though the finding of mala fides is in favour of the appellants, we permitted Mr. Ramamurthy, learned counsel for the respondent, to convass the correctness of the finding recorded against his client on this question by the High Court.
Though we are not satisfied with the approach made by the High Court in dealing with the allegation of mala fides made by the respondent, ultimately, after going through the entire materials placed before us and after hearing the contentions of the learned counsel on both sides, we are of the opinion that the conclusion arrived at by the High Court is correct.
It is not possible to accept 'the plea of the respondent that the impugned order has been passed mala fide by the second appellant, in collusion with or in collaboration with the third appellant.
Nor are we satisfied that the said order has been passed by the second appellant, actuated by malice and ill will against the respondent.
But we must say that the record does show that certain incidents have happened, which must have resulted in some misunderstanding between the respondent on the one hand, and the Chief Minister and the third appellant on the other.
Certain incidents have been 472 placed on record which will show that the respondent may have incurred the displeasure of the second appellant.
But that circumstance, by itself, cannot lead to the conclusion that the impugned order has been passed mala fide.
Why we are saying that the approach made by the High Court in this regard in considering the allegation of mala fides is not proper is that the, High Court has taken each allegation by itself and has held that it is not sufficient to establish mala fides.
The proper approach should have been to consider all the allegations together and find out whether those allegations have been made out and whether those allegations when established, are sufficient to prove malice or ill will on the part of the official concerned, and whether the impugned order is the result of such malice or ill will.
We are emphasising this aspect because in certain cases even a single allegation, if established, will be so serious to lead ,to an inference of mala fides.
But, in certain cases each individual allegation, treated separately, may not lead to an inference of mala fides; but when all the allegations are taken together and found to be established, then the inference to be drawn from those established facts may lead to the conclusion that an order has been passed male fide, out of personal ill will or malice.
The incidents, referred to by 'the respondent, due to which the Chief Minister is alleged to have acted mala fide, in passing the impugned order, in our opinion, taken individually or collectively, cannot lead to the conclusion that the order has been passed out of malice or ill will Even accepting that the incidents took place in the manner alleged by him, it is not possible to hold that the Chief, Minister has acted with malice when passing the impugned order.
The allegations made by the respondent, as well as the denial of those allegations by the Chief Minister and the third appellant are dealt with by us in the later part of the judgment.
We have already referred to the fact that the respondent had made four allegations against the Chief Minister, on the basis of which he alleged that the impugned order had been passed mala fide.
We have also referred to the fact that the fourth incident relating to the non publication of the, declaration made by the Congress President Sri Nijalingappa on October 31, 1968.
The respondent 's allegation was that the Chief Minister was anxious that the statement made by Sri Nijalingappa regarding his support to the Ministry headed by the second appellant should be published in all the daily newspapers in Delhi on the morning of October 31, 1968, itself and when the news item was not so published, he got annoyed.
It is the further case of the, respondent that in view of the fact that the Chief Minister was very much annoyed, he rushed to Chandigarh and had the order of termination passed forthwith.
So far as this is concerned, the Chief 473 Minister 's statement that he had already taken the decision to terminate the services of the respondent on October 29, 1968, has been accepted by the High Court.
It so, the incident mentioned above, which took place later, even if true, could not have influenced the Chief Minister.
We will now refer to the three other allegations made by the respondent against the Chief Minister.
The first allegation was that he had incurred the displeasure of the Chief Minister in connection with a Press Conference the Chief Minister had in Delhi after assuming office.
In that conference, according to the respondent, the Chief Minister made a statement that personally he was not convinced that the interest of the State of Haryana required inclusion of Chandigarh in that State.
The respondent appears to have suggested that such a statement should not appear in the Press, as it will have very serious political repercussions.
The second appellant, though be resented the advice of the respondent, agreed to have that observation to be deleted by the Press correspondent.
This incident took place sometime in early June, 1968.
The Chief Minister has denied this incident.
The second cause for unpleasantness of the Chief Minister, according to the respondent, arose on his close association with Mr. G. L. Nanda.
According to the respondent, the Chief Minister had told him, after assuming office that Mr. G. L. Nanda is his Guru and that he should act in Delhi according to Mr. Nanda 's advice.
But, later on by about August, 1968, the relationship between Mr. Nanda and the Chief Minister became strained, but the respondent, however, wag friendly with Mr. Nanda.
This association with Mr. Nanda was resented by the Chief Minister.
The Chief Minister has stated that he had always held Mr. Nanda in high esteem and that ha had no occasion to become unfriendly with Mr. Nanda in his personal relationship.
He has further stated that he had no occasion to find fault with the respondent for being friendly with Mr. Nanda.
The third allegation made against the Chief Minister was that on or about June 23, 1968, the Chief Minister had a talk with him from Srinagar on telephone and the former desired an appointment for him with the Editors of the Statesman and the Times of India, New Delhi, in order to explain to them that their correspondents at Chandigarh were not very friendly to the Government, headed by him.
According to the respondent, he requested the Chief Minister not to adopt this course as it will only irritate the Press.
The Chief Minister got annoyed and ended the conversation abruptly saying "do as you like".
The Chief Minister has denied having had any such talk on the telephone with the respondent.
The respondent, no doubt, made an application to the High Court for having the necessary records produced from the Telephone Department and also to summon the Chief Minister for cross examination.
We have gone through the application.
According 474 to the averments made in the said application, the respondent wanted to cross examine the Chief Minister, not only about the telephone conversation but also on other matters.
However, the High Court did not consider it necessary to order that application as in its opinion the allegations were not such, even if true, to make out a case of mala fides.
From the above three incidents, the respondent desires the Court to draw an allegation of mala fides against the Chief Minister.
Mr. Ramamurthy, learned counsel for the respondent, very strenuously pressed that these allegations which have been accepted by the High Court though in a qualified manner as true, taken along with the remarks made by the Chief Minister in the note file, will clearly show that he has acted mala fide.
So far as the note file is concerned, that is being discussed a little more elaborately when we deal with the allegation of mala fide against the third appellant.
But in the note file, the Chief Minister has, no doubt, expressed his views about the quality of the work turned out by the respondent, which he as Chief Minister was certainly entitled to do, in his official capacity.
So far as the three incidents, referred to above, are concerned, in our opinion, none of them, either considered separately or all of them considered cumulatively, will establish any personal prejudice or malice on the part of the Chief Minister against the respondent.
The last incident referred to above is the telephone talk stated to have taken place on June 23, 1968, but the order terminating the services of the respondent was passed only on October 31, 1968, in respect of which the decision was taken on October 29, 1968.
We are satisfied that the plea of mala fides alleged by the respondent against the Chief Minister has not been made out by the respondent.
So far as the third appellants concerned, the position of the respondent is still worse.
The respondent does not allege any personal ill will against him.
His allegation is that the third appellant was taking decision against him so as to conform to the opinion formed by the Chief Minister out of prejudice against the respondent.
As we have already pointed out that the respondent has referred to only one incident and that related to the displeasure alleged to have been shown by the third appellant at the time of passing the Traveling Allowance bills of the respondent.
According to the respondent, the third appellant did not like the manner in which he answered some of the queries relating to the bills and therefore he initiated a note on October 24, 1968, on the basis of which a final order terminating his services was passed by the Chief Minister.
It was this note that the High Court allowed the respondent to inspect by its order dated February 24, 1969.
The 475 respondent has filed a further affidavit and the third appellant has also denied the statements made by the respondent.
The main attack against the note file titled "termination of the services of Rajindra Sareen" is that when considering a claim made by the respondent for a higher allowance, the third appellant had no power to suggest the termination of the post held by the respondent as well as the termination of his services.
The third appellant has filed a very elaborate affidavit detailing the circumstances under which the note dated October 24, 1968 was prepared by him.
From the various matters referred to in his affidavit, it is clear that the Public Service Commission had raised objections to the appointment of the respondent as Deputy Director (Press) and the Public Accounts Committee had also criticised the Government for appointing the respondent to the said post.
The Public Accounts Committee had again desired the Government to give a fuller explanation regarding the circumstances under which the respondent was appointed as Deputy Director as also in respect of the various benefits granted to him.
Therefore when a claim was made by the respondent for a higher allowance, the third appellant, who was then the Head of the Department, had been directed to look into all these matters for the guidance of the Government.
It was under those circumstances that the third appellant had prepared the note dated October 24, 1968.
Any observations made in the note by the third appellant, who, was the Head of the Department or the Chief Minister regarding their views about the performance of the respondent, in the post held by him.
were all within their powers and jurisdiction in their official capacity.
Therefore, the allegation of mala fides alleged against the third appellant has also to be rejected.
Unfortunately, the High Court has not gone into the several aspects in the manner indicated above.
We must also state that in coming to the conclusion that the plea of mala fides alleged by the respondent against the second and the third appellants cannot be accepted, we have borne in mind the principles laid down by this Court in section Pratap Sing vs The State of Punjab (1).
The second point that has to be considered relates to the claim of the respondent of having become a permanent government servant on the expiry of three years of his continuing in the post of Deputy Director (Press) with effect from June 27, 1962.
The learned counsel for the state invited our attention to the definition of certain expressions contained in the Punjab Civil Services Rules (hereinafter to be, referred as the Civil Services Rules) which came into force from April 1, 1953.
The counsel also drew our attention to the provisions of Rule 10 of the Gazetted Service Rules and pointed out that when the respondent was appointed as Deputy (1) [1964]4 S.C.R. 733.
17 L500 SupCI/72 476 Director (Press) on June 27, 1962, Rajendra Nath, who was holding that post, had been promoted to the temporary post of Joint Director and Rajendra Nath had a lien on the post of Deputy Director (Press).
Therefore, he contended that the respondent cannot be considered to have been appointed against a permanent vacancy, in order to attract the provisions of Rule 10 of the Gazetted Service Rules.
He referred us to the pay slips issued by the Accountant General, describing the respondent as an officiating Deputy Director, as well as the objections that were being raised by the Public Service Commission and the Public Accounts Committee to the respondent being posted as Deputy Director (Press).
The fact that in 1964 the post of Deputy Director (Publicity Material) was made permanent will not entitle the respondent to invoke the provisions of the Proviso to Rule 10(3) of the Gazetted Service Rules.
Mr. Ramamurthy, learned counsel for the respondent, on the other hand, contended that under Rule 9 (b) of the Gazetted Service Rules, one of the mode of recruitment to the post of Deputy Director is by transfer of a person already in the service of the State or of the Union.
It is admitted by Mr. R. section Verma that the appointment of the respondent to the post of Deputy Director (Press) was by transfer.
The counsel pointed out that there is no controversy that the respondent was at that time already in service of the Government.
The Government, which is the appointing authority under Rule 6 of the Gazetted Service Rules, appointed the respondent as Deputy Director (Press).
That post was a permanent post and included in the cadre in Appendix A of the Gazetted Service Rules, and it is a cadre post.
In view of all the circumstances, he urged that the appointment of the respondent as Deputy Director must be considered to be an appointment against a permanent vacancy under Rule 10(1) of the Gazetted Service Rules.
Even on the basis that Mr. Rajendra Nath had a lien on the post of Deputy Director (Press), he urged that even according to the State, the post of Deputy Director (Publicity Material) had been made permanent on April 1, 1964.
Under the Proviso to Rule 10(3) of the Gazetted Service Rules, the total period of probation cannot exceed three years, if there is a perma nent vacancy in the post.
The respondent had completed three years of service as Deputy Director (Press) on June 27, 1965 and as there was on that date a permanent post of Deputy Director (Publicity Material), the respondent has become a permanent member of the Service.
We are not inclined to accept the contentions of Mr. Rama murthy.
We have already held that the plea of the respondent that he became a permanent Government servant on his holding the post of Deputy Director (Press) for three years, was raised 477 more or less for the first time only when he filed his affidavit on July 27, 1969.
But, again as already stated, both parties have joined issue on this point and invited a decision by the High Court.
We have also very extensively referred earlier to the pleas set up by the respondent and on behalf of the State in the various affidavits, and, therefore, it is not necessary for us to cover the ground over again.
The stand taken by the respondent is clear and that is that lie has become a permanent Government servant on his completing three years as Deputy Director (Press) and that claim is based on the Proviso to Rule 10(3) of the Gazetted Service Rules.
It is necessary now to refer to the definitions of certain expressions contained in the Civil Services Rules.
These Rules have been issued by the Governor under the Proviso to article 309 of the Constitution and have come into force from April 1, 1953.
Rule 2.9 defines "cadre " as the strength of a service or a part of a service sanctioned as a separate unit.
Rule 2.42 defines the expression "Officiate" as follows : "2.42.
Officiate.
A Government servant officiates in a post when he performs the duties of a post on which another person holds a lien.
A competent authority may, if it thinks fit, appoint a Government servant to officiate in a vacant post on which no other Government servant holds a lien.
" The expression "Permanent post" under Rule 2.46 means " A post carrying a definite rate of pay sanctioned without limit of time.
" The expression "Probationer" is defined in Rule 2.49 as follows: "Probationer means a Government servant employed on probation in or against a substantive vacancy in the cadre of a department.
This term does not, however, cover a Government servant who holds substantively a permanent post in a cadre and is merely appointed "on probation" to another post.
" Under the heading "Substantive Appointment and Lien" Rule 3.11 (c) states as follows "3.11.
(c) A Government servant cannot be appointed substantively to a post on which another Government servant holds a lien.
" Rule 3.14 gives power to a competent authority to suspend the lien of a Government servant on a permanent post in the circumstances mentioned therein.
Now coming to the Gazetted Service Rules may have also been framed by tile Governor under the proviso to article 309 of the 478 Constitution.
They have been framed for regulating the recruitment and conditions of service of persons appointed to the Punjab Public Relations Department (Gazetted) Service.
Rule 2 defines the expression "Direct Appointment" as follows "Direct appointment" means an appointment made otherwise than by promotion within the Service or by transfer of any official already in the service of the Government of a State or of the Union.
" Clause (c) defines "Service" as the Punjab Public Relations Department (Gazetted) Service.
Part 11 deals with the Posts and Qualifications.
Rule 3 dealing with the number and character of posts is as follows : "(3) Nuniber and Character of posts: The Service shall comprise the posts shown in Appendix 'A ' to these rules : Provided that nothing in these rules shall affect the right of Government to make additions to or reduc tions in the number of such posts whether permanently or temporarily.
" Appendix 'A ' referred to in the said Rules enumerates various posts.
The post of Deputy Directors (Press) and Deputy Director (Field ') are included.
in the said Appendix.
But it must be noted that under Rule 3 the right of the Government to make additions or reduction in the number of posts, enumerated in Appendix 'A ' whether permanently or temporarily is preserved.
Part III deals with "Appointment".
Rule 6 provides ,bat all appointments to posts in the Service shall be made by the Government.
Rule 8 deals with qualifications of persons recruited to the Service by direct appointment.
Rule 9 deals with the method of recruitment and cl.
(b) deals with recruitment in the case of Deputy Directors.
In this case we have already mentioned that Mr. R. section Verma, in his affidavit has accepted that the respondent was appointed to the post of Deputy Director (Press) by transfer.
Rule 10 on which very strong reliance has been placed on behalf of the respondent is as follows "(10) Probation. (1) Members of the Service.
who are appointed against permanent vacancies, shall, on appointment to any post in the Service, remain Oil probation for a period of two years in the case of members recruited by direct appointment, and one year in the case of members recruited otherwise : 479 Provided that the period of Service spent oil deputation or on a corresponding or a higher post may be allowed to count towards the period of probation fixed under this rule.
(2) If the work or conduct of any member during his period of probation is, in the opinion of appointing authority not satisfactory, the appointing authority may dispense with his services or revert him to his former post if he has been recruited otherwise than by direct appointment.
(3) On the completion of the period of probation of any member the appointing authority may confirm such members in his appointment or, if his work and conduct have, in the opinion of the appointing authority, not been satisfactory, dispense with his services or revert him to his former post if he has been recruited otherwise than 'by direct appointment or extend the period of probation and thereafter pass such orders as it could have passed on the expiry of the original period of probation.
Provided that the total period of probation including extensions, if any, shall not extend three years it there is a permanent vacancy against which such member can be confirmed.
" There is no controversy that the past of Deputy Director (Press) is a permanent cadre post.
The respondent was an officer on Special Duty from September 20, 1960 to June 26, 1962.
On June 6, 1962, the respondent, who was an officer on Special Duty was posted by way of transfer as Deputy Director (Press) Chandigarh in place of Mr. Rajendra Nath by the same order Mr. Rajendra Nath, who was then Deputy Director (Press) was posted by way of transfer as State Press Liaison Officer, Delhi.
On June 21, 1962 the Government created one post of Joint Director in the Public Relations and Tourism Department lit New Delhi till February 28, 1963.
The same order directed that the post of State Press Liaison Officer, New Delhi, shall be held in abeyance.
On July 30, 1962 the Governor passed an order appointing the respondent as Deputy Director (Press) with effect from June 27, 1962.
By the same order Mr. Rajendra Nath, who was then holding the post of Deputy Director (Press) was appointed as Joint Director, Public Relations Department, Delhi, which post was created temporarily by order dated June 21, 1962.
The third appellant as well as Mr. R. section Verma have both stated in 'their affidavits, referred to earlier, that Mr. Rajendra Nath when he was promoted to the temporary post of Joint Direc 480 tor at New Delhi, had his lien on his permanent post, namely, Deputy Director (Press).
This statement has not been contradicted by the respondent.
On the other hand, the stand taken by him is that in spite of Mr. Rajendra Nath having a lien on the post.
lie has become a permanent Government servant when he held the post of Deputy Director (Press) continuously for three years.
especially when there was another permanent post of Deputy Director (Publicity Material).
There is no controversy that the post of State Press Liaison Officer, New Delhi, was kept in abeyance from June 27, 1962 to June 14, 1966, corresponding to the period when the respondent was Deputy Director (Press).
The post of Joint Director, created temporarily by order dated June 21, 1962 was made permanent only in September, 1968.
On August 8, 1962 the Governor again passed an order that the 'three posts of Deputy Director (Press), Deputy Director (Field ') and Deputy Director (Publicity Material) and certain other posts mentioned therein, are inter changeable.
But the post of Deputy Director Publicity Material) was only a temporary post when the respondent was appointed as Deputy Director (Press); and it was made permanent only on April 1, 1964.
But Mr. Rajendra Nath continued to have his lien on the post of Deputy Director (Press) till September, 1968 when the post of Joint Director was made permanent.
Admittedly, there is no order passed by the competent authority suspending the lien of Mr. Rajendra Nath under Rule 3.14 of the Civil Services Rules.
Under Rule 3.11(c) of the Civil Services Rules, a Government servant cannot be appointed substantively to a post on which another Government servant holds a lien.
Therefore, on the date when the respondent was appointed as Deputy Director (Press), he could not have been appointed to that post substantively as Mr. Rajendra Nath was having a 'lien on the said post.
There is no controversy that with effect from April 1, 1964 post of Deputy Director (Publicity Material) was made per manent.
It is no doubt true that the respondent had completed 'three years of service as Deputy Director (Press) on June 27.
1 965 having been appointed to that post on June 27, 1962.
It is also true that he continued to hold the said post till June 14, 1966.
The question is whether in view of these circumstances the respondent can claim the benefit of the Proviso to Rule 10(3) of the Gazetted Service Rules.
It may also be mentioned at this stage that several pay slips issued by the Accountant General have described the respondent as Officiating Deputy Director (Press).
Under Rule 2.42 of the Civil Services Rules we have already pointed out that a Government servant officiates in a post when he performs the duties of a post on which another person holds a lien.
Therefore, considering the appointment of the respondent 481 as Deputy Director (Press)having due regard to Rules 2.42, 3.11 (c) and 3.14 prima facie, it is difficult to hold that the respondent was appointed against a permanent vacancy in the post of Deputy Director (Press).
In the first place, he could not have been appointed substantively as Mr. Rajendra Nath had a lien on the said post.
The various pay slips which are on record also lead to the conclusion that the respondent 's appointment must have been on officiating basis, as defined under Rule 2.42 of the Civil Services Rules.
It is also to be noted that the Public Service Commission raised objections to the posting of 'the respondent as Deputy Director (Press).
Those objections are contained in the letters dated January 16, 1963, May 22, 1963 and February 10, 1965 of the Public Service Commission.
It is also on record that the Public Accounts Committee also raised very serious objections to the respondents being posted as Deputy Director (Press).
Notwithstanding these objections, the Government no doubt did continue him in that post for over four years.
All the above circumstances are against the contention of the respondent of his having been appointed against a permanent vacancy.
Then the question is whether the Proviso to Rule 10(3) of the Gazetted Service Rules makes him a permanent Government servant, on the expiry of three years of his service as Deputy Director (Press).
The essential requisite for the applicability of Rule 10 is that a person must have been appointed against a permanent vacancy.
If once a person is appointed against a permanent vacancy, he has to be on probation for two years, if he has been recruited by direct appointment and for one year if he has been recruited otherwise.
The very connotation of the expression "Probationer" defined in Rule 2.49 of the Civil Services Rules clearly indicates that the person is employed in or against a substantive vacancy in the cadre of a Department.
Under sub rule 2, of Rule 10 the appointing authority has got ',he right to dispense with the services of the officer or to revert him to his former post, as the case may be, if the officer 's work, during the period of probation is not satisfactory.
Under sub Rule 3 when an officer has completed his period of probation, the appointing authority has to confirm the said officer in his appointment.
But if his work and conduct are not satisfactory, his services have to be dispensed with, or he has to be reverted to his former post, if he has been recruited otherwise than by direct appointment.
Under this sub.
rule the appointing authority has also power to extend the period of probation.
The point to be noted is that under sub rule 1, an officer appointed against a permanent vacancy, remains on proba 482 tion for a period of two years, or one year, depending upon the manner of recruitment.
No special order stating that he is on probation need be passed.
But when we come to the stage of sub rule 3, the appointing authority, on completion of probation has to confirm the officer in his appointment or extend the period of probation.
If the period of probation is extended, under subrule (3), it is needless to state that there must be an order to that effect by the, appointing authority.
In the case of the respondent no order of the appointing authority, which in this case is the Government, extending his probation or confirming his appointment has been passed, though he has been allowed to continue in the said post.
The Proviso to Subrule (3) of Rule 10 of the Gazetted Service Rules, will have to be understood in the context in which it appears in Rule 10.
Subrule (1) refers to an appointment against a permanent vacancy; similarly, the Proviso states that the total period of probation including extension shall not exceed three years "if there is a permanent vacancy against which such member can be confirmed.
" In our opinion, unless under sub rule (1), the respondent has been appointed against a permanent vacancy, as Deputy Director (Press), he is not entitled to claim the benefit of the Proviso.
The effect of the Proviso is that an officer cannot indefinitely occupy a post on probation.
It puts the upper limit of the period of probation as three years.
It only means that the appointing authority, if it does not dispense with the services or revert him to him former post under sub rule (3), cannot continue to keep the officer on probation beyond a period of three years.
On the other hand, if the officer had been appointed in a permanent post against a substantive vacancy and if he has completed the initial period of probation or the period of probation upto the maximum of three years, the inference is that he becomes a permanent member of the Service.
In the case before us, as the respondent cannot be considered to have been appointed in 1962 against a permanent vacancy to the post of Deputy Director (Press) which was no doubt a permanent post, and as he has been working only in an officiating capacity in that post, the question of extending his probation or confirming him under Rule 10, of the Gazetted Service Rules does not arise and, if so, the question of calculating the total period of probation of three years, which is necessary for the application of the Proviso does not and cannot arise.
Mr. Ramamurthy, however, placed considerable, reliance on the expression "if there is a permanent vacancy against which such member can be confined" occurring in the Proviso to Rule 10(3) and urged that on June 27, 1965 when he had completed three 483 years of service as Deputy Director (Press), there was a third permanent post of Deputy Director (Publicity Material) in which file could have been confirmed and therefore, by virtue of the Proviso to Rule 10(3), the respondent has acquired the status of a permanent Government Servant.
There is a fallacy underlying the contention of Mr. Rama murthy.
The Proviso speaks of the total period of probation and we have already pointed out that there is, no question of the respondent being on probation, when he held the post of Deputy Director (Press) on a purely officiating basis.
Before we come to the stage of the Proviso, the respondent will have to satisfy the requirement of sub rules (1) and (3).
We have already pointed out that he does not satisfy those requirements.
If Mr. Ramamurthy 's contention is accepted, we will presently show, that the position will become very anomalous.
We will assume that there was only one post of Deputy Director (Press).
In the said post to which the respondent was appointed, namely, Deputy Director (Press), the previous incumbent Mr. Rajendra Nath had admittedly a lion.
The post of Joint Director, to which Mr. Rajendra Nath had been promoted was a temporary post extending from year to year and confirmed only in the year 1968.
Therefore, from June 27, 1962 till 1968 Mr. Rajendra Nath had a lien on the post of Deputy Director (Press).
The respondent had admittedly been in tile said post from June 27, 1962 till June 14, 1966.
On the basis of Mr. Ramamurthy 's contention, on the expiry of three years from June 27, 1962, he must be considered to be a permanent Deputy Director (Press), which means Mr. Rajendra Nath will have no post to which he can come back, if the Joint Director 's post is not extended.
This is one anomaly.
Again, if the respondent 's services are considered to be satisfactory, even at the expiry of one year of probation, then under sub rule (3), tile appointing authority has no option but to confirm the respondent in the post of Deputy Director (Press).
Even in such a case Mr. Rajendra Nath will have no post to which he can come back, if the post of Joint Director is abolished.
We are only pointing out these anomalies to show that the construction to be placed on the Proviso must be having due regard to the object of Rule 10.
That object, in our opinion, will not be served by placing the interpretation on the Proviso as contended by Mr. Ramamurthy.
Mr. Ramamurthy, however, relied on the decision of this Court in State of Punjab vs Dharam Singh (1) in support of his contention that by virtue of the Proviso to Rule 10(3) of the Gazetted Service Rules, it should be presumed that the Government has confirmed the respondent as Deputy Director with effect from June 27, 1965.
(1) ; 484 In our opinion, the said decision does not assist the respondent.
In the above decision this Court had to consider Rule 6 of the Punjab Educational Service (Provincialised Cadre) Class III Rules.
The rule has been quoted therein.
A part from the fact that rule 6 construed therein is differently worded, the High Court in that case had found 'that the officers concerned were, officiating in permanent posts against permanent vacancies as contemplated by sub rules (1) and (2) of Rule 6 therein.
It was further found by the High Court that the officers therein had completed their three years period of probation and therefore they must be deemed to have been confirmed in their appointment.
The State contested the decision of the High Court on the ground that the officers cannot claim permanency, as no orders of confirmation had been passed by the appointing authority.
This Court after a consideration of the rules as well as the finding recorded by the High Court rejected this contention of the State and dismissed the appeal.
The position of the respondent before us is entirely different.
There was no substantive vacancy of Deputy Director(Press) when the respondent was appointed in 1962.
We havealso referred to the relevant provisions in the Civil Services Rulesand the Gazetted Service Rules.
In fact the Government could not have appointed the respondent against a permanent vacancy, in view of the fact that Mr. Rajendra Nath was having a lien on the post and so long as he had that lien there was no substantive vacancy in the post of Deputy Director.
The circumstance that with effect from April 1, 1964 the post of Deputy Director (Publicity Material) was made permanent will not help the respondent as lie has not been at all appointed in the first instance against a permanent vacancy.
In the view that we take about the Proviso to Rule 10(3) of the Gazetted Service Rules, we do not think it necessary to refer to the decisions in The Commissioner of Income tax, Mysore vs The Indo Mercantile Bank Limited(1), Tahsildar Singh and another vs The State of Uttar Pradesh(2), State of Madhya Pradesh and another vs Lal Bhargavendra Singh(3), cited by Mr. Tarkude regarding the principles to be borne in mind in construing a Proviso in a statute.
Mr. Tarkunde drew our attention to a decision of the Punjab High Court in Dr. Deep Kaur vs The State of Punjab(4).
The High Court in the said decision had to consider Rule 7 of the Punjab Civil Medical Service, Class 11 (Recruitment and Conditions of Service) Rules, 1943.
One of the contentions taken before the High Court was that the officer concerned should be considered to have been automatically confirmed after the (1) [1959] SuppI. (2) S.C.R. 256.
(3) (2) [1959] Suppl.
(2) S.C.R. 875.
(4) [1967] (Vol.
I) S.L.R. 34.
485 expiry of the period of three years.
On a consideration of the relevant rules, the learned Judges have beld that it is only a person who is appointed against a permanent vacancy would get automatically confirmed after completion of probation of three years.
It is not necessary for us to consider this decision any further as the rules construed by the learned judges were different.
It only necessary to note that the learned Judges have referred to the decision of the High Court, which is now under appeal before us as supporting the contention of the officer and the learned Judges have noted that the appeal is pending in this Court.
Mr. Ramamurthy, on the other hand, referred us to the decision of the Punjab and Haryana High Court reported in Devi Shanker Prabhakar vs The State of Haryana and another(1) and urged that the construction that lie wants us to place on the Proviso to Rule 10(3) has been adopted by the High Court.
We have gone through the said decision.
From the facts it is seen that the officer was appointed in a substantive vacancy in a permanent post on probation for one year on October 6, 1960.
The period of probation of one year ended on October 6, 1961.
He was continued in the said post till lie was reverted in 1969.
The officer challenged the order of reversion on the ground that after he had completed the period of probation and has continued in service for more than three years in a permanent vacancy and in a permanent post, he should be considered as a permanent employee of the Government under the Proviso to Rule 10(3) of the Gazetted Service Rules.
The State contended that as no order of confirmation was passed, the Government servant was not entitled to claim permanency in the post.
In that connection the High Court has referred, with approval, to the decision of the High Court, under appeal before us.
The facts of the decision of the High Court, referred.
to above, are entirely different from the facts in the appeal before us.
If the respondent officer had been appointed, in a substantive vacancy in a permanent post, and if he had been continued forover three years, quite naturally, he wilt be entitled to claim the benefit of the Proviso to Rule 10(3).
Therefore, the view of the High Court that as there was a permanent post of Deputy Director (Publicity Material) at the material time, the respondent had become a permanent Deputy Director under 'the Proviso to Rule 10(3) of the Gazetted Service Rule,,.
with effect from June 27, 1965 cannot be sustained.
The third point that arises for consideration is whether the respondent 's appointment as State Press Liaison Officer, is coterminus with the continuance of the said post.
We have already referred in extenso to the case of the parities regarding this post.
By order dated June 28, 1957 the Governor of Punjab created the (1) [1971] (Vol.
73) Punjab Law Reporter 644.
486 post of State Press Liaison Officer at Delhi with effect from June 22, 1957 till February 28, 1958 in the Public Relations Department, Punjab.
The said order also appoints the respondent to the said post.
On August 1, 1957 a notification was issued by the State Government regarding the appointment, posting and transfer of officers.
By virtue of that order, the Governor of Punjab appointed the respondent as State Press Liaison Officer at Delhi in the Public Relations Department.
The said order also states that the respondent has already assumed charge of his duties with effect from June 22, 1957.
Originally, in the writ petition the respondent had claimed to his having become a permanent Government servant more or less exclusively on the basis of his having been in service for over 11 years.
In connection with the post of State Press Liaison Officer, he later on, filed a copy of the gazette notification dated July 11, 1962 in and by which a new Service is said to have been created and in which the post of State Press Liaison Officer was included as a cadre post.
He had also filed along with his affidavit dated February 19, 1969, a copy of the Said notification.
On behalf of the State, the third appellant had filed an affidavit to the effect that the post of State Press Liaison Officer was a temporary one.
But it was admitted by the third appellant that the said post was held in abeyance from June 27, 1962 to June 14, 1966, during which period the respondent was functioning as Deputy Director (Press).
It has also been admitted by the third appellant that the post of State Press Liaison Officer was again revived and the respondent was posted to that post with effect from June 15, 1966.
In view of the different stand taken, regarding the nature of the post of State Press Liaison Officer, the High Court passed an order on July 21, 1969 requiring the parties, including the then Chief Secretary to file affidavits regarding the nature of the post of State Press Liaison Officer.
Various affidavits were filed by the respondent.
The officers of the State filed affidavits pleadings showing that the notification dated July 11, 1962 did not create any new Service, nor did the said notification make the post of State Press Liaison Officer a cadre post.
We may also refer to the notification dated July 11, 1962, which is as follows Chandigarh, the July, 11, 1962.
No. 6244 IPP 62.
The Governor Of Punjab is pleased to accord sanction to the creation of the Punjab 'Public Relations Service ' and to include therein tile following Posts after classifying them into Class I and II as mentioned below S.No.
Name of the Post Class of Service 4.
State Press Liaison Officer.
II 487 On June 24, 1966 the Government transferred the respondent from on the post of Deputy Director (Press) as State Press Liaison Officer with effect from June 14, 1966 "consequent upon the revival of the State Press Liaison Officer, Delhi".
The stand taken by the Chief Secretary and the various officers.
who filed affidavits in pursuance of the order dated July 21, 1969 was that the notification dated July 11, 1962 did not create a new service and did not make the post of State Press Liaison Officer a cadre post.
But it is seen that during the course of arguments before the High Court the State abandoned its initial stand that the post of State Press Liaison Officer has not become a cadre post as per notification dated July 11, 1962.
On the other hand it is recorded in the judgment that the State conceded that on and from July II, 1 962 the post of State Press Liaison Officer had become a cadre post.
But they contested the plea of the respondent that a new Service had been created.
The High Court has come to the conclusion that no new Service has been created by the said notification.
On the other hand what was done by the notification was only to give a new name as Punjab Public Relations Service and the gazetted posts were classified in Classes I and II.
The High Court has again remarked that the State having failed to prove that the post of State Press Liaison Officer was not a cadre post, it began to take a different stand that in any event.
it was not a permanent post.
It is on the basis of the concession made on behalf of the State their the post of State Press Liaison Officer has become a cadre post.
the High Court has considered the claim regarding the nature of the right that the respondent had when he was holding that post.
Before us Mr. Tarkunde, learned counsel for the appellants, attempted to argue that the statement in the judgment of the High Court that there has been either a concession or an abandonment of the original plea by the State, as recorded therein is erroneous, as no such concession has been made nor was the original stand taken by the State ever abandoned.
We are not inclined to accept this contention of Mr. Tarkunde.
If the statements in the judgment of the High Court were not correct, one would have expected the appellants when they filed their application S.C.A. No. 1 of 1970 before the High Court for grant of certificate to have challenged the statements contained in the judgment.
On the other hand there is only a feeble statement in the ground No. 3 filed before the High Court that in view of the stand taken by the Government there was no question of any concession nor was any statement made that the post was in the cadre of Service.
This 488 is not the manner in which a statement contained in the judgment Is to be challenged.
We have to proceed through on the basis that the appellants have accepted the position that the post Of State Press Liaison Officer is a cadre post.
One of the circumstances relied on by Mr. Tarkunde, that there could not have been any such concession made by the State, as stated in the judgment of the High Court, is that the post of State Press Liaison Officer is not shown in Appendix A of the Gazetted Service Rules.
But it should be remembered that those rules were framed in 1958 : it is also true that the said post is not contained in Appendix A.
But it will be seen that under Rule 3 of the Gazetted Service Rules, the right of the Government to make additions or reduction in the number of posts shown in Appendix A whether permanently or temporarily has been preserved.
In this connection it is also to be noted that in the affidavit dated August 7, 1969, filed by Mr. E. N. Mangat Rai, the then Chief Secretary, he has clearly admitted that though no new Service was created by notification dated July 11, 1962, nevertheless, the said notification added certain additional posts to the Service.
He has further admitted that one of the said additional posts was that of State Press Liaison Officer.
In view of the above, facts, which are on record, it is only reasonable to infer that in exercise of the power under Rule 3, the State Government, has made an addition to the cadre of the posts in Appendix A by including therein, the post of State Press Liaison Officer.
Therefore, there is nothing strange in the State having accepted the above position as correct and in the High Court holding that the respondent has succeeded in establishing that the post of State Press Liaison Officer was included in the cadre post in July 1962.
But any how it is unnecessary for us to pursue this matter further, because we have to proceed on the basis of the concession made before the High Court by the State and recorded in the judgment.
From the nature of the orders passed by the State in respect of this post, it looks as if the State was specially favoring the respondent by creating a post for him and appointing him to that post.
Originally the post was created on June 28, 1957 and the respondent was appointed thereto.
When he was Deputy Director (Press) for all those four years, and it is admitted that the said post was kept in abeyance.
This is admitted by the third appellant in his affidavit.
Even otherwise, the order of the Government dated June 21, 1962 creating a post of Joint Director itself ordered that the post of State Press Liaison Officer is to be held in abeyance.
It is significant to note that Mr. Rajendra Nath was appointed to this newly created post of Joint Director and tile respondent was appointed as Deputy Director (Press).
It was 489 during this period when the respondent was Deputy Director (Press) that the post of State Press Liaison Officer was kept in abeyance.
There is no indication in the order dated June 28, 1957 or in the order dated June 24, 1966 limiting the tenure of the respondent 's appointment as State, Press Liaison Officer.
These are the only two orders that have been produced, so far as we could see regarding the respondents appointment to the said post.
It is claimed on behalf of the appellants that the said post was being renewed from year to year and therefore it is a purely temporary post.
Though no orders have been produced before the Court, we will accept their this plea that it is a temporary post continuing from year to year.
But the point to be noted is that no further orders appointing the respondent to the said post have been produced, though it is admitted that he was.
holding the said post.
If such orders had been produced by the appellants, it may be possible to find out the exact nature of the tenure for which the respondent was appointed whether his appointment is for the duration of the post or whether it has been limited only till further orders or for any particular period.
But the lack of such particulars, has resulted in the Court not being able to investigate the term for which the respondent was appointed to the said post.
The High Court has proceeded on the basis that inasmuch as 'the post was a temporary one and was being continued from year to year, the respondent has a right to hold the post at least till February 28, 1969 till which period admittedly the post had been renewed and, therefore, the termination of his service on October 31, 1968 was illegal.
Mr. Tarkunde has urged that the appointment of the respon dent was also on a temporary basis and his appointment was not co terminus with the continuance of the, post.
As we have already pointed out, no orders have been placed before the Court regarding that aspect on behalf of the State.
But there is a pay slip on record dated April 22, 1968.
The Assistant Accounts Officer has issued the payslip to the Treasury Officer, Delhi stating that the payslip issued in favour of the respondent, who was the State Press Liaison Officer, Haryana, New Delhi, on August 31, 1967 may be deemed as operative upto and inclusive of February 28, 1969.
It was no doubt sought to be explained on behalf of the appellants that this payslip has only been issued in a routine and formal manner to enable the respondent to draw his salary.
We are not inclined to accept this contention of the learned counsel.
That payslip, in the absence of any other materials placed before the Court by the appellants, gives an indication that the respondent 's appointment as State Press Liaison Officer is co terminus with the 490 continuance of the post.
It is not disputed that at the time when the said payslip was issued, the duration of the post had been extended upto February 28, 1969.
In view of all the above circumstances, it is reasonable to infer that the appointment of the respondent as State Press Liaison Officer is co terminus with the continuance of the post.
No doubt, we are aware of the finding recorded by the High Court that such a claim by the respondent cannot be accepted.
But it was the duty of the appellants, who were urging that the respondent 's appointment was a purely temporary one and that it was not for the duration of the post, to have placed all the orders relating to the appointment of the respondent to the said post.
Going by the terms of the orders dated June 28, 1957 and June 24, 1966, there is no such indication.
On the other hand the indications are to the contrary that his appointment was co terminus with the continuance of the post subject of course to the rules regarding, the age of retirement and superannuation and the right of the State to take disciplinary action, according to law.
At this stage we may mention that there is on record a notification issued by the State of Haryana dated April 11, 1969 regarding the sanction accorded to the creation of a temporary post of Liaison Officer, Haryana at Delhi from April 1, 1969 to February 28.
That notification refers also to the special pay of the officer who is to be appointed to the said post as well as his grade.
But that order does not relate to any appointment of.
any officer to the said post.
Therefore, that notification by itself does not throw any light as to the duration of the office to be held by a person to be appointed to that post.
Mr. Tarkunde, learned counsel for the appellants, then urged that it was within the power of the State Government to terminate the services of the respondent under Rule 5.9(b) of the Civil Services Rules.
The High Court has held that the said rule does not apply.
But it is not necessary for us to express any opinion as to the applicability or otherwise of the said rule.
A,, we have already held that the appointment of the respondent must be considered to be co terminus with continuance of the post of State Press Liaison Officer, it follows that the State had no power to terminate the services of the respondent when the post itself was continuing.
If any action by way of disciplinary proceedings was being taken, then the State should have complied with article 311 (2) of the Constitution, which they have admittedly not done in this case.
We make it clear that by upholding the contention of the respondent that his appointment ,is State Press Liaison Officer was for the duration of the continuance of the said post, we do not 491 intend to lay down any general proposition that whenever an officer is appointed to a post, he will be entitled to hold that post so long as the post exists.
It will all depend upon particular circumstances of each case as well as the nature of the orders making the said appointment.
In the, case before us, we have held in favour of the respondent, in view of the various circumstances mentioned earlier.
To conclude, we accept the contentions of the State that the impugned order is not vitiated by mala fides and that the respondent did not become a permanent Government servant on his appointment as Deputy Director (Press).
But we further hold that in view of the circumstances of this case, indicated earlier, the respondent 's appointment as State Press Liaison Officer was co terminus with the continuance of the post and as such the order dated October 31, 1968 terminating the services of the respondent, when the post was admittedly in continuance, the order of termination is illegal.
In the result, the judgment and order of the High Court are modified to the extent indicated above and the appeal allowed in part.
In other respects, the appeal is dismissed.
There will be no order as to costs.
G.C. Appeal allowed in part.
| IN-Abs | The respondent joined the service of the composite State of Punjab and Haryana on June 22, 1957 as the State 's Press Liaison officer at Delhi in the Public Relations Department of the State.
The original appointment was to last till February 28, 1958 but was continued by orders passed from time to time.
The respondent went on leave for about six months from November 21, 1959 to May 18, 1960 with permission to act in Pakistan as a Special Correspondent of The Hindustan Times Delhi.
On return from leave he was posted in the same service in the post of Deputy Director (Field) from July 19, 1960 to September 19, 1960.
Later on he was again posted as Officer on Special Duty which was also an equivalent post, from September 20, 1960 to June 26, 1962.
When he crossed the efficiency bar in 1960 his salary was raised with effect from December 24, 1960.
He was appointed as Deputy Director (Press) which post was held by him from June 27, 1962 to June 14, 1966.
By order dated June 24, 1966 the Governor of Punjab appointed him as State Press Liaison Officer with effect from June 14, 1966 and he was posted to Delhi.
This post had been kept in abeyance during the period when he was Deputy Director (Press).
On the reorganisation of the composite State of Punjab and its bifurcation into the States of Punjab and Haryana the post of State Press Liaison Officer.
Delhi, held by him was allocated to the State of Haryana with effect from November 1, 1966.
He was also allotted to the State of Haryana.
He remained on deputation with the Punjab Government from December 1, 1966 to March 24, 1967 and again resumed his duty as State Press Liaison Officer, New Delhi, from March 25, 1967 under the Government of Haryana.
By order dated October 31, 1968 the Haryana Government terminated his services.
The respondent filed a writ petition in the High Court.
The High Court rejected the plea of mala fides raised by the respondent but allowed the writ petition holding in the respondent 's favour that (a) under Rule 10(3) of the Gazetted Service Rules the respondent on completing three years service as Deputy Director (Press) had become a permanent employee of the Government , (b) the appointment of the respondent to the post of State Press Liaison Officer was co terminus with the existence of the post and the respondent was entitled to continue in the post while it was in existence i.e. UP to February 28, 1969.
On the above grounds the High Court quashed the order dated October 31, 1968.
Following the High Court 's order the State Government reinstated the appellant but filed an appeal in this Court challenging the High Court 's judgment.
Apart from the merits, the Court 453 had to consider the preliminary objection of the respondent to the effect that in view of the fact that the respondent had been reinstated in service the question of the validity of the original order passed on October 31, 1968 terminating the services of the respondent, did not survive for con sideration.
HELD : (i) The circumstance that the respondent was are instated in service by the order dated December 5, 1969 could not and does not debar the State from challenging the judgment of the High Court.
In fact immediately after passing the order dated December 5, 1969.
the State had been taking very active steps to challenge the decision of the High Court.
It followed that the State was entitled in the present appeal to challenge the decision of the High Court setting aside the order dated October 31, 1968.
The preliminary objection must accordingly be over ruled.
[457 D E] (ii) The approach of the High Court in considering the allegation of mala fides was not proper.
The High Court had taken each allegation by itself and had held that it was not sufficient to establish mala fides.
The proper approach should have been to consider all the allegations together and find out whether those allegations had been made out and whether those allegations when established were sufficient to prove malice or ill will on the part of the officials concerned and whether the impugned order was the result of such malice or ill will, [472 B C] On the facts of the case the plea of mala fides alleged by the respondent against the second and third appellants could not be accepted [475 F] Principles laid down in section Pratap Singh vs State of Punjab, ; , followed.
(iii) When the respondent was appointed Deputy Director (Press) the former incumbent of the post R who was promoted as Joint Director, continued to have lien on it under r. 3.14 of the Civil Service Rules.
Under r. 3.11(c) of the Civil Service Rules a Government servant cannot be appointed substantively to a post on which another Government servant holds a lien.
Therefore on the date when the respondent was appointed as Deputy Director (Press) he could not have been appointed to that post substantively as R was having a lien on the post.
The various payslips which are on record also show that the respondent 's appointment must have been on an officiating basis as defined in r. 2.42 of the Civil Service Rules.
The objections of the Public Service Commission to the respondent 's appointments as Deputy Director (Press) were also on record.
All these circumstances were against the contentions of the respondent of his having been appointed against a permanent vacancy.
[481 A D] The essential requisite for the applicability of r. 10 is that a person must have been appointed against a permanent vacancy.
As the respondent had been working in the post of Deputy Director (Press) only in an officiating capacity the question of extending hi , probation or confirming him tinder r. 10 of the Gazetted Service Rules did not arise, and if so the question of calculating the total period of probation of three years which is necessary for the application of the Proviso to r. 10(3) did not arise.
[482 G] The circumstance that with effect from April 1.
1964 the post of Deputy Director (Publicity Material) was made permanent could not help the respondent as he had not been at all appointed in the first instance against a permanent vacancy.
The view taken by the High Court, to the contrary, could not be sustained.
[484 E] State of Punjab vs Dharam Singh, ; , C . 1.
Mysore vs Indore Mercantile Bank, Ltd., [1959] Supp.
2 S.C.R. 256, Tahsildar 454 Singh vs State of U.P., [1959] Supp.
2 S.C.R. 875, State of Madhya Pradesh vs Lal Bhargavendra Singh, [1966] 2 S.C.R. 56, Dr. Deep Kaur vs State of Punjab, and Devi Shanker Parbhakar vs State of Haryana [1971] 73 P. L. R. 644, referred to.
(iii) No orders had been placed before the Court to show that the appointment of the respondent as State Press Liaison Officer was on a temporary basis and was not co terminus with the post.
On the other hand the Assistant Accounts Officer had issued payslip dated April 22, 1968 which was on record to the Treasury Officer, Delhi stating that the payslip issued in favour of the respondent who was the State Press Liaison Officer, Haryana, New Delhi, on August 31, 1967 may be deemed as operative upto and inclusive of February 28, 1969.
It was not disputed that at the time when the said payslip was issued, the duration of the post had been extended upto February 28, 1969.
In view of all the circumstances it is reasonable to infer that the appointment of the respondent as State Press Liaison Officer was co terminus with the continuance of the post.
It followed that the State had no power to terminate the services of the respondent when the post itself was continuing.
If any action by way of disciplinary proceedings was being taken then the State should have complied with article 311(2) of the Constitution which they had admittedly not done in this case.
The order of the State Government dated October 31, 1968 terminating the services of the respondent was accordingly held to be illegal, [489 H, 490 A, E, G]
|
Appeal No. 105 of 1953.
Appeal by Special Leave granted by this Court 's Order dated the 24th September, 1951 from the Judgment and Decree dated the 2nd day of September, 1949 of the High Court of Judicature at Bombay in Appeal No. 274 of 1948 from Original Decree arising out of the Decree dated the 30th day of July, 1946 of the Court of Civil Judge, Senior Division at Hubli in Special Suit No. 56 of 1944.
K. R. Bengeri and Sardar Bahadur for the appellant.
section B. Jathar and I. N. Shroff for respondents Nos. 3, 4 and 5.
December 10.
The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C. J.
This appeal raises a question of importance "whether a widow can exercise a power of adoption conferred on her or possessed by her at any time during her life irrespective of any devolution of property or changes in the family or other circumstances and even after a grandson has come on the scene but has subsequently died without leaving a widow or a son".
The situation in which this question arises can properly be appreciated by reference to the following genealogy: 1137 Dyamappa I I I Kalasappa I I Krishtarao Radhabai=Gangabai (deft.2) (Deft.1) (Senior widow) (Junior window) | Gurunath | (Appellsnt adopted | by Gsngsbai on | | 18 11 53) | | | Dattatraya (son) (died 1913) | | =Sundarabai (died after | | her husband in 1913) Kamalabai Yamunabai (Resp.1) (Resp.2) | | | | | | | Kalasappa Jagannath (predeceased (died 1914) Dattatraya) Girimaji | Hanamanta | | | | | | Malhar Ganesh (Resp.3) (Resp.5) Venkatesh Hanamant (Resp.4) (Resp.6) 1138 Gurunath, the plaintiff, claims that he was adopted in 1943 by Gangabai, widow of Krishtarao.
Krishtarao died in 1890, leaving him surviving two widows Radhabai and Gangabai and a son Dattatraya.
Dattatraya died in 1913 leaving him surviving a widow Sundarabai and a son Jagannath.
Sundarabai died shortly after Dattatraya while Jagannath died in the year 1914.
After an interval of about 30 years since his death, it is alleged that Gangabai who survived both her son, and grandson adopted the plaintiff, and thus raised the problem which we are called upon to solve.
On the 15th of March, 1944 the appellant instituted the suit out of which this appeal arises in forma pauperis on the allegation that he was the adopted son of Krishtarao and adopted to him by Gangabai, his junior widow, and as such was entitled to the possession of his adoptive father 's properties comprised in the suit.
He also claimed a declaration regarding the amount of compensation money payable to the plaintiff 's family for the land acquired by Hubli Municipality.
The defendants who are the sons and grandsons of the first cousin of Krishtarao disputed the plaintiff 's adoption on the ground that Gangabai 's power to adopt was extinguished when Dattatraya died in 1913, leaving behind him a widow Sundarabai and a son Jagannath who could continue the family line.
Gangabai in her written statement supported the plaintiff 's claim and asserted that the senior widow Radhabai had given consent to her adopting the plain tiff.
The trial judge upheld the defendants ' contention and dismissed the plaintiff 's suit.
The factum of the plaintiff 's adoption was however upheld, and it was further held that Radhabai did not give her consent to the adoption.
On appeal this decision was affirmed by the High Court and it was held that Gangabai 's power to adopt came to an end at the time when her son died leaving a son and a widow to continue the family line.
No finding was given on the question whether Radhabai had given her consent to the adop tion.
That perhaps would have been the simplest way to end the dispute.
Against the decision of the High 1139 Court this appeal in forma pauperis is now before us by special leave.
The only question canvassed in the appeal is in respect to the validity of the plaintiff 's adoption.
It was contended that Hindu Shastric Law itself sets no limit to the exercise of the widow 's power of adoption once she has acquired that power or is possessed of it, and that being so, the power can be exercised by her during her life time when necessity arises for the exercise of it for the purpose of continuing the line of her husband.
On the other hand, it was argued that though Hindu Shastric Law itself sets no limit to the exercise of the power, yet it has long been judicially recognised that the power is not an unlimited and absolute one, and that it comes to an end when another heir has come on the scene and he has passed on to another the duty of continuing the line.
The question at what point of time the widow 's duty of continuing the line of the husband comes to an end has been the subject matter of a number of decisions of Indian High Courts and of the Privy Council and the point for our consideration is whether the limits laid down in these decisions have been arbitrarily fixed and are not based on sound principles and should be reviewed by us.
A brief reference to the different decisions of the Privy Council is necessary for a proper appreciation of the state of law on this subject at the present moment.
The two leading cases on this point are the decisions of the Privy Council arising out of the adoption made by Shrimati Chundrabullee and decided in 1876 and 1878.
The judgment in the first of these cases, i.e. in Bhoobun Moyee vs Ram Kishore(1) was delivered by Lord Kingsdown.
What happened there was that one Gour Kishore died leaving a son Bhowanee and a widow, Chundrabullee, to whom he gave authority to adopt in the event of his son 's death.
Bhowanee married and died at the age of 24 without issue, but leaving him surviving his widow Bhoobun (1) (1965] 10 M.I.A. 279. 146 1140 Moyee.
Chundrabullee then adopted Ram Kishore.
Ram Kishore brought a suit against Bhoobun Moyee for the recovery of the estate.
The Privy Council held that the claim of Ram Kishore failed on the ground that even if he had been in existence at the death of Bhowanee he could not displace the widow of the latter.
It was further held "that at the time when Chundrabullee professed to exercise her power of adoption, the power was incapable of execution on the ground that Bhowanee had married and left a widow as his heir".
The following quotation from the judgment of Lord Kingsdown may be cited as indicating the reasons for the decisions: "In this case, Bhowanee Kishore had lived to an age which enabled him to perform and it is to be presumed that he had performed all the religious services which a son could perform for a father.
He had succeeded to the ancestral property as heir; he bad full power of disposition over it; he might have alienated it; he might have adopted a son to succeed to it if he had no male issue of his body.
He could have defeated every intention which his father entertained with respect to the property.
On the death of Bhowanee Kishore, his wife succeeded as heir to him and would have equally succeeded in that character in exclusion of his brothers, if he had any.
She took a vested estate, as his widow, in the whole of his property.
It would be singular if a brother of Bhowanee Kishore, made such by adoption, could take from his widow the whole of his property, when a natural born brother could have taken no part.
If Ram Kishore is to take any of the ancestral property, he must take all he takes by substitution for the natural born son, and not jointly with him. .
The question is whether the estate of his son being unlimited, and that son having married and left a widow his heir, and that heir having acquired a vested estate in her husband 's property as widow, a new heir can be substituted by adoption who is to defeat that estate, and take as an adopted son what a legitimate son of Gour Kishore would not have taken.
1141 This seems contrary to all reason and to all the principles of Hindoo law, as far as we can collect them. .
If Bhowanee Kishore had died unmarried, his mother, Chundrabullee Debia, would have been his heir, and the question of adoption would have stood on quite different grounds.
By exercising the power of adoption, she would have divested no estate but her own, and this would have brought the case within the ordinary rule; but no case has been produced, no decision has been cited from the Text books, and no principle has been stated to show that by the mere gift of a power of adoption to a widow, the estate of the heir of a deceased son vested in possession, can be defeated,.
and divested".
In the result the suit of Ram Kishore was dismissed.
After the deaths of Bhoobun Moyee and Chundrabullee, Ram Kishore got possession of the property under a deed of relinquishment executed in 1869 in his favour by Chundrabullee, who herself had entered into possession of the property as mother and next heir of Bhowanee Kishore after the death of Bboobun Moyee in 1867.
If Ram Kishore 's adoption was good he was undoubtedly the next heir to the property.
A distant collateral however claimed the estate on the ground that his adoption was invalid.
The Privy Council then held that "upon the vesting of the estate in the widow of Bhowanee, the power of adoption of Chudrabullee was at an end and incapable of execution" and that Ram Kishore had therefore no title.
This was the decision in Padma Coomari vs Court of Wards(1) wherein a second effort to maintain the validity of his adoption by Chundrabullee was made but without success.
The High Court in its judgment in Padma Coomari 's case(1) remarked that the decision in Bhoobun Moyee vs Ram Kishore(2) did not decide that Chundrabullee could not adopt on the extinction of the issue either of natural born son or of the first to be adopted son, and that if Chundrabullee had on the death of Bhoobun Moyee made the adoption and so divested her own estate,, there would be (1) [1881] L.R. 8 I.A, 229.
(2) [1865] 10 M.I.A. 279, 1142 nothing in the judgment of the Privy Council and nothing in the law to prevent her doing that which her husband authorised her to do, and which would certainly be for his spiritual benefit, and for that of his ancestors and even of Bhowanee Kishore.
The learned Judges of the High Court proceeded then to observe as follows: "With all respect, therefore, we imagine that Lord Kingsdown must have said by inadvertence, in reference to the idea of adopting a son to the great grandfather of the last taker, that at that time 'all the spiritual purposes of a son, according to the largest construction of them, would have been satisfied '; and again, Bhowanee Kishore had lived to an age which enabled him to perform, and it is to be presumed that he had performed, all the religious services which a son could perform for a father.
There is really no time at which the performance of these services is finally completed, or at which the necessity for them comes to an end".
To this Sir Richard Couch, who delivered the judgment of the Privy Council, gave a very emphatic answer in these terms: "The substitution of a new heir for the widow was no doubt the question to be decided, and such.
substitution might have been disallowed, the adoption being held valid for all other purposes, which is the view that the lower Courts have taken of the judgment, but their Lordships do not think that this was intended.
They consider the decision to be that, upon the vesting of the estate in the widow of Bhowanee, the power of adoption was at an end, and incapable of execution.
And if the question had come before them without any previous decision upon it, they would have been of that opinion.
The adoption intended by the deed of permission was for the succession to the zemindary and other property, as well as the performance of religious services; and the vesting of the estate in the widow, if not in Bhowanee himself, as the son and heir of his father, was a proper limit to the exercise of the power".
The question of limitations upon the power of the 1143 widow to adopt thus stated in the Chundrabulle series of decisions was again affirmed by the Judicial Committee in Thayammal and Kuttiswami Aiyan vs Venkatarama Aiyan(1) decided in 1887 and in Tarachurn vs Suresh Chunder(2) decided in 1889.
In the year 1902 this question came up for consideration before the Full Bench of the Bombay High Court in Ramkrishna Ramchandra vs Shamrao(3).
There a grandmother succeeded to her grandson who died unmarried andit was held that her power to make an adoption hadcome to an end and that the adoption was invalid.
Chandavarkar, J., who delivered the judgment of the Full Bench, enunciated the principle in these words: "Where a Hindu dies leaving a widow and a son, and that son dies leaving a natural born or adopted son or leaving no son but his own widow to continue the line by means of adoption, the power of the former widow is extinguished and can never afterwards be revived".
This principle was approved and applied by the Judicial Committee in Madana Mohana vs Purushothama Deo(4) in these words: "Their Lordships are in agreement with the principle laid down in the judgment of the Full Court of Bombay as delivered by the learned judge, and they are of opinion that, on the facts of the present case, the principle must be taken as applying so as to have brought the authority to adopt conferred on Adikonda 's widow to an end when Brojo, the son she originally adopted, died after attaining full legal capacity to continue the line either by the birth of a natural born son or by the adoption to him of a son by his own widow".
The next and the most important decision of the Judicial Committee in regard to this matter was given in the year 1933 in Amarendra Mansingh vs Sanatan(5) where there was a departure from or at least a reorientation of the old doctrine, and stress was laid on the spiritual rather than on the temporal aspect (1) (1887] L.R. 14 I.A. 67.
(3) Bom.
(2) [1889] L.R. 16 I.A. 166.
(4) [1918] L.R. 45 I.A. 150.
(5) [1933] L R. 60 I.A. 242.
1144 of adoption, linking it up with the vesting and divesting of the estate.
There a Hindu governed by the Benaras school was survived by an infant son and a widow, to whom he had given authority to adopt in the event of the son dying.
The son succeeded to his father 's impartible zamindari but died unmarried at the age of 20 years and 6 months.
By a custom of the family which excluded females from inheritance the estate did not go to his mother but became vested in a distant collateral.
A week after the son 's death she made an adoption.
It was held that the adoption was valid and it divested the estate vested by inheritance in the collateral.
All the previous decisions were reviewed in this case by Sir George Lowndes who delivered the judgment of the Board.
At page 248 of the report it is said as follows: "In their Lordships ' opinion, it is clear that the foundation of the Brahminical doctrine of adoption is the duty which every Hindu owes to his ancestors to provide for the continuance of the line and the solemnization of the necessary rites.
And it may well be that if this duty has been passed on to a new generation, capable itself of the continuance, the father 's duty has been performed and the means provided by him for its fulfilment spent: the "debt" be owed is discharged, and it is upon the new generation that the duty is now cast and the burden of the "debt" is now laid.
It can, they think, hardly be doubted that in this doctrine the devolution of property, though recognised as the inherent right of the son, is altogether a secondary consideration. . that the validity of an adoption is to be determined by spiritual rather than temporal considerations; that the substitution of a son of the deceased for spiritual reasons is the essence of the thing, and the consequent devolution of property a mere accessory to it.
Having regard to this well established doctrine as to the religious efficacy of sonship, their Lordships feel that great caution should be observed in shutting the door upon any authorised adoption by the widow of a sonless man, The Hindu law itself sets no limit 1145 to the exercise of the power during the lifetime of the widow and the validity of successive adoptions in continuance of the line is now well recognised.
Nor do the authoritative texts appear to limit the exercise of the power by any considerations of property.
But that there must be some limit to its exercise, or at all events some conditions in which it would be either contrary to the spirit of the Hindu doctrine to admit its continuance, or inequitable in the face of other rights to allow it to take effect, has long been recognised both by the Courts in India and by this Board, and it is upon the difficult question of where the line should be drawn, and upon what principle, that the argument in the present case has mainly turned".
In another part of the judgment their Lordships observed as follows: "It being clear upon the decisions above referred to that the interposition of a grandson, or the son 's widow, brings the mother 's power of adoption to an end, but that the mere birth of a son does not do so, and that this is not based upon a question of vesting or divesting of property, their Lordships think that the true reason must be that where the duty of providing for the continuance of the line for spiritual purposes which was upon the father, and was laid by him conditionally upon the mother, has been assumed by the son and by him passed on to a grandson or to the son 's widow, the mother 's power is gone.
But if the son die himself sonless and unmarried, the duty will still be upon the mother, and the power in her which was necessarily suspended during the son 's lifetime will revive".
The learned counsel for the appellant placed reliance upon the last sentence in the passage in the Privy Council judgment quoted above and contended that if the power of the widow which remained suspended during the lifetime of the son could revive on the son dying sonless and unmarried, logically the power must also revive when the son and his widow and the grandson and his widow all died out.
Reliance was also placed on the passage already cited in which 1146 their Lordships laid emphasis on the proposition that the substitution of a son of the deceased for spiritual reasons is the essence of the thing, and the consequent devolution of property a mere accessory to it and it was contended that the grounds on which an outside limit was laid on the exercise of the widow 's power in the Chundrabullee series of decisions no longer survived, in view of the ratio in Amarendra 's decision and that it having been held that the power of adoption did not depend on and was not linked with the devolution of property or with the question of vesting or divesting of property and could be exercised whenever necessity for continuing the line arose, it should be held that when the son and his widow were dead and the grandson to whom he handed the torch for continuing the line also died, the power of Gangabai to make the adoption revived and thus the adoption was valid.
This argument, in our opinion, is not well founded as it is based on an incorrect apprehension of the true basis of the rule enunciated in this judgment, the rule being that "where the duty of providing for the continuance of the line for spiritual purposes which was upon the father and was laid by him conditionally upon the mother, has been assumed by the son and by him passed on to the grandson or to the son 's widow, the mother 's power is gone".
In the words of Chandavarkar, J. affirmed by the Judicial Committee in Madana Mohana vs Purushothama Deo(1) "the power having once been extinguished it cannot afterwards be revived".
In other words the true rule is this: "When a son dies before attaining full legal competence and does not leave either a widow or a son or an adopted son then the power of the mother which was in abeyance during his lifetime revives but the moment he hands over that torch to another, the mother can no longer take it".
The contention of the learned counsel therefore that even if the second generation dies without taking steps to continue the line the grandmother still (1) [1918] L R. 45 I.A. 156.
1147 retains her authority and is still under a duty to continue the line cannot be sustained.
The three propositions that the Privy Council laid down in Amarendra 's case therefore cannot now be questioned.
These propositions may be summed up in these terms: (1) That the interposition of a grandson, or the son 's widow, competent to continue the line by adoption brings the mother 's power of adoption to an end; (2) that the power to adopt does not depend upon any question of vesting or divesting of property; and (3) that a mother 's authority to adopt is not extinguished by the mere fact that her son had attained ceremonial competence.
The rule enunciated in Amarendra 's case was subsequently applied in Vijaysingji vs Shivsangji(1) and was again restated and reaffirmed as a sound rule enunciating the limitations on the widow 's power to adopt in Anant Bhikappa Patil vs Shankar Ramchandra Patil(2).
One of the propositions enunciated in this decision was not accepted by this court in Shrinivas Krishnarao Kango vs Narayan Devji Kango(3), but that apart no doubt was cast in this decision on the above rule.
The result of these series of decisions is, that now for about three quarters of a century the rule that "the power of a widow to adopt comes to an end by the interposition of a grandson or the son 's widow competent to adopt" has become a part of Hindu Law.
though the reasons for limiting the power may not be traceable to any Shastric text; and may have been differently stated in the several judgments.
It is well known that in the absence of any clear Shastric text the courts have authority to decide cases on principles of justice, equity and good conscience and it is not possible to bold that the reasons stated in support of the rule are not consistent with these principles.
During the arguments no substantial grounds have (1) [1935] L.R 62 I.A. 161.
(2) [1943] L.R. 70 I.A. 232.
(3) ; 147 1148 been suggested for holding that the rule is either in equitable or unjust or is repugnant to or inconsistent with any doctrine or theory of Hindu Law of adoption.
In this situation we are bound to hold that it is too late in the day to say that there are no limitations of any kind on the widow 's power to adopt excepting those that limit the power of her husband to adopt, i.e. that she cannot adopt in the presence of a son, grandson or great grandson.
Hindu Law generally and in particular in matters of inheritance, alienation and adoption gives to the widow powers of a limited character and there is nothing in the limitations laid down by the course of decisions above referred to repugnant to that law.
For the reasons given above, we are unable to depart from the rule that a widow 's power to make an adoption comes to an end by the interposition of a grandson or the son 's widow competent to continue the line by adoption.
The learned counsel for the appellant placed considerable reliance on two decisions of the Indian High Courts in support of his contention and suggested that the rule laid down in Amarendra 's case had no application to the situation that has arisen in the present case and that on the death of the grandson the widow 's power to adopt which was in abeyance during his life revived.
Reference in this connection was made to the decision of the Nagpur High Court in Bapuji vs Gangaram(1).
There a Hindu died leaving a widow and his son and the son died leaving a widow only who re married.
It was held that the power of the mother revived on the re marriage of the son 's widow.
Reliance for this proposition curiously enough was placed on the decision of the Judicial Committee in Amarendra 's case as appears from the following quotation from that judgment: "If the observation quoted from Amarendra Mansingh vs Sanatan Singh(2) be understood as limited to the case where the widow D or the grandson E stands between (is interposed) the grand widow C and her power, everything is clear except for the (1) (1941) I.L.R. Nagpur 178.
(2) Pat.
642, 658.
1149 words "and can never be revived" quoted from Ramkrishna vs Shamrao(1).
Strictly the above is the true meaning of their Lordships ' words.
That amounts to nothing more than this: that while D or E is alive and competent to adopt his or her existence prevents any adoption being made by C.
That leaves at large what happens when the "interposition" is ended.
Logic says that as the death of the son removes his "inter position" whereupon C 's power revives so the death of D removes her interposition and so C 's power revives".
In our judgment there is not only an obvious fallacy in this reasoning but it is based on a wrong apprehension of the true reasons stated for the rule in Amarendra 's case.
The reason for the rule in Amarendra 's case was "where the duty of providing for the continuance of the line for spiritual purposes which was upon the father, and was laid by him conditionally upon the mother, has been assumed by the son and by him passed on to a grandson or to the son 's widow, the mother 's power is gone".
If that is the true reason, obviously the duty having come to an end cannot be revived on logical grounds.
We are therefore clearly of opinion that the ratio of the decision in Bapuji vs Gangaram(2) was erroneous.
The second decision to which reference was made is a decision of the Lucknow Court reported in Prem Jagat Kuer vs Harihar Bakhsh Singh(3).
The learned Judges in that case followed the decision of the Nagpur High Court above quoted, and further added (though under some misapprehension) that this decision had been approved by their Lordships of the Privy Council.
As a matter of fact, there was another decision reported in the same report on a different question that had been upheld by the Privy Council and not the decision above referred to.
The authority of this later decision therefore is considerably shaken by this error and even otherwise the decision gives no independent reasons of its own apart from those contained in the Nagpur case.
(1) Bom.
(2) (3) Luck.
1. 1150 For the reasons given above, this appeal fails and is dismissed, but in the circumstances of the case we will make no order as to costs.
Appeal dismissed.
| IN-Abs | It is well settled according to Hindu Law that a widow 's power to adopt comes to an end by the interposition of a grandson or the son 's widow competent to continue the line by adoption.
The mother 's authority to adopt is not extinguished by the mere fact that her son had attained ceremonial competence.
The power to adopt does not depend upon any question of vesting or divesting of property.
The decision of the Judicial Committee of the Privy Council in Anant Bhikappa Patil vs Shankar Ramchandra Patil (L.R. 70 I.A. 232) is not sound in so far as it relates to the properties inherited from collaterals prior to adoption.
In respect of such properties the adopted son can lay no claim on the ground of relation back.
Shrinivas Krishnarao Kango vs Narayan Devji Kango ([1955] 1 S.C.R. 1), followed.
Amarendra Mansing vs Sanatan ([1933] L. R. 60 I. A. 242), explained.
Anant Bhikappa Patil vs Shankar Ramchandra `Patil ([1943] L.R. 70 I.A. 232), not relied on in part.
Bhoobun Moyee vs Ram Kishore ([1865] 10 M.I.A. 279); Pudma Coomari vs Court of Wards ([1881] L.R. 8 I.A. 229); Thayammal and Kuttisami Aiyan vs Venkatarama Aiyan ([1887] L.R. 14 I.A. 67); Tarachurn vs Suresh Chunder ([1889] L.R. 16 I.A. 166); Ramkrishna 1136 Ramchandra vs Shamrao ([1902] I.L.R. ; Madana Mohana vs Purushothama Deo ([1918] L.R. 45 I.A. 156); Vijaysingji vs Shivsangji ([1935] L.R. 62 I.A. 161); Bapuji v Gangaram ([1941] I.L.R. Nagpur 178); and Prem Jagat Kuer vs Harihar Bakhsh Singh ([1945] I.L.R. 21 Lucknow 1), referred to.
|
l Appeals Nos.
2180 to 2182 of 1968.
Appeals by Special Leave from the judgment and order dated October 6, 1967 of the Andhra Pradesh High Court in Writ Petitions Nos.
1456 of 1965, 376 and 2006 of 1966.
M. C. Chagla, P. Ramachandra Rao and B. R. Agarwala, for the appellants (in all the appeals).
P. Ram Reddy and A. V. V. Nair, for the respondents (in all the appeals).
The Judgment of the Court was delivered by Mitter, J.
These appeals are directed against the imposition of taxes under the Andhra Pradesh Motor Vehicles Taxation Act (V of 1963).
The appellant in the first two appeals is the Automotive Manufacturers (P.) Ltd., a dealer, among other automobile equipment, of motor chassis, motor vehicles etc.
received by it from manufacturers outside the State of Andhra Pradesh.
The first appeal arises out of a writ petition against the levy in respect of motor chassis delivered to it by Ashok Leyland Ltd. of Madras.
These chassis are said to be driven by transport contractors of the manufacturers themselves under temporary, certificates of registration under the Motor Vehicles Act and delivered to the appellant at Secunderabad.
The second appeal by the same appellant arises out of a writ petition challenging the levy on jeeps, jeep truck chassis, jeep station wagons of the manufacture of Mahindra & Mahindra Ltd. of Bombay, besides pick up vans, scooters etc.
from Bajaj Auto Ltd. of Poona.
The scooters are carried to Secunderabad in lorries.
The appellants in Civil Appeal No. 2182 of 1968 are Ashok Leyland Ltd. Madras who transport motor chassis by road from their factory at Encore to dealers in various parts of India, State Transport Undertakings etc.
According to their writ petition, these chassis have to traverse long distances in the State of Andhra Pradesh every month destined for delivery not only in the said State but also beyond the same.
These chassis are driven from Ennore to their respective destinations in the several States under temporary certificates of registration obtained from the 595 Madras State on payment of requisite tax in that behalf, such certificates of registration under section 28 of the Motor Vehicles Act being effective throughout India.
The appellants ' case is that the levy is illegal and unconstitutional.
The grounds urged in the writ petitions filed in the High Court inter alia are as follows : 1.
S.3 of the Act only authorises a levy of tax on a motor vehicles "used or kept for use in a public place in the State".
There can be no user or keeping for use: of the chassis of a motor vehicle as a motor vehicle unless a body is attached to it. 'In the, case of vehicles other than chassis such user or keeping for use in 'a public place can only take place when they are put to the required user or kept for use by the customers for whom the vehicles are transported in the manner contemplated by the Motor Vehicles Act.
2. section 9 of the Act exempts from payment of tax chassis of a motor vehicle "driven to another place in order that a body may be attached to it".
As the chassis are invariably driven to their respective destinations in order that bodies may be attached to them, they come directly under the notification of exemption issued by the State Government.
As the chassis or the vehicles are covered by temporary certificates of registration taken out by the manufacturers entitling transportation throughout the territory of India, the impugned levy operates as an impediment to the free trade and commerce of the petitioners in violation of article 301 of the Constitution.
The High Court turned down all the contentions.
Hence the appeals.
Before this Court Mr. Chagla for the appellants limited his first and second contentions to the cases of chassis only.
His first contention was that section 3 of the Act was not applicable to the appellants.
Sub section
(1) of that section, runs as follows : "The Government may, by notification from time to time direct that a tax shall be levied on every motor vehicle used or kept for use, in a public place in the State.
" Under sub section
(2) of section 3 the notification issued under sub section (1) is to specify the class of motor vehicles on which, the rates for the periods at which and the date from which the tax shall be levied.
A motor vehicle has not been defined in this Act but under section 2(j) of the Act it is to have, the same meaning as is assigned to it in the Motor Vehicles Act.
Under section 2(18) of the last mentioned Act, "a motor vehicle means any mechanically propelled vehicle adapt 596 ed for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises.
" The argument of learned counsel was that a chassis as such could neither be used nor kept for use in a public place, before a body was fitted to it and so long as the said step was not taken, the question of levy of tax under the Act would not arise.
We were referred to the different meanings of the word "use" in the Oxford Dictionary some of which are as follows : "To make use of as a means or instrument; To employ for a profitable end;" In our view, it is not necessary for a chassis to have a body attached to it before it can be used within the meaning of the Act inasmuch as it can be used by the man who drives it and such use of it on public roads would be enough to attract the levy.
Ordinary chassis have bodies attached to them for commercially profitable use but even without a body a chassis can be used and is actually used when it is taken over public roads.
The second submission was that the appellants qualified for exemption under the Government notification under section 9 of the Act.
Section 9 inter alia provides : "(1) The Government may, by notification (a) grant an exemption, make a reduction in the rate or order other modification not involving an enhancement in the rate, of tax payable (i) by any person or class of persons; or (ii) in respect of any motor vehicle or class of motor vehicles or motor vehicles running in any particular area; xx xx XX.
" The notification issued ran as follows: " In exercise of the powers conferred by sub section (1) of section 9 of the Andhra Pradesh Motor Vehicles Taxation Act, 1963 (Andhra Pradesh Act 5 of 1963), the Governor of Andhra Pradesh hereby grants exemption of the tax payable in respect of motor vehicles specified in column (1) of the Table below subject to the conditions, if any, specified in column (2) thereof '.
597 Item (4) of the table reads : "Any chassis of a motor vehicle" the condition for exemption being : "When driven to any place in order that a body may be attached to it.
" It was argued that as the use of a chassis would be meaningless unless a body is attached to it and all chassis, as a matter of fact, have to have bodies attached to them, the driving of the chassis on the road without a body ' would qualify for exemption under, the above notification.
We find ourselves unable to accept this view.
Item (4) in the table of the above notification limits the exemption from the tax to the journey of the chassis for the express purpose of a body being attached to it.
The Automotive Manufacturers being dealers can and do probably deal with or dispose of the chassis as such.
There is no allegation in any of the two writ petitions tiled by these appellants that the chassis were coming from Madras or Bombay for the purpose of having bodies attached to them at the workshop of the appellant.
In so far as Ashok Leyland Ltd. is concerned, it is their positive case that the chassis were being driven through the State of Andhra Pradesh either for delivery there or in other States of India.
They were certainly being driven along the roads of Andhra Pradesh for disposal at the joumey 's end and it would be for the purchaser at the destination to have a body fixed to the chassis according to Ms own need and on the specification given by him.
Merely because bodies were going to be attached by the ultimate purchasers, it cannot be said that the running of the chassis on the roads of Andhra Pradesh would attract exemption under item (4) of the notification.
The last point urged by counsel was that inasmuch as registration of a vehicle in any State under section 28 of the Motor Vehicles Act is to be effective throughout India any tax by a State on motor vehicles be they merely chassis or otherwise would run counter to article 301 of the Constitution according to which trade, commerce and intercourse throughout the territory of India is to be free subject to the other provisions of Part XIII.
Under article 304(b) how ever it is open to the Legislative of a State to impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest.
This again is subject to the proviso that no Bill or amendment for the purpose of the said cl.
(b) is to be introduced in the State Legislature without the previous sanction of the President.
Learned counsel wanted to urge that the impost was not saved by article 304(b) inter alia, on the ground that there was no previous sanction of the President in respect of the Bill as envisaged by article 304(b).
We did not allow counsel to press this point inasmuch as it had 598 not been urged in the writ petition and we hereby make it clear that we are not examining the merits of the contention urged by counsel in this regard and it will be open to his clients, if so advised, to urge it in any future proceedings they may choose to take.
These appeals were originally heard by a Bench of five Judges including section C. Roy, J. who expired a few days back.
The above judgment was concurred in by our late colleague.
We however gave a further hearing to the parties at which nothing was addressed to us to make us change our opinion already formed.
In the result, the appeals fail and are dismissed with costs.
One set of costs including hearing fee.
K. B. N. Appeals dismissed.
| IN-Abs | Section 3 of the Andhra Pradesh Motor Vehicles Taxation Act (5 of 1963) authorised levy of tax on motor vehicles "used or kept in use in a public place in the State".
Item 4 in the table of the notification issued under section 9 of the Act exempted from the tax "any chassis of motor vehicle when driven to any Place in order that a body may be attached it.
" The Automotive Manufacturers (P) Ltd. in the State of Andhra Pradesh, were dealers, among other things, in chassis received by it from manufacturers outside the State.
The chassis were driven by transport contractors of the manufacturers themselves under temporary certificate of registration under the Motor Vehicles Act and delivered to the appellant in the State of Andhra Pradesh.
The Ashok Leyland Ltd. transported motor chassis by road from their factory in Madras to dealers in various parts of India.
These chassis were driven through the State of Andhra Pradesh either for delivery there or in other States of India.
The Automotive Manufacturers and the Ashok Leyland challenged the imposition of tax under the Act.
The High Court dismissed the petitions.
In appeals to this Court it was contended that (i) section 3 of the Act was not appli cable, because, there could be no user or keeping for use of the chassis of a motor vehicle as a motor vehicle unless a body was attached to it; (ii) as the chassis were invariably driven to their respective destination, in order that bodies may be attached to them, they came directly under the notification of exemption issued by the State Government; and (iii) the impugned levy operated as an impediment to free trade and commerce in violation of article 301 of the Constitution.
Dismissing the appeals.
HELD : (i) It is not necessary for a chassis to have a body attached to it before it ran be used within the meaning of the Act, inasmuch as, it can be used by the man who drives it and such use of it on public roads would be enough to attract the levy.
[596 D] (ii) Item 4 in the table of the notification limits the exemption from the tax to the journey of the chassis for the express purpose of body being attached to it.
The Automotive Manufacturers, being dealers, could and probably did deal with or dispose of the chassis as such.
Further, it was not the case of the appellant that the chassis were coming from outside the State for the purpose of having bodies attached to them at the workshop of the appellant.
So far as Ashok Leyland was concerned the chassis were being driven along the roads of Andhra Pradesh for disposal at the journey 's end and it would be for the purchaser at the destination to have a body fixed to 594 the chassis according to his own need and on the specification given by him.
, Merely because bodies were going to be attached by the ultimate purchasers it could not be said that the running of the chassis on the roads of Andhra Pradesh would attract exemption under item (4) of the notification.
[597 C E] [The contention that there was no previous sanction of the President in respect of the bill as envisaged by article 304 (b) was not allowed to be raised inasmuch as it was not urged in writ petitions.
Therefore, the Court did not examine the merits of the contentions urged in this regard.
|
iminal Appeal No. 41 of 1969, Appeal from the judgment and order dated September 6, 1967, of the Allahabad High Court in Criminal Reference No. 265 of 1965.
O. P. Rana, for the appellant.
Nur ud din Ahmed and P. N. Bhardwaj, for the respondent.
The Judgment of the Court was delivered by P.Jaganmohan Reddy, J.
This Appeal is by Certificate against the order of the High Court of Allahabad quashing the charge framed by the Additional City Magistrate, Kanpur against the accused Respondent for offenses under Sections 78 and 79 of the 43 of 1958 (hereinafter referred to as 'the Act ').
Respondent 1 to Respondent 4 are the partners of the firm M/s. Pannalal Durga Prasad of Nayaganj, Kanpur which is a firm of bullion merchants who have also been minting gold coins with a trade mark said to be similar to the one which is the registered trade mark of M/s. Habib Bank Ltd., Bombay and which was in force on the day when the alleged offence is said to have been committed.
On 24th October 1962 the Inspector of Trade Marks on behalf of the Director of Industries wrote a letter to the Additional City Magistrate I, Kanpur that M/s. Habib Bank Ltd., Bombay which is one of the foremost refiners of gold has been producing coins and pieces of gold of various shapes and sizes for sale commonly known as under a distinct trade mark, the most striking feature of which has always been a device of a lion holding a sword with his forearm against the back ground of a rising sun.
This device of lion is with the word 'Habib Bank Ltd. ' above it and 'Shuddha Sonu ' below it in Gujarati script with a dotted circle along the border on the face of the device of a coin and a wreath 'along the border on the other face with the words 'Habib Bank Ltd., contained in the upper half and 'Pure Gold ' in the lower half of the space within it in English script with the description of weight and quality.
This trade mark it was stated had acquired distinctiveness in respect of old coins and pieces produced by 574 them on account of long and extensive use, that the people in that part of the country particularly the people in the rural areas have always had a great fancy for the gold pieces and coins of Habib Bank Ltd., on account of their fineness for use in preparing ornaments as also as the safest investment of their savings by purchasing and retaining these coins and pieces, and consequently such gold coins continued to be highly popular among the people in the rural areas as well in the bullion trade, and are distinguished on account of the above noted features and trade mark.
It was alleged that M/s. Pannalal Durga Prasad, Kanpur are producing similar coins and pieces of gold and to them they apply a trade mark which is deceptively similar to the above registered trade mark of M/s. Habib Bank Ltd., the only difference between the two was that instead of Habib Bank Ltd., in Gujarati script on one face and English script on the other face, the words 'Habib quality ' are used and the words 'pure gold ' in English script is preceded by the letters P & D.
It was averred that this trade mark adopted by M/s. Panna Lal Durga Prasad is bound to deceive not only the buyers who are ignorant of English and Gujarati scripts, but even unwary purchasers from urban areas are likely to be deceived.
Though by a registered letter the Trade Mark office had drawn the attention of the firm regarding the use of the mark by them and had requested them to indicate the period for which they had been using it and whether the mark had been registered as a trade mark in their name, they had not chosen to reply even though they received the letter.
It was further stated that a goldsmith Shri Pyarelal in Nayaganj market is also falsely applying the registered trade mark of M/s. Habib Bank Ltd., and has in his possession dies and other instruments for being used for falsifying the trade mark.
On these allegations the Magistrate was requested to take necessary action under the law against those mentioned in the letter in respect of offenses under Sections 78 and 79 of the Act, by directing the Police to investigate the case.
On receipt of this letter on the same day namely 24 10 1962 the Magistrate directed the Police to register a case and investigate.
The Sub Inspector of Police thereupon prepared a search Memo in as much as there was no sufficient time to get the warrant of search issued and also because of the possibility of the removal of goods and effected a search of the premises.
The Inspector went to the Silver and Gold factory of Panna Lal Durga Prasad and found that Ram Nath Son of Durga Prasad one of the Respondents was present there.
He made an inspection of the factory in his presence and seized the dies for the manufacture of coins and gold 575 bars found near the place of goldsmith Munna son of Lakhpat.
The Inspector further in the presence of the witnesses caused a gold coin of one tola and another of half tola to be manufactured by way of specimen out of the gold bar found at the place.
These coins were duly seized and preserved, after obtaining the seal of Ram Nath.
It is unnecessary to give, all the, details of the recoveries because that is not relevant for the purposes of this case.
A police report was accordingly made to the Magistrate who adopted the procedure under Sec.
251 A by examining each of the Respondents after which he framed charges against them.
Thereafter he examined Wadia, P.W. 1, a Senior Attorney Clerk of Habib Bank Ltd., Bombay on 1 5 64.
On 29 5 64 before other witnesses could be examined the Respondents filed an application stating that from the evidence of Wadia, P.W. 1, Habib Bank had stopped dealing in gold and does not now manufacture gold coins, that it had also destroyed the dies And since 1954 this trade mark of Habib Bank has become ineffective and is thrown open to the public, as such it was prayed that the case be stayed and the complainant directed to seek remedy ill the civil court so that the accused persons may not be unnecessarily harassed.
The Magistrate rejected this contention because it appeared from the evidence that the registration of the trade mark of Habib Bank was current upto 1967 and that since the Respondents have been charged under Sections 78 and 79 of ' the Act the contention of the accused that in view of Sec.
46 of the said Act where a trade mark is abandoned for more than years, the Respondents cannot be said to have committed an offence, is not tenable.
By a well considered order the Magistrate dismissed the application and directed the production of the entire evidence on the next date, without fail.
Against this a revision was filed before the Sessions Judge of Kanpur.
The Sessions Judge made a reference to the High Court recommending the quashing of the charge on the ground that "The principle of abandonment is given legal recognition in Sec.
46 Trade & Merchandise Marks Act which provides that a registered trade mark may be taken off the register if it was not used for continuous period of five years or longer.
" The High Court held that on the statement of Wadia it is clearly established that Habib Bank Ltd., had stopped dealing in gold and coins since 1954 and there could therefore be no question of the Respondents corn mitting any offence under Sections 78 and 79 of the Act.
On this reference the High Court by its Judgment dated 6 9 67 thought that Sec.
46 had no application inasmuch as, that Section provided that unless the registration had been rectified the propriety rights of the Bank could not be said to have ended only because the trade mark had not been used for a period of more than 5 years.
It observed that there may be cases where the non 576 user of the trade mark may have been occasioned on account of special reasons and such non user was explainable; that clause (iii) of Sec.
47 makes it clear that it is open to the owner to contest the application for rectification of the register, by the plea, that the non user of the trade mark was due to special circumstances in the trade and not due to any intention on his part to abandon or not to use the trade mark in relation to the goods to which the application relates.
Accordingly the learned Judge expressed the view that the proceedings are not vitiated on the ground that the trade mark in question has ceased +to be the property of M/s. Habib Bank Ltd. It appears that a contention was urged before the High Court that since Habib Bank Ltd., was declared to be a foreign Bank in the year 1960 by the Reserve Bank of India as it had become a citizen of Pakistan, it was not a citizen under the Constitution of India and therefore had no proprietory rights in this Country.
The High Court said that this submission of the Respondent 's Advocate had some force as the question raised was a substantial question of law involving the interpretation of the Articles of the Constitution, that could properly be decided in a civil action rather than by a Magistrate in a Criminal case.
For this proposition reliance was placed on a decision of that Court in Karan Singh vs Mohan Lal(1), which following a Full Bench decision of the Calcutta High Court in Ashutosh Das vs Keshav Chandra Ghosh(2) held that a controversy between the parties relating to a complicated question of abandonment of the user and relating to the express or implied consent of the registered holder of the trade mark are questions which should be decided in a civil court rather than by a Criminal Court.
It was also held by the High Court that Since the complaint in the particular case had not been made by a Proprietor of the trade mark, the prosecution of the accused on the complaint of the Trade Marks Inspector and a subsequent investigation by the Police were not tenable under Sections 78 and 79 of the Act in view of the provisions of Sec. 28 of that Act.
An objection seems to have, been taken before the learned Judge that the High Court was not competent to quash the proceedings pending before the Trial Magistrate in that case because no revision petition had been filed against the order of the Magistrate by which the charge was framed against him but it was only after one of the witnesses had been examined that a Revision had been filed which is not competent.
The High Court rejected this contention and held that it had power to exercise revisional powers under Sec.
561 A and accordingly accepted the reference made by the Sessions Judge and quashed the proceedings against the accused for offences under Sections 78 & 79 of the Act.
(1) (2) A.T.R. 577 It appears to us that the High Court had misdirected itself in considering that the submissions which found favour with it, were relevant for the purpose of deciding whether the proceedings for prosecution for offences under Sections 78 and 79 of the Act were not valid either because, the Habib Bank Ltd., being a foreign Bank was not a citizen and as such had no rights or that the prosecution cannot be initiated by the Inspector of Trade Marks or that the, question of the abandonment of trade mark amounted to an express or implied consent was a matter for civil court and cannot be made the subject of a criminal prosecution.
Sections 78 and 79 are contained in Chapter X of the Act.
Section 78 provides that any person who falsifies any trade mark, falsely applies to goods any trade mark; or makes, disposes of, or has in his possession any die, block, machine, plate or other instrument for the purpose of falsifying, or of being used for falsifying a trade mark, applies any false trade description to goods etc.
shall unless he proves that he acted without intent to defraud, be punishable with imprisonment for a term which may extend to two years, or with fine, or with both, while Section 79 makes a person liable to similar punishment if he sells goods or exposes them falsely or for having them in his possession for sale or for any purpose of trade or manufacture any goods or things to which any false trade description is applied.
Trade mark has been defined in Sec. 2 (1) (v) to mean (i) in relation to Chapter X (other than Section 81), a registered trade mark or a mark used in relation to 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 (ii) in relation to the other provisions of this Act,a mark used or proposed to be used in relation to 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 whether with or without any indication of the identity of that person and includes a certification trade mark registered as such under the provisions of Chapter VIII.
" It is apparent from this definition that for the purposes of Chapter X of the Act which deals with criminal offenses, a trade mark includes a registered as well as unregistered trade mark.
An offence under Sections 78 or 79 therefore relate to a trade mark whether it is registered or unregistered.
The contention that the 578 registered trade mark of the Habib Bank Ltd., has been abandoned since the said Bank had discontinued its use from 1954 will not absolve the respondents from Criminal liability because even if it was abandoned it can only furnish a ground for a person to make an application under sec.
46 to have the trade mark removed from the registers.
It does not however entitle him to use a trade mark whether it is current or has been removed from the register, or has been abandoned or even if it has never been initially regis tered but has acquired the currency of a trade mark.
The offenses under Sections 78 and 79 consists in the deception and application of a trade mark which is in use and which signifies a particular type of goods containing that mark.
There is, therefore, no validity in the contention that the infringement of the trade mark of Habib Bank Ltd., merely gives rise to a civil action, in respect of which no prosecution will lie.
The provisions contained in Chapter IV in which is contained Sec.
28 relate to the effect of registration and have no bearing on the question before us.
It was neatly urged that the Trade Marks Inspector had no right to make a complaint under Sections 78 and 79 and therefore the prosecution was invalid.
This contention also in our view is misconceived.
A perusal of sub section
(2) of Sec. 89 would show that no Court inferior to that of a Sessions Judge, Presidency Magistrate or Magistrate of the 1st Class shall try an offence under this Act; while sub section
(1) provides that no Court shall take cognizance of an offence under Sec.
or Sec. 83 except on complaint in writing made by the Registrar or any officer authorised by him in writing.
Merely because sub section
(1) of Sec. 89 refers to manner of taking cognizance in respect of offence under the Section specified therein, it does not preclude cognizance of other offenses specified in Chapter X from being taken under the procedure prescribed by the Criminal Procedure Code.
It is apparent that offenses under Sections 78 and 79 are punishable with imprisonment of two years or with three years if they fall under the respective provisos to the said Sections.
In cases where an offence is punishable with imprisonment of one year and upwards but less than 3 years, under Chapter XXIII of Schedule 11 it is non cognizable and is a summons case, triable as already stated under Sec.
89(2) by the Sessions Judge, Presidency Magistrate or a Magistrate of the 1st Class.
In such cases under Sec. 155 of the Criminal Procedure Code when an information is given to an officer incharge of the Police Station of the commission of a non cognizable offence, he has to enter the substance of the information in a book to be kept for the purpose and refer 'the informant to the Magistrate but he cannot under sub section
(2) investigate such a case without the order of a Magistrate.
On receiving such an order any Police officer may exercise the same powers in respect of the investigation (except the power to arrest 579 without warrant) as an Officer in charge of police station may exercise in a cognizable case.
On receipt of a report from the, Police in compliance with such orders, the Magistrate may it the report discloses the commission of an offence try the accused by the procedure prescribed under Sec.
251 A of the Criminal Procedure Code.
This being the legal position in this case the Magistrate in our view has followed the correct procedure.
The information in respect of the commission of an offence under Sections 78 and 79 of the Act was brought to the notice of the Magistrate by a letter from the Trade Marks Inspector, The Magistrate directed the police to register a case and investigate it.
The Police accordingly complied with it and made a report thereon.
On receipt of the report the Magistrate satisfied himself that the respondents had received the, documents referred to in Sec. 173.
After a consideration of those documents he examined the accused and after giving an opportunity to both the prosecution and the accused framed a charge on being satisfied that there was a prima facie case.
The procedure followed therefore is unexceptionable.
The question whether the Habib Bank Ltd., being a foreign Bank is not a citizen and whether it has any right in the trade mark is therefore irrelevant and does not affect the validity of the proceedings or of the charges framed against the accused.
We accordingly allow the appeal, set aside the Judgment of the High Court and direct the Magistrate to proceed with the case in accordance with law.
V.P.S. Appeal allowed.
| IN-Abs | The Inspector of trade marks wrote a letter to the Magistrate and requested him to take necessary action under law against the respondents on the allegations that the respondents were producing coins and pieces of gold and were applying to them a trade mark which was deceptively similar to the registered trade mark of a bank, and which was in force when the respondents produced the coins.
The Magistrate directed the police to register a case under the , and investigate it.
On receipt of the police report the Magistrate followed the procedure prescribed by section 251A of the Criminal Procedure Code, and framed charges under sections 78 and 79 of the Act on being satisfied that there was a prima facie case.
After one of the prosecution witnesses was examined the respondents raised the question that the evidence disclosed that the bank had discontinued the use of the trade mark and a question of abandonment which could be more suitably dealt with by the civil court, had arisen.
The High Court on reference by the Sessions Court held that : (1) the prosecution could not be initiated by the Inspector of Trade Marks in view of section 28 of the Act, (2) whether the question of the abandonment of the trade mark amounted to an express or implied consent for use by the respondent was a matter for the civil court and not for a criminal prosecution and (3) the prosecution for offenses under sections 78 and 79 was not valid because the Bank was declared to be a foreign bank by the Reserve Bank of India in 1960 and hence had no rights as a citizen of India.
Allowing the appeal to this Court, HELD : (1) Merely because section 89(1) of the refers to the manner of taking cognizance in respect of certain offenses specified therein, it does not preclude the cognizance of other offenses specified in Chapter X of the from being taken under the procedure prescribed by the Criminal Procedure Code.
The offenses with which the respondents were charged are punishable with imprisonment of two years and hence, being non cognizable, the procedure followed, in the present case, by the Magistrate, is unexceptionable.
Section 28 of the Act which is in Chapter IV relating to the effect of registration has no hearing on the question [578 C H; 579 A D] (2) An offence under sections 78 and 79 relates to a trade mark whether it is registered or unregistered.
The application of a trade mark signifies a particular type of goods and involves deception.
Therefore, the fact that the Bank discontinued the use of the trade mark would not absolve the respondents, from criminal liability.
Even if the trade mark was abandoned by the Bank it could only furnish a ground for a person to make 573 an application under section 46 of the to have the trade mark removed from the register of trade marks, but it does not entitle anyone to use the trade mark.
[577 A; 578 A C] (3) The question whether the Bank, being a foreign bank, is not a citizen and had no Tight in the trade mark is, therefore, irrelevant and does not affect the validity of the proceedings against the accused.
[577 A B]
|
iminal Appeal No. 12 of 1969.
Appeal by special leave from the judgment and order dated June 25, 1968 of the Kerala High Court in Criminal M.P. Nos.
175, 177 and 179 of 1968.
A. Sreedharan Nambyar, for the appellant.
Lily Thomas, for respondent No. 2.
A. G. Pudissery, for respondent No. 3.
The Judgment of the Court was delivered by P. Jaganmohan Reddy, J.
Respondent 1 and Respondent 2 were committed on 15th June 1965 by the Second Class Magistrate, Cannanore to stand trial before the Assistant Sessions Judge, Tellichery, the former for offences under Sections 467, 478 and 420 read with Section 109 of the Indian Penal Code while the latter under Sections 467 read with 109, 471 and 420.
While the case was pending before the Assistant Sessions Judge, the Public Prosecutor of Tellicherry filed a Memo on 30 11 67 under Sec.
494 of the Criminal Procedure Code for permission to withdraw from the prosecution which permission was accorded by the Assistant Sessions Judge on 2 12 67.
The Appellant who was the Managing Partner of Shree Narayana Transport Company, Calicut filed a Criminal Miscellaneous Petition on 19 2 68 in the High Court of Kerala against the order of the Assistant Sessions Judge according permission to the Public Prosecutor for withdrawing from the prosecution.
The High Court held that the Public Prosecutor was justified when he applied for the withdrawal of the case and accordingly dismissed the petition against which this appeal comes up before us by Special Leave.
The 1st Respondent was the Agent of Shree Narayana Transport Company of one of its Branches namely at Baliapattom and in that capacity it was one of his duties to accept goods from the Public for transporting them by lorry service of the Company and issue Way Bills.
These Way Bills contained an undertaking that in the event of any of the Banks discounting them and if goods are 601 lost or damaged during transport,, the Transport Company will be responsible to the Bank.
It is alleged that the 1st Respondent issued nine Way Bills on different dates in favour of the 2nd Respondent, as if the goods were received but in fact no such goods were accepted for transport nor were any such goods dispatched.
These Way Bills_ were duly discounted by the second Respondent the consigner who drew about Rs. 84,000 against, them from his Bank .
This fraud was detected on a check made by the General Manager of Shree Narayana Transport Co., Kozhikode and it appears that the 1st accused (1st Respondent) executed an agreement in favour of the Transport Company undertaking to make good the loss suffered by it, after which he was suspended on 10 4 63.
On the same day a complaint was filed before Baliapattom Police and a case was accordingly registered against both Accused 1 and Accused 2.
After _investigation the Sub Inspector of Police, Baliapattom filed a charge sheet.
The Magistrate on the materials disclosed in the report under Sec.
173 committed the accused to stand trial before the Assistant Sessions Court on 15 6 65 against which a Revision was filed in the High Court of Kerala on 9 7 65.
It was contended before the High Court that the committal was illegal as no evidence had been adduced in the case, as such it would be premature at that stage to say whether any and if so, what offence could be disclosed The High Court dismissed this Revision Petition on 20 10 66 holding that the procedure adopted in the committal proceedings instituted on a Police report is prescribed in Sec.
207 A of the Criminal Procedure Code under which the Magistrate had the power to commit even without recording the evidences of witnesses.
The High Court drew support for this conclusion from a decision of this Court in Ramanarayan Mor & Anr., vs State of Maharashtra (1) where it was held that though normally in a criminal trial, the Court can proceed on documents which are duly proved, or by the rules of evidence made admissible without formal proof, the Legislature had under the amended code in Sec.
207 A prescribed a special procedure for commitment of the accused.
The record under the said provision consists of the oral evidence recorded under sub & (4) of Sec. 173, and it would be difficult to regard only those documents which are duly proved or which are admissible without proof as "evidence ' within the meaning of Cl.
(6) and not the rest.
On this view it was observed that there was no legal impediment in the Magistrate using the case diary for the purpose of deciding whether there was a case for committal and accordingly dismissed the Revision Petition.
After this Revision was disposed of the Assistant Sessions Judge to whom the case stood committed ordered the splitting up the charges into 8 cases against which the second respondent filed a Revision in the High Court under Sec.
561 A Criminal Procedure Code where it (1) 602 was contended that .
It the 8 charges should have been consolidated into one case as otherwise there would be 8 distinct offences leading to multiplicity of trials.
The High Court by its Judgment dated 30 10 67, following a decision of this Court in Ranachhodlal V. State of Madhya Pradesh(1), said that the order of the Magistrate splitting up the charge into 8 cases was proper and while it does not call for any interference, it left it open for the prosecution as provided under Sec.
240 'Criminal Procedure Code to withdraw the other charges if one of the trials should end in a conviction.
After this petition was dismissed the Respondents seem to have moved the State Government to withdraw the prosecution and accordingly, as would appear from the Memo.
filed by the Public Prosecutor on 30 11 67, the Government passed an order G.O. Rt.
No. 1589/67 Home (B) dated 22 11 67 directing the withdrawal of the case with the sanction of the Court, in the interest of public policy as also because there was no likelihood of the case being pursued to a successful issue.
It was stated in the Memo.
filed by the Public Prosecutor that the alleged offences charged against the accused arose out of a contract agreed to between the accused and the defacing complainant viz., the General Manager, Shree Narayana Transport; that the subject matter of the case had been decided by the Subordinate Judge 's Court, Calicut in a Civil suit; that the case was registered as early as 1963 and the trial has not yet begun; that the witnesses from far off places such as Bombay and Calcutta are cited and the securing of their evidence would involve heavy expenses for the State and that the case is one of Civil nature.
It is contended before us that under Sec.
494 Criminal Procedure Code it is the Public Prosecutor and the Public Prosecutor alone who should make up his mind to withdraw from the prosecution without any reference to the State Government, that it was the State Government which directed the Public Prosecutor to seek permission as such the Public Prosecutor has not adverted his mind nor did he exercise his independent judgment in deciding whether the case is one in which permission of the Court to withdraw from the prosecution ought to have been asked for.
In any case it is submitted on the grounds disclosed in the Memo filed by the Public Prosecutor that no permission ought to have been given as even prior to the filing of the said Memo.
the High Court had said that there was a prima facie case for the trial to go on and therefore the present order directing the Public Prosecutor to withdraw from the prosecution is manifestly contrary to the views earlier expressed by it.
The Appellants Advocate later during the course of the argu ment conceded that there is no force in the first of his contentions (1) [1965](2) S.C.R. 283.
603 namely that the Public Prosecutor cannot either be asked by the State Govt., to consider the filing of a petition under Sec.
494 nor would it be proper for him if he was of the opinion that the prosecution ought not to proceed to get the consent of the Government to the filing of a petition under that Section for obtaining permission of the Court to withdraw from the prosecution.
, Sec. 494 which empowers the Public Prosecutor with the consent of the Court to withdraw from the prosecution is as follows: "Any Public Prosecutor may, with the consent of the Court, in cases tried by jury before the return of the verdict, and in other cases before the judgment is pronounced, withdraw from the prosecution of any person either generally or in respect of any one or more of the offences for which he is tried; and, upon such withdrawal (a) if it is made before a charge has been framed, the accused shall be discharged in respect of such offence or offences; (b) if it is made after a charge has been framed, or when under this Code no charge is required, he shall be acquitted in respect of such offence or offences".
The power contained in the Section gives a general executive direction to withdraw from the prosecution subject to the consent of the Court which may be determined on many possible grounds and is therefore wide and uncontrolled by any other provision in the Code nor is it in pari materia with Sec. 333 which enables the Advocate General at any stage in a Trial by the High Court and before the return of the verdict to inform the Court if he thinks fit on behalf of the Government that he will not further prosecute the Defendant upon the charge and on such information being given the case against the accused comes to an end.
This power of entering a noble prosecution under Sec.
333 Criminal Procedure Code is not dependent upon any permission of the Court.
A reading of Sec.
494 would show that it is the Public Prosecutor who is incharge of the case that must ask for permission of the Court to withdraw from the prosecution of any person either generally or in respect of one or more of the offences for which he is tried.
This permission can be sought by him at any stage either during the enquiry or after committal or even before the Judgment is pronounced.
The section does not, however, indicate the reasons which should weigh with the Public Prosecutor to move the Court for permission nor the grounds on which the Court will grant or refuse permission.
Though the Section is in general terms and does not circumscribe the powers 604 of the Public Prosecutor to seek permission to withdraw from the prosecution the essential consideration which is implicit in the grant of the power is that it should be in the interest of administration of justice which may be either that it will not be able to produce sufficient evidence to sustain the charge or that subsequent information before prosecuting agency would falsify the prosecution evidence or any other similar circumstances which it is difficult to predicate as they are dependent entirely on the facts and circumstances of each case.
Nonetheless it is the duty of the Court also to see in furtherance of justice that the permission is not sought on grounds extraneous to the interest of justice or that offences which are offences against the State go unpunished merely because the Government as a matter of general policy or expediency unconnected with its duty to prosecute offenders under the law, directs the public prosecutor to withdraw from the prosecution and the Public Prosecutor merely does so at its behest.
A large number of cases have, been referred to but it is unnecessary to consider them, except for a few as typifying the approach in cases where permission to withdraw from the prosecution was sought on grounds extraneous to and not germane to the maintenance and enforcement of the law and which permission though given by the Trial Court was quashed by the High Court.
A Special Bench of the Calcutta High Court in Devendra Kumar Roy vs Syed Yar Bakht Chaudhury & Ors.
(1), was considering the validity of the permission granted by the Magistrate to the Government Pleader to withdraw from the prosecution in a case where the accused were charged with offences under Sec tions 193, 467, 477, 109 and 120 A of the Penal Code.
The prosecution had been started and after some evidence had been recorded, the record of the case was called for by the Government which having kept it for six months returned it to the Government Pleader who filed a petition for withdrawal from the prosecution under Sec.
494 Criminal Procedure Code on certain grounds which were not substantial namely that the original complainant had withdrawn from the prosecution; that on an independent examination of the records of the Provincial Government considered that the evidence was insufficient to warrant further proceeding with the case; and that the Provincial Government would not in view of the uncertainty of a successful 'prosecution be justified in incurring heavy expenses.
in the fees, the travelling allowances of the handwriting expert and in lawyers ' expenses.
The Magistrate though considering that these grounds are not sufficient for not committing the accused persons but on the other hand was of the view that there was ample substantial evidence to show that serious offences were actually committed, (1) AIR 1939 Calcutta 220.
605 nonetheless granted permission to the Government Pleader to withdraw from the prosecution.
It was held by the High Court that the consent of the Trying Magistrate for the discharge had not been properly given and therefore quashed the proceedings.
It also appeared that some of the accused in the case were related to one of the Minister 's as found proved by the High Court and the action of the Government in calling for the record of the case from the Magistrate while it was still proceeding and retaining it for six months was quite illegal and utterly improper.
A Full Bench of the Patna High Court in The King vs Parmanand & Ors.(1) also hold that there was no justification whatever for the view that the Prime Minister or any other Minister or executive officer has the power to usurp the functions of the Court or to take the case out of the sensing of the Magistrate before whom it is pending for trial and that where the Trying Magistrate makes no attempt to exercise his discretion at.
all and permits the withdrawal of the prosecution merely in consequence of the order of the Government the High Court will interfere.
At the same time it was observed that the High Court would be reluctant to direct the prosecution of persons against whom Government does not desire to proceed, unless there is evidence which requires judicial consideration.
The permission granted by the Magistrate in that case was held to be wrong, so also was the action of the Government in a case which is subjudice irrespective of the question whether the prosecution is likely to end in conviction as interfering with the even and ordinary course of justice, by usurping the function of the Court and taking it out of its seisin.
In a recent case the Full Bench of the Kerala High Court in Deputy Accountant General (Admn.) Office of Accountant General, Kerala Trivandrum vs State of Kerala and Ors.(2), was considering the application for withdrawal filed by the Public Prosecutor under the directions of the Government to withdraw from the prosecution against the strikers for offences under Sections 4 & 5 of the Essential Services Maintenance Ordinance, 1968, and other laws such as the Penal Code and Telegraph Act mentioning as a ground the withdrawal order of the State Government which stated, that consistent with.the Policy of the Government in relation to mass agitation and strike it has been decided to withdraw with the leave of the Court, the cases registered in connection with the Central Government Employees strike on the 19th September, 1968 except those involving serious per sonal violence or destruction of property.
It was held that the policy set out therein being a policy opposed to the law could not be taken into consideration.
Apart from the order being in (1) AIR 1949 Patna 222.
(2) AIR 1970 Kerala 153.
606 disregard of the duty and the responsibility of the State Government to enforce the law, the Full Bench said there could be no question of the executive policy in a region covered by the law.
In that view it quashed the permission granted by the Trial Court.
In the State of Bihar vs Ram Narash Pandey(1), it was pointed out by this Court that though the Section does not give any indication as to the ground on which the Public Prosecutor may make an application on the consideration of which the Court is to grant its consent, it must nonetheless satisfy itself that the executive function of the Public Prosecutor has not been improperly exercised and that it is not an attempt to interfere with the normal course of justice for illegitimate reasons or purposes.
It appears to us that the wide and general powers which are conferred under Sec.
494 on the Public Prosecutor to withdraw from the prosecution though they are subject to the permission of the Court have to be exercised by him in relation to the facts and circumstances of that case in furtherance of, rather than as a hindrance to the object of the law and justified on the material in the case which substantiate the grounds alleged, not necessarily from those gathered by the judicial method but on other materials which may not be strictly on legal or admissible evidence.
The Court also while considering the request to grant permission under the said Section should not do so as a necessary formality the grant of it for the mere asking.
It may do so only if it is satisfied on the materials placed before it that the grant of it subserves the administration of justice and that permission was not being sought covertly with an ulterior purpose unconnected with the vindication of the law which the executive organs are in duty bound to further and maintain.
What then are the circumstances in which the permission has been sought in this case and the considerations that weighed with the Courts in granting that permission.
The Public Prosecutor as we have seen thought that the matter was of a civil nature, that the subject matter of the case before the Magistrate had been decided in a Civil suit, that witnesses are from far off places and their evidence will incur huge expenses for the State; that the case was registered as early as 1963 and the trial has not yet begun.
It is clear that prima facie none of these grounds or even the cumulative effect of all these grounds would justify the withdrawal from the prosecution.
It may be that the acts of the Respondent may make them both liable under the Civil law as well as under the Criminal law but it does not justify either the seeking of the permission to withdraw from the prosecution or granting of it unless the matter before the Criminal Court is of a purely civil nature.
The accused in this case have been (1) 607 charged with offences of cheating, of the forgery of valuable securities with the intention that the documents forged shall be used for the purpose of cheating, and/or also for using them as genuine which they know or have reason to believe to be forged documents.
The case of the Respondents was that all this was done with the knowledge of the complainant with a view to further the practice prevailing to popularise the transport business.
It appears that after the complaint was filed and the police took cognizance of the offence and investigated it but before the charge sheet was filed the Public Prosecutor seems to have expressed the view on 8 6 63 that a successful prosecution may not be possible under Sec. 467 and 420 because the matter for which the Respondents were sought to be charged related to a practice which seems to have prevailed in that Transport Company and in other Companies as well and in the light of that practice mens rea may not be established but this opinion did not prevail as he ' was directed to file the charge sheet and accordingly the case proceeded.
A perusal of the committal order will make this conclusion of ours clear.
Before the Magistrate, the learned Advocate had contended that there was a normal practice that the Company used to issue way bills without obtaining the goods from the party for the sake of popularising the Company and that in the circumstances Respondent 1 while issuing the way bill had no intention to cause damage or to cheat.
The Magistrate negatived this contention and said that he was not able to believe that the Company will resort to these practices for the sake of such popularity and that it was the way bills that were issued in Accused 2 's name and it was Accused 2 who obtained the money from the Bank.
Therefore, there was prima facie evidence to show that goods were not produced at the time of issuing way bills by Respondent 1 to Respondent 2 and that Respondent 2 was well aware of it when he drew the money on the way bills from the Bank for the goods he had never produced for booking.
Knowing that these receipts were forged one Respondent 2 had got them discounted.
It also appears from the committal order that the prosecution had produced a letter alleged to have been written by Respondent 2 to Respondent 1 requesting him to issue the way oil mills, a reading of which the Magistrate said shows that it was a letter written with the intention of obtaining them.
In this view he thought that there was a prima facie case against the accused and accordingly he framed the charges.
The High Court ignoring the view taken by it in its previous two Revisions referred to earlier that there was prima facia case and that there was no illegality in the prosecution, thought that the Public Prosecutor was right when he applied to the Court for 608 sanction to withdraw the prosecution on the ground that it might not result in a conviction to which it further added that there was a long delay of five years and that the witnesses were not in the locality and have to be brought to Court from different places.
Though it thought that this latter reason may not justify the abandonment of the prosecution but nevertheless it is said that in view of the practice prevailing in this Transport Company as well as in other Transport Companies the chances of successful prosecution were remote.
It further thought that the question of expenses would also become relevant.
We think that these grounds are flimsy and do not justify the granting of permission to withdraw from the prosecution.
In the first place there is nothing to indicate what that practice was, how it was resorted to and what elements were definition to constitute the offences for which the Respondents were entitled to be charged and in the second place nothing had happened since the committal order except that the several revisions filed by Respondent 1 and Res pondent 2 had delayed the trial which delay by itself cannot be made a ground for according permission.
On the other consideration which weighed with the High Court that a prosecution would involve a huge expenditure there is no material to show what amount would be involved if the case was prosecuted nor how many witnesses would be required to be called from Calcutta and Bombay.
On the other hand the case appears to be mostly hinged on the issue of the Way Bills to Respondent 2 bay Respondent 1 without receipt of goods from Respondent 2 which the Respondents say was due to the practice followed by the complainant to popularise its transport business.
The execution of the Way Bills by Respondent 1, their issue by him without receipt of the goods and the obtaining of money by the second Respondent from the Bank by discounting them with it are some of the elements and except perhaps for the non receipt of the goods by the people to whom they were alleged to have been booked, are all dependent on local witnesses.
In any case the expenditure involved is not the sole criterion for granting permission.
In the view we have taken this appeal is allowed, the permission granted by the Trial Court and confirmed by the High Court in Revision is set aside and we direct that the trial do proceed in accordance with law.
V.P.S. Appeal allowed.
| IN-Abs | The respondents were committed to trial before the Sessions Court for offences of forgery, cheating, etc.
They challenged the committal order but the High Court held that there was a prima facie case.
Thereafter, the trial judge split up the charges and this was again questioned but the High Court held that there was no illegality.
The Public Prosecutor then applied under section 494, Cr.
P.C., under instructions from the Government, for permission to withdraw from the prosecution, on the grounds, that the transaction relating to the offence arose out of a contract and was of a civil nature, that there had been enormous delay in proceeding with the trial, and that the securing the evidence of witnesses would involve heavy expense for the State as the witnesses were in far off places. 'Material judge gave the permission and the order was confirmed by the High Court.
Allowing the appeal to this Court, HELD : (1) Section 494 of the Code is not in pari materia with section 333 under which the Advocate General may enter a nolle prosequi at any stage of a trial.
It only gives power to the Public Prosecutor to withdraw from the prosecution subject to the consent of the Court.
Though the section is in general terms and does not circumscribe the powers of the Public Prosecutor the essential consideration which is implicit in the grant of the power is that it should be exercised in the interests of justice which may be, either that it may not be possible to produce sufficient evidence to sustain the charge, or that subsequent information before the prosecuting agency falsifies the prosecution evidence, or other similar circumstances depending on the facts and circumstances of each case.
The power is subject to the permission of the Court and it is the duty of the Court to see that the permission is not sought on grounds extraneous to the interests of justice or that offences against the State do not go unpunished merely because the Government as a matter of general policy or expediency unconnected with its duty to prosecute offenders directs a Public Prosecutor to withdraw from the Prosecution and the Public Prosecutor merely does so at its behest.
The court, while considering the request to grant permission, should not do so as a formality for the mere a .king.
it may grant permission only if it is satisfied on the materials placed before it that the grant of it subserves the administration of justice and that the permission was not sought covertly with an ulterior purpose unconnected with the vindication of the law.
[603 E H; 604 A D; 606 E] State of Bihar vs Ram Naresh Pandey, , followed.
Devendra Kumar Roy vs Syed Yar Bakht Chaudhury & Ors.
A.I.R. 1939 Cul. 220, The King vs Parmanand & Ors., A.I.R. 1949 Pat. 222 and Dy.
Accountant General (Admn.) Office of Accountant General, Kerala Trivandrum vs State of Kerala & Ors., , referred to.
(2) In the present case none of the grounds alleged or even their cumulative effect would justify, the withdrawal from the prosecution.
[906 G] 600 (a) It may be that the acts of the respondents may make them both liable under the civil as well as the criminal laws.
But that does not justify either the seeking of the permission to withdraw from the prosecution or the granting of it unless the matter before the criminal court is of a purely civil nature.
The committal order and the judgments of the High Court at the prior two stages show that there was a prima facie case against the accused with respect to the charges framed against them.
[906 G H; 907 G H] (b) Neither the ground of delay nor the question of expenditure involved by themselves, could be a proper ground for granting permission to the Public Prosecutor for withdrawing from the case [608 B C, F G]
|
Appeals Nos. 167 and 168 of 1968.
Appeals from the judgment and orders dated December 20, 1966 of the Madhya Pradesh High Court in Misc.
Petition Nos.
139 and 182 of 1966.
I. N. Shroff, for the appellants (in both the appeals).
section V. Gupte, Suresh A. Shroff, R. K. Thakur, Bhuvanesh Kumari, K. section Cooper, M. K. Cooper, J. B. Dadachanji, O. C. 611 Mathur and Ravinder Narain, for respondent No. 1 (in C.A. No. 167 of 1968).
B. P. Maheshwari, for, respondent No. 1 (in C.A. No. 168 of 1968).
section P. Nayar, for respondent No. 2 (in both the appeals).
The Judgment of the Court was delivered by Shelat, J.
By an Indenture of Lease, dated January 12, 1944, made between the then Ruler of Korea State of the one part, referred to as the lessor therein, and Sir Mukherji B. Dadabhoy, referred to as the lessee, of the other part, the lessor granted to the lessee for a term of 30 years, in consideration of payment of rents and royalties therein mentioned, a mining lease of an area measuring 5.25 sq.
miles delineated on the plan annexed thereto, with liberties, powers and privileges and on terms and conditions therein set out.
By cl.
(2) of that Indenture, the lessee agreed to pay during the subsistence of the lease royalties at the rates and on dates set out therein.
The rates of royalty varied from 5% to 25% according to the price of coal per ton extracted from the leased area, that is to say, from 4 ans.
per ton if the price was Rs. 51/ per ton to 25% of the price per ton at the pit 's head if that price was Rs. 20/ or more.
On the merger of the Korea State with Madhya Pradesh, into the events of which it is not necessary for the purposes of this appeal to go, the leased area became subject to the provisions of the Mines and Minerals (Regulation and Development) Act, 53 of 1948 and the Mineral Concession Rules made thereunder on October 25, 1949.
In 1952, Sir Maneckji agreed to assign the said lease and the benefits, powers and privileges thereunder provided to the respondent company.
Since, under that lease, such assignment could not be made without the previous consent of the lessor and since, by that time, owing to the merger of the Korea State with Madhya Pradesh, the State of Madhya Pradesh had acquired the said area and the rights in respect of it under the said lease, an agreement was made between the State of Madhya Pradesh and the respondent company on November 6, 1952 under which the State of Madhya Pradesh granted its consent to the said assignment for the unexpired period of the said lease in consideration of the respondent company agreeing to comply with the terms and conditions of the said lease including I payment of royalties to the State Government as provided therein.
That meant that the respondent company had to pay henceforth royalty to the State of Madhya Pradesh as the lessor at the rates provided in the original lease.
612 An unexpected development in the meantime took place.
Under an industrial award, called the Mazumdar Award, published on May 25, 1956, increased wages were awarded to colliery workers.
To meet the consequent increased expenditure which the collieries had to incur, the Government of India proportionately increased the controlled coal price.
A representation made by the respondent company to the Government of India, dated October 5, 1956 shows that the increase in respect of the coal extracted by the respondent company was from 14.6.0 and Rs. 15.6.0 to Rs. 17.6.0 and Rs. 18.6.0 per ton.
That increase, however, resulted in the respondent company having to pay royalty at an increased rate since the rate of royalty payable by the company was on graded slabs varying according to the price of coal at the pit 's head.
The company 's representation, therefore, was that the royalty payable by it should be modified so as to bring it in consonance with that payable under the 1948 Act read with the Mineral Concession Rules, 1949 and the First Schedule thereto, namely, at a fixed rate of 5% of the f.o.r.
price subject to the minimum of 8 ans.
per ton.
(rule 41 (1) (a)).
The Government of India referred the respondent company to the State Government and advised it to make a similar representation to that Government.
Thereafter correspondence went on between the Government of Madhya Pradesh and the respondent company for a considerable time.
The State, Government, however, was not agreeable to modify the terms of the said lease and to bring the royalty payable thereunder in consonance with r. 41 of 1949 Rules and the First Schedule thereto.
On December 28, 1957, Parliament passed the Mines and Minerals (Regulation and Development) Act, 67 of 1957 under its power under Entry 54 of List I of the Seventh Schedule to the Constitution.
Before the Act was brought into force by a notification as provided by section 1(3) thereof, an amending Act, being Act 15 of 1958, was passed on May 15, 1958, By a notification dated May 29, 1958, the Central Government brought into force the Act with effect from June 1, 1958.
As its long title recites, the Act was passed to provide for the regulation of mines and the development of minerals under the control of the Union.
2 declared that it was in the public interest that the Union should take under its control the regulation of mines and the development of minerals.
6 and 8 provided for the period and the area in respect of which mining leases henceforth could be granted.
9(1) provided that a lessee under a mining lease granted before the commencement of the Act shall pay royalty at the rate for the time being specified in the Second Schedule.
Its sub sec.
2 provided that a lessee under a lease granted on or after the commencement of the Act 613 shall likewise pay royalty in respect of any mineral removed by him from the area leased to him at the rate for the time being.
specified in the Second Schedule in respect of that mineral.
Sub sec.
(3) authorised the Central Government to amend the rates of royalty specified in the Second Schedule, but not so as to exceed twenty per cent.
of the sale price at the pit 's head.
Under item (1) of the Second Schedule, royalty payable in respect of coal was the same as under r. 41 of the Mineral Concession Rules, 1949, that is, 5% of the f.o.r. price, subject to a minimum of fifty naye paise per ton.
The effect of sec.
9 was that the rate of royalty was enhanced in the case of those lessees, who, under the leases obtained by them before the commencement of the Act, were paying at a rate lesser than 5%, while the royalty payable by lessees similarly placed was reduced if they were paying royalty at a higher rate.
Under sec.
9(1) read with the Second Schedule, the respondent company would have been required to pay royalty at the reduced, rate of 5 % instead of at the rates varying from 5 % to 25 % according as the price fluctuated from time to time.
Sec. 1 6 provided that all mining leases granted before October 25, 1949 should, as soon as may be, after the commencement of the Act, be brought into conformity with the provisions of the Act and the Rules made under sees.
13 and 18.
The Amending Act, 15 of 1958, by its sec.
2, inserted into the Act sec.
30A with retrospective effect.
That section reads as under "Notwithstanding anything contained in this Act, the provisions of sub section (1) of section 9 and of sub section (1) of section 16, shall not apply to or in relation to mining leases granted before the 25th day of October, 1949, in respect of coal, but the Central Government, if it is satisfied that it is expedient so to do, may, by notification in the Official Gazette, direct that all or any of the said provisions (including any rules made under sections 13 and 18) shall apply to or in relation to such leases subject to such exceptions and modifications, if any, as may be specified in that or in any subsequent notification.
" The section falls into two parts.
Under the first part, the operation of sections 9(1) and 16(1) was suspended as far as pre 1949 mining leases for coal were concerned.
The second part, however, empowered the Central Government, on its satisfaction that it was expedient to do so, to direct that all or any of those provisions, including rules made under sees.
13 and 18, should apply to such leases subject to such exceptions and modi 614 fications, if any, as might be specified in that or any subsequent notification.
The "exceptions and modifications" which might be so specified in the notification would obviously be in regard to the application, when such application was decided upon, of sees.
9(1) and 16(1) and the relevant rules.
As a result of the suspension of the operation of sec.
9(1), and consequently of the Second Schedule, the respondent company remained liable to pay under its lease royalty at the graded rates provided therein which, in consequence of the increase in the controlled price of coal, came to more than 5% prescribed by the Second Schedule.
On December 29, 1961, the Central Government issued a notification in exercise of its power under the second part of sec.
30A, by which it directed application of sec.
9(1) with immediate effect to or in relation to the pre 1949 coal mining leases " subject to the modification that the lessee shall pay royalty at the rate specified in any agreement between the lessee and lessor or at 2 1/2% of f.o.r.
price, whichever is higher, in lieu of the rate of royalty specified in respect of coal in the Second Schedule to the said Act.
" The respondent company would have been, under this notification, liable to pay royalty at the rate of 5% under the Second Schedule.
The question is whether the said modification made any difference.
It appears that the respondent company continued to press the Central Government to modify and reduce the royalty pay able by it under its lease.
This is seen from the Central Government 's letter, dated July 4, 1962, by which it informed the company in reply to the company 's letter of May 21, 1962 that the question of the rate of royalty payable, by the colliery was, in consultation with the State Government, under consideration and that action in that connection would shortly be taken.
It would seem that as a result of the company 's representations and consultation by the Central Government with the State Government, the latter issued an order, dated September 23, 1963 to the Collector, Surguja, directing him to recover from the respondent ,company royalty at the rate of 5% with effect from July 1, 1958 subject to the condition that the royalty amount should not be less than Rs. 2,47,000/ per year.
The Government, however, directed the Collector to recover the outstanding royalty due for the period prior to July 1, 1958 at the old rates, that is, as provided by the lease.
The State Government, however, changed its mind later on, for, by its order dated October 1, 1965 it partially suspended its order of September 23, 1963 and directed the Collector to recover royalty as from December 29, 1961 at the rates prescribed under the lease "in accordance with the Government of 615 India 's notification No. S.O. 30, dated 29th December, 1961".
Representations by the respondent company to the State Government to charge royalty at 5% proved futile.
However, on January 1, 1966, the Central Government issued a notification under which it directed the lessees of pre 1949 leases to pay royalty at 5% of the f.o.r. price.
Thereupon, by its order, dated February 11, 1966, the State Government issued instructions to the Collector to charge royalty at that rate with effect from 1st of January, 1966.
The controversy between the parties, therefore, is confined to the rate of royalty at which the company was liable to pay royalty for the period between December 29, 1961 and December 31, 1965.
On January 25, 1966, the Collector served upon the respon dent company demand notices to pay the arrears of royalty for the aforesaid period at the rates provided in the lease.
The company thereupon filed a revision before the Central Government under the Mineral Concession Rules, 1960.
That revision was pending when the company filed a writ petition in March 1966 in the High Court of Madhya Pradesh for quashing the said order, dated October 1, 1965, the rejection of its representation by the State Government, dated November 19, 1965 and the said demand notices.
The respondent company urged that the purpose of suspending operation of section 9(1), till a notification applying it was issued by the Central Government, was not to burden lessees under pre 1949 leases with royalty at the rate of 5% of the f.o.r. price for the time being prescribed in the Second Schedule, and that even when a notification applying sec.
9 was to be issued, the Central Government was empowered to direct that that section, the Second Schedule and the Rules made under sees.
13 and 18 would apply with such exceptions and modifications as may be specified in such or any subsequent notification.
Such exceptions and modifications had to be and were intended to cushion or soften the burden which would otherwise fall on the lessees under sec.
9(1) and the Second Schedule, and therefore, any modification or exception which would be specified in such notification was intended to reduce rather than increase the rate of royalty payable under sec.
The contention, therefore, was that the notification, dated December 29, 1961 could not be read to mean that lessees, such as the respondent company, whose leases provided for royalty at a rate higher than 5% were to pay royalty at a rate higher than the one provided under sec.
The State Government, on the other hand, urged that the language of the notification was clear and provided treat such lessees were to pay royalty either at the rate provided in their leases or if the rate provided therein was less than 2 1/2% at that rate, whichever was 616 higher.
Therefore, oil a plain construction of the words of the notification, the respondent company was bound to pay royalty at the rates provided in its lease, that being higher than the minimum of 2 1/2% provided in the notification.
The High Court rejected the contention raised by the State as being inconsistent with the purpose for which sec.
30A was introduced.
The High Court observed : "In our view, the true construction and effect of the notification dated 29th December 1961 is that in regard to coal mining leases granted before 25th October 1949 if the rate of royalty stipulated in the lease was higher than 5% of f.o.r. price per ton, then the royalty payable from 29th December 1961 in respect of coal removed from the leased area after that date would be the one specified on that date in the Second Schedule, namely, 5 per cent of f.o.r. price per ton; in relation to leases where the rate of royalty stipulated in less than 5 per cent but more than 2 1/2 per cent of f.o.r. price per ton, the rate of royalty would be the one specified in the lease agreement; and in respect of leases where the rate of royalty specified was less than 2 1/2 per cent of f.o.r. price per ton, the rate would be 2 1/2 per cent of f.o.r. price per ton from 29th December 1961.
It follows from this that the petitioner company which was, under the terms of its lease liable to pay royalty at a rate higher than 5 per cent of f.o.r. price per ton for the period from 29th December .1961, is rightly entitled to claim that under the notification dated 29th December 1961, it cannot be called upon to pay royalty from 29th September 1961 at the rate stipulated in the lease granted to it but only at the rate of 5 per cent of f.o.r.
price per ton specified in the Second Schedule.
" The High Court also rejected the State 's contention as regards its order dated September 23, 1963 that once the said notification was issued, the State Government could not charge royalty at a rate lower than the one prescribed in the said notification, and that therefore, the State acted properly in rescinding its said order.
The High Court held that order amounted to a modification of the terms of the lease in consideration of the lessee guaranteeing payment of the minimum amount of Rs. 2.47,000/ a year, which the State Government was competent to make, and that therefore, it had no right to rescind it unilaterally.
On this view, it held that the company 's liability for royalty as from December 29, 1961 would be at the reduced rate of 5% of the f.o.r. price and not as provided by the original lease deed.
617 As against these conclusions, counsel for the State took us through the terms of the lease and the provisions of the Act, and in particular sees.
9 and 30A, and formulated three contentions for consideration.
These were, (1) that the High Court erred in construing the relevant provisions of the Act and particularly sec.
30A, (2) that it also erred in construing the said notification, and (3) that the order of the State Government of September 23, 1963 was erroneous having regard to the said notification which fixed the rate of royalty payable by the lessees under the pre 1949 1eases, and that order being inconsistent with the notification had to be rescinded.
by its subsequent order of November 19, 1965.
Counsel urged that upon precision of its order dated September 23, 1963, the State Government was entitled to recover royalty as from the date of the said notification at the rate agreed to in the lease or at 2 1/2%, whichever was higher.
Therefore, the said demand notices were valid and had to be complied with.
It is well known that prior to the enactment of the 1948 Act, ' leases of mining areas had been granted by diverse authorities on different terms and conditions.
The rate of royalty under those leases were inevitably divergent and were often fixed at very low rates.
The purpose of enacting the 1948 Act was to bring about uniformity in such leases and with that lend that Act had made provisions for power to modify the terms and conditions both in regard to the area and the period under such leases.
The object of such provisions was to regulate in a systematic and scientific manner development of mining and minerals.
Though under the Constitution that subject was left to the States, a power was carved out by entry 54 in List I for the exclusive exercise of it by the Centre.
The consequence was 'the enactment of Act 67 of 1957 which was brought into operation from June 1, 1958.
The purpose of passing that Act is clearly seen from the declaration required under entry 54, List I, in sec. 2, namely, that it was necessary for the Union to take under its control regulation of mines and the development of minerals.
In pursuance of that object the Act made provisions with regard to the persons to whom prospecting licences and mining leases should be granted (sections 4 and 5), the maximum area for which such licences and leases should be granted (section 6), and the period for which a mining lease should be granted (section 8).
In order that uniformity in leases granted before and after the commencement of the Act could be attained, power was also conferred to bring all mining leases granted before October 25, 1949 into conformity with the provisions of the Act and the Rules made thereunder.
(sections 16, 17 and 18).
As regards royalty payable by the lessees under diverse kinds of leases for different minerals granted before October 25, 1949 uniformity was sought to be brought about sec.
618 In the 1948 Act the Central Government had the power to make rules for, regulating the grant of mining leases, or for prohibiting the, grant of such leases in respect of any mineral including the power to make rules as regards the terms upon which and the conditions subject to which such leases would be granted.
(section 5) Under sec.
7 of that Act, the Central Government also could make rules for modifying or altering the terms and conditions of leases granted before the commencement of that Act, that is, before October 25, 1949.
In pursuance of the power under sec.
5, the Central Government framed the Mineral Concession Rules, 1949 and provided by r. 41 thereof read with the First Schedule thereto that the rate of royalty chargeable under a lease in respect of coal would be 5% of the f.o.r. price per ton.
No rules, however, were made under sec.
7, and therefore, the rate of royalty provided by r. 41 did not govern pre 1949 leases, with the result that the lessees thereunder continued to pay royalty provided in their respective leases.
Such diversity in the rates of royalty was sought to be done away with by prescribing uniform rates of royalty in respect of each mineral through sec.
Item 1 in the Second Schedule prescribed, in respect of coal, the rate of royalty at 5% of the f.o.r.
price subject to a minimum of fifty naye paise per ton.
The result of section 9 and item I in the Second Schedule was that all lessees whether their leases were granted before or after the commencement of the Act became liable to pay royalty at the uniform rate of 5% in respect of coal.
Since under the 1948 Act the lessees, whose leases were granted on and after the commencement of that Act, were liable to pay royalty at 5% under r. 41 of the 1949 Concession Rules, sec.
9 did not make any difference to them as it prescribed the same rate.
But so far as lessees under the pre1949 leases were concerned, the new rate affected them, inasmuch as those, who, under their leases were paying at a lesser rate became liable to pay royalty at 5%, while those who were paying at a higher rate had to pay at, the lower rate of 5% only.
Besides, the change in the rate of royalty under sec.
9, pre 1949 leases were liable to be modified in respect of the area and the period under sec.
16 and the rules made under secs.
13 and 18.
Even before the new Act was brought into force, consequences of enforcing such uniformity and the resultant automatic spurt in the rate of royalty, especially in respect of coal, had been realised.
The Central Government, therefore, itself sponsored the insertion of sec.
30A by sec.
2 of the Amendment Act, 15 of 1958, with retrospective effect.
The consequences flowing from the attempted uniformity were set out in the Statement of Objects and Reasons(1) for amending the Act.
The statement acknowledged (1) Gazette of India, Extra., Part , Jan. July, 1958, p. 507.
619 that coal, as the basic fuel, occupied a unique position in the country 's economy and had always, therefore, been treated differently from other minerals.
It also acknowledged that operation of secs.
9 and 16 would have "numerous desirable consequences" such as unsettling coal industry as a whole and retarding the programme of coal production estimated in the, Second Five Year Plan on account of the sudden and automatic rise in the royalty payable by lessees, who under their leases granted before October 25, 1949 generally had to pay royalty "much below the rate" prescribed under the Second Schedule.
A similar anxiety was also expressed during the passage of the Amendment Bill by the concerned Minister stating that if the automatic enhancement under sec.
9(1) in the rate of royalty at 5% were to be implemented, the results would be unfortunate.
For, besides affecting the rate of production of coal, it would also adversely affect the price structure in other industries, such as cement, steel and other similar industries, and that for that reason "by this Amending Bill that mistake is sought to be rectified". "Instead of giving those increases automatically power will not be taken to phase them in such a way that the upward revision is not pushed up to the maximum limit (i.e. five per cent.) with one jerk, but it is so phased that it does not cause any upset in the coal production programme and in the economy of the country as a whole".(1).
The mischief which the Amending Act, 1958 sought to avoid was thus to prevent enhancement of royalty at one stroke to 5%.
As aforesaid, sec.
30A suspended the application of secs.
9(1) and 16(1) in relation to pre 1949 leases and authorised the Central Government to direct that all or any of the said provisions (including rules made under secs.
13 and 18) shall apply to or in relation to such leases subject to such exceptions and modifications, if any, as may be specified in a notification.
As a result of the suspension of Sec.
9(1), lessees under pre 1949 leases were relegated to the original position under which they were liable to pay royalty at rates agreed to in those leases whether the rate was over or below 5% provided by sec.9(1).
As and when the Central Government issued the notification envisaged by the second part, such lessees would be obliged to pay royalty at the rate of 5% as prescribed for the time being in the Second Schedule, and even if the Government were, in the meantime, to enhance the rate as authorised by sec.
9(3) upto the maximum rate of 20% at such rate but never more than 20%.
The second part thus contemplated payment of royalty, on sec.
9(1) being made applicable, at the most, at the rate of 5% only, as no increase had till.
then been made under sec.
(1) Rajya Sabha Proceedings, dated November 620 On December 29, 1961, the Central Government "in exercise of the powers conferred by sec.
30A" issued the notification directing that the provisions of sub sec.
(1) of sec.
9 of the said Act shall apply with immediate effect to or in relation to pre 1949 coal mining leases, subject to the modification that such lessees shall pay royalty at the rate specified in the agreements between the lessees and the lessors or at 2 1/2% of f.o.r.
price, whichever was higher, "in lieu of the rate of royalty specified in respect of coal in the Second Schedule to the said Act".
The argument urged on behalf of the State both before the .High Court and before us was that the notification clearly envisaged payment of royalty at the rate agreed to between the lessor ,and the lessee or at 2 1/2% whichever was higher.
Since, the agreement in the present case provided for royalty at graded rates which were higher than 21%, the company had to pay royalty at such agreed rates.
The argument, in our opinion, is untenable :as it is not borne out by the language of the notification itself and of sec.
30A and was therefore rightly repelled by the High Court.
The notification was issued, as it recites, in exercise of the powers conferred by sec.
30A. That power was to apply, by issuing a notification thereunder, sees.
9(1) and 16(1) and the rules made under sees.
13 and 18.
The notification in terms directed the application of sec.
9(1) which meant that on and from December 29, 1961 the company would have to pay royalty as prescribed under that sub section read with the Second Schedule, that is, at 5%.
The notification, however, applied sec.
9(1) subject to one modification, namely, that lessees under the pre1949 leases were to pay royalty at, the rate provided in their leases or at 21% whichever was higher.
The modification was to the rate applicable under sec.
9(1) and the Second Schedule, that is, to the rate of 5%.
Considering the object with which sec.
30A was enacted, viz., to phase the rate of 5%, and not to impose it at one stroke, the modification could not mean recovery at a rate inconsistent with sec.
9(1) and the Second Schedule, that is, at ,the rate higher than 5% provided thereunder.
Such a modification, if it were to be construed as meaning payment at a rate higher than 5% would be in excess of the power under sec.
30A and also in contravention of the language of sec.
9(1) and the Second Schedule.
A modification, if any, would be for charging royalty at a rate lesser than the one provided under sec.
9 (1 ) and the Second Schedule, and not at a rate higher than such rate.
A construction to the contrary would mean exercise of power in excess of that conferred by the section and would affect the validity of the notification.
A literal meaning which the State canvassed for can, therefore, be accepted only at the cost of invalidating the notification.
621 The rule of construction that a court construing a provision of law must presume that the intention of the authority making it was not to exceed its power and to enact it validly is well settled.
Where, therefore, two constructions are possible, the one which sustains its validity must be preferred.
On a plain reading of the notification, however, it is clear that what it meant was that instead of the rate flowing from the application of sec.
9(1) and the Second Schedule, a modified rate should be applied, that is, "in lieu of the rate of royalty" specified in the Second Schedule, royalty at the agreed rate should be charged if it was lower than 5%, or at 2 1/2% minimum, whichever was higher.
The notification, thus, did not empower the State Government to recover royalty at a rate higher than 5% in lieu of the rate chargeable under sec.
9(1) and the Second Schedule which provided 5% only.
It appears that the State Government itself understood such a construction as proper, for, if it had understood otherwise, it would not have issued its order dated September 23, 1963 directing the Collector to recover royalty at 5% pursuant to the correspondence which had ensued between the company, the Central Government and the State Government.
If it had understood the notification in the manner now urged by its counsel, it would have at once pointed out both to the company and the Central Government in that correspondence that it was entitled to recover royalty at the rates agreed to in the lease instead of at 5 %.
It was only in 1965 that it changed its mind and cancelled its previous order.
On the construction placed by us on sec.
30A and the said notification, it was not entitled so to do.
The High Court, in our view, was right in quashing that order as also the demand notices issued in pursuance of that order.
In view of our decision on the question of construction of the notification and sec.
30A, it becomes unnecessary to consider the second contention raised by the company 's counsel that the order of 1963 amounted to a modification of the terms of the lease, and that therefore, the State Government could not unilaterally supersede such modification by issuing a subsequent order in 1965.
For the reasons aforesaid, we are in agreement with the High Court 's conclusions.
Civil Appeal No. 168 of 1968 involves the same question and our decision in that appeal, must, therefore, be governed by the decision in this appeal.
Both the appeals, therefore, fail and are dismissed with costs. 'Mere will, however, be one set of hearing costs as the arguments in both the appeals have been common.
G.C. Appeals dismissed.
| IN-Abs | In 1944 the Ruler of the erstwhile Indian State of Korea granted to D a mining lease in respect of an area of 5.25 sq. miles in the State.
According to the terms of the lease the rates of royalty varied from 5% 0 25% according to the price of the coal per tons extracted from the eased area, that is to say, from 4 as.
per ton if the price was Rs. 51 per .on to 25% of the price per ton at the pit 's head if that price was Rs. 20/or more.
On the merger of the Korea State with Madhya Pradesh the leased area became subject to the provisions of the Mines & Minerals (Regulation and Development) Act 53 of 1948 and the Mineral Concorde Rules, 1949.
, In 1952 D assigned the lease and its benefits to the respondent company.
The State of Madhya Pradesh granted its consent to the assignment for the unexpired period of the lease in consideration of the respondent company agreeing to comply with the terms and conditions of the lease including payment of royalties ' On December 28, 1967 Parliament passed the Mines & Minerals (Regulation and Development) Act 67 of 1957 under its power under Entry 54 of List I of the Seventh Schedule to the Constitution.
The Act as amended by Act 15 of 1958 was brought into force by a notification of the Central Government with effect from June 1, 1958.
Under section 9(1) of the Act a lessee under a mining lease granted before the commencement of the Act was liable to pay royalty at the rate for the time being specified in the Second Schedule.
Under item (1) of the Second Schedule royalty payable in respect of coal was the same as under r. 41 of the Mineral Concession Rules, 1949, that is, 5% of the f.o.r. price, subject to.
a minimum of fifty naye paise per ,on.
Under section 30A which had been inserted by Act 15 of 1958 with re trospective effect, the provisions of section 9(1) and section 16(1) were not applicable to mining leases granted before 25th October 1949 in respect of coal, but the Central Government bad power if satisfied that it was expedient to do so, to direct by notification in the Official Gazette, that all or any of the said provisions (including rules made under sections 13 and 18) shall apply to or in relation to such leases "subject to such exceptions and modifications, if any, as may be specified in that or in any subsequent notification".
On December 29.
1961 the Central Government issued a notification in exercise of its power under the second part of section 30A by which it directed application of section 9(1) with immediate effect to or in relation to the pre 1949 coal mining leases "subject to the modification that the lessee shall pay royalty at the rate specified in any agreement between the lessee and the lessor or at 2 1/2% of f.o.r. price, whichever is higher, in lieu of the rate of royalty specified in respect of coal in the Second Schedule to the said Act.
" The Collector served upon the respondent company demand notices to pay the arrears of royalty for the period December 29, 1961 to December 31, 1965 at the rates specified in the lease.
The com 610 pany in a writ petition before the High Court urged that the exception; and modifications under section 30A had to be and were intended to cushion of soften the burden which would otherwise fall on the lessees under section 9(1) and the Second Schedule and therefore any modification or exception which would be specified in such notification was intended to reduce rather than increase the rate of royalty payable under section 9(1).
The State Government contended that the respondent company was bound to pay royalty at the rates provided in its lease, that being higher than the minimum.or 2 1/2% provided in the notification.
The High Court rejected the contention raised by the State as being inconsistent with the purpose for which section 30A was introduced.
The State appealed.
HELD : The notification was issued in exercise of the powers con feared by section 30A.
That power was to apply by issuing a notification there% under, sections 9(1) and 16(1) and the rules made under sections 13 and 18.
The notification in terms directed the application of section 9(1) which meant that on and from December 29, 1961 the company would have to pay royalty as prescribed under that sub section read with the Second Schedule, that is, at 5%.
The notification however applied section 9(1) subject to one modification, namely.
that the lessees under the pre 1949 leases were to pay royalty at the rate provided in their leases or at 21% whichever was higher.
The modification was to the rate applicable under section, 9(1) and the Second Schedule, that is, to the rate of 5%.
Considering the object with which section 30A was enacted viz. to phase the rate of 5% and not to impose it at one stroke, the modification could not mean recovery at a rate inconsistent with section 9(1) and the Second Schedule.
that is, at the rate higher than 5% provided thereunder.
[620 D F] Such a modification, if it were to be construed as meaning payment at a rate higher than 5% would be in excess of the power under section 30A and also in contravention of the language of section 9(1) and the Second Schedule.
A lateral meaning which the State canvassed for could therefore be accepted only at the cost of invalidating the notification.
Where two constructions are possible the one which sustains the validity of the law must be preferred.
[620 G H; 621 A] On a plain reading of the notification it was clear that what it meant was that instead of the rate flowing from the application of section 9(1) and the Second Schedule, a modified rate should be applied, that is, 'in lieu of the rate of royalty ' specified in the Second Schedule, royalty at the agreed rate should be charged if it was lower than 5% or at 21% minimum, whichever was higher.
The notification thus did not empower the State Government to recover royalty at a rate higher than 5% in lieu of the rate chargeable under section 9(1) and the Second Schedule which provided 5% only.
[621 B C] The High Court was therefore justified in quashing the impugned orders also the demand notices issued in pursuance of that order.
|
Appeals Nos. 2136 and 2295 of 1966.
Appeals from the judgment and order dated February 2, 1965 of the Bombay High Court, Nagpur Bench in Special Civil Applications Nos. 246 of 1964 and 84 of 1963 respectively.
G. B. Pai, P. C. Bhartari, J. B. Dadachanji, 0.
C. Mathur and Ravinder Narain, for the appellant (in C.A. No. 2136 of 1966).
section V. Gupte, C. N. Nagle and A. G. Ratnaparkhi, for the appellant (in C.A. No. 2295 of 1966).
M. C. Bhandare, F. P. Sathe, Praveen Pareek, Vineet Kumar and Indira Jai Singh, for respondents Nos.
131 to 142, 144 to 478, 480 to 488, 490 and 492 (in C.A. No. 2136 of 1966).
The Judgment of the Court was delivered by Mitter, J.
The main question in these two appeals by certi ficate is, whether the Labour Court bad jurisdiction to entertain the application for lay off compensation under section 33 C(2) of the Industrial Disputes Act.
The appellant in the first appeal is a 582 limited company which is now under liquidation while the appellant in the second is a partnership firm, the respondents in the two appeals being the Labour Court and different groups of workmen.
The facts are as follows.
In Hinganghat there was a textile mill known as R. B. Bansilal Abirchand Mills which used to employ about 1000 men.
The mill was owned by the firm, the appellant in the Second appeal.
A fire broke out in the mill on March 27, 1959 doing appreciable damage to some of the machines.
The employers put up a notice under their Standing Order No. 19 on March 28, 1959 to the effect that the fire of the previous night had caused heavy loss and extensive damage to the departments rendering the mill 's working impracticable until necessary repairs and adjustments were carried out.
The employees were however to note that the folding and workshop departments would continue to work as usual and notice of resumption of mill 's working would be posted after necessary adjustment and repairs were carried out.
This was followed by a second notice issued on April 2, 1959 to the effect that the pre liminary survey of the fire have in conjunction with the insurance companies had shown that over 60 per cent of the machines in the carding.
fly frame and Ring frame departments had been damaged and that the damage to the bulk of these machines was such that they might require complete replacement.
It was further announced that in the circumstances the Management had no alternative but to declare stoppage of work of all the productive departments of the mills.
Although it is not possible to be precise as to the extent of the damage caused, a fair idea of it can be had from a letter of Hukumchand Insurance Company Ltd. dated August 28, 1959 stating that the loss to buildings, machinery and accessories had been determined at Rs. 22,624/ by the surveyors.
It appears that on 27th April 1960 the representatives of the insurance companies had agreed to re assessment increasing the figure for repairs to Rs. 37,420/ .
The third notice put up by the firm on April 29, 1960 gave no indication of the date of completion of the repairs.
On September 13, 1960 the firm notified that the departments of the mills which had remained unproductive since 28th March, 1959 were expected to commence working on or about 30th September, 1960.
The firm did not however work the mills in terms of the last notice but transferred the same to the company which had been incorporated on 8th December, 1959.
It appears that the consideration for the transfer was Rs. 34,75,000/ made up of 583 Rs. 11,50,000/ being the value of the immovable properties and Rs. 23,25,000/ being the value of movable properties.
Compared to the second figure, the damage to the machinery as assessed by the insurance companies is insignificant.
The first notice of 28th March, 1959 brings out the fact that the work in the mill as a whole was not.
brought to a stand still and that it was to continue as usual in the folding and workshop departments.
According to the second notice, the preliminary survey had shown that over 60 per cent of the machines in only three departments, namely, carding, fly frame and ring frame, had been damaged and that complete replacement of some of the above might be necessary.
The notices do )not make out the case that the damage was such that it was not possible to run the mills it all.
Towards the end of 1961 and the be inning of 1962, respon dents 2 to 346 in Civil Appeal No. 2295 of 1966 presented applications under section 33 C(2) of the Industrial Disputes Act to the Labour Court at Nagpur claiming to have been laid off from 28th March 1959 to 30th September, 1960.
The appellants in the second appeal filed a written statement before the Labour Court contending inter alia that the Labour Court had no jurisdiction under section 33 C(2) and that the parties had to work out their rights within the four corners of the State Act i.e. the C.P. and Berar Industrial Disputes Settlement Act, 1947.
By order dated 30th November, 1962 the preliminary objection as to jurisdiction of the employers was rejected by the Labour Court.
On this, the appellants preferred an application under article 226 of the Constitution of India before, the Bombay High Court.
By a common judgment rendered on 25th August, 1962 the High Court rejected the contentions of the appellants that the claim under the Industrial Disputes Act was not maintainable because of the operation of the State Act and further held that the Labour Court was competent to adjudicate on the merits of the claim of the workers even where the employer disputed not only the jurisdiction of the said court but also disputed that there was any lay off as claimed and that the applicants were not workmen within the meaning of the Act.
The appellants who were petitioners before the High, Court did not proceed further in the matter by applying for a certificate that the case was fit for appeal to this Court.
By order dated November 30, 1962 the Labour Court dismissed as barred by the principles of res judicata 125 applications of some of the workers who had previously applied to the Labour Court at Bombay and whose applications had been subsequently dismissed by the Labour Judge, Bombay on the ground of lack of jurisdiction under section 33 C of the Industrial Disputes Act.
The claim dismissed related to the period between March 28, 1959 and May 584 2, 1960.
The Labour Court allowed the claims relating to the period from May 3, 1960 to September 30, 1960 and ordered the issue of certificates of recovery under section 33 C of the Act.
Respondents 2 to 493 in Appeal No. 2136/1966 filed appli cations under section 33 C in the Labour Court at Nagpur claiming lay off compensation for the period 28th March, 1959 to September 30, 1960.
The Labour Court held by order dated February 29, 1964 that there had been a lay off within the meaning of section 2(kkk) of the Industrial Disputes Act and that the employees were entitled to compensation for the full period of 18 months but workers who were "badli" workers were not entitled to such compensation.
The appellants in both the appeals preferred writ petitions before the High Court of Bombay for quashing the order of the Labour Court.
The two writ petitions were disposed of by the High Court by a common judgment on February 2, 1965.
Before the High Court four main points were raised, namely 1.
Whether having regard to the circumstances and the established facts there had been a lay off within the meaning of the expression in section 2(kkk) ? 2.
If there had been a lay off, whether compensation under section 25 C read with section 25 E of the Act was payable to the workers, also whether the workers were not entitled to compensation because of non fulfilment of conditions prescribed in section 25 E ? 3.
Whether badli workers were entitled to lay oil ' compen sation? and 4.
Whether the quantum of compensation would be governed by the first proviso to section 25 C or whether section 25 C(ii) would be applicable entitling the workers to compensation for the full period of the lay off i.e. 28 3 59 to 30 9 1960 ? On the first question the High Court held that "by every indication and circumstance and by express declaration of its management it was a running industry", meaning thereby that there was no closure.
On the second question, the High Court held that the Labour Court should have considered whether the workmen had proved that they had presented themselves for work or not in terms of section 25 E to be able to claim compensation under section 25 C, excepting with regard to three workmen who cave clear evidence on the point.
It also held that badli labour were not entitled to lay off compensation.
It turned down the contention that compensation was claimable only in terms of the Standing Orders of the Mill.
In the result the High Court remanded the 585 matters 'back to the Labour Court for recording fresh evidence on behalf of both the parties on the following issue : Do the applicants prove that they presented themselves for work at the appointed time at least once a day within the meaning of section 25 E(ii)? On the applications of the appellants, the High Court granted certificates under article 133(1) (a) of the Constitution.
Before us learned counsel for the respondents Mr. Bhandare sought to resist the main contention of the appellants by urging that the decision of the High Court in 1962 operated as res judicata in the present appeals.
He said that it was open to the appellants to challenge the conclusion of the High Court arrived at in 1962 by moving the High Court by an application for the issue of a certificate of fitness for appeal to this Court and in the event of refusal thereof, to ask for special leave of this Court.
In the absence of such applications the determination of the High Court in 1962 had become final and the question as to jurisdiction could not be canvassed again.
We do not think it necessary to go into this question as the matter can be disposed of even on the basis that it is open to the appellants to raise the question of jurisdiction before this Court although the point was not expressly taken in the grounds for leave to appeal to this Court before the High Court.
The substantial point of Mr. Gupte appearing for one set of appellants was that it being the case of the employers that there had been a closure of the mills the dispute could not be adjudicated upon by a Labour Court and was entertainable only by an Industrial Tribunal under the provisions of section 10(1) (d) of the Act.
Mr. Gupte drew our attention to various sections of the Act in support of his contention that an "industrial dispute meant primarily a dispute or difference between employers on the one hand and employees on the other connected with the employment or non employment or the terms of employment etc.
of any person.
He urged that the basic underlying idea was that to be an industrial dispute the dispute had to be one which affected the employee,; , is a class as pitted against their employers.
He argued that individual workman could only approach the Labour Court for lay off compensation when prima facie there was no question of closure of the industry by the employers and drew our attention to the definition of 'lay off ' ins.2(kkk).
According to him in a situation like the present where the inability on the part of the employer to give employment was not limited to a handful of persons but extended to the employees wholesale arising out of a calamity it could not be said that there had been a lay off of the employees.
Although the word 'closure ' is not defined in the Act, counsel 586 argued that the expression would aptly describe the condition prevailing in the mills as a result of the fire on March 27, 1959.
We find ourselves unable to accept Mr. Gupte 's contention.
We may in this connection refer to the relevant provisions in the Act.
The authorities under the Act are specified in different sections of Chapter II containing sections 3 to 9.
Under section 7 it is open to the appropriate Government by notification in the Official Gazette constitute one or more Labour Courts for the adjudication of industrial disputes relating to any matters specified in the Second Schedule and for performing such other functions as may be assigned to them under the Act.
Under section 7 A the appropriate Government may, by notification, constitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to any matter, whether specified in the Second Schedule or the Third Schedule.
In the Second Schedule are set forth certain matters in items 1 to 5 which are within the jurisdiction of a Labour Court and item 6 gives the Labour Court jurisdiction to deal with "all matters other than those specified in the Third Schedule".
The Third Schedule contains 11 items of which item 10 reads : "Retrenchment of workmen and closure of establishment".
Lay off is not expressly covered by either of the two Schedules.
It would therefore be a matter covered by the Second Schedule tinder item 6 thereof.
section 10 (1) (c) enables the appropriate Government when it is of opinion that an industrial dispute exists or is apprehended inter alia, to refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second Schedule to a Labour Court for adjudication.
So far as an Industrial Tribunal is concerned,, the appropriate Government may under section 10(1)(d) make reference to it not only in cases covered by the Second Schedule but also those included in the Third Schedule except that when the dispute relates to any matter in the Third Schedule and is not likely to affect more than one hundred workmen, the appropriate Government may, if it thinks fit, make a reference to a Labour Court tinder cl.
According to Mr. Gupte, Chapter V A of the Act introduced in the year 1953 providing for claims being preferred by individual workmen to compensation could only be resorted to when the dispute was such as would not call for a reference under section 10 (1) (d).
He urged further that it being open to the Central Government to amend the Second and the Third Schedules by issue of notification under section 40 of the Act, so long as the said Schedules stood unaltered, it should be presumed that the legislature did not intend a Labour Court to exercise its jurisdiction in cases where there was 587 a serious question of closure of an establishment put forward by the employers.
All this, argued counsel, went to show that if the essential nature of the dispute was a difference between the employer on the one hand and a very large body of workmen on the other, the employer making an assertion involving a matter covered by the Third Schedule to the Act, it would not be open to the workmen to prefer claims individually under section 33 C.
The ambit of section 33 C has been examined by this Court on a number of occasions and reference may usefully be made to some of the authorities in this connection to find out whether the Labour Court was within its jurisdiction to entertain the applications which were followed by the writ petitions to the Bombay High Court.
in Central Bank of India Ltd. vs P. section Rajagopalan(1) the legislative history of section 33 C was gone into at length and the conclusion of this Court on the scope thereof was as follows (see p. 150) "The legislative history to which we have just referred clearly indicates that having provided broadly for the investigation and settlement of industrial disputes on the basis of collective bargaining, the legislature recognised that individual workmen should be given a speedy remedy to enforce their existing individual rights, and so inserted section 33 A in the Act in 1950 and added section 33 C in 1956.
These two provisions illustrate the cases in which individual workmen can enforce their rights without having to take recourse to section 10(1) of the Act, or without having to depend upon their Union to espouse their cause.
Therefore, in construing section 33 C we have to bear in mind two relevant considerations.
The construction should not be so broad as to bring within the scope of section 33 C cases which would fall under section 10(1).
Where industrial disputes arise between employees acting collectively and their employers, they must be adjudicated upon in the manner prescribed by the Act, as for instance, by reference under section 10(1).
These disputes cannot be brought within the purview of section 33 C. Similarly, having regard to the fact that the policy of the Legislature in enacting section 33 C is to provide a speedy remedy to the individual workmen to enforce or execute their existing rights, it would not be reasonable to exclude from the scope of this section cases of existing rights which are sought to be implemented by individual workmen.
" Turning down the contention put forward on behalf of the em ployers there that computation under section 33 C(2) would only be (1) ; 588 possible where the right of the workman to receive the benefit was not disputed, it was said : "The claim under section 33 C(2) clearly postulates that the determination of the question about computing the benefit in terms of money may, in some cases, have to be preceded by an enquiry into the existence of the right and such an enquiry might be held to 'be incidental to the main determination which has been assigned to the Labour Court by sub section
As Maxwell has observed " where an Act confers jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its executions" Accordingly it was held that section 33 C(2) took "within the purview cases of workmen who claimed that the benefit to which they are entitled should be computed in terms of money, even though the right to the benefit on which their claim is based is disputed by their employers".
Following the above decision, it was held in Mining Engineer vs Rameshwar(1) that sub section
(2) of section 33 C was not confined to cases arising under an award, settlement or even under the provisions of Chapter V A of the Act and the benefit provided in the bonus scheme under the Coal Mines Provident Fund and Bonus Schemes Act, 1948 would be covered by sub section
Section 25 C provides for the measures of compensation to be awarded in cases of lay off of workers.
section 25 F of the Act however provides inter alia that no compensation shall be paid to a workman who has been laid off if he does not present himself for work at the establishment at the appointed time during the normal working hours at least once a day.
The claim to compensation of every workman who is laid off is one which arises under the statute itself and section 25 C provides for a benefit to the workman which is capable of being computed in terms of money under section 33 C(2) of the Act.
The scheme of the Act being to enable a workman to approach a Labour Court (oil computation of the compensation claimed by him in terms of section 25 C of the Act he is not concerned to see whether other co workers will or will not adopt the same course.
The fact that a number of workers make claims of identical nature i.e. to compensation for lay off, arising out of the same set of facts and circumstances cannot make any difference to the individual workman who prefers the claim.
The mere fact that a large number of persons makes a claim of the same nature against the employer, does not change (1) [1968] 1 S.C.R. 140.
589 the nature of the dispute, so as to take it out of the pale of section 7 of the Act and render the dispute one which can only be dealt with by an Industrial Tribunal to which reference can be made by the appropriate, Government.
Reference was however made to the decision of U.P. Electric Supply Co. vs R. K. Shukla(1) in aid of the contention for the appellants that if the dispute touches a matter in the Third Schedule the Labour Court will not have jurisdiction to.
deal with it.
In this case the State Electricity Board, U.P. took over the undertaking of the company from September 16, 1964 in exercise of power under sec.
6 of the and under the provisions of the appellants ' licences.
As a result thereof, the company ceased to carry on the business of generation and distri bution of electricity thereafter.
On September 16, 1964 the Board issued letters of appointment to the employees of the appellant in the posts and positions which they had previously held.
According to the respondents they were not given credit for their past services with the company.
All the workmen of the two undertakings were taken over in the employment of the Board with effect from September 17, 1964.
443 workmen employed in the Allahabad undertaking filed applications before the Labour Court under section 6 H(2) of the U.P. for payment of retrenchment compensation and salary in lieu of notice.
The orders for payment of retrenchment compensation were resisted by the company inter alia on the ground that the workmen were )not in fact retrenched and in any event since they were admitted to the service of the Board on terms not less favorable than those enjoyed before, the company was under no liability to pay retrenchment compensation and the Labour Court was incompetent to entertain and decide the applications for awarding such compensation.
On the above facts the Court in the appeal by special leave observed "the Company had expressly raised a contention that they had not retrenched the workmen and that the workmen had voluntarily abandoned the Company 's service by seeking employment with the Board even before the Company closed its working.
" Reliance was however placed on certain passages in the judgment at p. 513 and at p. 517 which according to counsel for the appellants went to show that when the factum of retrenchment is questioned, there is a dispute which is 'exclusively within the competence of the Industrial Tribunal.
These observation cannot be considered binding on us as all the aspects were not placed before the Court then.
Reference was also made to the case of Ramakrishna Ramanath vs Presiding Officer, Nagpur(2).
In that case the appellant bad (1) [1970] 1 S C.R. 507.
7 L643 Sup.
CI/72 (2) 590 issued a notice in writing on the 1st July 1958 following the issue of a notification by the Government of Bombay under section 5 (2) read with section 5(1) of the to the effect that it had been forced to close its factory as from the 1st of July 1958 by the action of the Bombay Government in issuing the said notification inasmuch as minimum rates of wages made payable as from 1st July, 1958 were so excessive and unworkable that it was impossible for any employer to give effect to them and the notification had made the working of the business a financial impossibility.
The workers were also informed that the closure of the business would continue as long as the notification dated 11th June, 1958 continued in force.
The Government of Bombay withdrew the notification after some time and the appellants started to work the factory from 10th August, 1958 taking in all employees who were there before 1st July.
The respondent No. 2 put in an application before the Presiding, Officer, Labour Court Nagpur on 5th November, 1963 claiming Rs. 334.80 on account of retrenchment compensation and one month 's pay in lieu of notice.
The appellant put in its written statement, inter alia, contending that the said respondent was not an employee but an independent contractor and that there had been no closure of the business to attract section 25 FFF of the Act and that in any event the dispute could not be referred to a Labour Court.
In the appeal by special leave to this Court it was contended, inter alia, (a) that the dispute did not fall within the jurisdiction of the Labour Court but within that of an Industrial Tribunal, (b) that there was really, no closure of the appellant 's business but only a lock out or a temporary stoppage of work not attracting the operation of section 25 FFF and (c) that in order that the respondent could claim.
the benefit of 25 F it was obligatory on her to show that she had worked for 240 days in each year of service for which the claim was made.
This Court found that the appellant had not taken the plea in its written statement and that there had been a lay off or a lock out and that it had only submitted that the closure in accordance with the notice did not fall within the scope of section 25 FFF of the Act.
By issues 6 and 7 the appellant raised questions as to whether the closure had resulted in the retrenchment of the applicant and whether the closure was beyond the control of the employer.
No dispute was raised about the factum of closure.
Strangely enough it was urged before this Court that "there could be no closure because the appellant was ,merely protesting against irresponsible action of the Government action and had no intention to close the business permanently.
" The Court found that the question of lock out was not mooted when the issues were settled nor had any plea been taken that there had been a temporary cessation of work under Standing Order No. 11.
In our view, the observations in this case do not help the appellants before us.
591 In Sawatram Mills vs Baliram(1) the claim of the workmen for lay off during a certain period before the Second Labour Court Bombay was resisted inter alia on the ground that the said court had no jurisdiction as the dispute fell to be tried under the C.P. and Berar Industrial Disputes (Settlement) Act, 1947, and, secondly, the application under section 33 C was incompetent because it was not a claim for money due and calculations had to be made for ascertaining the sum due.
On a construction of the sections of the industrial Disputes Act this Court held that : "Compensation for lay off could only be determined under Chapter V A of the and the workmen were entitled under section 3 3 C (1) to go before the Second Labour Court to realise moneys due from their employers under Chapter V A." The Court also negatived the contention that the did not apply but the C.P. and Berar Industrial Disputes (Settlement) Act did as the State Act made no mention of lay ,off or compensation for lay off.
The other argument was rejected following the judgment in Kays Construction Co. (P) Ltd. vs State of U.P. & ors.
In substance the point urged by the appellants was that if a claim is made on the basis of a lay off and the employer contends that there was no lay off but closure, it is not open to a labour court to entertain an application under section 33 C(2).
The more so it was stated, when the dispute was not between a solitary workman on the one hand and the employer on the other but a whole body of workmen ranged against their employer who was faced with numerous application , before the Labour Court for computation of benefit in terms of money.
As has been said already, the Labour Court must go into the matter and come to a decision as to whether there was really a closure or a lay off.
If it took the view that there was a lay off without any closure of the business it would be acting within its jurisdiction ' if it awarded compensation in terms of the provisions of Chapter V A.
In our opinion the High Court 's conclusion that "In fact the business of this Company was continuing.
They in fact continued to employ several employees.
their notices say that some portions of the mills would continue to work" was unexceptionable.
The notices which we have referred to can only lead to the above conclusion.
The Labour Court 's jurisdiction could not be ousted by a mere plea denying the workman 's claim to the computation of ,lie benefit in terms of money: the (1) [1966] I S.C.R, 764.
(2) ; 592 Labour Court had to go into the question and determine whether, on the facts, it had jurisdiction to make the computation.
It could not however give itself jurisdiction by a wrong decision on the jurisdiction plea.
Appearing for the appellant in Civil Appeal No. 2136/66 Mr. Pai contended that his clients ' liability would only commence after the 1st October, 1960 when it started to run the mill.
This point had not been canvassed before the High Court and consequently we cannot entertain it.
In the second case Mr. Gupte argued that although his client did not raise the question of liability before, there was no question of any concession and he should be allowed to contest his liability on the basis of the application preferred for urging additional grounds before this Court.
As this point was not urged in the court below this application must be refused.
The last point urged was that in view of Standing Orders 19 and 21 the quantum of compensation had to be scaled down or measured in terms of the Standing Order 19 the employer could, in the event of fire, breakdown of machinery etc.
stop any machine or machines or department or departments wholly or partially or the whole or a part of the establishment for any period, without notice and without compensation in lieu of notice.
Under Standing Order 21, any operative played off under Standing Order 19 was not to be considered as dismissed from service but as temporarily unemployed and was not to be entitled to wages ' during such unemployment except to the extent mentioned in Standing Order No. 19.
The High Court rightly turned down the contention in view of section 25 J of the Act under which the provisions of Chapter V A are to have effect notwithstanding anything inconsistent therewith contained in any other law including Standing Orders made under the .
These appeals were originally heard by a Bench of five, Judges including section C. Roy, J. who expired a few days back.
The above judgment was concurred in by our late colleague.
We however gave a further hearing to the parties at which nothing was addressed to us to make us change our opinion already formed.
In the result, the appeals fail and are dismissed with costs.
One set of hearing fee.
S.C. Appeals dismissed.
| IN-Abs | A textile mill in Madhya Pradesh employed about a thousand workers.
The mill was owned by a firm, the appellant in the Second Appeal.
A fire broke out in the Mill doing appreciable damage to some of the machines.
From a letter of the Insurance company, the extent of the damage caused, was ascertained to be about Rs. 37,420/ .
In terms of the last notice given by the employers the mills did not commence work but instead, the management transferred the mills to the company which had been incorporated on 8th December 1959.
From the facts it was clear, that the damage to the machinery was insignificant as against the total assets transferred to the company and the damage was not such that it was not possible to run the mills at all.
Respondents 2 to 346 in the Second Appeal applied under section 33C(2) of the Industrial Disputes Act to the Labour Court claiming lay off compensation for the period they remained idle.
The Labour Court held that there had been a lay off within the meaning of section 2(K KK) of Industrial Disputes Act and except 'badli ' workers the employees were entitled to compensation for the full period of 18 months.
The appellants in both the appeals, filed writ petitions before the High Court for quashing the order of the Labour Court and the High Court raised several issues and ultimately remanded the matters back to the Labour Court for recording fresh evidence as to whether the applicants presented themselves for work at the appointed time at least once a day within the meaning of section 25E(ii).
On the application of the appellants the High Court granted certificates under article 133 (1) (a) of the Constitution.
The point urged by the appellants was that if a claim is made on the basis of a lay off and the employer contends that there was no lay off but closure it is open to a labour court to entertain an application under section 33C(2).
It is more so when the dispute was not between a solitary workman on the one hand and the employer on the other but a whole body of workmen ranged against their employer who was faced with numerous applications before the labour court for computation of benefit in terms of money.
Dismissing the appeals, HELD : (i) From the facts and circumstances of the Case, it was clear that the business of the company was continuing.
They, in fact, continued to employ several employees and their notices say that some portion of the mills would continue to work.
The Labour Court 's jurisdiction could not be ousted by a mere plea denying the workmen 's claim to the computation of benefit in terms of money.
The Labour Court must go into the matter and come to a decision as to whether there was really a closure or a lay off.
If it took the view that there was a lay off, it would be acting within its jurisdiction if it awarded compensation in terms of the provisions in Ch.
The High Court is right in upholding the decision of the Court.
[591 E H] 581 (ii) Section 33C(2) takes within the purview, rases of workmen who claim that the benefits to which they were entitled should be computed in terms of money, even though the right to the benefit on which their claim is based, is disputed by their employers.
In other words, the Labour Court may enquire into all such acts or disputes which are incidental to the main dispute, [588 C D] (iii) Section 25C provides for the measure of compensation to be awarded in cases of lay off of workers.
The claim to compensation of every workman who is laid off is one which arises under the statute itself and section 25C, provides for a benefit to the workman which is capable of being computed in terms of money under section 33C(2), of the Act.
The scheme of the Act is that an individual workman can approach a labour court for computation of compensation in terms of section 25C of the Act and he is not concerned to see whether other co workers will adopt the same course or not.
The fact that a number of workers make claims of identical nature cannot make any difference to the individual workman who prefers the claim, The mere fact that a large number of persons makes a claim, of the same nature against the employer does not change the nature of the dispute so as to take it out of the pale of section 7 of the Act and render the dispute one which can only be dealt with by an industrial tribunal.
[588 E H] Central Bank of India Ltd. vs P. section Rajagopalan, ; , followed.
, Mining Engineer vs Rameshwar, [1968] 1 S.C.R. 140, U.P. Electric Supply Co. vs R. K. Shukla, ; , Ramkrishna Ramnath vs Presiding Officer, Nagpur, and Sawatram Mills vs Baliram, [1966] 1 S.C.R. 764, referred to and distinguished.
|
peal No. 291 of 1968.
Appeal by special leave from the judgment and order dated March 28, 1968 of the Calcutta High Court in Criminal Revision No. 159 of 1968.
P. K. Chatterjee, for the appellant.
P. K. Chakravarty, for respondent No. 1.
The Judgment of the Court was delivered by Ray, J.
This is an appeal by special leave from the judgment dated 28 March, 1968 of the High Court at Calcutta quashing the processes issued against the three accused persons.
The appellant on 8 March, 1966 filed a petition of complaint against the Block Development Officer Purulia, the Officer in Charge of the local Police Station and T. Ganguly, the Deputy Superintendent of Police, Purulia under section 395 of the Indian Penal Code on the allegation that during search of the appellant 's house they committed dacoity in the house.
The Magistrate dismissed the complaint under section 203 of the Code of Criminal 672 Procedure on the ground that the complaint was incompetent without sanction as the accused were Government servants.
The complainant thereafter moved the Sessions Judge, Purulia against the order of dismissal.
A reference was made to the Calcutta High Court.
The learned Single Judge of the Calcutta High Court accepted the reference, set aside the order of the Magistrate and sent the case back for proceeding in accordance with law.
On 27 March, 1967 the Magistrate Shri section K. Ganguly took cognizance of the case and fixed a date for holding judicial enquiry.
The Magistrate on 22 November, 1967 came to the conclusion that a prima facie case under section 395 of the Indian Penal Code had been made out against the three accused and submitted a report to the Sub Divisional Magistrate, Purulia.
The Sub Divisional Magistrate, Purulia on receipt of the report of the judicial enquiry passed an order on 6 December, 1.967 directing the issue of process against all the three accused.
This order forms the subject matter of the appeal.
One of the accused thereafter moved the High Court at Calcutta for quashing the process.
The High Court at Calcutta said that cognizance of the offence was taken by the Magistrate Shri section K. Ganguly but process was issued by the Magistrate Shri section Sarkar and held that Shri Sarkar not having taken cognizance of the offence had no right to issue process under section 204 of the Code of Criminal Procedure.
The High Court, therefore, quashed the process and observed that the learned Magistrate who had taken cognizance of the offence if he was so advised would be at liberty to issue processes against the other two accused persons.
The question for consideration is whether Shri Sarkar could have issued process in the present case.
Shri Ganguly was the Magistrate who took cognizance.
Shri Sarkar was not the Magistrate who took cognizance.
Therefore, under section 204 of the Code of Criminal Procedure the Magistrate who took cognizance of the case could issue process.
Sections 191 and 192 of the Code of Criminal Procedure con template transfer of cases by a Magistrate, who has taken cognizance, of an offence.
Section 191 of the Code of Criminal procedure of transfer of a case or commitment to the Court of sessions on the application of the accused.
Section 192 of the Code of Criminal Procedure speaks of transfer of a case by a Magistrate who has taken cognizance to any Magistrate subordinate to him for enquiry or trial.
673 In these cases where either the Magistrate has taken cogni zance and is in session of the case or where a case is transferred by a Magistrate who has taken Cognizance to another Magistrate subordinate to him the complainant is required to be examined under section 200 of the Code of Criminal Procedure.
There are certain exceptions with which we are not concerned in the the present appeal.
The relevant section which confers power on the Magistrate to whom the case has been transferred to issue process is section 202 of the Code of Criminal Procedure.
The language of section 202 of the Code of Criminal Procedure is that the Magistrate may, for reasons to be recorded in writing, postpone the issue of process for compelling the attendances of the person complained against.
Therefore the power of the Magistrate to issue process under section 202 of the Code, of Criminal Procedure is not limited by the terms of section,204 of.
the Code of Criminal Procedure to issue process.
Therefore, the two courses are : first, under section 204 of.
the Code of Criminal Procedure for the Magistrate taking cognizance to issue process Or secondly under section 202 of the Code of Criminal Procedure for a Magistrate to whom a case has, been transferred to issue process.
In the present case there was no order of transfer of the case, by Shri Ganguly to Shri Sarkar.
The issue of process is a matter for judicial determination.
Before issuing a process ' the Magistrate has to examine the complainant.
That is why the issue of process is by the Magistrate who has taken cognizance or the Magistrate to whom the case has been transferred.
The High Court therefore correctly quashed the issue of process.
It was contended on behalf of the appellant that the High Court should not have gone to the question as to whether a prima facie case was established or not.
The High Court under section 561 A of the Code of Criminal Procedure can go into the question as to whether there is any legal evidence.
When the High Court said that the evidence in the present case came from tainted sources and was not reliable the High Court meant what can be described as 'no case to go to the jury '.
The High Court correctly quashed the process against T. Ganguly.
The appeal therefore fails and is dismissed.
V.P.S. Appeal dismissed.
| IN-Abs | After taking cognizance of an offence against the respondent the Magistrate enquired into it and submitted a report to the Sub Divisional Magistrate that a prima facie case was made out against the respondents.
The Sub Divisional Magistrate directed the issue of process.
The High Court in a petition to quash the issue of process hold that under section 204, the Sub Divisional Magistrate had no right to issue process since he was not the Magistrate who had taken cognizance of the offence, and also observed that the evidence in the case came from tainted sources.
Dismissing the appeal to this Court, HELD: (1) Under section 204, Cr.
P.C. the Magistrate who takes cognizance could issue process and under section 202, Cr. P.C., a Magistrate to whom a case had been transferred could issue process.
Since, in the present case, the magistrate who issued process had not taken cognizance of the offence and there was no order transferring the case to him, the High Court was right in quashing the issue of process.
[673 C F] (2) Under section 561A, Cr.
P.C., the High Court could go into the question as to whether there was any legal evidence.
[673 F G]
|
o. 1239 of 1970.
Appeal under Section 116 A of the Representation of the People Act, 1951 from the judgment and order dated February 13, 1970 of the Madras High Court in Election Petition No. 1 of 1969.
K. K. Venugopal, R. Gopalakrishnan and T. L. Garg, for the Appellant.
M. K. Ramamurthi, Vineet Kumar, section section Khanduja and N. Natrajan, for the Respondent.
The Judgment of the Court was delivered by Hegde, J.
This is an election appeal arising from a judgment of the Madras High Court.
It relates to the Election to the Ariyankuppam Assembly constituency of the Pondicherry Legis lative Assembly.
The said election was held on March 9, 1969.
In that election, the appellant as well as the respondent contested.
The appellant was the Congress nominee and the respondent was.
the nominee of the D.M.K. After the counting of votes, the res 648 pondent was declared elected as having obtained 3774 votes as against 3758 obtained by the appellant.
The appellant challenged the validity of the election of the respondent on various grounds.
In his election petition he alleged that the respondent war, guilty of canvassing votes on the basis of his caste, that he had, bribed the voters, that the election was not conducted property, that there was improper reception of void votes and lastly that he had incurred expenditure more than the prescribed limit.
The charge of bribery was not pressed at the time of the trial.
The other grounds pleaded on behalf of the appellant were rejected by the High Court and the election petition was dismissed.
After hearing the Counsel for the parties regarding the allegation relating to the contravention of section 123(6) of the Representation of the People Act, 1951 (,to be hereinafter referred to as the Act), we have come to the conclusion that the respondent was guilty of an offence falling within that section as he is proved to have incurred expenditure more than the prescribed limit.
We therefore thought that it was not necessary to go into the other charges levelled against the respondent.
The limit of expenditure prescribed for the constituency was Rs. 2,000/ .
In his election return, the respondent had stated that he had incurred an expenditure of Rs. 1865/59 P.
The trial court came to the conclusion, which conclusion was not challenged before us, that he had incurred a further expenditure of Rs. 20/50 P. Hence if the appellant is able to establish that the respondent had incurred at least a further expenditure of Rs. 113/92 P., then the election of the respondent will have to be set aside under section 100 ( 1 ) (b) of the Act on the ground that the respondent was guilty of the corrupt practice falling under section 123(6).
The appellant had alleged in his election petition that the respondent had suppressed in the return submitted by him expenditure incurred under various heads such as, expenditures incurred in connection with, the holding of election meetings, hire paid for the cars used in connection with the elections as well as the price of petrol used for the cars used in that connection.
We shall first take up the question of expenditure said to have been incurred in connection with the holding of meetings.
The allegation as regards the same is found in paragraph 8(v) of the ,election petition.
The material portion of that allegation reads "The total expenditure incurred or authorised by the respondent herein in connection with the election exceeded the limit prescribed under the Act and the Rules made thereunder.
The accounts submitted by the respondent to the Special Officer (Election), Pondicherry showing a sum of Rs. 1,865/59 are false 649 and unrelated to the actual expenditure incurred or authorised by the respondent for his purposes.
In his election account the respondent has failed to show the following items of expenditure (v) The respondent held a large number of election meetings and all these election meetings were conducted in a pandal where a dias was constructed for the speakers.
All these meetings were installed with loud speakers, tube lights and other electrical fittings were also provided.
The construction of the pandal and dais and the installation of loudspeakers and other electrical equipment such as lights etc.
would have at least cost Rs. 100/ for each meeting except for the meeting at Ariyankuppam on 5 3 69 at 7.30 p.m. when Shri V. R. Nedunchezian presided in which meeting several loudspeakers and extra light fittings were provided costing over Rs. 200.
The dates, the time and the place of the meetings are as follows : (i) On 5 3 1969 at about 8.30 p.m. at Poornamukuppam.
(ii) On 6 3 1969 at about 10.00 p.m. at Nonamkuppam.
(iii) On 28 2 69 at about 8.00 p.m. at Manaveli.
(iv) On 5 3 69 at about 9.00 p.m. at Manaveli.
(v) On 27 2 1969 at about 7.30 p.m. at Ariyankuppam.
Three other election meetings at Ariyankuppam and one meeting at Periaveerampatinam were also held at the instance of the respondent.
(vi) On 23 2 1969 at about 8.00 p.m. at Ariyankuppam.
(vii) On 24 2 1969 at about 8.00 p.m. it Ariyankuppam. (viii) On 26 2 1969 at about 8.00 p.m. at Veerampattinam.
" The respondent 's plea relating to those allegations are found paragraph 17 of his written statement.
Therein he averred "The allegations made in paragraph 8 of the petition are totally false and they are hereby denied.
Every one of the allegations made therein are factually incorrect and false.
None of the expenditure alleged therein was incurred, by the Respondent or under his authority.
" 650 This is a general denial.
The respondent did not deal with .the various facts stated in the election petition.
From those averments, it is clear that the respondent denied having arranged .any of the meeting mentioned in the election petition.
After the respondent filed his written statement, the appellant applied for and obtained permission of the court to amend certain clerical mistakes that had crept into the election petition.
After those amendments were carried out, the respondent filed an additional written statement.
In paragraph 3 of that statement the .averred thus : "I state that no public meeting took place either on 27 2 1969 or on 28 2 1969 in the manner as alleged by the petitioner in paragraph 4(iii) and 4(iv) of the Election Petition.
Consequently, the allegations as amended in paragraph 8 (v) (iii) and 8 (v) (v) are also ,not correct.
I further state that no meeting took place on 5 3 69 at Ariyankuppam in the manner as alleged by the petitioner in the amendment application No. 2204 of 1969".
On October 13, 1969, the appellant applied for amendment of the election petition by giving some more particulars of the meetings held by the respondent.
By that application he sough, to give particulars of about six other meeting; in addition to what he had already stated in his election petition, said to have beer arranged by the respondent.
The court rejected that application on the ground that by that application, additional grounds on, corrupt practice were sought to be included in the election petition and the same cannot be permitted to be done after the period, prescribed for filing the election petition was over.
It may be noted that the trial of the case started on January 9, 1970.
In the order rejecting the amendment application though the court, referred to the delay in filing the application, it did not reject is on the ground of laches, nor did it reject the application on the ground that it was not a bona fide one.
The sole ground or which it was rejected was that it was not 'maintainable as is sought to include additional grounds of corrupt practice.
In our opinion, the High Court was wholly wrong in coming to the conclusion that the amendment application moved on behalf of the appellant sought to add any new corrupt practice The incurring or authorising of an expenditure in contravention of section 77 of the Act is one single corrupt practice.
The incurring or authorising of an expenditure in connection with the election is not by itself a corrupt practice.
The corrupt practice is the incurring or authorising the expenditure of more than the prescribed limit.
Hence the trial court erred in thinking that each 651 item of expenditure is a corrupt practice by itself.
This position is obvious from the language of the section itself.
This Court had occasion to go into that question in D. P. Mishra and anr.
v Kamal Narayan Sharma and anr.(1).
In that case this Court came to the conclusion that the particulars of a corrupt practice falling under section 123 (6) may in an appropriate case be introduced by amendment.
By doing so, no additional ground of corrupt practice can be said to have been introduced.
If it had been necessary for the case, we would have allowed that amendment application and sent back the case for further trial.
But for the reasons to be presently stated, we have thought it unnecessary to do so.
In dealing with the expenditure incurred in connection with the election meetings, the first and the important question that has to be decided is as to when the election campaign of the respondent commenced.
According to the appellant, it commenced on February 23, 1969.
But according to the respondent it commenced on February 27, 1969.
Decision on this question has great bearing on the other points arising for decision.
Hence we shall first address ourselves to that question.
The learned trial judge did not give any positive finding on this question.
In the course of his judgment he doubted the evidence of the respondent on this point but by taking a facile view of the evidence on record, he just rejected the evidence of the appellant as un acceptable and wholly accepted the evidence of the respondent as regards the number of meetings held though he felt that the respondent has not come forward with a truthful version.
It is true that in election cases oral evidence has to be examined with great deal of care because, of the partisan atmosphere continuing even after the election.
But it will be wrong on the part of courts to just brush aside the oral evidence even when the evidence is highly probable and the same is corroborated by unimpeachable documentary evidence.
As mentioned earlier, according to the appellant, the respondent started his election campaign with a well attended meeting on February 23, 1969 at Ariyankuppam.
In support of that version he examined P.Ws. 3, 4, 7, 13, 16 and 19.
Their evidence was corroborated by Exhts.
P. 15 and P. 3.
But the learned trial judge rejected this evidence without examining them.
He came to the conclusion that the witnesses examined are partisan witnesses.
Therefore much reliance cannot be placed on their testimony.
But he failed to attach sufficient importance to the tell tale evidence (1) [1971] I S.C.R. 8. 652 afforded by Exhts.
P. 17 and P. is an application made by the respondent to the Inspector of Police, 'C ' Circle, Pondicherry.
Therein the respondent stated : "Please grant me permission to hold a public meeting at Ariyankuppam Cuddalore Road in front of market, on the occasion of inauguration of my electoral office on 23 2 1969 from 9 to 12 a.m. and to make use of loud speakers.
" The permission sought for was granted by the Inspector.
The Inspector, P.W. 24 deposed that he deputed a Head constable to cover that meeting and report about the same.
It is gathered from the evidence of P.W. 24, that in Pondicherry, before holding a meeting, permission of the police will have to be obtained and it is the usual practice there to depute a police officer to cover the meetings and report about the speeches made by the speakers, P.W. 24, further says that he deputed a Head constable to cover the meeting to be held in connection with the inauguration of the election campaign of the respondent and in that connection the Head constable in question submitted to him the report Exh.
The report in question was proved through the Inspector without any objection.
The report says that the election campaign of the respondent was inaugurated by holdings a public meeting on February 23, 1969 and that meeting was addressed by as many as eight persons in addition to the respondent.
This report was received by the Inspector on the 25th of February.
Despite this clinching evidence afforded by Exhts.
P. 15 and P. 35, the respondent made bold to deny the factum of having held a meeting on the 23rd.
In view of this documentary evidence, the learned trial judge was unable accept the evidence of the respondent.
All the same he opined that it was immaterial whether the election campaign was inaugurated on the 23rd or on the 27th, since he was inclined to accept the evidence of the respondent that he had held only seven meetings and not more.
This in our opinion, is an erroneous approach.
As seen earlier, the respondent has denied having held any meeting on February 23.
But this denial cannot be accepted as true.
For the reasons already mentioned we feel satisfied that the respondent 's election campaign commenced on the 23rd February 1969 and in that connection a meeting was held in Ariyankuppam on that date.
Before proceeding further, we may at this stage mention that though in his written statement, respondent denied having held any meeting at all a statement which on the face of it cannot be true in his evidence he admitted having arranged seven meetings.
This he had to admit in view of the receipts that be had produced along with his return.
In his evidence he admitted 653 that he held meetings on February 27, 1969, March 5, 1969 and March 6, 1969 at Ariyankuppam.
He also admitted that he held a meeting on March 5, 1969 at Poornamukuppam and on March 6. 1969 at Manaveli and again on the same day at Veerampatnam.
Hence admittedly he held seven meetings.
Let us now proceed to see whether the appellant has satisfactorily proved that the respondent had held any more meetings.
We have earlier come to the conclusion that he had held a meeting at Ariyankuppam on February 23, 1969.
The appellant alleged that the respondent had held one more meeting at Ariyankuppam on February 24, 1969.
To prove this fact he had examined P.Ws. 3 and 4.
Their evidence is corro borated by Exh.
P 16,an application admittedly given by the respondent to the police for permission for holding a meeting on that day and exhibit P.36, the police report sent in that connection, The learned trial judge did not accept the contention of the respondent that he had not hold a meeting on Ariyankuppam on February 24, 1969.
Then we come to the meeting alleged to have been held on February 26, 1969 at Veerampatinam.
On this question the trial court has come to the conclusion that the respondent bad held a meeting at Veerampattinam on February 26, 1969.
On this point the oral evidence adduced by the appellant is corroborated by exhibit P. 17, the application made by the respondent to the police for permission to hold that meeting and P. 38, the report made by the police.
Then we come to the meeting said to have been held at Manaveli on February 28, 1969.
The respondent himself admitted in his evidence that he did arrange a meeting at Manaveli on that date.
In his evidence the respondent admitted as having arranged a meeting at Ariyankuppam on March 6, 1969.
According to him he arranged that meeting but curiously the learned trial judge came to the conclusion, despite that admission of the respondent that P.W. 6 arranged that meeting as that witness in his evidence claimed that he arranged that meeting and spent for the same.
The learned trial judge over looked the fact that no such plea was taken by the respondent in his written statement nor was it his case in his evidence that meeting was arranged for P.W. 6.
For the reasons mentioned above,we are satisfied that in addition to the seven election meetings which the respondent admitted having arranged, the appellant has been able to satisfactorily prove that the respondent had arranged at least four more meetings.
Now coming to the question as to the expenditure incurred in collection with those meetings, it is no doubt for the appellant L643SupCI/72 654 to prove the same.
According to the respondent he had not maintained any accounts in connection with his election.
The expenditure incurred for his election is specially within the knowledge of the respondent.
He has not adduced any evidence in that connection.
He has totally denied having held those meetings.
That denial for the reasons already mentioned cannot be accepted.
Therefore we have now to find out what would have been the reasonable expenditure incurred in connection with those meetings.
Even according to the respondent for the seven meetings held by him, he incurred an expenditure of more than Rs. 225/ .
That means on an average he had incurred an expense of about Rs. 32/ per meeting.
This is clearly an underestimate.
But even if we accept that to be correct, for the four meetings referred to earlier, he would have incurred an expenditure of Rs. 128/ .
If this expense is added to the sum of Rs. 1886/9 p., referred to.
earlier, the total expenditure incurred exceeds the prescribed limit of Rs. 2,000/, ' .
Hence the respondent is clearly guilty of the corrupt practice mentioned in section 123(6).
Before leaving this case it is necessary to refer to one of the contentions taken by Mr. Ramamurthi, learned Counsel for the respondent.
He contended that the police reports referred to earlier are inadmissible in evidence as the Head constables who covered those meetings have not been examined in the case.
Those reports were marked without any objection.
Hence it is not open to the respondent now to object to their admissibility see Bhagat Ram vs Khetu Ram and anr.
It was next urged that even if the reports in question are admissible, we cannot look into the contents of those documents.
This contention is again unacceptable.
Once a document is properly admitted, the contents of that document are also admitted in evidence though those contents may not be conclusive evidence.
It was lastly contended that the, evidence afforded by the police reports is not relevant.
This again is untenable contention.
Reports in question were made by government officials in the discharge of their official duties.
Those officers had been deputed by their superiors to cover the meetings in question.
Obviously they were deputed in connection with the maintenance of law and order which is the special responsibility of the police.
Hence, the question whether those reports were made in compliance with any particular provision of law is irrelevant.
The first part of section 35 of the Evidence Act says that an entry in any public record stating a fact in issue or relevant fact and (1) A.I.R.1929P.C.110.
655 made by a public servant in the discharge of his official duty is relevant evidence.
Quite clearly the reports in question were made by public servants in discharge of their official duty.
The issue before the court is whether the respondent had arranged certain election meetings on certain dates.
The police reports in question are extremely relevant to establish that fact.
Hence they come within the ambit of the 1st part of section 35, of the Evidence Act.
In this connection we would like to refer to the decision of the Madras High Court in Navaneetha Krishna Thevar vs Ramaswami Pandia Thalavar(1).
Therein the learned judges observed thus: "As however the case may not stop here, we think it right to allow the petitioners in Civil Miscellaneous Petitions Nos. 845 and 1655 of 1915 for the admission of certain documents rejected by the Subordinate Judge, namely (1) the decree of the Zilah Court of Tinnevelly, dated 31st May 1859 in Original Suit No. 4 of 1859, (2) the Takid of the Collector to the Muzumdar on the death of the raja in 1850, (3) the reply of the Muzumdar and (4) the Collector 's Takid in 1853 on the complaint of the zamindar 's widow as to the conduct of Maruthappa Thevar who according to the plaintiff 's case was the father of Gnanapurani 's mother.
They will accordingly be marked as Exhibits XXXIV, XXXV, XXXVI and XXXVII respectively and incorporated in the record.
The learned Advocate General did not support the exclusion of the last three on the ground that the copies of correspondence kept in the Collector 's and taluk offices were not signed but contended that they were not admissible under section 35 of the Indian Evidence Act.
We think however that copies of actual letters I made, in registers of official correspondence kept for reference and record are admissible under section 35 as reports and records of acts done by public officers in the course of their official duty and of statements made to them, and that in the words of their Lordships in Rajah Muttu Ramalinga Setupati vs Periyanayagam Pillai (2 ) they are entitled to great consideration in so far as they supply information of material facts and also in so far as they are relevant to the conduct and acts of the parties in relation to the proceedings of Government founded upon them.
" We are in agreement with the view taken by the Madras High Court in that case.
(1) I.L. R. at 678 & 870.
(2) [1974] L. R. I.A. 209.p.
656 Now coming to the value to be attached to the evidence afforded by those reports, we may usefully refer to the decision of the Judicial Committee in Arjuno Naiko and ors.
vs Modonomohano Naiko and ors.(1) In fact case a person brought a suit for establishing that lie was the adopted son of a dismissed Sirdar and as such entitled to succeed to the Sirdarship.
In evidence documents coming from official sources recording statements as to adoption made to the officials in the locality not merely by the plaintiff himself in the presence of others but also by other member and by the dismissed Sirdar himself were produced.
These statements were made at a time when no disputes had arisen and were made in connexion with a matter of local interest viz. the appointment of a new Sirdar.
The Judicial Committee held that the documents carried greatest possible weight and could not be dismissed as mere self assertions.
Similarly in this case, the police reports in question were made by the government officials who are not shown to be inimically disposed towards the respondent or his party.
They were made when there was no dispute and the dispute in question could not have been anticipated.
In view of the above conclusion, it is not necessary to go to the other contentions advanced on behalf of the appellant.
In the result we allow this appeal, set aside the order of the High Court, accept the election petition of the appellant and set aside the election of the respondent.
The respondent shall pay the costs of the appellant both in this Court as well as in the High Court.
S.C. Appeal allowed.
| IN-Abs | The appellant challenged the validity of the election of the respondent to the Pondicherry Legislature Assembly on various grounds including corrupt practices.
The High Court dismissed the election petition.
In the appeal to this Court, the appellant contended (i) that the appellant 's amendment application of the election petition giving more particulars of meetings held by the respondent was wrongfully rejected by the Trial Court on the sole ground that it sought to include additional grounds of corrupt practice and (ii) that the respondent had actually incurred expenses in connection with 4 more meetings thereby exceeding the prescribed limit.
The respondent, on the other band, contended that the various police reports about the meetings relied on by the appellant were not admissible in evidence as the head constable who covered the meetings had not been examined in the case that even if the reports were admissible, the Court could not look into the contents of those documents and that the evidence afforded by the Police reports was not relevant.
Allowing the appeal, HELD : (i) The incurring or authorising of an expenditure in contravention of section, 77 of the Act is one single corrupt practice.
The incurring or authorising of an expenditure in connection with the election is Dot by itself a corrupt practice.
The corrupt practice is the incurring or authorising the expenditure of more than the prescribed limit.
Hence, the Trial Court erred in thinking that each item of expenditure is a corrupt practice by itself.
The particulars of corrupt practice failing under sections 123(6) of the Act may, in an appropriate case, be introduced by amendment.
By doing so, no additional ground of corrupt practice can he said to have been introduced.
[650 H] D. P. Misra and Anr .
vs Kamal Narain Sharma and Anr.
[1971] I .S.C.R. 8, referred to.
(ii) As regards the number of meetings held by the respondent, although he denied having held any meeting at all however admitted in his evidence that he bad arranged seven meetings between, February 27, 1969 to March 6, 1969.
The appellant, however, had been able to prove that the respondent had held four more meetings between February 23, 1968 to March 6, 1969.
In support of his claim, the appellant examined a number of witnesses and their evidence was corroborated by a number of applications (which the respondent made to the Inspector of Police asking permission to hold the meetings) and by the police reports (which the Head constables made to their superior after attending the meetings).
Therefore, on an average, if the respondent spent Rs. 32/ per meeting (which he admitted), the total for the 4 extra meetings must have cost the Respondent Rs. 128/ .
If this expense was added to the sum of Rs. 18,86.09 which the respondent had spent for his entire election, the 647 total expenditure, would exceed the prescribed limit of Rs. 2,000/ .
Hence, the respondent was clearly guilty of corrupt practices mentioned in 123(6).
[652 H] (iii) The police reports were marked without any objection.
Hence, it was not open to the respondent to object to their admissibility at a later stage.
Bhagat Ram vs Kheta Ram and Anr., A.I.R. 1929 P.C. 110, referred (iv) Further as regards the contents of the document, once a document is properly admitted the contents of that document are also admitted in evidence although the contents may not be conclusive evidence.
[654 F] (v) The first part of section 35 of the Evidence Act says that an entry in any public record stating a fact in issue or relevant fact made by a public servant in discharge of his official duties is relevant evidence.
Quite clearly the reports in question were made by public servants in discharge of their official duty.
The issue before the Court was whether the respondent had arranged certain election meetings on certain dates.
The police reports in question were extremely relevant to establish that fact.
Hence, it came within the ambit of the first part of section 35 of the Evidence Act.
[655 B] Naveneetha Krishna Thelavar vs Ramesway Pandia Thelavar, I.L.R. 40, Madras 871, approved.
In the present case, the police reports in question were by government officials who were not shown to be inimically disposed towards the respondent or his party.
They were made when there was no dispute and the dispute in question would not have been anticipated.
Therefore, such reports carry greatest possible weight and could not be dismissed lightly.
[656 D] Arjuno Naiko and Ors.
vs Madonomohano Naiko & Ors., A. I. R. , referred to.
|
Appeals Nos.
1384 and 1584 of 1970.
Appeals under Section 116 A of the Representation of the People Act, 1951 from the Judgment and Order dated May.22, 1970 of the Patna High Court in Election Petition No. 2 of 1969.
J. P. Govat, Subhagmal Jain, section P. Mukherjee, Pranab Chatterjee and G. P. Roy, for the appellant (in C.A. No. 1384 of 1970) and respondent No. 1 (in C.A. No. 1584 of 1970).
V. M. Tarkunde, P. N. Tiwari, 0.
C. Mathur, Ravinder Narain and J. B. Dadachanji, for respondent No. 1 (in C.A. No. 1384 of 1970) and the appellant (in C.A. No. 1584 of 1970).
The Judgment of the Court was delivered by Hegde, J.
These are cross appeals under section 116 A of the Representation of the People Act, 1951 (to be hereinafter referred to as the Act) arising from an election petition filed by the first respondent (who for the sake of convenience will hereinafter be referred to as the respondent), before the High Court of Patna.
During the last mid term election for the Bihar Legislative Assembly held in the beginning of 1969, the appellant, the respondent and 1 1.
other contested from the Arrah Assembly Constituency.
The last date for filing the nomination was January 8, 1969 and the date of scrutiny was January 9, 1969.
The poll took place on February 9, 1969 and the votes were counted on the next day.
The appellant was declared elected as having obtained the highest number of votes i.e 13,556.
His nearest rival was the respondent 676 who secured 12,278 votes.
The appellant was the nominee of the Socialist party and the respondent was the nominee of the Congress party.
After the publication of the results in the official gazette, the respondent filed the election petition challenging the validity of the appellant 's election on various grounds.
The principal ground taken by her was that the result of the election had been materials affected by the improper acceptance of the appellant 's nomination papers.
She also charged the appellant with the commission of various corrupt practices to which reference will be made at a later stage.
The learned trial judge accepted the contention of the respondent that the result of the election had been materially affected by the improper acceptance of the appellant 's nomination.
He accordingly set aside the election of the appellant; but lie ,rejected the contention of the respondent that the appellant was guilty of any corrupt practice.
Aggrieved by the decision of the High Court, the appellant has filed Civil Appeal No. 1384 of 1970 and the respondent has filed Civil Appeal No. 1. 5 84 of 1970.
The principal questions that arise for decision are : (1) whether the defects found in the nomination paper of the appellant are, of " substantial character" within the meaning of that expression in section 36(4) of the Act and (2) whether it in is established that the acceptance of the nomination of the appellant had materially affected the result of the election.
After dealing with those questions, we shall proceed to consider the appeal of the respondent challenging the conclusion of the trial court regarding the corrupt practices alleged to have been committed by the appellant.
Before proceeding to consider the relevant provisions in the Act, it is necessary to set out a few more facts.
The appellant has been contesting from the Arrah constituency from about the year 1962.
He represented that constituency before the dissolution of the Bihar Legislative Assembly.
He was registered as on elector in the Sandesh Assembly Constituency of the Bihar State.
His name continued to be on the electoral roll of that constituency even at the time he filed his nomination from the Arrah constituency on January 6, 1969 i.e. two days before the last date for filling the nomination.
It appears that in 1968, his name was also entered in the electoral roll of Arrah constituency.
But later on, evidently because.
his name stood entered in the Sandesh constituency, the same was deleted from the Arrah constituency.
But this deletion was done without notice to the appellant.
The deletion was shown in a separate supplemented list.
In the main electoral roll, his name continued to be shown in the Arrah constituency.
According to the appellant when he came, to file his nomination paper, he was not aware of the fact that his name was entered in the electoral 677 roll of the Arrah constituency.
Therefore he had brought with him a certified copy of the electoral roll of the Sandesh constituency.
But in the ' morning of January 6, 1969 he came to know that his name was also in the Arrah constituency.
At that time he did not notice the deletion of his name which was in a separate list.
Therefore in his nomination paper, he entered his electoral roll No., as shown in the electoral roll of Arrah constituency.
But at the, same time he showed to the Returning Officer the certified copy of the scrutiny, no one objected to the nomination of the appellant.
The Returning Officer supports this version of the appellant.
After checking the name of the appellant as well as his electoral number as found in the electoral roll of Arrah constituency, and also the names and electoral roll number of his proposers, the Returning Officer received the nomination paper filed by him.
At the time of the scrutiny, no one objected to the nomination of the appellant.
The Returning Officer accepted his nomination as a valid nomination.
The objection to the acceptance of the nomination of the appellant was put forward for the first time, in the election petition.
We have now to consider whether the appellant was validly nominated.
Section 5 of the Act prescribes the qualifications for membership of a Legislative Assembly.
It says that "A person shall not be qualified to be chosen to fill a seat in the Legislative Assembly of a State unless (a) (b) (c) in the case of any other seat he is an elector for any Assembly constituency in that State" It is not denied that the appellant possesses all the qualifications prescribed either under the Constitution or under the Act and further that he has none of the disqualifications mentioned either under the Constitution or under the Act.
All that is said against his nomination is that his nomination paper was not properly filled in.
The law requires that the nomination of a candidate should be in the prescribed form and among others it should contain the name of the person nominated, his proposer 's name as well as the electoral roll numbers of the candidate and his proposer.
Sub cl.
(4) of section 33 provides that : "On the presentation of a nomination paper, the returning officer shall satisfy himself that the names and electoral roll numbers of the candidate and his proposer as entered in the nomination paper are the same as those entered in the electoral rolls : Provided that no misnomer or inaccurate description or clerical, technical or printing error in regard to the 678 name of the candidate or his proposer or any other person, or in regard to any place, mentioned in the electoral roll or the nomination paper and no clerical, technical or printing error in regard to the electoral roll numbers of any such person in the electoral roll or the nomination paper, shall affect the full operation of the electoral roll or the nomination paper with respect to such person or place in any case where the description in regard to the name of the person or place is such as to be commonly understood; and the returning officer shall permit any ,such misnomer or inaccurate description or clerical, technical or printing error to be corrected and where necessary, direct that any such misnomer, inaccurate description, clerical, technical or printing error in the electoral roll or in the nomination paper shall be overlooked.
" Sub section
(5) of section 33 provides that where a candidate is an elector ,of a different constituency, a copy of the electoral roll of that constituency or of the relevant part thereof or a certified copy of the relevant entries in such roll shall unless it has been filed along with the nomination paper be produced before the Returning Officer at the time of the scrutiny.
Section 36 of the Act prescribes the mode of scrutiny of the nomination.
Sub section
(2) of that section says : "The returning officer shall then examine the nomination papers and shall decide all objections which may be made to any nomination and may, either on such objection or on his own motion, after such summary enquiry, if any, as he thinks necessary, reject any nomi nation on any of the following grounds : (a) that on the date fixed for the scrutiny of nomination the candidate either is not qualified or is disqualified for being chosen to fill the seat under any of the following provisions that may be applicable namely .
Articles 84, 102, 173 and 191 (b) that there has been a failure to comply with any of the provisions of section 33 or section 34; or (c) that the signature of the candidate or the proposer on the nomination paper is not genuine." Sub section
(4) of that section commands the Returning Officer not to reject any nomination paper on the ground of any defect which 679 is not of a substantial character.
Sub section
(6) of that section prescribes that : "The returning officer shall endorse on each nomination paper his decision accepting or rejecting the same and, if the nomination paper is rejected, shall record in writing a brief statement of his reasons for such rejection.
" The only other relevant provision which we need consider is sub section
(1) of section 100 which prescribes the grounds for declaring election to be void.
That section reads : "Subject to the provisions of sub section
(2) if the High Court is of opinion (a) that on the date of his election a returned candidate was not qualified, or was disqualified, to be chosen to fill the seat under the Constitution or this Act or the ; or (b) that any corrupt practice has been committed by a returned candidate or his election agent or by any other person with the consent of a returned candidate or his election agent; or (c) that any nomination has been improper rejected; or (d) that the result of the election, in so far as it concerns a returned candidate, has been materially affected (i) by the improper acceptance of any nomination.
or (ii) by any corrupt practice committed in the interests of the returned candidate by an agent other than his election agent or (iii) by the improper reception, refusal or rejection of any vote or the reception of any vote which is void, or (iv) by any non compliance with the provisions of the Constitution or of this Act or of any rules or orders made under this Act, the High Court shall declare the election of the returned candidate to be void.
" The first question that we have got to decide is whether the defects found in the nomination paper of the appellant are of substantial character.
As mentioned earlier, the appellant was fully 680 qualified to be nominated for the election.
The only thing said against his nomination is that his nomination paper was not properly filed in.
We have earlier seen that a duty is imposed on the Returning Officer by sub section
(4) of section 33 to look into the nomination ' paper when it is presented and to satisfy himself that the names and the electoral roll numbers of the candidate and that of the proposer as entered in the nomination paper are the same as those entered in the electoral roll.
In this case it is proved that the Returning Officer did look into the nomination paper but unfortunately he also did not notice that the name of the appellant had been removed from the ' electoral roll of Arrah constituency.
If lie had noticed that fact, he, would have asked the appellant either to correct the mistake or to file a fresh nomination paper.
We have earlier noticed that the appellant filed his nomination paper on the 6th of January 1969 and the last date for filing the nomination paper was the 8th of that month.
That being so, there would have been no difficulty for him either to correct the nomination paper filed or to file a fresh nomination paper.
We have earlier noticed that the appellant had with him a certified copy of the electoral roll of the Sandesh constituency and he had shown the same to the Returning Officer.
Mistakes complained or occurred because both the appellant as well as the Returning Officer merely looked into the main voters ' list but overlooked the deletion noted in a separate list.
But the implication of section 33 (4) is that a wrong entry in a nomination paper as regards the name of the candidate or the proposer or their electoral roll numbers is not a matter of substantial importance.
That is why the legislature requires the Returning Officer to look into them and if there are any mistakes to get them corrected.
What is of importance in an election is that the candidate should possess all the prescribed qualifications and that he should not have incurred any of the disqualifications mentioned either in the Constitution or in the Act.
The other information required to be given in the nomination paper is only to satisfy the Returning Officer that the candidate possesses the prescribed qualification and that he is not otherwise disqualified.
In other words those information relate to the proof of the required qualifications.
It may also be noted that the legislature itself has made distinction between the acceptance of a nomination and the rejection of a nomination.
The Returning Officer is required to give reasons for rejecting a nomination whereas he is not required to give reasons for accepting a nomination.
Further sub section
(2) of section 36 says that "he may reject the nomination paper".
It is further seen that the proviso to sub c.
(4) of section 33 says that no inaccurate description in regard to the name of the candidate or his proposer or in regard to any place mentioned in the nomination paper shall affect the full operation of the nomination.
681 From a, combined reading of sections 33 and 36, it is clear that a mis description as to electoral roll number of the candidate or of the proposer in the nomination paper is not to be considered as a material defect in the nomination paper.
In Karnail Singh vs Election Tribunal, Hissar and ors.(1), the tribunal held that the nomination paper of one of the candidates was wrongly rejected on the ground that column No. 8 in the nomination paper was not duly filled up.
The only defect pointed out was that the name of the sub division was not stated therein '.
But on the evidence it was quite clear that there was no difficulty in identifying the candidate and the candidate himself pointed out to the returning officer the entry of his name in the electoral roll.
Agreeing with the tribunal this Court held that the defect in those circumstances was a technical one and the tribunal was perfectly right in holding that the defect was not of a substantial character and that the nomination paper should not have been rejected.
In Rangilal Choudhury vs Dahu Sao and ors.
(2) this Court held that the fact that the name of the constituency was wrongly, mentioned as 'Bihar ' instead of 'Dhanbad ' in the nomination paper did not vitiate the nomination as it was clear from a reading of the entire nomination paper that the respondent was seeking election from the Dhanbad constituency.
In reaching that conclusion this Court referred to the requirements, of section 3 3 (4), section 3 6 (2) (b) and (4).
After referring to those provisions this Court observed "The result of these provisions is that the proposer and the candidate are expected to file the nomination papers complete in all respects in accordance with the prescribed form; bat even it there is some defect in the nomination paper in regard to either the names of the electoral roll numbers, it is the duty of the returning officer to satisfy himself at the time of the presentation of the nomination paper about them and if necessary to allow them to be corrected, in order to bring them into conformity with the corresponding entries in the electoral roll.
Thereafter on scrutiny the returning officer has the power to reject the nomination paper on the ground of failure to comply with any of the provisions of section 33 subject however to this that no nomination paper shall be rejected on the ground of any defect which is not of a substantial character." In Namdeo Chimanji Tapre and anr.
vs Govinddas Ratanlal Bhatia and ors.
(1), the High Court of Bombay held that as the (1).
(2) ; (3).
I.L,R. 682 identity of the candidate was not in dispute, the rejection of the nomination paper by the Returning Officer was not valid having regard to the provisions in section 33 and section 36 of the Act.
In Dev Kanta Barooah vs Kusharam Nath and ors.
(1), a nomination paper for the Nowgong constituency of the Assam Legislative Assembly contained a recital in the heading that the respondent was thereby nominated as a candidate for election "from the Assembly constituency", but against column No. 2 of nomination paper relating to the electoral roll number of the proposer and column No. 5 relating to the electoral roll number of the candidate, the entry was "Assam Legislative Assembly constituency, Part No. 10 of the Electoral Roll of village Phulaniati, Mouza Hatichung, Police Station Sadar, Nowgong, Roll No.
" The Returning Officer rejected the nomination paper on the ground that the name of the constituency to which the elec toral roll related was not mentioned in columns 2 and 5 as required section 33 (4) of the Act.
This Court agreeing with the tribunal and the High Court held that the rejection of the nomination was improper.
Our attention has not been invited to any decision either of this Court or of any High Court or even of a tribunal where the Returning Officer had accepted the nomination paper of a qualified candidate, the same was found to be improper because of some defect in the nomination paper.
The case of rejection of a nomination paper by the Returning Officer stands on a footing different from that of an acceptance of a nom ination paper.
In the latter case the main though not the only question to be considered is whether the candidate is qualified to be a candidate.
The very fact that the law requires the Returning Officer to look into the nomination paper, when filed and get any mistake regarding the name or electoral number of the candidate or his proposer corrected shows that the mistake regarding them is not a material defect.
Learned Counsel for the respondent has sought to place reliance on some decisions of this Court in support of his contention that the appellant 's nomination paper was improperly accepted.
We shall now refer to the decisions relied on by him.
, In Narbada Prasad vs Chhagan Lal and ors.
(2) a candidate 's nomination paper was rejected by the Returning Officer on the round that he did not produce the proof required under section 33(5) of the Act.
That rejection was upheld by this Court.
We fail to see how that decision lends any support to the respondent 's case.
Without the required proof, the Returning Officer could not satisfy himself that the candidate was qualified to seek election.
(1) XXI, E.L.R. 459.
(2) [1969] 1, S.C.R.499 683 Reliance was next placed on the decision of this Court in Rana Dayal vs Brijraj Singh and ors.
(1) Therein the proposer of the candidate was an illiterate person.
He had not got authenticated or attested the mark put by him in the nomination paper by one of the designated officers as required by the relevant provisions of the Act and the rules framed thereunder.
Hence the nomination paper was rejected by the Returning Officer.
That rejection was upheld both by the High Court as well as by this Court.
No nomination can be held to be valid unless the candidate is duly proposed.
If the mark put by the proposer is not authenticated in the manner required by law, it cannot be said that the candidate has been properly nominated.
In Brijendralal Gupta and ant .
vs Jwalaprasad and ors.(2), this Court observed that the word 'defect ' in section 36(4) included an omission to satisfy the details prescribed in the nomination.
It further observed that the distinction laid down in English cases between "omission and "inaccurate description" depended on the specific provisions of the English statute which did not obtain under the Indian law.
This decision, again has no bearing on the point in issue.
For the reasons mentioned above we are of the opinion that the defect in the appellant 's nomination paper was not a substantial defect.
Hence the High Court was not justified in allowing the election petition on the ground that his nomination was improperly accepted.
In view of the conclusion reached above, it is not necessary for us to go into the question as to the true interpretation of section 100(1) (d).
We shall merely notice the arguments advanced on either side on that question.
According to the appellant th@e legislature has made a clear distinction between improper rejection and improper acceptance of a nomination.
In the case of improper rejection, the High Court shall declare the election of the returned candidate to be void but in the case of improper acceptance before the election of the returned candidate can be declared void, the election petitioner will have to establish that the result of the election in so far as it concerns the returned candidate has been materially affected.
At this stage we, may notice that prior to the amendment of the Act in 1956, improper rejection and improper acceptance were placed in the same category.
Clause (c) of section 100(1) as it stood then read : "If the Tribunal is of opinion.
(c) that the result of the election has been materially affected by the improper acceptance or rejection of any nomination.
(1) [1970] I S.C.R. 530.
(2) ; 684 the Tribunal shall declare the election to be wholly void." This Court in Vashist Narain Sharma vs Dev Chandra and ors.
(1) observed in the course of its judgment that where the person whose nomination has been improperly accepted is the returned .candidate himself, it may be readily conceded that his nomination has materially affected the result of the election.
This observation was not the ratio of that decision.
That apart, after this observation was made, the Parliament has amended the relevant provision and has made a distinction between improper rejection and improper acceptance of a nomination.
It was urged on 'behalf of the ,appellant that in view of the amendment the observation made by this Court in Vashist Narain Sharma 's case (supra), can no more govern the point in issue.
According to the learned Counsel, clause (d) of section 100(1) as it now stands definitely requires that in the case of improper acceptance of any nomination, the election petitioner must establish that the result of the election in so far as it concerns the returned candidate has been materially affected.
He urged that the word "any" in section 100(1)(d) (1) means every .nomination.
On the other hand it was urged on behalf of the respondent that the amendment of section 100(1) did not affect the correctness of the observation made by this Court and that observation had been quoted by this Court in two cases arising under the amended provision.
In view of our earlier finding about the validity of the appellant 's nomination, it is not necessary to decide the controversy relating to the interpretation of section 100 (1) (d).
For the reasons mentioned above, differing from the view taken by the I earned trial judge, we have come to the conclusion that the nomination of the appellant was properly accepted.
This takes us to the appeal filed by the respondent.
As mentioned earlier, the High Court has rejected the charges of corrupt practices levelled by the respondent against the appellant.
Those charges were sought to be established only by oral evidence.
The learned trial judge was unable to accept the evidence adduced in support of the alleged corrupt practices.
Ordinarily this Court does not reappropriation Oral evidence.
Our attention has not been ,invited to any exceptional circumstances in this case requiring us .to go into the evidence afresh.
It is well known that the factious feelings generated during elections continue even after the election and hence the contesting parties are able to produce before court large (number of witnesses, some of whom may be seemingly disinterested ' But that by itself is no guarantee of the truth of the .evidence adduced.
Mr. Tarkunde, learned Counsel for the respondent put forward three broad contentions in support of the (1)[1955] S.C.R. 509.
685 appeal preferred by the respondent.
They are : (1) that the High Court failed to take an overall view of the evidence adduced; it merely contented itself by examining evidence relating to each one of the instances, (2) the High Court erred in not relying on the evidence relating to an instance when the same is spoken to by a single witness and (3) the High Court erred in rejecting the testimony of some of the witnesses on the ground that they were chance witnesses.
None of these contentions appear to have any merit.
Each instance of a corrupt practice pleaded had to be established separately.
If every one of those instances are not proved, all of them put together cannot be accepted as true because of the volume of evidence.
Now coming to the instances sought to be proved by the evid ence of a single witness, the learned trial judge observed in the course of his judgment that those instances were not seriously pressed by the Counsel for the respondent.
Evidently these charges were given up.
In appreciating evidence of the witnesses, the courts have to take into consideration the probability of their being present at the time of the alleged incident.
Courts have always viewed with suspicion.
the evidence of chance witnesses.
There was nothing wrong in the learned judge not being able to place much reliance on the evidence of chance witnesses.
Hence we see no merit in the appeal filed by the respondent.
For the reasons mentioned above we allow Civil Appeal 1384 of 1970 and dismiss Civil Appeal No. 1584 of 1970.
In the result the election petition stands dismissed with costs both in the High Court as well as in this Court in this Court the appellant is entitled to only one hearing fee.
G.C. C.A. No. 1384/70 allowed.
| IN-Abs | During the mid term election held in 1969 in Bihar the respondent and 11 others contested from the Arrah Assembly Constituency.
The appellant was declared elected as having obtained the highest number of votes.
His nearest rival was the respondent. ' The respondent filed an election petition challenging the election of the appellant on various.
The principal ground taken was that the result of the election had been material affected by the improper acceptance of the appellant 's nomination papers.
It was alleged that nomination Paper showed that r the appellant 's name was registered as an elector in the Arrah Constituency whereas at the relevant time it had been removed therefrom.
The returning Officer was therefore wrong in accepting the nomination paper.
The other allegations against the appellant related to corrupt practice.
The High Court rejected the allegations as regards corrupt practice but it set aside the election of the appellant on the ground that the nomination paper had been improperly accepted and the election had been materially affected thereby.
In appeal to this Court, HELD : (i) The appellant was fully qualified to be nominated at the election.
The only thing said against his nomination was that his nomination paper was not properly filled in.
It was proved from the evidence that the Returning officer did look into the nomination paper but unfortunately he also did not notice that the name of the appellant had been re moved from the electoral roll of Arrah constituency.
If he had noticed F that fact he would have asked the appellant either to correct the mistake or to file a fresh nomination paper.
The appellant filed his nomination paper on the 6th of January 1969 and the last date for filing the nomination paper was the 8th of that month.
That being so there would have been no difficulty for him neither to correct the nomination paper filed or to file a fresh nomination paper.
The appellant had with him a certified copy of the electoral roll of Sandesh Constituency where his name was enrolled and he had shown the same to the Returning Officer.
Mistakes complained of occurred because both the appellant as well as the Returning Officer merely looked into the main voters ' list in Arrah constituency but overlooked the deletion noted in a separate list [670 A D] From a combined reading of sections 33 and 36 of the Representation of the People Act, 1961 it is clear that a mis description as to the electoral roll number of the candidate or of the proposer in the nomination paper is not to be considered as a material defect in the nomination paper.
The High Court was accordingly not justified in allowing the election petition on the ground that the nomination paper of the appellant was improperly accepted.
[681 A; 683 E] 675 In view of the above finding the further question whether the result of the election was materially affected did not survive for consideration.
[683 E F] (ii) The appeal of the respondent on the question of corrupt practice had no merit.
The three instances mentioned were in the opinion of the High Court not established by the evidence.
Each instance of a corrupt practice pleaded has to be established separately.
If every one of the instances was not proved all of them put together cannot be accepted as true because of the volume of evidence.
[685 B C] The election petition must therefore be dismissed.
Karnail Singh vs Election Tribuna, Hissar & Ors., 10 E.L.R. 189, Rangilal Choudhury vs Dahu Sao & Ors., [1962] 2 S.C.R. 401, Namdeo Chimnaiji Tapre & Anr.
vs Govindas Ratanlal Bhatia & Ors.
I.L.R. and Wey Kanta Barooah vs Kusharam Nath & Ors,, XXI E.L.R. 459, applied.
Narbada Prasad vs Chhagal Lal & Ors., [1967] I S.C.R. 499, Ram Dayal vs Brijrai Singh & Ors., [1970] I S.C. R. 530 and Brijendralal Gupta find Anr.
vs Jawalaprasad & Ors.
, ; , distinguished.
Vashist Narainin Sharma vs Dev Chandra and Ors., , referred to.
|
ivil Appeal No. 1546 of 1969.
V.M. Tarkunde, section K. Dholakia and section K. Bagga, for appelIants Nos. 1 and 3.
section K. Bagga, for appellant No. 2.
D. V. Patel, A. G. Parikh and B. R. Agarwala, for the respondents.
The Judgment of the Court was delivered by Mathew, J.
This is an appeal by special leave, from the judgment of the High Court of Bombay dismissing a petition filed under Article 227 of the Constitution praying for issue of an approprivate writ or order quashing the order dated 28 2 1968 passed by the Full Bench, Small Causes Court, Bombay, in appeal No. 95 of 1963 from the order dated 21 2 1963 passed by the Judge, Small Causes Court, Bombay, in R.A.E. Suit No. 9293 of 1959.
In this appeal we are concerned with a plot of land admeasuring 2108 square yards in Survey No. 171, Hissa No. 7, at 892 Ghatkopar.
This plot belonged to one Jamnadas Chhotalal Dani.
On 15 11 1948, Jamnadas executed two leases in favour of one Bhawani Laksamsi and Maojibhai Jethabhai, defendants 1 and 2.
The subject matter of the first lease was two plots, the one referred to above and another in the same area measuring 805 square yards.
The subject matter of the second lease was a third plot in the same area.
The leases were for a period of ten years and in respect of the first plot, the rent payable was Rs. 75/ a month.
In both the leases there was an option clause which entitled the lessees to surrender the leased property by 30 9 1953.
The lessees surrendered the two plots, other than the plot with which we are ,concerned, in pursuance of the option clause, on 15 1 1951, with the result that the lease in respect of the first plot continued.
Jamnadas died on 14 8 195 1, but before his death he had made a gift of the leased property in favour of the three respondents.
The lease in respect of the plot in question here determined by efflux of time on 30 9 1958.
But the lessees continued to remain in possession paying rent at the rate of Rs. 75/ per month.
On 7 8 1959, the lessors gave notice purporting to Terminate the tenancy by the end of September, 1959.
They stated in the notice that the lessees had sub let the premises and that the lessors required the plot for the purpose of putting up constructions on it.
Since the lessees did not vacate the premises, the lessors filed suit on 22 10 1959 in the Small Causes Court of Bombay.
The lessees contended that they did not sub let the premises and that the lessors did not bona fide require the premises for the purpose of construction.
They also contended that by the acceptance of rent by the lessors after the termination of the tenancy by efflux of time, a fresh tenancy was created, that the original lease was granted for erecting a saw mill a manufacturing purpose and so the lease created by holding over was, by implication, also for a manufacturing purpose, and therefore, lessees were entitled to six months ' notice expiring with the end of the year of the tenancy, and that the tenancy created by holding over was not validly determined by the one month 's notice.
The trial court held that there was no clear evidence of the subletting of the premises, but that the plaintiffs required the plot bona fide for constructing a new building within the meaning of ,clause (1) of sub section (1) of Section 13 of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947, hereinafter called the Act.
The court also held that the tenancy terminated by efflux of time, but that the lessees continued in possession by virtue of the immunity from eviction conferred by the Act and so, they were not holding over within the meaning of section 116 893 of the Transfer of Property Act, notwithstanding the fact that rent was accepted by the lessors from month to month after 30 9 1958, and that it was not necessary to give the lessees six months ' notice expiring with the end of the year of the tenancy, for terminating that tenancy.
In appeal, the Full Bench of the Small Causes Court confirmed the decree of the trial court.
It was to quash this decree that the petition under Article 227 was filed before the High Court.
Before the High Court, the main contention of the appellants was that, since a fresh tenancy by holding over was created by the acceptance of rent by the lessors after the determination of the lease by efflux of time, the appellants were entitled to six months ' notice expiring with the end of the year of the tenancy, as the lease originally granted was for a manufacturing purpose, and therefore, the lease created by the holding over was also for same purpose.
The High Court was of (the opinion that in view of the decision of this Court in Ganga Dutt Murarka vs Kartik Chandra Das(l) no case was made out for new tenancy by holding over under section 116 of the Transfer of Property Act as the appel lants had obtained the status of irremovability under the Act, and as there was no contractual tenancy, the tenants were not entitled to any notice.
The Court also held that the lease which was granted for erecting a saw mill was not a lease for manufacturing purpose.
Counsel for the appellants argued that the appellants were holding over as the lessors were receiving the rent from the appellants after the termination of the tenancy by efflux of time on 30 9 1958 and the fact that appellants gained immunity from eviction by virtue of the Act was quite immaterial in deciding the question whether the appellants were holding over under section 116 of the Transfer of Property Act.
He submitted that as there was a new contractual tenancy created by the holding over, the appellants were entitled to six months ' notice as the purpose of the original lease was for a manufacturing purpose and that purpose became incorporated in the new lease by implication of law.
Counsel said that certain vital points were omitted to be considered in the decision of this Court in Ganga Dutt Murarka vs Kartik Chandra Das,(1) and therefore, the decision requires re consideration.
In Ganga Dutt Mararka vs Karlik Chandra Das, this Court held that where a contractual tenancy, to which rent control legislation applied, had expired by efflux of time or by determination by notice to quit and the tenant continued in possession of the premises, acceptance of rent from the tenant by the landlord after the expiration or determination of the contractual tenancy will not afford ground for holding that the landlord had assented to a new contractual tenancy.
It was further.
held (1) ; 894 that acceptance by the landlord from the tenant, after the contractual tenancy had expired, of amounts equivalent to rent, or amounts which were fixed as standard rent, did not amount to acceptance of rent from a lessee within the meaning of section 1 1 6 of the Transfer of Property Act.
The act of holding over after the expiration of the term does not create a tenancy of any kind.
If a tenant remains in possession after the determination of the lease, the common law rule is that he is a tenant on sufferance.
A distinction should be drawn between a tenant continuing in possession after the determination of the term with the consent of the landlord and a tenant doing so without his consent.
The former is a tenant at sufferance in English Law and the latter a tenant holding over or a tenant at will.
In view of the concluding words of section 116 of the Transfer of Property Act, a lessee holding over is in a better position than a tenant at will.
The assent of the landlord to the continuance of possession after the determination of the tenancy will create a new tenancy.
What the section contemplates is that on one side there should be an offer of taking a new lease evidenced by the lessee or sub lessee remaining in possession of the property after his term was over and on the other side there must be a definite consent to the continuance of possession by the landlord expressed by acceptance of rent or otherwise.
In Kai Khushroo Bezonjee Capadia vs Bai Jerbai Hirjibhoy Warden and another(), the Federal Court had occasion to consider the question of the nature of the tenancy created under section 116 of the Transfer of Property Act and Mukberiea J. speaking for the majority said, that the tenancy which is created by the "holding over" of a lessee or under lessee is a new tenancy in law even though many of the terms of the old lease might be continued in it, by implication; and that to brine a new tenancy into existence, there must be a bilateral act.
It was further held that the assent of the landlord which is founded on acceptance of rent must be acceptance of rent as such and in clear recognition of the tenancy right asserted by the person who pays it.
Patanjali Sastri J., in his dissenting judgment, has substantially agreed with the majority as regards the nature of the tenancy created by section 116 of the Transfer of Property Act, and that is evident from the following observations : "Turning now to the main point, it will be seen that the section Postulates the lessee remaining in possession after the determination of the lease which is conduct indicative, in ordinary circumstances of his desire to continue as a tenant under the lessor and implies a tacit offer to take a new tenancy from the expiration of the (1) 895 old on the same terms so far as they are applicable to the new situation, and when the lessor assents to the lessee so continuing in possession, he tacitly accepts the latter 's offer and a fresh tenancy results by the implied agreement of the parties.
When further the lessee in that situation tenders rent and the lessor accepts it, their conduct raises more readily and clearly the implication of an agreement between the parties to create a fresh tenancy.
" Mere acceptance of amounts equivalent to rent by a landlord from a tenant in possession after a lease had been determined, either by efflux of time or by notice to quilt, and who enjoys statutory immunity from eviction except on well defined grounds as in the Act, cannot be regarded as evidence of a new agreement of tenancy.
In Ganga Dutt Murarka vs Kartik Chandra Das,(1) this Court observed as follows : " By the Rent Restriction Statutes at the material time, Statutory immunity was granted to the appellant against eviction, and acceptance of the amounts from him which were equivalent to rent after the contractual tenancy had expired or which were fixed as standard rent did not amount to acceptance of rent from a lessee within the meaning of section 116, Transfer of Property Act.
Failure to take action which was consequent upon a statutory prohibition imposed upon the courts and not the result of any voluntary conduct on the part of the appellant did not also amount to "otherwise assenting to the lessee continuing in possession".
Of course, there is no prohibition against a landlord entering into a fresh contract of tenancy will a tenant whose right of occupation is determined and who remains in occupationtion by virtue of the statutory immunity.
Apart from an express contract, conduct of the parties may un doubtedly justify an inference that after determination of the contractual tenancy, the landlord had entered into a fresh contract with the tenant, but whether the conduct justifies such an inference must always depend upon the facts of each case.
Occupation of premises by a tenant whose tenancy is determined is by virtue of the protection granted by the statute and not because of any right arising from the contract which is determined.
The statute protects his possession so long as the conditions which justify a lessor in obtaining an order of eviction against him do not exist.
Once the prohibition against the exercise of jurisdiction by the, (1) ; 896 Court is removed, the right to obtain possession by the lessor under the ordinary law springs into action and the exercise of the lessor 's right to evict the tenant will not unless the statute provides otherwise, be conditioned.
" In Davies vs Bristow(1) the Court held that where a tenant of a house to which the Increase of Rent, & c. (War Restrictions) Acts apply, holds ever after the expiry of a notice to quit, and pays rent, the landlord is not to be taken by accepting it to assent to a renewal of the tenancy on the old terms, for he has no choice but to accept the rent; he could not sue in trespass for mesne profits, for those Acts provide that the tenant, notwithstanding the notice to quit, shall not be regarded as a trespasser so long as he pays the rent and performs the other conditions of the lease.
In Morrison vs Jacobs(2), Scott L.J. said : "The sole question before the court is whether after the expiration of the contractual tenancy the mere fact of the landlord receiving rent for the dwelling house from the tenant affords any evidence that the landlord had entered on a new contractual tenancy to take the place of the tenancy which had expired.
In my opinion, it does not.
The true view is that the landlord takes the rent, knowing that the tenant is granted a statutory tenancy by the Rent Restrictions Acts and that his right to gain possession of his dwelling house depends entirely on his establishing that he brings himself within the conditions laid down by the Acts.
" In the same case, MacKinnon J. said: "At common law, if at the expiration of a tenancy a landlord has acquired a right to claim possession against his tenant and instead of exercising that right he allows him to remain in the house and accepts rent from him as before, the parties by their conduct may, with reason, be held to have entered into a new contract of demise.
But the essential factor in those circumstances is that the landlord voluntarily abstains from turning the tenant out.
When the tenant remains in possession, not by reason of any such abstention by the landlord, but because the Rent and Mortgage Interest Restrictions Acts deprive the landlord of his former power of eviction, no such inference can property be drawn.
That is the very obvious and cogent basis of the decision in Davies vs Bristow".
It was argued on behalf of the appellants, on the basis of the ,decision of this Court in Manujendra Dutt vs Purendu Prosad Roy (1) [1920]3 K.B. p. 428.
(2) [1945] 1 K.B. p. 577.
897 Chowdhury & others(l) that if in the case of a tenancy to which Rent Restriction Acts applied, the Provision of section 106 of the Transfer of Property Act was applicable, there is nothing incongruous in making section 116 also applicable in the case of a statutory tenancy.
In the said decision, the appellant before this Court was a tenant of a piece of land.
The lease was for a period of ten years but the lessee was given the option of renewal on his fulfilling certain conditions.
The lease deed also provided that if the lessor required the lessee to vacate the premises, whether at the time of the expiry of the lease or thereafter (in case the lessee exercised his option to renew the lease) six month notice to the lessee was necessary.
The lessee exercised his option to renew the lease and offered to fulfill the condition therefore.
In the meanwhile the Calcutta Thika Tenancy Act, 1949, was passed.
One of the questions which arose for consideration was whether the Thika tenant was entitled to the notice provided under the lease.
This Court held that the Act did not give a right to the landlord to evict a contractual tenant without first determining the contractual tenancy.
After referring to the decision of this Court in Mangilal vs Sigam Chand(2), it was held that section 3 of the Act in question was similar to section 4 of the Madhya Pradesh Accommodation Control Act (XXIII of 1965).
It was further held that on the construction placed upon the section, name IV, that the provisions of the section are in addition to those of the Transfer of Property Act, it follows that, before a tenant can be evicted, a landlord must comply with both the provisions of section 106 of the Transfer of Property Act and those of section 3.
In the case before us, admittedly, the tenancy has been determined by efflux of time and what is contended for is that by the acceptance of rent, a new tenancy has been created by virtue of the provisions of section 116 of the Transfer of Property article In other words, the question here is whether the conditions for the application of section 116 of the Transfer of Property Act are fulfilled.
Learned counsel for the appellants argued that whenever rent is accepted by a landlord from a tenant whose tenancy has been determined, but who continues in possession, a tenancy by holding over is created.
The argument was that the assent of the lessor alone and not that of the lessee was material for the purposes of section 116.
We are not inclined to accept this contention.
We have already shown that the basis of the, section is a bilateral contract between the erstwhile landlord and the erstwhile tenant If the tenant has the statutory right to remain in possession, and if he pays the rent, that will not normally be referable to an offer for his continuing in possession which can be converted into a contract by acceptance thereof by the landlord.
We do not say (1) ; (2) A.I.R. 1965 S.C. 101.
898 that the operation of section 116 is always excluded whatever might be the circumstances under which the tenant pays the rent and the landlord accepts it.
We have earlier referred to the observations of this Court in Ganga Dutt Murarka vs Kartik Chandra Das(1) regarding some of the circumstances in which a fresh contract of tenancy may be inferred.
We have already held the whole basis of section 116 of the Transfer of Property Act is that, in case of normal tenancy, a landlord is entitled, where he does not accept the rent after the notice to quit, to file a suit in ejectment and obtain a decree for possession, and so his acceptance of rent is an unequivocal act referable only to his desire to assent to the tenant continuing in possession.
That is not so where Rent Act exists; and if the tenant says that landlord accepted the rent not as statutory tenant but only as legal rent indicating his assent to the tenant 's continuing in possession, it is for the tenant to establish it.
No attempt has been made to establish it in this case and there is no evidence, apart from the acceptance of the rent by the landlord, to indicate even remotely that he desired the appellants to continue in possession after the termination of the tenancy.
Besides, as we have already indicated, the animus of the tenant in tendering the rent is also material.
If he tenders the rent as the rent payable under the statutory tenancy, the landlord cannot, by accepting it as rent, create a tenancy by holding over.
In such a case the parties would not be id idem and there will be no consensus.
The decision in Ganga Dutt Murarka vs Kartik Chandra Das(l), Which followed the principles laid down by the Federal Court in Kai Khushrao Bezonjee Capadia vs Bai Jerbai Hirjibhoy Warden and another(1) is correct and does not require reconsideration.
We, therefore, come to the conclusion that there was no holding over by the appellants and if that be so, the question whether the tenancy created by holding over was for manufacturing purpose and therefore the landlord was bound to give six months ' notice for the determination of the tenancy by holding over does not arise for consideration.
Appellants ' counsel prayed that the appellants may be given some time for vacating the premises.
This Court, when passing the order on July 31, 1969, on the application for stay by the appellants had observed : "Petitioner undertakes to vacate the premises within such time as may be fixed by this Court." (1) ; (2) 899 We accordingly grant three months, time from today to the appellants to vacate the premises, and they have to comply with the undertaking given to this Court and referred to above.
We dismiss the appeal with costs, G.C. Appeal dismissed.
| IN-Abs | The appellants were lessees of a plot of land in Bombay.
The lease Was granted in 1948 and was determined by efflux of time on September 30, 1958.
However the appellants continued to occupy the land and to pay rent to the lessors.
On August 7, 1959 the lessors gave notice purporting to terminate the tenancy in the land by the end of September 1959 on the ground inter alia that the lessors required the plot for the purpose of putting up construction on it.
Since the appellants did not vacate the premises the lessors filed a suit on October 22, 1959 in the Small Causes Court, Bombay.
The appellants contended in defence that the land was not required by the lessors bona fide for purposes of construction.
They further contended that they were tenants holding over within the meaning of section 116 of the Transfer of Property Act, and that since the landlord had accepted rent after the tenancy had determined by afflux of time a new lease had come into being and as the original lease was for a manufacturing purpose the new lease was by implication for the same purpose and consequently six months ' notice was required for its termination by the lessors.
The Trial Court held that the, plaintiff required the plot bona fide for constructing a new building within the meaning of clause (1) of sub section (1) of 'section 13 of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947.
The Court also held.
that the tenancy terminated by efflux of time, but that the lessees continued in possession by virtue of the immunity from eviction conferred by the aforesaid Bombay Act and so they were not holding over within the meaning of section 116 of the Transfer of Property Act.
The Trial Court accordingly decreed the suit.
In appeal the appellate Court confirmed the decree.
The High Court rejected the appellants ' petition under article 227 of the Constitution.
In appeal to this Court by Special leave, HELD : The act ofholding over after the expiration of the term does not create tenancy ofany kind.
if a tenant remains in possession after the determination of the lease the common law rule is that he is a tenant on sufferance.
A distinction should be drawn between a tenant continuing in possession after the determination of the term with the consent of the landlord and a tenant doing so without his consent.
The former is a tenant on sufferance in English law and the latter a tenant holding over a tenant at will.
In view of the concluding words of section 116 of the Transfer of Property Act a lease holding over is in a better position than a tenant at will.
The assent of the landlord to the continuance of possession after the determination of the tenancy will create a new tenancy.
What the section contemplates is that on one side their should be an offer of taking a new lease evidenced by the lessee or sub lessee remaining 891 in Possession of the property after his term was over and on the other side there must be a definite consent to the continuance of possession by the landlord expressed by acceptance of rent or otherwise.
The bases of the section is thus a bilateral contract between the erstwhile landlord and the erstwhile tenant.
If the tenant has the statutory right to remain in possession, and if he pays the rent, that will not normally be referable to an offer for his continuing in possession which can be converted into a contract by acceptance thereof by the landlord.
[894 B D; 897 G H] In the case of normal tenancy a landlord is entitled where he does not accept the rent after the notice to quit, to file a suit in ejectment and obtain a decree for possession, and so his acceptance of rent is an unequivocal act referable only to his desire to assent to the tenant con tinuing in possession.
That is not so where a Rent Act exists; and if the tenant says that landlord accepted the rent not as statutory tenant but only as legal rent indicating his assent to the tenant 's continuing in pos session it is for the tenant to establish it.
[898 B C] In the present case neither the landlord 's desire that the appellants should continue in possession nor the necessary animus on the part of the tenant had been proved.
The parties had not been shown to be ad idem.
[898 D] Acccordingly it must be held that there was no holding over by the appellants and the appeal must be dismissed.
Ganga Dutt Murarka vs Kartik Chandra Das, [1961] 3 S.C.R. 813, reaffirmed.
Kai Khushroo Bezonjee Capadia vs Bai Jerbai Hirjibhoy Warden K.B. 428, Morriwon vs Jacobs, and Mangilal vs Sugan Chand, A.I.R. 1965 S.C. 101, applied.
Manujendra Dutt vs Purendu Prosad Roy Chowdhury & Ors.
, ; , distinguished.
|
iminal Appeal No. 50 of 1969.
Appeal from the judgment and order dated December 24, 1968 of the Calcutta High Court in Criminal Revisions No. 235 of 1966.
Nur ur din Ahmed, section C. Agarwal and Indiraj Jaisingh, for the appellant.
S.P. Mitra and G. section Chatterjee for Sukumar Basu for the respondent.
The Judgment of the Court was delivered by Jaganmohan Reddy, J.
This appeal is by certificate under article 134(1) (c) of the Constitution.
The appellant is the Manager of Sree Krishna Oil Mills, Midnapore, the proprietor of which was one Srilal Bajoria.
Both these persons were tried jointly for an offence under section 7(1)/16(1)(a)(i) of the Prevention of Food Adulteration Act, 1954 hereinafter referred to as 'the Act '.
The proprietor Srilal Bajoria was acquitted but the appellant was sentenced to one year rigorous imprisonment.
The offence in respect of which the appellant was charged was that he being the Manager of the Oil Mills for manufacturing mustard oil was responsible for the adulteration.
On July 10, 1964, at about II A.M. the appellant was going in a truck carrying 100 tins of mustard oil and was stopped by the Food Inspector, Kharagpore Municipality.
On being 847 questioned by the Food Inspector the appellant informed him that the oil which he was carrying was manufactured at Sree Krishna Oil Mills, Midnapore.
As the Food Inspector suspected that this oil may have been adulterated, he took three samples according to the provisions of the Act.
He sent one sample to the Public Analyst one he kept with himself and the third he gave to the appellant.
The Public Analyst on examining the sample sent to him reported on August 5, 1964, that saponification value of the oil was 181.6, Iodine value 107.2 and B. R. reading at 40 'C was 60.1 and was of the opinion that the sample of mustard oil was adulterated vide Ext.
After obtaining the sanction for prosecution from the Chairman of the Municipality, the appellant was prosecuted before, the Magistrate, 1st Class, Midnapore.
He pleaded not guilty but on the evidence and the report of the Public Analyst he was convicted and sentenced as aforesaid.
An appeal to the Sessions Judge was without success.
Thereafter the appellant filed a revision before the High Court and that was also dismissed.
Before us the learned counsel for the appellant has urged similar points as were urged before the High Court, namely, (i) that the trial was vitiated for want of valid and legal sanction; (ii) that the report of the Public Analyst was not a proper report in law and cannot form the basis of legal conviction; and (iii) that the Public Analyst 's report Was bad and incomplete for failure to carry out all the tests required under A. 17.06 of Appendix B to the Prevention of Food Adulteration Rules, 1955, and also for failure to disclose the data in the report.
It is contended on behalf of the appellant that the sanction to prosecute the appellant was given by the Chairman of Kharagpore Municipality Shri K C. Chaki on August 19, 1964.
This sanction did not show (a) that tile Chairman had applied his mind before giving the sanction; (b) that it was valid as it was not granted by the Local Authority, namely, the Municipality; and (c) that since the resolution of the Municipality had authorised the Chairman to give the sanction, the new Chairman cannot avail himself of that authorisation as by that time there were fresh elections and a new Chairman was elected.
Accordingly it is submitted that the sanction given by Mr. Chaki was not a proper sanction.
It appears to us that the challenge to the validity of the sanction is misconceived.
As pointed out by the High Court, section 51 of the Bengal Municipal Act, 1932, enumerates the powers of the Chairman as under: "Save as hereinafter provided, the Chairman shall for the transaction of the business connected with this Act or for the purpose of making any order authorised 848 thereby, exercise all the powers, vested by this Act in the Commissioners and whereby any other law power is vested in the Commissioners for any purpose, the Chairman may transact any business or make any order authorised by that law in the exercise.
of that power, unless it is otherwise expressly provided in that law." Section 20 of the Act provides for sanction of the Local Authority for prosecutions under the Act which includes a Municipality.
Reading these two provisions together the Chairman of a Municipality duly authorised by the Municipality can accord sanction for prosecution of offences under the Act.
In compliance with the aforesaid power under section 51 of the Bengal Municipal Act, the Municipality by resolution dated July 28, 1960 authorised the Chairman "to perform all the functions and exercise the.
powers of the Local Authority within the meaning of the ." (Exe.
This power, it may be noticed, is not granted to any particular Chairman Eo nominee, but is a general power exercisable by any Chairman for the time being of the Municipality.
It is true that a fresh election of the Chairman was held after the resolution of the Municipality but that does not deprive the new Chairman of the power to grant sanction in under that, resolution.
The appellant in Criminal Miscellaneous Petitions Nos.
450 & 515 of 1970 seeks permission to allow him to adduce additional evidence to show that there was another resolution by the Kharagpore Municipality dated August 18, 1965, which had given a, fresh authorisation to the Chairman to grant sanctions for prosecution under the Act which would show that the previous authorisation was not really valid when sanction was given to prosecute the appellant.
Apart from the fact that, no case has been made out to adduce any fresh evidence, the resolution itself has been passed after the sanction for the prosecution was.
given and even that resolution as can be noticed is in similar terms to the earlier resolution passed by the Municipality.
This subsequent resolution does not in any way indicate that the previous power could not be availed of by the Chairman who in fact had granted the sanction.
At, the most it may have been passed by way of abundant caution, having regard to the contentions raised during the trial of the appellant.
The High Court has pointed out, and we think rightly, that under section 15(2) of the Bengal Municipal Act, the Municipality is a body corporate and it has perpetual succession, if so any authorisation granted by it is not limited to the Chairman then in office, but will continue unless otherwise rescinded.
Nextly it has been strenuously urged before us on behalf of the appellant that the report of the Public Analyst is not a complete report in that out of the seven tests that he had to make under 849 A 17.06 of Appendix B to the Rules he had only made three tests and secondly the report does not give the basis on which.
the Public Analyst came to the conclusion that the sample of the mustard oil was adulterated.
It is true that the Public Analyst in his report has only indicated the result of the three tests out of which two tests were as indicated in A 17.06 while only one, namely, the saponification test was said to have exceeded the maximum on the strength of which the Public Analyst reported that the sample was adulterated.
Omission to report on the other four tests does not, in our view make the reporter ineffective or the report inconclusive.
Even assuming that the other four tests are normal, if the saponification test alone did not conform to the standards indicated in A 17.06 of Appendix B to the Rules the sample cannot be said to have come up to the standard and, therefore, it is adulterated.
An attempt was made to refer us to certain technical books and the decisions in Jagadish Chandra Jain vs Corporation of Calcutta(1) Messrs. Netai Chandra and Surendra Nath Dey vs Corporation of Calcutta,(2) and In re.
Perumal & Co.(3) for the proposition that the standard prescribed by A 17.06 in Appendix B to the Rules is not conclusive because in some places mustard can yield a higher reading.
We cannot allow any fresh evidence to be used, nor do we think that the decisions referred to, even if they justify that contention, can alter or vary the standard fixed in exercise of the powers conferred by the Act in Appendix B to the Rules.
Section 3 of the, Act authorises the Central Government to constitute a Committee called the Central Committee for Food Standards to advise the Central Government and the State Governments on matters arising out of the administration of the Act and to carry out the other functions assigned to it under the Act.
Under section 23 ( 1 ) (b) of the Act the Central Government may, after consultation with the Committee and subject to the condition of previous publication, make rules "defining the standards of quality for, and fixing the limits of variability permissible in respect of, any article of food.
" It is in exercise of this power that r. 5 was made authorising standards of quality of the various articles of food specified in Appendix B to the Rules.
In view of this provision any article of food which does not conform to the standards specified in Appendix B to the Rules which under section 2 (1) of the Act is said to be adulterated because "the quality or purity of the article falls below the prescribed standard or its constituents are present in quantities which are in excess of the prescribed limits of variability.
" The contention that the standards cannot be conformed to by an ordinary vendor who is not versed in the technicalities is also (1) (3) A.I.R. 1943 Mad.
(2) A.I.R. 1967 Cal.
65. 850 not of significance.
In this regard it was pointed out by Shah, J., as he then was, speaking for this Court in Andhra Pradesh Grain and Seed Merchants Association and others vs Union of India & Anr.
(1) : "The various items in the Schedule setting out standards of quality use technical expressions with which an ordinary, retail dealer may not be familiar, and also set out percentages of components which the dealer with the means at his command cannot verify.
But by section 3, the Central Government has to set up the Central Committee for Food Standards to advise the Central and the State Governments on matters arising out of the administration of the Act. . .
Under section 23 ( 1 ) (b) the Central Government makes rules prescribing the standards of quality and the limits of variability permissible in any article of food.
The rules are made after consultation with the Committee for Food Standards.
The standards set out in the Appendix to the Rules are prescribed after consultation with the Committee for Standards.
" It appears to us therefore that standards having been fixed as aforesaid any person who deals in articles of food which do not confirm to them contravenes the provisions of the Act and is liable to punishment thereunder.
It was again urged that the Public Analyst had not given the basis for his conclusion that the saponification test did not conform to the standards specified in A 17.06 of Appendix B to the Rules which contention is also not tenable.
Under section 13 (5) of the Act any document purporting to be a report signed by a Public Analyst, unless it has been superseded under sub section
(3), or any document purporting to be a certificate signed by the Director of the Central Food Laboratory, may be used as evidence of the facts stated therein in any proceeding under the Act or under sections 272 to 276 of the Indian Penal Code.
Under the proviso to that sub section any document purporting to be a certificate signed by the Director of the Central Food Laboratory shall be final and conclusive evidence of the facts stated therein.
If the report of the Public Analyst was not satisfactory, it was open to the appellant to have made an application for the sample which was in his possession to be sent to the Director of the Central Food Laboratory for examination.
If he had made such an application and sent the sample under section 13 (2) the certificate granted by the (1) ; 851 Director of the Central Food Laboratory would have superseded the report given by the Public Analyst.
This he has not done.
In the circumstances he has been properly convicted.
Lastly it has to be considered whether the sentence awarded in the circumstances requires any modification.
It was urged that the prosecution of the appellant was prior to the amendment of sub section
(1) of section 16 of the with effect from March 1, 1965, under which the sentence has to be a minimum of six months rigorous imprisonment, but there is no such injunction under the unamended section and yet the maximum sentence has been awarded to the appellant which is harsh for a first offender.
Offences under the Act being antisocial crimes affecting the health and well being of our people, the Legislature having regard to the trend of courts to impose in most cases only fines or where a sentence of imprisonment was passed a light sentence was awarded even in cases where a severe sentence was called for, a more drastic step was taken by it in prescribing a minimum sentence and a minimum fine to be imposed even for a first offence.
An exception was however made in cases falling under sub cl.
(i) of cl.
(a) of section 16(1) and in respect of an article of food which was considered to be adulterated under section 2 cl.
(i),(i) or misbranded under section 2 cl.
(ix) or for an offence under sub clause (ii) of clause (a) of section 16(1), in which case the Court is given the discretion, for any adequate and special reasons to be mentioned, to award a lesser sentence than six months or impose a fine lesser than one thousand rupees or of both lesser than the minimum prescribed.
If for the offence of which the appellant is convicted even under the amended section a lesser sentence can be awarded, if there were adequate and special reasons, it would be much more so under the unamended section.
The reasons for the Legislature to make the exception is not that the offences specified are not considered to be serious, but the gravity of the offence having regard to its nature can be less if there are any special or adequate reasons.
In our view though offences for adulteration of food must be severely dealt with, no doubt depending on the facts of each case which cannot be considered as precedents in other cases, in this case having regard to the fact that the appellant has been on bail since 1964 for a period of nearly seven years, and also because not only the mustard oil sample satisfied all the tests except one but the main person concerned in the manufacture of the said oil has been acquitted, interests of justice would be served if the sentence of one year is reduced to two months rigorous imprisonment and the appellant is further directed to pay a fine of 852 Rs. 1,000/ failing which to be directed to undergo a further term of rigorous imprisonment for one month.
We accordingly so direct.
Subject to this modification, the appeal and the Criminal Miscellaneous Petitions Nos. 450 and 515 of 1970 are dismissed.
K.B.N. Appeal and petitions dismissed.
| IN-Abs | The appellant, manager of an Oil Mill, was convicted under section 7(i)/16(1)(a)(i) of the , and sentenced to one year rigorous imprisonment.
His appeal to the Sessions Judge was without success and a revision to the High Court, was also dismissed.
In appeal to this Court it was contended that (i) the sanction for prosecution did not show (a) that the Chairman of the Muni cipality had applied his mind before giving the sanction, (b) that it was invalid since it was not granted by the local authority, namely, the municipality and (e) that since the resolution of the Municipality had authorised the Chairman to give the sanction, the new Chairman could not avail himself of that authorisation and, therefore.
the trial was vitiated for want of valid and legal sanction; (ii) the 'report of the Public Analyst was not a proper report in law and was bad and incomplete for failure to carry out all the tests required under A. 17.06 of Appendix B to the Prevention of Food Adulteration Rules, 1955, and also for failure to disclose the data in the report; and (iv) the sentence awarded was harsh for a first offender.
Reducing the sentence and dismissing the appeal, HELD : (i) Reading sections 20 and 51 of the Bengal Municipal Act, 1932, the Chairman of a municipality duly authorised by the municipality can accord sanction for prosecution of offences under the Act.
The resolution of the Municipality authorising the Chairman to perform all the functions and exercise the powers of the local authority within the meaning of the , is not to grant power to any particular Chairman eo nominee, but, is a general power exercisable by any Chairman, for the time being, of the municipality.
The High Court has rightly pointed out that under section 15(2) of the Bengal Municipality Act the Municipality is a body corporate and it has perpetual succession and, as such, any authorisation granted by it is not limited to the Chairman then in office but will continue unless rescinded.
[848 D; G H] (ii) It is.
true that the Public Analyst in his report has only indicated the result of the three tests out of which two tests were as indicated in A 17.06, while, only one, namely, the saponification test, was said to have exceeded the maximum on the strength of which the Public Analyst reported that the sample was adulterated.
Omission to.report on the other four tests does not make the report ineffective or inconclusive.
Even assuming that the other four tests are normal, if the saponification test alone did not conform to the standards indicated in A 17.06 of Appendix B to the Rules, the sample cannot be said to have come up to the standard and, therefore, it is adulterated.
It is in exercise of the powers conferred by section 23 (i) (b) that rule 5 was made authorising standards of quality of 846 the various articles of food specified in Appendix B to the Rules.
Standards having been fixed, any person who deals in articles of food which do not conform to them contravenes the provisions of the Act and is liable to punishment thereunder.
[849 A C; 850 E] Andhra Pradesh Grain and Seed Merchants Association and others vs Union of India & Anr., A.I.R. , referred to.
If the report of the Public Analyst was not satisfactory it was open to the appellant to make an application for sending the sample which was in his possession to the Director.
If he had made such an application and sent the sample under section 13(2) the certificate granted by the Director of the Central Food Laboratory would have superseded the report given by the Public Analyst.
This has not been done.
In the circumstances he has been properly convicted.
[850 H] (iv) The reason for the legislature to makeexception to the minimum of six months rigorous imprisonment prescribedunder section 16(1) is not that the offences specified are not considered to be serious, but the gravity of the offences, having regard to its nature can be less if there are any special or adequate reasons.
In the present case having regard to the fact that the appellant has been on bail since 1964 for a period of nearly seven years, and also because not only the oil sample satisfied all the tests except one but the main person concerned in the manufacture of the oil has been acquitted, interests of justice would be served if the sentence of one year is reduced to two months rigorous imprisonment and the appellant is further directed to pay a fine of Rs. 1000/ .
[851 F, H]
|
Appeal No. 61 of 1954.
Appeal under Article 132(1) of the Constitution of India from the Judgment and Order dated the 4th November 1953 of the High Court of Judicature at Nagpur in Civil Miscellaneous Petition No. 174 of ' 1953.
N. C. Chatterjee, Bakshi Tek Chand and Veda Vyas, (section K. Kapur and Ganpat Rai, with them), for the appellant.
G. section Pathak, (Rameshwar Nath and Rajinder Narain, with him), for respondent No. 1. 1954.
December 9.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
The appellant and respondents 1 to 5 herein were duly nominated for election to the House of the People from the Hoshangabad Constituency in the State of Madhya Pradesh.
Respondents 4 and 5 subsequently withdrew from the election, leaving the contest to the other candidates.
At the polling the appellant secured 65,201 votes the first respondent 65,375 votes and the other candidates far less; and the Returning Officer accordingly declared the first respondent duly elected.
The appellant then filed Election Petition No. 180 of 1952 for setting aside the election on the ground inter alia that 301 out of the votes counted in favour of the first respondent were liable to be rejected under Rule 47 (1) (c) of Act No. XLIII of 1951 on the ground that the ballot papers did not have the distinguishing marks prescribed under Rule 28, and that by reason of their improper reception, the result of the election had been materially affected.
Rule 28 is as follows: "The ballot papers to be used for the purpose of voting at an election to which this Chapter applies shall contain a serial number and such distinguishing marks as the Election Commission may decide".
Under this rule, the Election Commission had decided that the ballot papers for the Parliamentary Consti 142 1108 tuencies should bear a green bar printed near the left margin, and that those for the State Assembly should bear a brown bar.
What happened in this case was that voters for the House of the People in polling stations Nos. 316 and 317 in Sobhapur were given ballot papers with brown bar intended for the State Assembly, instead of ballot papers with green bar which had to be used for the House of the People.
The total number of votes so polled was 443, out of which 62 were in favour of the appellant, 301 in favour of the first respondent, and the remaining in favour of the other candidates.
Now, Rule 47(1)(c) enacts that "a ballot paper contained in a ballot box shall be rejected if it bears any serial number or mark different from the serial numbers or marks of ballot papers authorised for use at the polling station or the polling booth at which the ballot box in which it was found was used".
In his election petition, the appellant contended that in accordance with this provision the ballot papers received at the Sobhapur polling stations not having the requisite mark should have been excluded, and that if that had been done, the first respondent would have lost the lead of 174 votes, and that he himself would have secured the largest number of votes.
He accordingly prayed that he might be declared duly The first respondent contested the petition.
He pleaded that the Returning Officer at Sobbapur had rightly accepted the 301 votes, because Rule 47 was directory and not mandatory , and that further the votes had been accepted as valid by the Election Commission, and the defect, if any, had been cured.
He also filed a recrimination petition under section 97 of Act No. XLIII of 1951, and therein pleaded inter alia that at polling station No. 299 at Malkajra and at polling station No. 371 at Bammangaon ballot papers intended for use in the State Legislature election had been wrongly issued to voters to the House of the People by mistake of the polling officers, that all those votes had been wrongly rejected by the Returning Officer, and that if they had been counted, he would 1109 have got 117 votes more than the appellant.
He accordingly challenged the right of the appellant to be declared elected.
The Election Tribunal held by a majority that Rule 47(1)(c) was mandatory, and that the 301 ballot papers found in the box of the first respondent bearing the wrong mark should not have been counted; while the third Member was of the opinion that rule was merely directory, and that the Returning Officer had the power to accept them.
The Tribunal, however, was unanimous in holding that the result of the election had not been materially affected by the erroneous reception of the votes, and on that ground dismissed the petition.
The appellant then moved the High Court of Nagpur under articles 226 and 227 of the Constitution for the issue of a writ of certiorari or other order or direction for quashing the decision of the Election Tribunal on the ground that it was illegal and without jurisdiction.
Apart from supporting the decision on the merits, the first respondent contended that having regard to article 329(b) the High Court was not competent to entertain the petition, as in substance it called in question the validity of an election.
The petition was heard by a Bench consisting of Sinha, C. J., Mudholkar and Bhutt, JJ., who differed in their conclusions.
Sinha, C. J., and Bhutt, J., held that no writ could be issued under article 226, firstly because the effect of article 329(b) was to take away that power, and secondly, because the Election Tribunal had become functus officio after the pronouncement of the decision, and that thereafter there was no Tribunal to which directions could be issued under that article.
Mudholkar, J., agreed with this conclusion, but rested it on the second ground aforesaid.
As regards article 227, while Sinha, C. J. and Bhutt, J. held that it had no application to Election Tribunals, Mudholkar, J. was of the view that they were also within the purview of that article, but that in view of article 329(b), no relief could be granted either setting aside the election of the first respondent, or declaring the appellant elected, and that the only 1110 order that could be made was to set aside the decision of the Tribunal.
On the merits, Sinha, C.J. and Bhutt, J. took the view that the decision of the Tribunal that the result of the election had not been materially affected by the erroneous reception of votes was one within its jurisdiction, and that it could not be quashed under article 226, even if it had made a mistake of fact or law.
But Mudholkar, J. held that as in arriving at that decision the Tribunal had taken into consideration irrelevant matters, such as the mistake of the polling officer in issuing wrong ballot papers and its effect on the result of the election, it had acted in excess of its jurisdiction.
He was ac cordingly of opinion that the decision should be quashed leaving it to the Election Commission "to perform their statutory duties in the matter of the election petition".
The petition was dismissed in accordance with the majority opinion.
The learned Judges, however, granted a certificate under article 132(1), and that is how this appeal comes before this Court.
The first question that arises for decision in this appeal is whether High Courts have jurisdiction under article 226 to issue writs against decisions of Election Tribunals.
That article confers on High Courts power to issue appropriate writs to any person or authority within their territorial jurisdiction, in terms absolute and unqualified, and Election Tribunals functioning within the territorial jurisdiction of the High Courts would fall within the sweep of that power.
If we are to recognise or admit any limitation on this power, that must be founded on some provision in the Constitution itself.
The contention of Mr. Pathak for the first respondent is that such a limitation has been imposed on that power by article 329(b), which is as follows: "Notwithstanding anything in this Constitution no election to either House of Parliament or to the House or either House of the Legislature of a State shall be called in question except by an election petition presented to such authority and in such manner 1111 as may be provided for by or under any law made by the appropriate Legislature".
Now, the question is whether a writ is a proceeding in which an election can properly be said to be called in question within the meaning of article 329(b).
On a plain reading of the article, what is prohibited therein is the initiation of proceedings for setting aside an election otherwise than by an election petition presented to such authority and in such manner as provided therein.
A suit for setting aside an election would be barred under this provision.
In N. P. Ponnuswami vs Returning Officer, Namakkal Constituency and Others(1) it was held by this Court that the word "election" in article 329(b) was used in a comprehensive sense as including the entire process of election commencing with the issue of a notification and terminating with the declaration of election of a candidate, and that an application under article 226 challenging the validity of any of the acts forming part of that process would be barred.
These are instances of original proceedings calling in question an election, and would be within the prohibition enacted in article 329(b).
But when once proceedings have been instituted in accordance with article 329(b) by presentation of an election petition, the requirements of that article are fully satisfied.
Thereafter when the election petition is in due course heard by a Tribunal and decided, whether its decision is open to attack, and if so, where and to what extent, must be determined by the general law applicable to decisions of Tribunals.
There being no dispute that they are subject to the supervisory jurisdiction of the High Courts under article 226, a writ of certiorari under that article will be competent against decisions of the Election Tribunals also.
The view that article 329 (b) is limited in its operation to initiation of proceedings for setting aside an election and not to the further stages following on the decision of the Tribunal is considerably reinforced, when the question is considered with reference to a candidate, whose election has been set aside (1) ; 1112 by the Tribunal.
If he applies under article 226 for a writ to set aside the order of the Tribunal, he cannot in any sense be said to call in question the election; on the other hand, he seeks to maintain it.
His application could not, therefore, be barred by article 329(b).
And if the contention of the first respondent is well founded, the result will be that proceedings under article 226 will be competent in one event and not in another and at the instance of one party and not the other.
Learned counsel for the first respondent was unable to give any reason why this differentiation should be made.
We cannot accept a construction which leads to results so anomalous.
This question may be said to be almost concluded by authority.
In Durga Shankar vs Raghuraj Singh(1) the contention was raised that this Court could not entertain an appeal against the decision of an Election Tribunal under article 136 of the Constitution, as that would be a proceeding in which an election is called in question, and that could be done only before a Tribunal as provided in article 329(b).
In overruling this contention, Mukherjea, J. observed: "The 'non obstante ' clause with which article 329 of the Constitution begins and upon which the respondent 's counsel lays so much stress, debars us, as it debars any other court in the land, to entertain a suit or a proceeding calling in question any election to the Parliament or the State Legislature.
It is the Election Tribunal alone that can decide such disputes and the proceeding has to be initiated by an election petition and in such manner as may be provided by a statute.
But once that Tribunal has made any determination or adjudication on the matter, the powers of this Court to interfere by way of special leave can always be exercised".
By parity of reasoning it must be held that the power of the High Court under article 226 to issue writ of certiorari against decisions of Election Tribunals remains equally unaffected by article 329(b).
It is next contended that even if there is jurisdic (1) [1955] S.C.R. 267.
1113 tion in the High Court under article 226 to issue certiorari against a decision of an Election Tribunal, it is incapable of exercise for the reason that under the scheme of Act No. XLIII of 1951, the Tribunal is an ad hoc body set up for determination of a particular election petition, that it becomes functus officio when it pronounces its decision, and that thereafter there is no authority in existence to which the writ could be issued.
The question thus raised is of considerable importance, on which there is little by way of direct authority; and it has to be answered primarily on a consideration of the nature of a writ of certiorari to quash.
At the outset, it is necessary to mention that in England certiorari is issued not only for quashing decisions but also for various other purposes.
It is issued to remove actions and indictment pending in an inferior court for trial to the High Court; to transfer orders of civil courts and sentences of criminal courts for execution to the superior court; to bring up depositions on an application for bail when the prisoner has been committed to the High Court for trial; and to remove the record of an inferior court when it is required for evidence in the High Court.
These are set out in Halsbury 's Laws of England, Volume IX, pages 840 to 851.
It is observed therein that the writ has become obsolete in respect of most of these matters, as they are now regulated by statutes.
That is also the position in America appears from the following statement in Corpus Juris Secundum, Volume 14, at page 151: "At common law the writ of certiorari was used both as a writ of review after final judgment and also to remove the entire cause at any stage of the proceeding for hearing and determination in the superior court.
In the United States it is now the general rule that the writ will be refused where there has been no final determination and the proceedings in the lower, tribunal are still pending".
As we are concerned in this appeal with certiorari to quash a decision, it is necessary only to examine whether having regard to its nature such a writ for 1114 quashing can be issued to review the decision of a Tribunal, which has ceased to exist.
According to the common law of England, certiorari is a high prerogative writ issued by the Court of the King 's Bench or Chancery to inferior courts or tribunals in the exercise of supervisory jurisdiction with a view to ensure that they acted within the bounds of their jurisdiction.
To this end, they were commanded to transmit the records of a cause or matter pending with them to the superior court to be dealt with there, and if the order was found to be without juirsdiction, it was quashed.
The court issuing certiorari to quash, however, could not substitute its own decision on the merits,, or give directions to be complied with by the court or the tribunal.
Its work was destructive; it simply wiped out the order passed without jurisdiction, and left the matter there.
In T. C. Basappa vs
T. Nagappa(1), Mukherjea, J. dealing with this question observed: "In granting a writ of 'certiorari ' the superior court does not exercise the power of an appellate tribunal.
It does not review or reweigh the evidence upon which the determination of the inferior tribunal purports to be based.
It demolishes the order which it considers to be without jurisdiction or palpably erroneous but does not substitute its own view for those of the inferior tribunal.
The offending order or proceeding so to say is put out of the way as one which should not be used to the deteriment of any person.
Vide per Lord Cairns in Walsall 's Overseers vs
L. and N. W. Ry.
Co.(2)".
In Corpus Juris Secundum, Volume 14 at page 123 the nature of a writ of certiorari for quashing is thus stated: "It is not a proceeding against the tribunal or an individual composing it; it acts on the cause or proceeding in the lower court, and removes it to the superior court for reinvestigation".
The writ for quashing is thus directed against a record, and as a record can be brought up only (1) ; (2) [1879] 4 A.C.30, 39. 1115 through human agency, it is issued to the person or authority whose decision is to be reviewed.
If it is the record of the decision that has to be removed by certiorari, then the fact that the tribunal has become functus officio subsequent to the decision could have no effect on the jurisdiction of the court to remove the record.
If it is a question of issuing directions, it is conceivable that there should be in existence a person or authority to whom they could be issued, and when a certiorari other than one to quash the decision is proposed to be issued, the fact that the tribunal has ceased to exist might operate as a bar to its issue.
But if the true scope of certiorari to quash is that it merely demolishes the offending order, the presence of the offender before the court, though proper, is not necessary for the exercise of the jurisdiction or to render its determination effective.
Learned counsel for the first respondent invites our attention to the form of the order nisi in a writ of certiorari, and contends that as it requires the court or tribunal whose proceedings are to be reviewed, to transmit the records to the superior court, there is, if the tribunal has ceased to exist, none to whom the writ could be issued and none who could be compelled to produce the record.
But then, if the writ is in reality directed against the record, there is no reason why it should not be issued to whosoever has the custody thereof.
The following statement of the law in Ferris on the Law of Extraordinary Legal Remedies is apposite: "The writ is directed to the body or officer whose determination is to be reviewed, or to any other person having the custody of the record or other papers to be, certifled".
Under section 103 of Act No. XLIII of 1951 the Tribunal is directed to send the records of the case after the order is pronounced either to the relative District Judge or to the Chief Judge of the Court of Small Causes, and there is no legal impediment to a writ being issued to those officers to transmit the record to the High Court.
We think that the power to issue a 143 1116 writ under article 226 to a person as distinct from an authority is sufficiently comprehensive to take in any person who has the custody of the record, and the officers mentioned in section 103 of Act No. XLIII of 1951 would be persons who would be amenable to the jurisdiction of the High Court under the article.
It is argued that the wording of article 226 that the High Court shall have power to issue writs or directions to any person or authority within its territorial jurisdiction posits that there exists a person or authority to whom it could be issued, and that in consequence, they cannot be issued where no such authority exists.
We are of opinion that this is not the true import of the language of the article.
The scope of article 226 is firstly that it confers on the High Courts power to issue writs and directions, and secondly, it defines the limits of that power.
This latter it does by enacting that it could be exercised over any person or authority within the territories in relation to which it exercises its jurisdiction.
The emphasis is on the words "within the territory", and their significance is that the jurisdiction to issue writ is co extensive with the territorial jurisdiction of the court.
The reference is not to the nature and composition of the court or tribunal but to the area within which the power could be exercised.
The first respondent relied on the decision in Clifford O 'Sullivan(1) as authority for the position that no writ could be issued against a Tribunal after it had ceased to exist.
There, the facts were that the appellants had been tried by a military Court and convicted on 3 5 1921.
They applied on 10 5 1921 for a writ of prohibition against the officers of the Court, and that was refused on the ground that they bad become functi officio.
The respondent contended that on the same reasoning certiorari against the decision of an Election Tribunal which bad become functus officio should also be refused, and he further relied on the observations of Atkin, L.J. in Rex vs Electricity Com missioners; London Electricity Joint Committee Co. (1920), Exparte(2) as establishing that there was no (1) (1921] 2 A.C. 570.
(2) , 204, 205.
1117 difference in law between a writ of prohibition and a writ of certiorari.
What is stated there is that both writs of prohibition and certiorari have for their object the restraining of inferior courts from exceeding their jurisdiction, and they could be issued not merely to courts but to all authorities exercising judicial or quasi judicial functions.
But there is one fundamental distinction between the two writs, and that is what is material for the present purpose.
They are issued at different stages of the proceedings.
When an inferior court takes up for hearing a matter over which it has no jurisdiction, the person against whom the proceedings are taken can move the superior court for a writ of prohibition, and on that, an order will issue forbidding the inferior court from continuing the proceedings.
On the other band, if the court hears that cause or matter and gives a decision, the party aggrieved would have to move the superior court for a writ of certiorari, and on that, an order will be made quashing the decision on the ground of want of jurisdiction.
It might happen that in a proceeding before the inferior court a decision might have been passed, which does not completely dispose of the matter, in which case it might be necessary to apply both for certiorari and prohibition certiorari for quashing what had been decided, and prohibition for arresting the further continuance of the proceeding.
Authorities have gone to this extent that ,in such cases when an application is made for a writ of prohibition and there is no prayer for certiorari, it would be open to the Court to stop further proceedings which are consequential on the decision.
But if the proceedings have terminated, then it is too late to issue prohibition and certiorari for quashing is the proper remedy to resort to.
Broadly speaking, and apart from the cases of the kind referred to above, a writ of prohibition will lie when the proceedings are to any extent pending and a writ of certiorari for quashing after they have terminated in a final decision.
Now, if a writ of prohibition could be issued only if there are proceedings pending in a court, it must follow that it is incapable of being granted when the 1118 court has ceased to exist, because there could be then no proceeding on which it could operate.
But it is otherwise with a writ of certiorari to quash, because it is directed against a decision which has been rendered by a court or tribunal, and the continued existence of that court or tribunal is not a condition of its decision being annulled.
In this context, the following passage from Juris Corpus Secundum, Volume 14, page 126 may be usefully quoted: "Although similar to prohibition in that it will lie for want or excess of jurisdiction, certiorari is to be distinguished from prohibition by the fact that it. . is directed to the cause or proceeding in the lower court and not to the court itself, while prohibition is a pre ventive remedy issuing to restrain future action and is directed to the court itself".
The decision in Clifford O 'Sullivan(1) which was concerned with a writ of prohibition is, therefore, inapplicable to a writ of certiorari to quash.
It has also to be noted that in that case as the military Court had pronounced its sentence before the application was filed, a writ of prohibition was bound to fail irrespective of the question whether the Tribunal was functus officio or not, and that is the ground on which Viscount Cave based his decision.
He observed: "A further difficulty is caused to the appellants by the fact that the officers constituting the so called military Court have long since completed their investigation and reported to the commanding officer, so that nothing remains to be done by them, and a writ of prohibition directed to them would be of no avail.
[See In re Pope(2) and Chabot vs Lord Morpeth(3)]".
In this connection, reference must be made to the decision in B. vs Wormwood Scrubbs (Governor)(4).
There., the applicant was condemned by a court martial sitting in Germany, and in execution of its sentence,, he was imprisoned in England.
He applied for a writ of habeas corpus, and contended that the military Court had no jurisdiction over him.
The Court (1) (3) 118481 15 Q. B. 446.
(2) (1833] ; (4) , 1119 agreed with this contention, and held that the conviction was without jurisdiction and accordingly issued a writ of habeas corpus.
But as he was in the custody of the Governor of the Prison under a warrant of conviction, unless the conviction itself was quashed no writ of habeas corpus could issue.
In these circumstances, the Court issued a writ of certiorari quashing the conviction by the court martial.
It is to be noted that the military Court was an ad hoc body, and was not in existence at the time of the writ, and the respondents to the application were the Governor and the Secretary for War.
The fact that the court martial was dissolved was not considered a bar to the grant of certiorari.
Our attention has also been invited to a decision of this Court in The Lloyds Bank Ltd. vs The Lloyds Bank Indian Staff Association and others(1).
In that case, following the decision in Clifford O 'Sullivan(2) the Calcutta High Court had refused applications for the issue of writs of certiorari and prohibition against the decision of the All India Industrial Tribunal (Bank Disputes) on the ground, amongst others, that the Tribunal had ceased to exist.
In appeal to this Court against this judgment, it was contended for the appellant that on a proper construction of section 7 of the Industrial Disputes Act, the Tribunal must be deemed to be not an ad hoc body established for adjudication of a particular dispute but a permanent Tribunal continuing "in a sort of suspended animation" and "functioning intermittently".
This Court agreeing with the High Court rejected this contention.
But the point was not argued that certiorari could issue even if the Tribunal had become functus officio, and no decision was given on the question which is now under consideration.
Looking at the substance of the matter, when once, it is held that the intention of the Constitution was to vest in the High Court a power to supervise decisions of Tribunals by the issue of appropriate writ and directions, the exercise of that power cannot be (1) Civil Appeal No. 42 of 1952.
(2) (1921] 2A. C. 570.
1120 defeated by technical considerations of form and procedure.
In P. C. Basappa vs T. Nagappa(1), this Court observed: "In view of the express provisions in our Constitution we need not now look back to the early history or the procedural technicalities of these writs in English law, nor feel oppressed by any difference or change of opinion expressed in particular cases by English Judges.
We can make an order or issue a writ in the nature of 'certiorari ' in all appropriate cases and in appropriate manner, so long as we keep to the broad and fundamental principles that regulate the exercise of jurisdiction in the matter of granting such writs in English law".
It will be in consonance with these principles to hold that the High Courts have power under article 226 to issue writs of certiorari for quashing the decisions of Election Tribunals, notwithstanding that they become functus officio after pronouncing the decisions.
We are also of opinion that the Election Tribunals are subject to the superintendence of the High Courts under article 227 of the Constitution, and that superintendence is both judicial and administrative.
That was held by this Court in Waryam Singh and another vs Amarnath and another(2), where it was observed that in this respect article 227 went further than section 224 of the Government of India Act, 1935, under which the superintendence was purely administrative, and that it restored the position under section 107 of the Government of India Act, 1915.
It may also be noted that while in a certiorari under article 226 the High Court can only annul the decision of the Tribunal, it can, under article 227, do that, and also issue further directions in the matter.
We must accordingly hold that the application of the appellant for a writ of certiorari and for other reliefs was maintainable under articles 226 and 227 of the Constitution.
Then the question is whether there are proper grounds for the issue of certiorari in the present case.
(1) (1955] S.C.R. 250.
(2) ; 1121 There was considerable argument before us as to the character and scope of the writ of certiorari and the conditions under which it could be issued.
The question has been considered by this Court in Parry & Co. vs Commercial Employees ' Association, Madras(1), Veerappa Pillai vs Raman and Raman Ltd. and Others(2), Ibrahim Aboobaker vs Custodian General(3) and quite recently in T. C. Basappa vs T. Nagappa(4).
On these authorities, the following propositions may be taken as established: (1) Certiorari will be issued for correcting errors of jurisdiction, as when an inferior Court or Tribunal acts without jurisdiction or in excess of it, or fails to exercise it.
(2) Certiorari will also be issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice.
(3) The Court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction.
One consequence of this is that the Court will not review findings of fact reached by the inferior Court or Tribunal, even if they be erroneous.
This is on the principle that a Court which has jurisdiction over a subject matter has jurisdiction to de cide wrong as well as right, and when the Legislature does not choose to confer a right of appeal against that decision, it would be defeating its purpose and policy, if a superior Court were to re hear the case on the evidence, and substitute its own findings in certiorari.
These propositions are well settled and are not in dispute.
(4) The further question on which there has been some controversy is whether a writ can be issued, when the decision of the inferior Court or Tribunal is erroneous in law.
This question came up for consideration in Rex vs Northumberland Compensation Appeal Tribunal; Ex parte Shaw(5), and it was held that when a Tribunal made a "speaking order" and the reasons given in that order in support of the decision (1) ; (2) ; (3) ; (4) (1955] S.C.R. 250.
(5) 1122 were bad in law, certiorari could be granted.
It was pointed out by Lord Goddard, C. J. that had always been understood to be the true scope of the power.
Walsall Overseers vs London and North Western Ry.
Co.(1) and Rex vs Nat Bell Liquors Ld.
(2) were quoted in support of this view.
In Walsall Overseers vs London and North Western Ry.
Co.(1), Lord Cairns, L.C. observed as follows: "If there was upon the face of the order of the court of quarter sessions anything which showed that order was erroneous, the Court of Queen 's Bench might be asked to have the order brought into it, and to look at the order, and view it upon the face of it, and if the court found error upon the face of it, to put an end to its existence by quashing it".
In Rex vs Nat Bell Liquors Ld.
(2) Lord Sumner said: "That supervision goes to two points; one is the area of the inferior jurisdiction and the qualifications and conditions of its exercise; the other is the observance of the law in the course of its exercise".
The decision in Rex vs Northumberland Compensation Appeal Tribunal; Ex parte Shaw(3) was taken in appeal, and was affirmed by the Court of Appeal in Rex vs Northumberland Compensation Appeal Tribunal; Ex parte Shaw(4).
In laying down that an error of law was a ground for granting certiorari, the learned Judges emphasised that it must be apparent on the face of the record.
Denning, L.J. who stated the power in broad and general terms observed: "It will have been seen that throughout all the cases there is one governing rule: certiorari is only available to quash a decision for error of law if the error appears on the face of the record".
The position was thus summed up by Morris, L.J. "It is plain that certiorari will not issue as the cloak of an appeal in disguise.
It does not lie in order to bring an order or decision for rehearing of the issue raised in the proceedings.
It exists to correct error of law where revealed on the face of an order or decision, (1) (3) (2) (4) ; 1123 or irregularity, or absence of, or excess of, jurisdiction where shown".
In Veerappa Pillai vs Raman & Raman Ltd. and Others(1), it was observed by this court that under article 226 the writ should be issued "in grave cases where the subordinate tribunals or bodies or officers act wholly without jurisdiction, or in excess of it, or in violation of the principles of natural justice, or refuse to exercise a jurisdiction vested in them, or there is an error apparent on the face of the record".
In T. C. Basappa vs T. Nagappa(2) the law was thus stated: "An error in the decision or determination itself may also be amenable to a writ of 'certiorari ' but it must be a manifest error apparent on the face of the proceedings, e.g., when it is based on clear ignorance or disregard of the provisions of law.
In other words, it is a patent error which can be corrected by 'certiorari ' but not a mere wrong decision".
It may therefore be taken as settled that a writ of certiorari could be issued to correct an error of law.
But it is essential that it should be something more than a mere error; it must be one which must be manifest on the face of the record.
The real difficulty with reference to this matter, however, is not so much in the statement of the principle as in its application to the facts of a particular case.
When does an error cease to be mere error, and become an error apparent on the face of the record? Learned Counsel on either side were unable to suggest any clear cut rule by which, the boundary between the two classes of errors could be demarcated.
Mr. Pathak for the first respondent contended on the strength of certain observations of Chagla, C. J. in Batuk K. Vyas vs Surat Municipality(3) that no error could be said to be apparent on the face of the record if it was not self evident, and if it required an examination or argument to establish it.
This test might afford a satisfactory basis for decision in the majority of cases.
But there must be cases in (1) ; (2) ; (3) A.I.R. 1953 Bom.
144 1124 which even this test might break down, because judicial opinions also differ, and an error that might be considered by one Judge as self evident might not be so considered by another.
The fact is that what is an error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element of indefiniteness inherent in its very nature, and it must be left to be determined judicially on the facts of each case.
These being the principles governing the grant of certiorari, we may now proceed to consider whether on the facts found, this is a fit case for a writ being issued.
The Tribunal, as already stated, held by a majority that Rule 47 (1) (c) was mandatory, and that accordingly the 301 ballot papers found in the box of the first respondent should have been rejected under that rule on the ground that they had not the distinguishing marks prescribed by Rule 28.
It bad also held under section 100(2) (c) of Act No. XLIII of 1951 that the result of the election had not been materially affected by the failure of the Returning Officer to comply with Rule 47(1)(c).
It accordingly dismissed the petition.
Now the contention of Mr. N. C. Chatterjee for the appellant is that in reaching this conclusion the Tribunal had taken into account matters which are wholly extraneous to an enquiry under section 100(2)(c), such as the mistake of the polling officer in issuing wrong ballot papers and its possible effect on the result of the voting, and that accordingly the decision was liable to be quashed by certiorari both on the ground of error of jurisdiction and error in the construction of section 100(2) (c) apparent on the face of the record.
The first respondent, on the other hand, contended that the decision of the Tribunal that the 301 ballot papers found in his box should have been rejected under Rule 47 (1) (c) was erroneous, because that rule was only directory and not mandatory and because the Election Commission had validated them, and that its decision was final.
He also contended that even if the ballot papers in question were liable to be rejected under Rule 47 (1) (c), for the purpose of deciding under section 100(2)(c) 1125 whether the result of the election had been materially affected the Tribunal had to ascertain the true intention of the voters; and the mistake of the polling officer under Rule 23 and its effect on the result of the election were matters which were within the scope of the enquiry under that section.
The correctness of these contentions falls now to be determined.
On the question whether Rule 47(1) (c) is mandatory, the argument of Mr. Pathak is that notwithstanding that the rule provides that the Returning Officer shall reject the ballot papers, its real meaning is that he has the power to reject them, and that on that construction, his discretion in the matter of accepting them is not liable to be questioned.
He relies on certain well recognised rules of construction such as that a statute should be construed as directory if it relates to the performance of public duties, or if the conditions prescribed therein have to be performed by persons other than those on whom the right is conferred.
In particular, he relied on the following statement of the law in Maxwell on Interpretation of Statutes, 10th Edition, pages 381 and 382: "To hold that an Act which required an officer to prepare and deliver to another officer a list of voters on or before a certain day, under a penalty, made a list not delivered till a later day invalid, would in effect, put it in the power of the person charged with the duty of preparing it to disfranchise the electors, a conclusion too unreasonable for acceptance".
He contended that to reject the votes of the electors for the failure of the polling officer to deliver the correct ballot papers under Rule 23 would be to disfranchise them, and that a construction which involved such a consequence should not be adopted.
It is well established that an enactment in form mandatory might in substance be directory, and that the use of the word "shall" does not conclude the matter.
The question was examined at length in Julius vs Bishop of Oxford(1), and various rules were (1) 1126 laid down for determining when a statute might be construed as mandatory and when as directory.
They are well known, and there is no need to repeat them.
But they are all of them only aids for ascertaining the true intention of the legislature which is the determining factor, and that must ultimately depend on the context.
What we have to see is whether in Rule 47 the word "shall" could be construed as meaning "may".
Rule 47(1) deals with three other categories of ballot papers, and enacts that they shall be rejected.
Rule 47(1) (a) relates to a ballot paper which "bears any mark or writing by which the elector can be identified".
The secrecy of voting being of the essence of an election by ballot, this provision must be held to be mandatory, and the breach of it must entail rejection of the votes.
That was held in Woodward vs Sarsons(1) on a construction of section 2 of the Ballot Act, 1872.
That section had also a provision corresponding to Rule 47(1) (b), and it was held in that case that a breach of that section would render the vote void.
That must also be the position with reference to a vote which is hit by Rule 47 (1) (b).
Turning to Rule 47(1) (d), it provides that a ballot paper shall be rejected if it is spurious, or if it is so damaged or mutilated that its identity as a genuine ballot paper cannot be established.
The word "shall" cannot in this sub rule be construed as meaning "may", because there can be no question of the Returning Officer being authorized to accept a spurious or unidentifiable vote.
If the word "shall" is thus to be construed in a mandatory sense in Rule 47(1) (a), (b) and (d), it would be proper to construe it in the same sense in Rule 47(1) (c) also.
There is another reason which clinches the matter against the first respondent.
The practical bearing of the distinction between a provision which is mandatory and one which is directory is that while the former must be strictly observed, in the case of the latter it is sufficient that it is substantially complied with.
How is this rule to be worked when the Rule provides that a ballot paper shall be rejected? There can be no degrees (1) 1127 of compliance so far as rejection is concerned, and that is conclusive to show that the provision is mandatory.
It was next contended that the Election Commission had validated the votes in question, and that in consequence the acceptance of the ballot papers by the Returning Officer under Rule 47 (1) (c) was not open to challenge.
It appears that interchange of ballot papers had occurred in several polling stations where election was held both for the House of the People and the State Assembly, and the Election Commission had issued directions that the rule as to the distinguishing mark which the ballot paper should bear under Rule 28 might be relaxed, if its approval was obtained before the votes were actually counted.
The Returning Officer at Hoshangabad reported to the Chief Electoral Officer, Madhya Pradesh that wrong ballot papers had been issued owing to the mistake of the polling officers, and obtained the approval of the Commission for their being included, before the votes were counted.
It is contended by Mr. Pathak that the power of the Election Commission to prescribe a distinguishing mark includes the power to change a mark already prescribed, and substitute a fresh one in its stead, and that when the Election Commission approved of the interchange of ballot papers at Hoshangabad, it had, in effect, approved of the distinguishing mark which those ballot papers bore, and that they were therefore rightly counted as valid by the Returning Officer.
There is no dispute that the Election Commission which has the power to prescribe a distinguishing mark for the ballot papers has also the power to change it.
But the question is, was that done? The Commission did not decide in terms of Rule 28 that the ballot paper for election to the House of the People should bear a brown bar and not a green bar.
The green bar continued to be the prescribed mark for the election under that rule, and the overwhelming majority of the ballot papers bore that mark.
What the Commission has done is to condone the defects in a specified number of ballot papers issued in the 1128 Hoshangabad polling stations.
That is not prescribing a distinguishing mark as contemplated by Rule 28, as that must relate to the election as a whole.
There can be no question of there being one distinguishing mark for some of the voters and another for others with reference to the same election and at the same polling station.
There is another difficulty in the way of accepting the contention of the first respondent.
The approval of the Election Commission was subsequent to the actual polling, though it was before the votes were counted.
Rule 23 throws on the polling officer the duty of delivering a proper ballot paper to the voter.
If a distinguishing mark had been prescribed under Rule 28, the ballot paper to be delivered must bear that mark.
Therefore, if any change or alteration of the original distinguishing mark is made, it must be made before the commencement of the poll, and the ballot paper should contain the new distinguishing mark.
The approval by the Election Commission ' subsequent, to the polling, therefore, cannot render valid the 301 ballot papers which did not bear the distinguishing mark prescribed for the election, and they are liable to be rejected under Rule 47 (1) (c).
The conclusion of the majority of the Tribunal that in accepting the ballot papers in question the Returning Officer had contravened that rule must therefore be accepted.
It remains to deal with the contention of the appellant that the decision of the Election Tribunal under section 100(2)(c) that the result of the election bad not been materially affected is bad, as it is based on considerations extraneous to that section.
This opens up the question as to the scope of an enquiry under section 100(2)(c).
That section requires that before an order setting aside an election could be made, two conditions must be satisfied: It must firstly be shown that there had been improper reception or refusal of a vote or reception of any vote which is void, or noncompliance with the provisions of the Constitution or of the Act (No. XLIII of 1951) or any rules or orders made under that Act or of any other Act or rules re 1129 lating to the election or any mistake in the use of the prescribed form.
It must further be shown that as a consequence thereof the result of the election had been materially affected.
The two conditions are cumulative, and. must both be established, and the burden of establishing them is on the person who seeks to have the election set aside.
That was held by this Courtin Vashist Narain vs Dev Chandra(1).
The Tribunal has held in favour of the appellant that Rule 47 (1) (c) is mandatory, and that accordingly in accepting the 301 ballot papers which had not the requisite distinguishing marks the Returning Officer had contravened that rule.
So, the first condition has been satisfied.
Then there remains the second, and the question is whether the appellant has established that the result of the election had been materially affected by contravention of Rule 47(1)(c).
The contention of Mr. Chatterjee is that when once he has established that the Returning Officer had contravened Rule 47 (1) (c), he has also established that the result of the election had been materially affected, because the marginal difference between the appellant and the first respondent was only 174 votes, and that if the ballot papers wrongly counted under Rule 47 (1) (c) had been excluded and the valid votes alone counted, it was be and not the first respondent that should have been declared elected under Rule 48, and that the result of the election bad thus been materially affected.
In reply, Mr. Pathak contends that this argument, though it might have proved decisive if no other factor had intervened, could not prevail in view of the other facts found in this case.
He argued that Rule 47 was not the only rule that had been broken; that owing to the mistake of the polling officer wrong ballot papers had been issued, and thus Rule 23 had been broken; that the printing of the distinguishing mark was faint and that Rule 28 had not also been properly complied with; that there was thus a chain of breaches all linked together, the final phase of it being the breach of Rule 47 (1) (c) and the effective cause thereof being the violation of Rule 23, and that (1) ; 1130 in judging whether the result of the election had been affected, these were matters relevant to be taken into consideration.
The object of the election, be contended, was to enable the majority of the voters to send a representative of their choice and for that purpose it was necessary to ascertain the intention of the voters from the ballot papers, irrespective of the question whether they were formally defective or not; that it was accordingly open to the Tribunal to look behind the barriers created by Rules 23, 28 and 47 (1) (c), discover the mind of the voters, and if that was truly reflected in the result of the election as declared under Rule 48, dismiss the petition under section 100(2) Mr. Chatterjee disputes this position, and contends that the enquiry under that section must be limited to the matters raised in the election petition, and that as there was no complaint about the breach of Rule 23 in that petition, it was outside the scope of the enquiry.
It is unnecessary to consider whether it was open to the Tribunal to enquire into matters other than those set out in the petition, when the returned candidate merely seeks to support the declaration.
He has in this case presented a recrimination petition tinder section 97 raising the question of breach of Rule 23, and that is therefore a matter which has to be determined.
The Tribunal has gone into that question, and has held that there was a violation of that rule, and its conclusion is not open to attack in these proceedings, and has not, in fact, been challenged.
The real controversy is as to the effect of that finding on the rights of the parties.
The answer to this is to be found in section 97.
Under that section, all matters which could be put forward as grounds for setting aside the election of the petitioner if be had been returned under Rule 48 could be urged in answer to the prayer in his petition that he might be declared duly elected.
And the result of this undoubtedly is that the first respondent could show that if the appellant had been returned under Rule 48 his election would have been liable to be set aside for breach of Rule 23, and that therefore he should not be declared 1131 elected.
That according to the Tribunal having been shown, it is open to us to hold that by reason of the violation of Rule 23, the appellant is not entitled to be declared elected.
Can we go further, and uphold the election of the first respondent under section 100 (2) (c) on the ground that if Rule 23 had not been broken, the wasted votes would have gone to him? The argument of the appellant is that would, in effect, be accepting the very votes which the Legislature says in Rule 47(1) should be rejected, and that it is not warranted by the scheme of the Act.
We think that this contention is well founded.
Section 46 of the Act provides that "when the counting of the votes has been completed, the Returning Officer shall forthwith declare the result of the election in the manner.
provided by this Act or the rules made thereunder".
The rule contemplated by this section is Rule 48.
That provides that the Returning Officer should after counting the votes "forthwith declare the candidate or candidates to whom the largest number of valid votes has been given, to be elected".
Under this rule quite clearly no candidate can be declared elected on the strength of votes which are liable to be rejected under Rule 47.
The expression "the result of the election" in section 100(1) (c) must, unless there is something in the context compelling a different interpretation, be construed in the same sense as in section 66, and there it clearly means the result on the basis of the valid votes.
This conclusion is further fortified when the nature of the duties which a Returning Officer has to perform under Rule 47 is examined.
Under that Rule, the Returning Officer has to automatically reject certain classes of votes for not being in conformity with the rules.
They are set out under Rule47(1)(b) and (c).
In other cases, the rejection will depend on his decision whether the conditions for their acceptance have been satisfied.
Thus in Rule 47 (1) (a) he must decide whether the mark or writing is one from which the elector could be identified; under Rule 47 (1) (d), 145 1132 whether the ballot paper is spurious or mutilated beyond identification; and under Rule 47(2), whether more than one ballot paper has been cast by the voter.
Rule 47 (4) is important.
It provides that "the decision of the Returning Officer as to the validity of a ballot paper. .shall be final subject to any decision to the contrary given by a Tribunal on the trial of an election petition calling in question the election".
Under this provision, the Tribunal is constituted a Court of appeal against the decision of the Returning Officer, and as such its jurisdiction must be co extensive with that of the Returning Officer and cannot extend further.
If the Returning Officer had no power under Rule 47 to accept a vote which had not the distinguishing mark prescribed by Rule 28 on the ground that it was due to the mistake of the presiding officer in delivering the wrong ballot paper it is not contended that he has any such power, and clearly he has not the Tribunal reviewing this decision under Rule 47(4) can have no such power.
It cannot accept a ballot paper which the Returning Officer was bound to reject under Rule 47.
It is argued with great insistence that as the object of the Election Rules is to discover the intention of the majority of the voters in the choice of a representative, if an elector has shown a clear intention to vote for a particular candidate, that must be taken into account under section 100(2) (c), even though the vote might be bad for non compliance with the formalities.
But when the law prescribes that the intention should be expressed in a particular manner, it can be taken into account only if it is so expressed.
An intention not duly expressed is, in a Court of law, in the same position as an intention not expressed at all.
The decision in Woodward vs Sarsons(1) was cited in support of the contention that for deciding whether the result of the election had been affected it was permissible to take into account votes which bad been rendered invalid by the mistake of the polling officer.
That was a decision on section 13 of the Ballot Act, (1) 1133 1872 which provided that no election should be declared invalid by reason of non compliance with the rules, if it appeared to the Tribunal "that the election was conducted in accordance with the principles laid down in the body of this Act, and that such noncompliance or mistake did not affect the result of the election".
What happened in that case was that all the ballot papers issued at polling station No. 130 had been marked by the polling officer and bad become invalid under section 2 of the Act.
It was con.
tended on behalf of the unsuccessful candidate that the mistake of the polling officer rendered the whole election void, without reference to the question whether the result of the election had been affected.
In repelling this contention, the Court observed at page 750: "Inasmuch, therefore, as no voter was prevented from voting, it follows that the errors of the presiding officers at the polling stations No. 130 and No. 125 did not affect the result of the election, and did not prevent the majority of electors from effectively exercising their votes in favour of the candidate they preferred, and therefore that the election cannot be declared void by the common law applicable to parliamentary elections".
This was merely a decision on the facts that the departure from the prescribed rules of election at the polling stations was not so fundamental as to render the election not one "conducted in accordance with the principles laid down under the body of this Act" Reliance was placed on certain observations in Re South Newington Election Petition(1).
In that case, the ballot paper had been rejected by the Returning Officer on the ground that it did not bear the requisite official mark.
The Court in a petition to set aside the election held on an examination of the ballot paper that the official stamp had been applied, though imperfectly, and that it should have been accepted.
The actual decision is in itself of no assistance to the respondent; but the Court observed in the course of its judgment: (1) (1948] 2 All E.R 503. 1134 "We think that, in a case where the voter is in no sense to blame, where he has intended to vote and has expressed his intention of voting in a particular way, and, so far as his part of the transaction is concerned, has done everything that he should, and the only defect raised as a matter of criticism of the ballot paper is some defect on the part of the official machinery by which the election is conducted, special consideration should (and, no doubt, would) be given, in order that the voter should not be disfranchised".
These observations are no authority for the proposition that if there was no mark at all on the ballot paper it could still be accepted on the ground of intention.
On the other hand, the whole of the discussion is intelligible only on the hypothesis that if there was no mark at all on the ballot paper, it must be rejected.
In the result, we must bold that in maintaining the election of the first respondent on the basis of the 301 votes which were liable to be rejected under Rule 47(1)(c) the Tribunal was plainly in error.
Mr. Chatterjee would have it that this error is one of jurisdiction.
We are unable to take this view, because the Tribunal had jurisdiction to decide whether on a construction of section 100 (2) (c) it could go into the fact of breach of Rule 23, and if it committed an error, it was an error in the exercise of its jurisdiction and not in the assumption thereof.
But the error is mani fest on the face of the record, and calls for interference in certiorari.
We have held that the election of the first respondent should be set aside.
We have further held that if the Returning Officer had, after rejecting the 301 ballot papers which did not bear the correct marks, declared the appellant elected, his election also would have to be declared void.
The combined effect of section 97 and section 100(2)(c) is that there is no valid election.
Under the circumstances, the proper order to pass is to quash the decision of the Tribunal and remove it out of the way by certiorari under article 226, and to set aside the election of the first respondent in exercise of the powers conferred by article 1135 227.
As a result of our decision, the Election Commis sion will now proceed to hold a fresh election.
This appeal must accordingly be allowed, the decisions of the High Court and the Tribunal quashed and the whole election set aside.
The parties will bear their own costs throughout.
Appeal allowed.
| IN-Abs | Article 226 of the Constitution confers on High Courts power to issue appropriate writs to any person or authority within their territorial jurisdiction, in terms absolute and unqualified, and Election Tribunals functioning within the territorial jurisdiction of the High Courts would fall within the sweep of that power.
The power of the High Court under article 226 to issue writ of certiorari against decisions of Election Tribunals remains unaffected by article 329(b) of the Constitution.
The High Courts have power under article 226 of the Constitu tion, to issue writs of certiorari for quashing the decisions of Election Tribunals, notwithstanding that they become functus officio after pronouncing the decisions.
The writ of certiorari for quashing the offending order or proceeding is directed against a record, and as a record can be brought up only through human agency, it is ordinarily issued to the person or authority whose decision is to be reviewed.
If it is the record of the decision that has to be removed by certiorari, then the fact that the tribunal has become funtus officio subsequent to the decision could have no effect on the jurisdiction of Court to remove the record.
As the true scope of the writ of certiorari to quash is that it merely demolishes the offending order, the presence of the offender before the court, though proper, is not necessary for the exercise of the jurisdiction or to render its determination effective.
The writ of certiorari being in reality directed against the record, there is no reason why it should not be issued to whosoever has the custody thereof.
The writ of certiorari is directed to the body or officer whose determination is to be reviewed, or to any other person having the custody of the record or other papers to be certified.
1105 The scope of article 226 of the Constitution is firstly that it confers on the High Courts power to issue writs and directions and secondly it defines the limits of that power.
This latter it does by enacting that it could be exercised over any person or authority within the territories in relation to which it exercises its jurisdiction.
The emphasis is on the words "within the territory", and their significance is that the jurisdiction to issue writs is coextensive with the territorial jurisdiction of the court.
The reference is not to the nature and composition of the court or tribunal but to the area within which the power could be exercised.
There is one fundamental distinction between a writ of prohibition and a writ of certiorari.
A writ of prohibition will lie when the proceedings are to any extent pending and a writ of certiorari for quashing will lie after the proceedings have terminated in a final decision.
If a writ of prohibition could be issued only if there are proceedings pending in a court, it must follow that it is incapable of being granted when the court has ceased to exist, because there could be then no proceeding on which it could operate.
But it is otherwise with a writ of certiorari to quash, because it is directed against a decision which has been rendered by a Court or tribunal, and the continued existence of that court or tribunal is not a condition of its decision being annulled.
Election Tribunals are subject to the superintendence of the High Courts under article 227 of the Constitution, and that superintendence is both judicial and administrative.
While in a certiorari under article 226 the High Court can only annul the decision of the Tribunals, it can, under article 227 do that, and also issue further directions in the matter.
As respects the character and scope of the writs of certiorari the following propositions may be taken as well established: (1) Certiorari will be issued for correcting errors of jurisdiction,as when an inferior Court or Tribunal acts without jurisdiction or in excess of it, or fails to exercise it.
(2) Certiorari will also be issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice.
(3) The court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction.
One consequence of this is that the court will not review findings of facts reached by the inferior Court or Tribunal, even if they be erroneous.
(4) An error in the decision or determination itself may also be amenable to a writ of "certiorari" if it is a manifest error apparent on the face of the proceedings, e.g., when it is based on clear ignorance or disregard of the provisions of law.
In other words, it is a patent error which can be corrected by "certiorari" but not a mere wrong decision.
What is an error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element 1106 of indefiniteness inherent in its very nature, and it must be left to be determined judicially on the facts of each case.
It is well established that an enactment in form mandatory might in substance be directory, and that the use of the word "shall" does not conclude the matter.
There are well known rules for determining when a statute should be construed as mandatory and when directory.
All of them are only aids for ascertaining the true intention of the legislature which is the determining factor, and that must ultimately depend on the context.
The word "shall" in Rule 47(1)(c) of the Representation of the People (Conduct of Elections and Election Petitions) Rules, 1951 which enacts that "a ballot paper contained in a ballot box shall be rejected if it bears any serial number or mark different from the serial numbers or marks of ballot papers authorised for use at the polling station or the polling booth at which the ballot box in which it was found was used", cannot be construed as meaning "may".
The provisions of Rule 47(1)(c) are mandatory like the provisions of Rule 47(1)(a), Rule 47(1)(b) and Rule 47(1)(d).
Held, that in maintaining the election of the first respondent in the present case on the basis of the 301 votes which were liable to be rejected under Rule 47(1)(c) the Tribunal was plainly in error.
As the error was manifest on the face of the record, it called for interference in certiorari.
Held further, that the prayer of the appellant to be declared elected must be refused under section 97, as the respondent had pleaded in his recrimination petition that there had been violation of Rule 23, and that by reason thereof the election of the appellant was liable to be set aside, if he had been declared elected and that plea had been established.
In the result the entire election was set aside.
N. P. Ponnuswami vs Returning Officer, Namakkal Constituency and Others ([1952] S.C.R. 218), Durga Shankar vs Raghuraj Singh ([1955] S.C.R. 267), T. C. Basappa vs T. Nagappa ([1955] S.C.R. 250), Clifford O 'Sullivan ([1921) 2 A.C. 570), Rex vs Electricity Commissioners ([1924] 1 K.B. 171), B. vs Wormwood Scrubbs (Governor) ([1948] 1 All E.R. 438), Waryam Singh and another vs Amarnath and another ([ ; , Parry & Co. vs Commercial Employees ' Association, Madras ([1952] S.C.R. 519), Veerappa Pillai vs Raman and Raman Ltd. and Others ([1952] S.C.R. 583), Ibrahim Aboobaker vs Custodian General ([1952] S.C.R. 696), Rex vs Northumberland Compensation Appeal Tribunal; Ex parte Show ([1951] ; 1 K.B. 711; , Rex vs Nat Bell Liquors Ltd. ([1922] 2 A.C. 128), Batuk K. Vyas vs Surat Municipality (A.I.R. , Julius vs Bishop of Oxford ([1880] L.R. 5 A.C. 214), Woodward vs Sarsons ([1875) , Vashist Narain v Dev Chandra ([1955] S.C.R. 509) and In Be South Newington Election Petition ([1948] 2 A.E.R. 503), referred to.
|
iminal Appeal No. 67 of 1969.
Appeal by special leave from the judgment and order dated August 12, 1969 of the Delhi High Court in Criminal Appeal No. 68 of 1967 and Murder Reference No. 1 of 1967.
H. R. Khanna and R. N. Sachthey, for the appellant.
Har Pershad and O. N. Mohindroo, for the respondent.
The Judgment of the Court was delivered by P. Jaganmohan Reddy, J.
This Appeal is by Special leave against the Judgment of the Himachal Bench of The High Court of Delhi acquitting the accused who had been sentenced to death for an offence of murder under Section 302 of the Indian Penal Code.
The accused Respondent was a Manager at the Kotkhai Branch of the Himachal Pradesh State Cooperative Bank of which Sunder Lal Chaturvedi the deceased was the General Manager.
It appears that during the period the accused was working in that Bank there was a fire in the Kotkhai Branch in which the records of the Bank were burnt and a sum of Rs. 10,000/,A was found missing.
The deceased had suspended the accused from the service and subsequently he was dismissed.
In or about 1964, the deceased retired from the Bank and in 1965 started a Private Limited Company under the name of Himprasth Financiers with the Head Office at Nagina Singh Building which was situated in the Mall at Shimla of which he was the Managing Director.
He used to also live in the same building in one of the rooms of the office and have his meals in the Mansarovar Hotel.
The other Directors of this Company were Gurucharan Singh, Puran Chand Sood and Kailasli Devi wife of I. C. Gupta, P.W. 2, who was at one time also Manager in the Himachal Pradesh State Cooperative Bank.
After the accused was dismissed from the Bank he had applied to the deceased for a job and was appointed as an Accountant in the Finance Company but later when his request for increase in his pay was not sanctioned, he sent in his resignation by a letter dated 31 12 66 Exh.
P. 8 and it was accepted on 3 1 67 by a resolution of the Board of Directors Exh.
P. 43.
On the night of 30th January 1967 the deceased had his dinner at the Hotel and when lie came out after taking his food it was alleged that he was met by the accused.
This was witnessed by Romesh Chand P.W. 7 the Proprietor of the Hotel who saw them both going towards the Mall.
Thereafter at the betel shop which is near Nagina Singh Building, Lal Chand P.W. 9 who was purchasing cigarettes at that shop saw them together and going towards the Nagina Singh Building.
It 768 was the last time he was seen alive.
On the 31st January 67 at about 9.30 a.m. I. C. Gupta P.W. 2, came to visit the deceased and .found that the main door was bolted from inside.
He then peeped through the glass of the window panes through the adjoining room and saw that the deceased was lying in a pool of blood.
He immediately telephoned to the Police.
In response to this call the Station House Officer of the Saddar Police Station, Inder Raj Malik, P.W. 28 came to the building, broke open the room through the kitchen door and saw that the back door of the bath room was open.
At that time there were present P.W. 2.
Amar chand P.W. 8, Raidev Krishan P.W. 13 and others.
The deceased had on him four incised wounds one on the neck and 3 on the hands.
On inspection of the room he found on the nearby table a key exhibit 4 stained with blood and under the table there was a biscuit colour Coat button exhibit 1.
Inside the shelf of an Almirah there was a water flask which appeared to have on its neck 3 finger impressions.
On the glass pane of the door leading to the kitchen were also found two finger marks.
The curtain near the kitchen door showed that someone had wiped his blood stained hands on it.
The key and the button were seized and a panchnama was made.
There were also found two bunches of the keys underneath the pillow of the deceased.
Des Raj, P.W. 6, the Police Photograph took photographs not only of the various objects in the room but also of the finer marks on the flask and the window panes after the same were dusted with some prey powder.
Thereafter the Investigating, Officer P.W. 28 requested P.W. 2, P.W. 8 and P.W. 13 to ascertain if any of the things belonging to the deceased were missing.
These three persons informed him after inspection list two loan registers, one general ledger, one cash book and vouchers from April '66 to December '66 were missing.
They further informed him that one blanket of the deceased, one tea poy cove, ' and one canvas bag was missing.
An inquest on the dead body was held and the blood found was also seized.
Thereafter p.
W. 28 went to Mansarover Hotel and recorded the statement of P.W. 7.
On 1 2 6 / at about 11.30 a.m. P.W. 28 accompanied by the Assistant Sub Inspector and Constables met P.W. 2, P.W. 8 and boarded the jeep of P.W. 2 driven by Roshan Lal and went towards the house of Om Prakash.
On the way PW. 2 saw Kala Ram, P.W. 5, who was waiting for a bus and asked him to get into the jeep.
Thereafter they went to the house of the accused situated at Anandale and there P.W. 28 went inside the house and saw the accused in one of his rooms and brought him outside.
After interrogating him he arrested him and pursuant to a statement made by him seized from him one sweater, one coat, one blanket which was hidden inside the nivar of his cot lying inside his room.
The sweater and the coat were stated by the accused to be his.
The accused also gave them the pair of boots and socks which he was wearing and informed them that he had concealed one blood 769 stained dagger under a stone slab below the Maidan of Burnt Market and over the bakeries which was by the side of a pipe and offered to have it recovered.
He further stated that he had kept the five registers in a canvas bag which lie had hidden below a stone at Krishna Nagar on the bank of Ganda Nala and that he had thrown 8 or 9 bundles of the vouchers tied in a tea poy cloth and his blood stained pants in the Ganda Nala and would get them recovered.
The, Investigating Officer reduced the statements to writing in the presence of the Panchas and took their signatures.
This Panchnama is exhibit P. 6.
The coat and sweater and the blanket inside he nivar of his cot were handed over by the accused to the police.
These were found to contain blood and were seized through a Panchnama.
The accused then took them to the market and on the way were met by Bhag Singh P.W. 12 and in the presence of all these persons he.
removed a piece of stone which was near a pipe and brought out a blood stained dagger from under it and gave it to P.W. 28.
He then took them to the Tekri of one Ganga Singh P. W. II, in the Lower Bazar who sells daggers and there P.W. 28 recorded his statement that on the day of the incident the accused had purchased the dagger recovered from under the stone which was identified by P.W. 11, as the one sold to him.
On the next day namely 2 2 67 P.W. 28, got a plan of the rooms and the office where the deceased was working and living prepared and from there accompanied by P.W. 2, P.W. 13 went to Krishna Nagar taking with them on the way Manohar Lal P.W. 14, from Krishna Nagar to Ganda Nala which was flowing in the khud.
From near there the accused pointed out a stone slab from where a canvas bag which contained five registers said to be missing from the residence of the deceased were recovered and then the accused went into the Ganda Nala brought out a tea poy cloth which contained vouchers and also recovered a blood stained pant which was lying under the water.
The button and the coat were sent to the forensic laboratory at Chandigarh for examination.
The flash and, the glass panes were sent to the Finger Print Examiner at Phillor and the button to the Forensic Laboratory which gavel a report that it was similar to the button on the coat from which it was missing.
The Chemical Examiner and Serologist found human blood on the key.
the dagger, blanket, coat, sweater and pant, the shoes and socks.
The blood grouping could only be found on the pajama and shirt of the deceased which is of 'O ' group while no blood grouping was possible in respect of the other articles referred to.
Vide exhibit P. 60 and exhibit P. 48.
The finger print expert found on the flask and the glass pane reported as per exhibit P. 59 that they are the same as those of the accused and have more than 12 points of similarity i.e. matching ridge characteristic details.
The High Court grouped the circumstances relied against the accused Under 4 broad heads namely 770 (i) that there was a motive for committing the murder; (ii) that the deceased Chaturvedi was seen last in the Company of the accused; (iii) that in pursuance of the statement said to have been made by the accused as per exhibit P. 6 a recovery of blood stained sweater, coat, blanket.
shoes and socks and blood stained dagger were made ,as per exhibit P. 6/A on 1 2 67 (the date given in the Judgment as 2 2 67 is not correct), and that on 2 2 67 five registers contained in a bag and 12 bundles of vouchers were recovered; and (iv) that the finger marks of the accused were found on the flask as well as on the glass panes at the place where the murder took place.
If the circumstantial evidence as relied upon by the prosecution is credible and acceptable the offence with which the accused is charged can be held to be established beyond reasonable doubt.
The High Court however did not accept these circumstances as having been established by any independent and reliable evidence.
In so far as motive suggested byu the prosecution is concerned it was of the view that while no doubt the accused was suspended by an order of the deceased on 21 6 63 that suspension must have been as a consequence of the action taken by the authorities of the Bank with the approval of the Board of Directors and this does not indicater that he could have any grievance against him; that the accused had no grievance against the deceased is also shown by the fact that the deceas ed had given him employment in the Finance Company.
The second circumstance against the accused, that lie was last seen in the Company of the deceased on 30 1 67 at 9.30 p.m. was also held not to incriminate him for the reason that even if Lal Chand P.W. 9 's statement was true, it only goes to show that the accused was seen going with the deceased towards the Nagina Singh Building but that does not mean that they had gone into that Building together, but on the other hand there was a possibility of the accused taking leave of the deceased and going away to his house without entering into the Nagina Singh Building.
With respect to the third circumstance relating to the seizure and recovery of articles and their admissibility under Sec.
27 of the Evidence Act, it was observed that the evidence adduced by the prosecution for establishing these circumstances reveals a number of irregularities and is suspicious firstly because the prosecuting officer took with him all the witnesses who were neither independent nor impartial and even the witness P.W. 5 Kala Ram cannot be considered to be independent or impartial as he was not a stranger but was known to the Enquiry Officer.
A reading of Kala Ram 's ,evidence gives the impression that he is a person willing to be an ;agent of the police.
It also appeared to the High Court that the 771 action of P.W. 28 in bringing the accused out of the room when he and the other witnesses went to his house gives rise to the suspicion that it might have been done deliberately to clear the way for planting the articles in the cot which was in the room and fourthly the statement exhibit 6 said to have been made by the accused amounted to a confession by the accused and it as the enquiry officer P.W. 28 claimed that the statement was voluntary instead of recording it himself he could have produced the accused before a Magistrate for recording the same.
In view of this the High Court was not satisfied that the statements were freely and voluntarily made by the accused and accordingly neither the portions of those statements which related to the discovery of incriminating facts nor the admissibility under Sec.
27 of these Memos exhibit P6 & P. 6A and P. 7 which were signed by P.W. 2, P.W. 5, P.W. 8 and P.W. 28 both on 1 2 67 as well as on 2 2 67 could be relied upon.
Even the handing over of the shoes and socks it was observed cannot be treated as having been discovered because the accused was wearing them at the time when he handed them over to the police, and also that it was difficult to believe that the accused will have the coat, sweater and blanket which are said to have blood stains on them recovered because he could have discarded them in the same way as he is said to have done with his pants.
Moreover the coat and the sweater were not shown to belong to the accused by independent and reliable evidence.
For these reasons the alleged discoveries or the recoveries of the coat, the sweater, the blanket, shoes and socks were rejected.
Even with respect to the discovery of the dagger the High Court thought that Amar Chand P.W. 8 was not an independent witness, that Bhag Singh P.W. 12 who was just a worker at the bakery claimed to be present casually did not inspire confidence, nor in the absence of independent witnesses who could have been easily procured could the other evidence be relied upon.
The identification of the dagger by Ganga Singh P.W. 11 before the Magistrate was also not accepted because there was nothing to show that the dagger was the one which was purchased by the accused nor is it possible to distinguish the dagger in question from the other 3 daggers with which it was mixed up.
Similarly the evidence relating to the recovery of the account books and vouchers was disbelieved.
The thumb impressions on the flask and the glass panes was rejected on the ground that no particulars were set out by the Director of the Finger Prints Bureau except the stereotyped statement that there was a similarity of more than 12 points.
On this aspect the High Court observed as follows "If the accused also had handled the flask, as suggested by the prosecution, his finger impressions also would be on the flask, and there would be quite a good number of finger impressions on the flask.
But curiously only three finger impressions, and that too of the accused, are 772 said to be present on the flask.
This in our Opinion, is a very suspicious feature.
Further, the existence of the finger marks is said to have been noticed even at the earliest stage of the inquest, and that too not by any expert but by the any vestigating Officer, I.C. Gupta, Amar Chand and Baldev Krishan as though they anticipated the presence of the finger marks.
There is thus no clear proof that the finger marks alleged to have been found on the flask and the glass pane were those of the accused, and we hold accordingly".
In possession of articles which bear incriminating blood stains and Court has undoubted power to interfere with the findings of fact, no distinction being made between judgments of acquittal and conviction, though in the case of acquittals it will not ordinarily interfere with the appreciation cf evidence or on findings of fact unless the High Court "acts perversely or otherwise improperly" (See State of Madras vs Vaidyanatha lyer) (1).
The case against the accused as already stated depends entirely on circumstantial evidence the credibility of which is very much in issue.
It is well established that circumstantial evidence consists in various links in a chain, which if complete, leads to the undoubted conclusion that the accused and accused alone could have committed the offence with which he is charged.
It is said that this evidence is much more dependable than direct evidence provided that no link in the chain is missing.
While it is possible that each of these links may not by itself incriminate the accused or be conclusive against him the linking of all of them may forge the chain in arriving at that conclusion The evidence that accused had ill will against the deceased furnishing a motive, that he was last seen in the company of the deceased, that he was present in the room of the deceased at or about the time he was murdered, that he was subsequently found in possession of articles which bear incriminating 'blood stains and that he had hidden the dagger with blood stains thereon and certain other articles which were discovered on the information furnished by him, all of which if believed leads to the conclusion that he was the murderer.
In appreciating the evidence against the ac cused the prime duty of a court is firstly to ensure that the evidence is legally admissible, that the witnesses who speak to it are credible and have no interest in implicating him or have ulterior motive.
At the very outset an attempt was made on behalf of the de fence to suggest that it was P.W. 2 who was the murderer and not the accused.
This suggestion was made to him in the committal court as also in Sessions Court but it was denied.
It was submitted that P.W. 2 had a motive to do away with the deceased because he (1) ; , 587. 773 wanted to appropriate to himself the money and property of the deceased.
To this end he was cross examined with the object of establishing that he and the deceased had purchased jointly a land near Chhail and that the deceased was in possession of large sums of money and that P.W. 2 used to receive all the amounts from the loans.
advanced by the Finance Company and to avoid any liability for these amounts the murder was committed with the object of taking away the accounts and destroying the evidence relating there to.
It was further suggested that because of this motive he and P W, 8 who admitted that he considered P.W. 2 as his superior and P.W. 13 Bhag Singh who is the brother in law of P.W. 2 being the wife 's brother, were interested in shifting the offence to the accused by taking a prominent part during the investigation and became the main witnesses for proving the several incriminating circumstances against him.
While it is not the function cf this Court to determine who other than the person who has been charged with the murder had committed it, the line which the defence adopted was to establish that the witnesses referred to above had an interest in implicating the accused or at any rote to create uncertainty and doubt sufficient to give the benefit to the accused.
It is not beyond the ken of experienced able and astute lawyers to raise doubts and uncertainties in respect of the prosecution evidence either during trial by cross examination or by the marshalling of that evidence in the manner in which the emphasis is placed thereon. 'But what has to be borne in mind is that the penumbra of uncertainty in the evidence before a Court is generally due to the nature and quality of that evidence.
It may be the witnesses are lying or where they are honest And truthful, they are not certain.
It is therefore difficult to expect a scientific or mathematical exactitude while dealing with such evidence or arriving at a true conclusion.
Because of these difficulties corroboration is sought wherever possible and the maxim that the accused should be given the benefit of doubt becomes pivoital in the prosecution of offendsers which in other words means that the prosecution must prove its case against an accused beyond reasonable doubt by a sufficiency of credible evidence.
The benefit of doubt to which the accused is entitled is reasonable doubt the doubt which rational thinking men will reasonably, honesty and conscientiously entertain and not the doubt of a timid mind which fightshy though unwittingly it may be or is afraid of the logical consequence if that benefit was not given.
Or as one great Judge said it is "not the doubt of a vacillating mind that has not the moral courage to decide but shelters itself in a vain and idle scepticism".
It does not mean that the evidence must be so strong as to exclude even a remote possibility that the accused could not have committed the offence.
If that were so the law 774 would fail to protect society as in no case can such a possibility be excluded.
It will give room for fanciful conjectures or untenable doubts and will result in deflecting the course of justice if pot thwarting it altogether.
It is for this reason the phrase has been criticised.
Lord Goddard C.J. in Rex vs Kritz(1) said that when in explaining to the juries what the prosecution has to ,establish "a Judge begins to use the words " 'reasonable doubt" and to try to explain what is a reasonable doubt and what is not, be is much more likely to confuse the jury than if he tells them in plain language "It is the duty of the prosecution to satisfy you ,of the prisoner 's guilt" ".
What in effect this approach amounts to is that the greatest possible care should be taken by the Court in convicting an accused who is presumed to be innocent til the contrary is clearly established which burden is always in the accusatory system, on the prosecution.
The mere fact that there is only a remote possibility in favour of the accused is itself sufficient to establish the case beyond 'reasonable doubt.
This then is approach.
The High Court thought, there was force in the suggestion of the learned Advocate for, the accused that P.W. 2 had a clear motive to take away the registers and vouchers of the Company to make such use of them as would suit him and also to murder the deceased.
On the contrary the I evidence of P.W.; 2 shows that he was a friend of the deceased.
, He had been a Manager in the Himachal: Pradesh State Cooperative Bank when the de , was the General Manager.
There is nothing to show that during that period the deceased and, he were.
,on inimical terms or there was any disagreement between them of Such a nature as .would imply that he bore ill will towards the deceased.
On the ,other hand both of them had jointly purchased a land, and when the deceased started the Himprasth Finance Company P.W. 2 's wife was made a Director in that Company blecause P.W. 2 being an employee in a State Cooperative Bank could not take interest therein.
At the time of the incidept it ' appear. , that P.W. 2 was living in Simla and according to him he had ,regard for the deceased and as he was his General Manager he ,used to go to him almost daily in the morning and in the evening.
He further says he must have visited him hundred times inside the house, and on the evening of the 30th January, 67, the deceased and he went for an evening stroll as usual and at 9.30 p.m. that day he left him near the Nagina Singh Building, after which the deceased went away to take his food towards the Lower Bazar side and he went away to his house.
P.W. 2 knew of the financial position of the deceased which was according to the loan ledger entries of the Himprasth Finance Company 775 Rs. 1157.71 np.
as on 31 12 66, that there was a credit amount of Rs. 14,000 as on 29 11 66 Which was not withdrawn till then; that certain amounts were also borrowed for the marriage of his daughter from Rawal Chand of Sanjouli whom he knew welt and that from the accounts it appeared that there was only Rs. 6.10 np.
as cash in hand of the Company which may be in the hands of P.W. 13.
He further states that he used to.
be present in every meeting of the Himprasth Financiers and he used to write: the Minutes Book.
There is no suggestion that these Account Books were manipulated or that the entries therein were, not made con temporaneously with the transactions which they evidenced.
There is therefore no justification for holding that either P.W. 2, or P.W. 8 or P.W. 13 notwithstanding their close connection with the deceased and the Himprasth ;Finance Company were inimically disposed towards the deceased or towards the accused.
No adverse inference can be drawn as contended by the learned Advocate for the accused, against P.W. 2 that the circumstance point out to him as being concerned with the murder or against the other two witnesses that they were supporting P.W. 2 with the object of exculpating him from any charge that may be levelled again st him.
The ' suggestion that P.W. 2 Wanted to appropriate the property of the deceased or do away with the cash from the loans which were, being paid to him directly had no rationale.
to support it, because firstly the deceased had one married daughter another unmarried, and secondly that he had nephews who,in the absence, of the daughters would have inherited his property.
A suspicion was sought to be aroused because P.W. 2 did.not scene for the daughters jut sent for the nephews which was with the object of dividing the properties of the deceased in league with them.
P.W. 2 said that he did not know the address of the daughters of deceased and therefore he sent for the nephews, as such no sinister motive can be attributed to him.
P;W. 28 the Investigating Officer had known that P.W. 2, P.W. 8 and P.W. 13 were the only persons closely connected he found some finger prints on the flask and the window panes, he out of abundant caution took their finger prints also on that very day long before the accused was suspected as being involved in the murder.
It was only after the investigating Officer examined P.W. 7 the Proprietor of Mansarover Hotel at about 8.30 p.m. on the day the murder was discovered that he came to know that the accused had met the deceased outside the Hotel after he had taken his meals that night.
The various Panchnamas of seizures that the Investigating Officer prepared in the presence of P.W. 2, P.W. 8 and P.W. 13 cannot be assailed merely on the ground that they were connected with the deceased or with Himprasth Finance Company.
The fact that a key and a button 776 was recovered or that the flask or the window panes had finger prints were found in the room where the deceased was murdered are, unassailable nor has any doubt been raised to discredit these recoveries.
All that is said by the learned Advocate is that P.W. 28, being an experienced Investigator had created evidence and the Account Books, vouchers, tea poy cloth, a canvas bag, blanket of the deceased were shown as missing in order to plant them subs equently on the accused.
But at the time when these seizures were made the part played by the accused if any was not known, and if at all P.W. 2, P.W. 8 and P.W. 13 who were Witness to the panchnama had not been cleared from suspicion.
We are not unaware that Section 27 of the Evidence Act which makes the information given by the accused while in custody leading, to the discovery of a fact and the fact admissible, is liable to be abused and for that reason great caution has to be exercised in resisting any attempt to circumvent, by manipulation or ingenuity of the Investigating Officer, the protection afforded by Sec. 25 and Sec.
26 of the Evidence Act.
While considering the evidence relating to the recovery we shall have to exercise that caution and care which is necessary to lend assurance that the information furnished and, the fact discovered is credible.
As already stated, on 1st February 1967 the coat, sweater, shoes and socks of the accused and a blanket of the deceased ware recovered in the presence of P.W. 2, P.W. 5, P,W. 8 and P.W. 28.
After this they proceeded to: the place indicated by the accused and recovered the blood stained dagger from under a stone, which was witnessed by them.
P.W. 2 did not accompany the party as according to him he had to Jo to make arrangements for the funeral of: the deceased On 'the way to the place from where the dagger was to be recovered, the party met one Bhag Singh P.W. 12 who also accompanied then to the place of recovery and in the presence of Roshan Lal who I was 'not examined) Amar Chand, P.W. 8, Bhag Singh, P.W. 12, and P.W. 28, the dagger was recovered and a Memo exhibit P. 28 was prepared and.
attested by the 'aforesaid witnesses,.
The High Court rejected the evidence of 'these recoveries under exhibit P. 6/A and P. 28 because P.W. 2, P.W. 8, P.W. 13 and Roshan Lal the driver of P.W. 2, were all connected with the deceased and are not therefore independent or impartial witnesses, It thought that the Investigating Officer should have called independent and impartial witnesses preferably, and if possible, from the locality, as it could not be said that they were not available or if,,: available would not be willing to be witnessed and that in any base calling of, the same persons to witness several searches or recoveries, is objectionable, and would render the search or the recovery doubtful and suspect, if not invalid.
777 Further having held this it nonetheless said that there was no injunction against the same get of witnesses being present at the successive enquiries if nothing could be urged against them.
In our view the evidence relating to recoveries is not similar to that contemplated under Sec.
103 of the Criminal Procedure Code where searches are required to be made in the presence of two or more inhabitants of the locality in which the place to be searched is situate.
In an investigation under Sec.
157 the recoveries could be proved even by the solitary evidence of the Investigating Officer if his evidence could otherwise be believed.
We cannot as a matter of law or practice lay down that where recoveries have to be effected from different places on the information furnished by the accused different sets of persons should be called in to witness them.
In this case P.W. 2 and P.W. 8 who worked With the deceased were the proper persons to witness the recoveries as they could identify some of the things that were missing and also they could both speak to the information and the recovery made in consequence thereof as a continuous process.
At any rate P.W. 2 who is alleged to be the most interested was not present at the time of the recovery of the dagger.
P.W. 5,s evidence was not considered to be independent, be cause the High Court thought that he was known to P.W. 28 from before.
This by itself in our view will not justify the rejection of his evidence.
That apart there is nothing in his evidence to show that P.W. 28 knew him before he came to Simla while he was living in Kaithal.
The witness stated that the S.H.O. was never posted at Kaithal but knew the Daroga (SHO) from 2/3 months before that date.
He had not met P.W. 28 before be arrived at Simla.
It was suggested to him that Daroga had come and sat in his shop at the Mandi but that was denied.
He however stated that the Daroga used to ask his 'hal chal ' sometime and used to wish him and that was all.
Witness also denied having seen P.W. 2 and P.W. 8 before that day and came to know their names only when he went to Anandale.
The brothers of P.W. 5 were at Kaithal doing business ' but here again there was nothing to connect the brothers with P.W. 28 and though P.W. 28 admits that his own brothers Roshan Lal and Malik Harbans Lal reside in Kaithal and one of them has some lands there, he was not.
on good terms with them and denies that they bad any connection with P.W. 5.
From this evidence it is clear that apart from the fact that P.W. 28 had known P.W. 5 after he had come to.
Simla which is not unusual for a Police Officer, there is nothing to indicated that P.W. 5 could be subservient to P.W. 2,8.
It is not unknown that in some instances where persons are made to witness Panchnamas they have resiled from them while giving evidence in Court, probably either due to 778 the pressure exerted by the police at that time or they have been won over by the defence.
Nothing of that nature is appar ent in this case and the comment of the High Court that a reading of the evidence of P.W. 5 gives the impression that he is a person willing to be pliable agent of the police and cannot be regarded as an independent or impartial witness has in our view no justification.
It is said that P.W. 12 Bhag Singh was just a worker at the bakery and while he pretends to be present there casually at the spot from where the dagger was taken out, the Investigating Officer said he had summoned him on the suggestion of the Head Constable; as such his evidence 'does not inspire confidence .
'We do not think that this is a sufficient reason for discarding the evidence of P.W. 5 because when P.W. 28 says he summoned Bhag Singh through the constable it does not negative the statement of Bhag Singh that he was casually present and could have been called 'by him through the Head Constable.
In our view there is no reason to hold that the evidence of these persons P.W. 2, P.W. 5, P.W. 8 and P.W. 12 can be said to suffer from any infirmity or that they had not witnessed the information given by the accused as per Exhibits P. or P. 28 or the recoveries made by him as a consequence of that information.
Thereafter on the information furnished by the accused that he had purchased the weapon from Ganga Singh P.W. 11 and that be would take them to him, they went to the, thari of P.W. 11 where the accused pointed him out to them.
It is contended that the information given by the accused that he purchased the dagger from P.W. 11 followed by his leading the police to his thari and pointing him out is inadmissible under Sec. 27 of the Evidence Act.
In our view there is force in this contention.
A fact discovered within the meaning of Sec.
27 must refer to a material fact to which the information directly relates.
In order to render the information admissible the fact discovered must be relevant and must have been such that it constitutes the information through which the discovery was made.
What is the fact discovered in this case? Not the dagger but the dagger hid under the stone which is not known to the police.
(See Pulukuri Kotayya & Ors.
vs King Emperor) (1).
But thereafter can it be said that the information furnished by the accused that he purchased the dagger from P.W. 11 led to a fact discovered when the accused took the police to the thari of P.W. 11 and pointed him out ? A single Bench of the Madras High Court in Public (1) 74 India Appeals p. 65.
779 Prosecutor vs India China Lingiah & Ors.
(1), and in re Vellingiri (2), seems to have taken the view that the information by an accused leading to the disco very of a witness to whom he had given stolen articles is a discovery of a fact within the meaning of Sec. 27.
In Emperor vs Ramanuja Ayyangar(3), a Full Bench of three Judges by a majority held that the statement of the accused "I purchased the mattress from this shop and it was this woman (another witness) that carried the mattress" as proved by the witness who visited him with the police was admissible because the word 'fact ' is not restricted to something which can be exhibited as a material object.
This judgment was before Pulukuri Kotayya 's case (4) when as far as the Presidency of Madras was concerned the law laid down by the Full Bench of that Court, in Re Athappa Goundan prevailed.
It held that where the accused 's statement connects the fact discovered with the offence and makes it relevant, even though the statement amounts to a confession of the offence, it must be admitted because it is that has led directly to the discovery.
This view was over ruled by the Privy Council in Pulukuri Kotayya 's case(5) and this Court had approved the Privy Council case in Ramkishan Mithanlal Sharma vs The State of Bombay(6).
In the Full Bench judgment of seven Judges in Sukhan vs The Crown (7 ) , which was approved by the Privy Council in Pulukuri Kotayya 's case(8), Shadi Lal, C.J., as he then was speaking for the majority pointed out that the expression 'fact ' as defined by Sec.
3 of the Evidence Act includes not only the physical fact which can be perceived by the senses but also the psychological fact or mental condition of which any person is conscious and that it is in the former sense that the word used by the Legislature refers to a material and not to a mental fact.
It is clear therefore that what should be discovered is the material fact and the information that is admissible is that which has caused that discovery so as to connect the information and the fact with each other as the 'cause and effect '.
That information which does not distinctly connect with the fact discovered or that portion of the information which merely explains the material thing discovered is not admissible under Sec. 27 and cannot be proved.
As explained by this Court as well as by the Privy Council, normally Sec.
27 is brought into operation where a person in police custody produces from some place of concealment some object said to be connected with the, crime of which the informant is the accused.
The concealment of the fact which is not known to the police is what is discovered by the information and lends assurance that (1) AIR 1954 Mad. 333.
(2) AIR 1950 Mad 613.
(3)AIR (4) 74 1.
A. 64.
(5) ILR (6) ; , (7) ILR Vol.
X Lahore 283.
780 the information was true.
No witness with whom some material fact, such as the weapon of murder, stolen ' 'property or other in eliminating article is not hidden sold or kept and which is unknown to the Police can be said to be discovered as a consequence of the information furnished by the accused.
These examples however are only by way of illustration and are not exhaustive.
What 'Makes the information leading to the discovery of the witness admissible is the discovery from him of the thing sold to him or hidden or kept with him which the police did not know until the.
information was furnished to them by the accused.
A wittiness cannot be said to be discovered if nothing is to be found or recovered from him as a consequence of the information furnished by the accused and the information which disclosed the identity of the witness will not be admissible.
But even apart from the admissibility of the information under Sec. 27, the evidence of the Investigating Officer and the panchas that the accused had taken them to P.W. 11 and pointed him out and as corroborated by P.W. 11 himself would be admissible under Sec. 8 '.of the Evidence Act as conduct of the accused.
We then come to the recovery on the second February, of Pant, the Account Books and the vouchers.
These however, cannot in our view be relied upon because P.W. 28 had information relating to them which had been furnished by the accused more than 24 hours before and the description given by him was that they could have been discovered.
At any rate the long delay does not lend assurance to the discovery.
It appears from the application made on the 2nd February to the Magistrate that the accused was arrested on 1 2 67 and at his instance and from his possession one sweater.
one coat and one blanket blood stained, have been recovered and in addition one blood stained warm pant, one duster, one bag containing 5 registers are still t0 be 'recovered on the pointing out of the accused but the remand of the, accused is due to expire at 1 p.m. and accordingly it was requested that a further remand for 7 days be given and the a caused made over to the police and orders be passed.
The accused is alleged to have given the information that he had hid them under the stone slab near Krishna Nagar Ganda Nala Which he had thrown away in the sewage and which he said will point out and get them recovered.
The recovery itself is under E P.7, to which P.W. 2, P.W. 13 and Manohar Lal P.W. 14 who was picked up on the 'rasta when he was summoned by the constables are witnesses.
According to P.W. 14 the Thandar was going ahead and went down to the Nala, when the constable summoned him and he went there.
He further says that the Thanedar sent a constable down.
The accused bad a talk with Thanedar.
The constable took out from below a stone slab five registers in a bag, the accused was standing on a stone.
At ibis 781 stage the prosecutor sought permission to cross examine the witness and it 'Was given.
In the cross examination he denied in signed the Memo at the spot and said that he had signed ' it at the Thana.
He also said it was incorrect to suggest that the Memo was read over to him and he signed it.
Whether the articles recovered were planted at the place from where, they were alleged to be recovered or not as suggested by the learned Advocate for the accused, the evidence referred to certainly goes against the prosecution version that the Account Books, vouchers and the pant were recovered at the instance of the accused.
The Police appears to have known the place from where these articles were alleged to have been recovered and therefore it cannot be said 'that they were discovered as a consequence of the information furnished by the accused.
After excluding the recoveries made tinder exhibit 7 namely the Account Books etc.
the evidence against the accused which remains to be considered is, the motive, the recovery of the button, the finger prints on the flask and the window panes, blood stained coat, sweater, shoes and socks alleged to be of the accused, blanket, the dagger and the deceased being last seen alive in his Company.
As we have already noticed the High Court had rejected the evidence of motive but in our view it failed to consider one aspect which is important namely that the accused wanted to be reemployed with the Himprasth Finance Company and though the other Directors were willing, the deceased was not.
It is true that the initial illwill which he may have had against the deceased when he suspended him in 1964 may have been forgotten because the deceased subsequently extended his sympathy and employed him in his Finance Company.
The accused was not satisfied with the conditions of his service and wanted an increase in the pay which the Company was not prepared to give causing him to resign.
This itself may have given him cause to nurse a grievance against the deceased because he was the person who was as incharge of the affairs of that Company in which he had a dominant voice but when he wanted to be reappointed the deceased definitely put his foot down and refused to entertain him which would certainly create ill will in him against the be occasion but if he does not continue to do so or positively obstructs or is against his being given any benefit even on one such occasion it may give rise to a sense of grievance against him.
The springs of human action and conduct are unfathomable because what motivates them is difficult to postulate.
At any rate where personal interest is involved, it is too much to expect objectivity in a person s relationship with others who are unobliging or considered to be hostile to him.
There 'are many with 782 greater cause who may not venture to do away with those that give occasion for it but experience has shown that even with lesser motive persons have committed more dastardly crimes; that is why in view of these imponderable, motive by itself is not sufficient to determine culpability.
It has to be judged with positive evidence relating to incriminating facts and circumstances proved in a case against an accused.
It is contended strenuously that there is no evidence to establish that the accused was with the deceased at the time when he was murdered.
This contention seems to have found favour with the High Court which has held that though the deceased was last seen alive in the Company of the accused it is not sufficient to indicate that he had gone with the deceased into the Nagina Singh Building and was with him at the time when the murder was committed.
The evidence of P.W. '7 is positive that he had seen the accused in the company of the deceased after the deceased had his meals at about 9.30 or so.
This witness was the first to give information to P.W. 28 which was at about 8.300 p.m. on 31st January.
The High Court does not disbelieve this evidence.
In so far as P.W. 9 is concerned it is said that he is a mere casual or chance witness.
Even if the reasons given by the High Court for disbelieving his evidence is accepted it cannot negative the fact of the accused being seen in the company of the deceased at about 9.30 or 9.45 p.m. on 30th January when he was the last one to have seen him alive.
That the accused was in the room with.
the deceased is established by the fact that his finger prints were en the flask and the window panes and that a coat button of his Was found in the room.
It was however contended on behalf of the accused that these finger prints were not blood stained nor do they indicate that the accused was present at the time when the offence was committed because the evidence shows that be was seeking to get reemployment and the possibility of his.
having, visited the deceased earlier in the day or a few days before the offence when the finger prints could have been found on the flask and the window panes cannot be ruled out.
Secondly it was urged that the report of the finger print expert as the High Court has held does not furnish the reasons for the opinion that they belonged to the accused.
On the first of these contentions it may be observed that there is no evidence that he bad been to see the deceased earlier that day or had seen him before that day as would probably these finger prints being still present on the 31st January.
The evidence merely points out to the fact that the accused was seeking reemployment in the Company and the deceased was unwilling to give him employment.
It is a long way from this circumstance to infer that he had been in the room earlier.
The second contention is in our view equally untenable.
The report regarding the Finger Print is that of the 783 Director of the Finger Print Bureau which under Sec.
510 Criminal Procedure Code can be used as evidence in any enquiry or trial without examining the person who gave the report just in the same way as the report of the Chemical Examiners or of the Chief Inspector of Explosives is evidence.
Under sub.
(2), however the Court may, if it t hinks fit, and shall, on the application of the prosecution or the accused, summon and examine any such person as to the subject matter of his report.
The addition of the report of the Director of Finger Prints Bureau and of the Chief Inspector of Explosives in Sec.
510 was made by Sec. 99 of Act 26 of 1955 and unless the Court or the Public Prosecutor or the accused require the summoning and examining of any person as to the subject matter of his report that report can be.
acted upon.
It is however submitted that while the report may be admissible the opinion will have to be justified.
Neither the decision of a Single Judge of Andhra Pradesh High Court in re.
Godaverthy Bheshyakaravcharvulu(1).
, nor that of the Madras High Court case in re.
Marudai, support this contention.
The reason why the reports of the Director of the Finger Print Bureau is treated as evidence 'Without examining the persons giving the report is that the comparison and identification of Finger Prints has now developed into a science and the results derived therefrom have reached a stage of exactitude.
As long as the report shows that the opinion was based on observations which lead to a conclusion that opinion can be accepted, but should there be any doubt it can always be decided by the calling of the person making the report; when once the report is proved; neither the prosecution nor the accused nor yet the Court thought it necessary to require the person making the report to be examined.
In this case, however, the photographs of the finger prints were taken on the very day when the flask and the glass pane were seized.
After these material objects were sent to the Finger Print Bureau they were again photographed and compared with the finger prints taken of P.W. 2, P.W. 13 and P.W. 8 and the accused.
In so far as.
the Finger Prints of the accused are concerned though some what smudged they were said to be readably clear and in each of the finger impressions found on the flask and the window pane there Were more than 12 points of similarity i.e. matching ridge characteristic details in their identical sequence, without any discordances in their comparable portion and the corresponding portion of the left thumb impression, middle finger impression, left index finger, right middle finger of Om Prakash the accused.
It was also stated that so many points of similarity cannot be found to occur in the impressions of different thumbs and fingers and they are therefore of one and the same person.
In respect (1) AIR 1960 A.P. 164.
(2) AIR 1960 Madras 370.
784 of a thumb impression compared with the right thumb impression of Om Prakash the expert had found not less than 10 points of similarity and even with respect to this his opinion was that SO many points of similarity cannot be found to occur in the impressions of different thumbs and fingers and are therefore identical or are, of one and the same person.
There appears to be no difficulty in coming to the conclusion from the report that 'the points of similarity are those which can be accepted as a positive finding.
The absence of these Finger Prints being blood stained is not indicative of the accused not being there before the murder We have it in evidence that the curtain near the door showed that blood stained hands severe wiped thereon.
That apart the button which was recovered gives a direct clue to the presence of the accused at the time when the offence was committed. 'it.
is seen from exhibit P. 6/A that the upper button of the 3 small buttons on the cuff of the coat recovered from the accused was missing and the button recovered from the room where the deceased was murdered matches the button and supplies the missing one.
The report of the Forensic expert is that on a comparison of that button with the button of the accused 's coat esta blishes that it is the similar one.
For this reason the accused had denied that the coat and the sweater belonged to him and the learned Advocate on his behalf has urged in support of that plea that these were not recovered from the accused and the recovery memos were all fake and were written subsequently.
Accused in the statement under Sec.
342 in answer to question 19, that he had signed the recovery Memos dealing with the sweater, coat and blanket said that it was incorrect.
He further said that he was made to sign three blank papers in the Thana and that he Was filing a copy of the application in this connection made by while he was in the judicial lock up.
Again in answer to question 35 whether he has anything else to say he stated categorically that on the 1st February '67 he was taken to the Thana at 5 p.
M. on the 2nd February he was produced before the Court where a remand was taken and that on 7 2 67 the S.H.O. 'obtained his signatures on three blank papers in respect of Which 'he had sent an application after he was taken to the judicial lock up.
This statement goes counter to the facts stated ill the application of remand made to the Magistrate on 2 2 67 which was earlier extracted.
A perusal of that remand application would show that these recoveries had already been made on the 1st and so there could be no question of his signatures been taken on the blank papers on the 7th for purposes of cooking up the recovery Memos which according to the accused Were not recovered on the 1st.
The coat.
and the sweater were recovered from his room while the shoes and socks from his person as the was wearing them, There can be no doubt of the ownership being that of the accused.
785 respect to which similar contentions were raised.
Where a person who is not a hardened criminal is burdened with the guilt of a gruesome crime, is confronted with as ' tell tale finding the possibility of his making a clean breast of what is weighing heavily on him cannot be ruled out.
It is difficult to generalise as to what a man may or may not do after committing a ghastly murder nor can there be an infallible test to determine the course of human reaction, conduct or behaviour in a given situation which might manifest itself in various ways.
In case when the accused was confronted with the button of his coat he gave information leading to the incriminating discoveries.
Whether the knife could have been properly identified by P. W. 11 in the identification held before the Magistrate there can be little doubt, if we believe his evidence, the accused hid purchased a knife that day, which is similar in nature to the one he was selling.
There is no reason why P.W. II should not be, believed on this aspect.
He says that it was purchased by the accused at the noon time on the day when Mahatma Gandhi had died on the 30th for Re. 1/ and that the police had; brought the accused to his shop on the 3rd day after the dagger was purchased.
He further says that the accused used to go to him previously for the mending of his knife and scissors though the witness admits that he had not purchased any dagger from him previously.
In cross examination he admitted frankly that he was having his thari without permission of the municipality and that he was challenged and fined almost every month though from the last 8 months the police have not challaned but the Municipal Committee have challaned him.
He also admitted that once about 23/24 years ago he was convicted in a theft case and was sentenced to rigorous imprisonment and his history sheet was closed 21 or 22 years ago.
At the time of giving evidence he is about 35 years and even making an approximation of the age he must have been 13 or 14 years when the offence for which he was convicted was committed.
This admission seemed to have weighed with the High Court that his antecedents were such as to justify their not relying upon his evidence.
They also found it difficult to believe that when he had not put any special mark on the dagger he could identify it from amongst three similar ones.
In this connection it may be remembered that P.W. It was making the knives which be was selling and it is not unknown that persons who make knives or other implements can recognise them with some amount of certainty even though special identification marks may not be present.
Be that as it may, even if the identification is discarded there is nothing to doubt his statement that he knew the accused before the 30th January 1967 786 and that about noon on that day he had purchased a dagger from him.
It is not unreasonable to infer that the dagger which he purchased is the dagger which was recovered on the information furnished by the accused himself on the second day after his purchase and that dagger 'Contained human blood.
One other important circumstance against the accused is the blanket that was found in his house which had.
human blood stains thereon.
The murder of the deceased was in January in the coldest months in Simla and the possibility of the accused having taken a blanket to cover himself also 'fits in with the other evidence adduced by the prosecution.
There is in our view no justification for the High Court in jettisoning this cogent evidence of a conclusive nature on mere conjectures and.
on the omnibus ground that the witnesses were not independent or impartial which as we have shown is without justification.
In our view the evidence in this case is. sufficient to justify the conviction of the accused for an offence of murder.
We, accordingly set aside the judgment of acquittal of the High Court, convict the accused under Sec. 302 and sentence him to life imprisonment.
V.P.S. Appeal allowed.
| IN-Abs | The accused was charged with murder by stabbing, and the evidence against him was circumstantial.
It consisted of : (a) evidence of ill will against the deceased furnishing a motive (b) evidence that he was last seen in the company of the deceased, (c) evidence furnished by finger prints, that he was present in the room of the deceased at or about the time of the murder, (d) evidence that he was subsequently found in Possession of articles which had incriminating blood strains, and (e) evidence that he had bidden a dagger with bloodstains thereon, and certain other articles.
which were discovered on information furnished by him.
The trial court convicted him but the High Court set aside the conviction on the ground that the witnesses were not independent or impartial.
Allowing the appeal to this Court, HELD : (1) In an appeal against acquittal by special leave under article 136, this Court has power to interfere with the findings of fact, no distinction being made between judgments of acquittal and conviction though in the case of acquittals, it will not ordinarily interfere with the appreciation of evidence or findings of fact unless the High Court acted perversely or otherwise improperly.
[772 B D] State of Madras vs Vaidyanatha Iyer, ; , 587, referred to.
(2) In the case of circumstantial evidence if the links in the chain are complete leading to the undoubted conclusion that the accused alone could have committed the offence then it can be accepted.
In appreciating such evidence the prime duty of a court is to ensure that the evidence is legally admissible, that the witnesses are credible and that they have no interest or motive in implicating the accused, Since it is difficult to expect a scientific or mathematical exactitude while dealing with such evidence corroboration is sought wherever possible.
If there is any reasonable doubt the accused is given the benefit of such doubt.
The doubt should be reasonable and not a remote possibility in favour of the accused.
That is, the greatest possible care should be taken by the court in convicting an accused,, who is presumed to be innocent till the contrary is clearly established, and the burden of so establishing is always on the prosecution.
[772 C E, G; 773 E H; 774 C] (3)(a) While considering the evidence relating to the recovery under section 27 of the Evidence Act the court will have to exercise that caution and care which is necessary to lend assurance that the information furnished by the accused lead in to the discovery of a fact is credible.
[776 D] 766 In the present case, the various panchnamas of seizure prepared by the Investigating Officer could not be assailed on the ground that the witnesses who witnessed the recoveries were connected with the deceased or with his business, and that therefore, they were not independent or impartial witnesses.
[775 H; 776 G] (b) The evidence relating to recoveries is not similar to that contemplated under section 103, Cr.
It cannot be laid down as a matter of law or practice that where recoveries had to be effected from different places on the information furnished by an accused different sets of persons should be called to witness them.
[777 B C] On the contrary, in the present case, the witnesses who worked with the deceased were proper persons to witness the recoveries as they could identify the things which were missing.
[777 C D] (4) The report of the Director of the Finger Print Bureau regarding the finger prints can be used as evidence under section 510 Cr.
P.C., without examining the person making the report, because identification of finger prints has developed into an exact science.
As long as the report shows that the opinion was based on relevant observations that opinion can be accepted.
[783 A E] In the present case, the report set out many points of similarity between the finger prints found in the room of the deceased and those of the accused.
[783 H] (5) The information given by the accused that he purchased a dagger from one of the prosecution witnesses followed his leading the police to that witness and pointing him out is inadmissible under section 27 of the Evidence Act.
The concealment of a fact which is not known to the police is what is discovered by the information given by an accused and lends assurance that the information was true.
What makes the information leading to the discovery of a witness admissible is the discovery from him of the thing sold to him or hidden or kept with him which the police did not know until information was furnished by the accused.
But a witness cannot be said to have been discovered if nothing was found with or recovered from him.
as a consequence of the information furnished by the accused.
[778 F 779 H; 780 A C] Emperor vs Ramanuya Ayangar, A.I.R. 1935 Mad. 528, over ruled.
Pulukiuri Kotayya & Ors.
vs King Emperor, 74 I.A. 65, Ramkrishan Mithaplal Sharma vs State of Bombay, [1955] I S.C.R. 9 '03, Sukhan vs Crown, I.L.R. X Lah. 283, Public Protector vs India China Lingiah & Ors., A.I.R. 1954 Mad.
435 and Re : Vellingiri, A.I.R. 1950 Mad.
referred to.
(6) But that the accused had taken some of the prosecution witnesses to the witness from whom he bought the dagger and pointed him out, would be admissible under section 8 of the Evidence Act as conduct of the accused.
[780 C D] (7) Even after excluding some recoveries on the ground that the evidence regarding them was not satisfactory, the evidence against the accused consisted of evidence of motive, recovery of a button in the room of the deceased which matched with the button on the cuff of the coat recovered from the accused, the finger prints in the room, recovery of a blood stained coat and other articles of dress, a blanket, and the dagger, and the 767 fact that the accused and deceased were last seen together.
The evidences cogent and conclusive and should not have been rejected by the High Court.
[781 C E; 786 C D]
|
Civil Appeal No. 32 of 1971.
Appeal from the judgment and order dated March 12, 1970 of the Madhya Pradesh High Court in Miscellaneous Petition No. 184 of 1965.
I. N. Shroff, for the appellants.
V. section Desai, section K. Mehta, K. L. Mehta, V. K. Sapre and K. R. Nagaraja, for the respondent.
The Judgment of the Court was delivered by Vaidialingam, J.
The short question that arises for consideration in this appeal, on certificate, is whether the High Court has complied with the directions given by this Court in its judgment dated January 25, 1968 in Civil Appeals Nos. 1244 and 1245 of 1967 and adjudicated upon the question whether the claim made by the respondent that the tanks and wells in question were constructed on "occupied I and" belonging to the Jagirdar within the meaning of section 5(c) of the Madhya Bharat Abolition of Jagirs Acts, Samvat 2008 (Act 28 of 1951) (hereinafter to be referred as the Abolition Act).
The facts leading up to the present decision of the High Court may be stated: In Samvat 1885 the Ruler of the erstwhile Gwalior State conferred on the predecessor in title of the respondent the Jagir of Mauza Siroli situated in Pargana Gwalior.
The Abolition Act came into force on December 4, 1952.
Section 3 provides for resumption of Jagir lands by the Government.
Under sub section (3), the date appointed under section 3 as the date for resumption of Jagir lands is "the date of resumption '.
After the issue of notification under section 3, appointing a date for resumption, all the property in the Jagirdar including Jagir lands, forest, trees, fisheries, wells, tanks, ponds etc.
stood vested in the State under section 4 of the Abolition Act.
But under section 5 (c) all tanks, trees, private wells and buildings in or on the occupied lands, belonging or held by the Jagirdar or any other person, were excluded from vesting.
After the abolition of Jagirs under the Abolition Act, proceedings were initiated for determining the compensation payable to the respondent and the same was determined.
Out of the amount, so determined, certain loans were deducted and the balance amount was paid.
The Madhya Pradesh Land Revenue position ultimately was that the entire extent of the tanks was in 'occupied as the Code) came into force on October 2, 1959.
Section 251 866 of the Code provided for vesting in the State Government all ranks situated on unoccupied lands, in the circumstances mentioned therein.
The said section made provision for claiming compensation in the manner laid down therein.
The respondent on April 5, 1961 made an application to the Collector, Gwalior under section 251 of the Code claiming com pensation for tanks which, according to him, had been built by himself and his predecessor in title over an area of 1679 bighas and 18 biswas of land.
There were various orders passed by the authorities in connection with the said claim for compensation.
The respondent moved the Madhya Pradesh High Court under article 226 of the Constitution by two writ petitions to quash two orders of the Collector of Gwalior and two orders of the Additional Commissioner, Gwalior Division.
The writ petitions were opposed by the State on the ground that the four tanks claimed by the writ petitioner were really not tanks and in any case the tanks were not on "occupied land" within the meaning ,of section 5 (c) of the Abolition Act and the wells claimed by him had also vested in the State under section 4(1)(a) of the Abolition Act.
The High Court by its judgment dated November 30, 1966 allowed the writ petitions and quashed the four orders, referred to above, on the ground that the claim made by the respondent that the tanks were on "occupied land" under section 5(c) of the Abolition Act, has to be decided by the Jagir Commissioner in the manner required under section 17 of the said Act.
The State challenged before this Court in Civil Appeals Nos. 1244 and 1245 of 1967, the decision of the Madhya Pradesh High Court. 'Me contention raised on behalf of the State was that section 17 of the Abolition Act had no application and that it was the function of the Jagir Commissioner alone to inquire whether the claim of the writ petitioner under section 5(c) of the Abolition Act was well founded on merits and then refer the matter for the final decision of the Government under section 17 of the Abolition Act.
After a consideration of the scheme of the Abolition Act and in particular of section 17, this Court accepted the contention of the State and held that the inquiry contemplated under section 17 by the Jagir Commissioner relates to compensation to be paid to the Jagirdar whose Jagir is vested in the State Government and once the compensation is determined and paid, no further inquiry under section 17 is contemplated.
In this view, by its judgment dated January 25, 1968, this Court set aside the orders passed by the High Court.
This Court further held that the writ petitioner, namely, the present appellant before us" is, not left without any remedy to 867 agitate his claim that the, tanks and wells claimed by him were constructed on occupied land and that they have been saved from vesting in the Government under section 5(c) of the Abolition Act.
It was held that if the writ petitioner was able to establish this plea, the State Government will have no power or authority to take possession of such tanks and wells, as the title thereto did not vest in it in view of section 5 (c) of the Abolition Act.
It was further held that section 5 (c) has an over riding effect on section 4 of the Abolition article In this view this Court held that it was the duty of the High Court to have decided the jurisdictional fact as to whether the tanks and wells claimed by the present respon dent belonged to the Jagirdar within the meaning of section 5(c) of the Abolition Act and that, if the High Court accepted the said contention, the High Court was competent to issue a writ under article 226 of the Constitution directing the State to hand over possession of the said tanks and wells to the writ petitioner.
Ultimately, for all the reasons given in its judgment, this Court set aside the decision of the High Court and remanded the proceedings for deciding afresh the claim made by the writ petitioner under section 5(c) of the Abolition Act.
Liberty was given to the parties to place before the High Court such further evidence, oral and documentary, as they may desire to give on the point at issue.
The main judgment was given in Civil Appeal No. 1245 of 1967.
For the same reasons given in the said judgment, Civil Appeal 1244 of 1967 was also remanded in accordance with the directions given in Civil Appeal No. 1245 of 1967.
The said decision of this Court is reported in State of Madhya Pradesh and others vs Sardar D. K. Jadhav(1).
After remand, when the matter was taken up by the High Court, both the appellant and the respondent, filed many documents and examined witnesses with particular reference to the claim regarding the wells and the tanks made by the respondent under section 5(c) of the Abolition Act.
The respondent laid his claim on the ground that the tanks and wells had been constructed on lands which were his Khud kasht lands as also on lands held on tenure by other persons.
But ultimately his claim was on the basis that the wells and tanks were all on occupied land belonging to the Jagirdar or any other person, as laid down under section 5(c) of the Abolition Act.
The State, on the other hand, denied the right of the respondent to claim any right in the said tanks and wells on the ground that they were not located on occupied land belonging to the Jagirdar, but were situated on lands which were in the possession ,of tenants.
Hence, according to the State, the said tanks and (1) ; 868 wells were not saved to the respondent under section 5 (c) of the Abolition Act, and that they have vested in the State, as rightly held by the Revenue authorities.
In short, the contention of the State appears to have been that only those tanks and wells, which are on occupied land belonging to the Jagirdar and in his possession as Khudkasht land alone are saved under section 5 (c) of the Abolition Act.
At this stage we may mention that though the respondent laid claim to certain wells also in addition to the tanks, it is seen from the judgment of the High Court that during the stage of arguments, it was represented on his behalf that three out of five wells were already in his possession and that no adjudication is necessary regarding those wells.
Regarding the other two wells, it is also seen that the respondent abandoned his claim before the High Court.
Therefore, the entire controversy, which the High Court had to decide centred round the claim, regarding the tanks, made by the respondent under section 5 (c) of the Abolition Act.
Though various maters have been adverted to by the High Court in its judgment, its material findings are as follows : That the four tanks_ as also the pick up weir are tanks within the meaning of the Abolition Act.
The four tanks as also the pick up weir belonged to the respondent at the time of the resumption of Jagirs under the Abolition Act, namely, December 4, 1952; Section 5 (c) is clearly attracted it the right of ownership or possession of the tanks belonged either to the Jagirdar or to any other person as against the said right belonging to the community at large or the State.
The fact that a part of the bed of the tanks may be in the occupation of tenants is of no consequence in holding in favour of the respondent under section 5 (c) of the Abolition Act; The entire area of the tanks in the possession of the respondent must as his Khud Kasht land and also in the occupation of the tenants are both saved under section 5 (c) and do not vest in the State under section 4 of the Abolition Act.
On these findings, the High Court accepted the contention of the respondent and held that the tanks claimed by him are saved under section 5 (c) and they have not vested in the State under the Abolition Act.
We may state at this stage that the High Court has not thought it necessary to consider the precise area of each one of the tanks as the tenants were not parties to the proceedings.
Ultimately, the High Court held that on resumption of Jagirs under the Abolition Act, the four tanks and the pick up weir are saved to the respondent under section 5(c) of the Abolition Act, subject to certain observations contained in the judgment.
In consequence, the High Court quashed the four orders of the Revenue authorities, referred to, in the judgment.
869 Though Mr. I.N.Shroff, learned counsel for.
the State, has raised several contentions, in our view, most of them do not survive in view of the specific directions contained in the order of remand passed by this Court.
The only two contentions that have been advanced by him and require to be considered are : (1) That the High Court has not complied with the directions given by this Court in its order of remand; and (2) The High Court has not found that the said tanks are situated on "occupied land" so as to be saved under section 5(c)of the Abolition Act.
The counsel has, no doubt, pointed out certain other circumstances, which, ,according to him, constitute an infirmity in the judgment of the High Court.
On the other hand, Mr. V., section Desai, learned counsel for the respondent, has pointed out that the directions of this Court have been fully complied with and that after a very elaborate consideration of the materials placed before it by both the parties, the High Court has recorded a finding that the tanks claimed by the respondent are on "occupied land" belonging to or held by the Jagirdar or any other person as required under section 5 (c) of the Abolition ' Act.
The fact that the High Court has not considered is necessary to adjudicate upon the exact area of the tanks is of no consequence because that is a matter to be decided as between the Jagirdar and the other tenure holders, if any.
Once the requirement that the tanks are on occupied land and that they belong to the Jagirdar or to,any other person is satisfied they are saved under section 5(c) of the Abolition Act.
That was the only point that the High Court was, directed to adjudicate upon and on.
that aspect clear findings have been recorded by it.
Before we deal with the contentions of the learned counsel on both sides, it is necessary to refer the material provisions of the Abolition" Act.
The expressions "Homestead" and "Occupied land" are defined in sub clauses (iv) and (ix) of section 2(1) and they are as follows: "2 In this Act unless the: context otherwise requires (iv)"Homestead" means a dwelling house together with any court yard, compound or attached garden or bari and includes any out building used for agricultural purposes and any tank or well appertaining to the dwelling house.
(ix) "Occupied land" means land held immediately the following tenures, namely, L36 SupCI/72 870 (a) Ex proprietary; (b) Pukhta Maurusi; (c) Mamuli Maurusi; (d) Gair Maurusi; and includes land held as Khud kasht and land comprised in a homestead;" Section 3 deals with resumption of Jagir lands by the Government.
As we have already mentioned the date of resumption is December 4, 1952.
Section 4 enumerates the various items which vest in the State, unless the contrary has been provided in the Abolition Act.
Section 5 saves, from vesting certain items arid clause (c), which is material is as follows: "Section 5 : Private wells, trees, buildings, house sites and enclosures.
Notwithstanding anything contained in the last preceding section (c) all tanks, trees, private wells and buildings in or on occupied land belonging to or held by the Jagirdar or any other person shall continue to belong to or, be held by such Jagirdar or other person.
Regarding the first contention we are satisfied that the High Court has complied with the directions given by this Court in its remand order.
The High Court was directed to decide the jurisdictional fact as to whether the tanks and wells claimed by the respondent belonged to the Jagirdar and were saved under section 5(c) of the Abolition Act.
Therefore, the only investigation that had to be made by the High Court was on the point, referred to above.
In fact, it is seen that the High Court has been very considerate when it allowed the appellant to raise various other questions, such as, the locus standi of the respondent, to file the writ petition, the question of non impleading of the tenants in possession of lands over which part of the tanks are situated and the undue delay in filing the writ petition.
Further, the High Court has allowed the appellant to raise the question that the respondent is estopped from seeking relief regarding the tanks under section 5(c) in view of the stand taken by him before the Revenue authorities in his application for award of compensation.
These matters should not have been permitted to have been raised by the appellant.
If these contentions were available to the appellant, they should have been raised be fore this Court in the appeals, referred to earlier.
Any how the High Court has gone into those matters and held against the appellant.
Therefore, far from not complying with 871 the directions given by this Court, it has even allowed the appellant to raise certain contentions which were.
not available to it at the stage when the matter was being considered after remand.
Therefore, the first contention will have to be rejected straightaway.
Regarding the second contention, it is also clear from the judgment of the High Court that it has very elaborately considered the various aspects presented; to it, both by the appellant as well as the respondent.
After a consideration of the materials so placed before it and having due regard to the provisions of the Abolition Act, the High Court, as we, have pointed out earlier, has considered, as directed by this Court, the main question whether the tanks are saved under section 5(c) of the Abolition Act.
In that connection the High Court had naturally to consider the scope of the definition of "Occupied land" under section 2 (1) (ix) of the Abolition Act.
It is after a consideration of all these aspects that the High Court has found that the four tanks belonged to the respondent at the time of resumption.
and the said tanks were on occupied land belonging to the Jagirdar or any other person.
Therefore, it considered the question properly as per the remand order and has given a finding on the same.
As to whether the said finding is correct or not, is a different matter.
But the criticism that it has not considered the point regarding the saving of the tanks under section 5(c) of the Abolition Act, cannot be accepted.
Now coming to the merits, it is clear that as and from the date of resumption, the consequences enumerated under section 4 will have full effect.
Except as otherwise provided in the Abolition Act, normally under cl.
(a) of Section 4(1) the right, title and interest of every Jagirdar and of every other person claiming through him in his Jagir lands including among other items, tanks, shall stand resumed to the State.
The saving is provided under section 5.
If the respondent is able to establish that the tanks in question are on occupied land belonging or hold by the Jagirdar or any other person, then those tanks are saved in favour of the respondent under section 5 (c) of the Abolition Act.
It may be mentioned at this stage that though the items are, all described as tanks, it is in evidence that they get submerged at times and at other times portions of the same are being cultivated either by the respondent or by other s under certain tenures.
That is, parts of the tanks are included and held by the respondent as khud kasht and rest of it is held by the tenure holders, who have got tenancy rights over them.
As the other tenure holders, namely, the tenants, were not parties before the High Court, the question of the extent of the area of the tanks was not decided and it was left open.
But the 872 entire extent of the tanks had been given by the respondent as 1679 bighas and 18 biswas of land and this claim was fully known to the Revenue authorities, who raised the specific plea that the said tanks are not on occupied land.
Therefore, the circumstance that the High Court did not adjudicate upon the question of the extent of the tanks, is of no consequence and it is not material for the point in dispute.
In order to get the tanks in question saved under section 5 (c) of the Abolition Act, the respondent will have to establish They were on occupied land; and (b) They belonged to or were held by the Jagirdar or any other person.
We have already extracted the definition of "occupied land '.
The essential ingredient of such land is that it must have been held immediately before the commencement of the Abolition Act under one or other of the four tenures mentioned in sub cls.
(a) to (d).
We have not been shown about the, existence of any other type of tenure.
The occupied land will also include as per the definition lands held by the Jagirdar as khud kasht as well as the land com prised in a homestead.
Therefore, occupied land comprises broadly of two types of lands: (1) four categories of land held under the tenures enumerated in sub clauses (a) to (d); and (2) comprised in khud kasht and "Homestead".
To attracted cl.
(c) of section 5, the tank must be shown ' in the first instance, to be on occupied land, that is, on land comprised under the tenures enumerated in sub clauses (a) to (d) or in the land held, as khud kasht and homestead.
In our opinion, it is not necessary that the entire tank should be exclusively situated in one or other of the tenures enumerated in sub clauses (a), to (d) of s.2 (1) (ix) on exclusively in the land herd as khud kasht and land comprised ' in homestead.
The requirement of the tanks in question being ;on occupied land, will be satisfied even if, part; of the: tanks is situated in one or other of the tenures mentioned in sub clauses (a) to (d) of cl.
(ix) of section 2 (1 ) and the rest of it is included in, the land held ;Is khud kasht and land comprised in a homestead.
That is the entire area of the tank must be comprised in either the tennures of the khudkasht and homestead or in both.
Therefore, it is not.
possible, to: accept the contention advanced: on behalf if the appellant State that only those tanks ', which are on khud kasht land of the Jagirdar are saved to him. ' Acceptance of such a contention will be ignoring the clear wording of cl (ix) of section 2(1), which takes in also lands held on the various tenures referred to therein.
From this, it follows that the mere fact that a part of the tanks is in the occupation of 'the tenants as ' tenure holders does not detract from operation of the saving cl.(c) of 'section 5.
There is no controversy that at the material date the occupied lands on which 873 tanks are situated belonged to or were held by the Jagirdar or any other person.
The expression "any other person" is comprehensive enough to take in the persons who were holding the land on one or other of the.
tenures, enumerated.in sub clauses (a) to (id) of section 2(1) (ix) of the Abolition Act.
Whatever may be the extent of the tanks in the possession of the respondent, as his khud kasht or homestead and in the possession of the tenure holders, the position ultimately is, that the entire extent of the tanks is in "occupied land" belonging to or held by the Jagirdar or any other person.
The actual extent and the area held by the Jagirdar and the tenure holders can be worked out only in the presence of both those parties.
To conclude, we are satisfied that the High Court has appealed the correct test.
to find out whether the.
tanks are saved under section ) of the Abolition Act.
We, are also in agreement with the finding of the High Court that the four tanks and the pick up weir are saved to the respondent under section 5(c) of the Abolition Act.
In the result, the judgment and order of the High Court are confirmed and this,appeal dismissed with costs G. C. Appeal dismissed.
| IN-Abs | Under section 5(c) of the Madhya Bharat Abolition of Jagirs Act Samvat 2008 (Act 28 of 1951) all tanks, trees etc.
in or on 'occupied lands ' belonging to or held by the Jagirdar or any other person were excluded from vesting in the State by virtue of section 4.
The respondent filed a writ petition in the High Court claiming that certain tanks built by himself and his predecessor in title were on 'occupied land ' and therefore came within the protection of section 5(c).
The original order passed by the High Court in the writ petition was set aside, by this Court and the High Court was directed to decide afresh the claim made by the writ petitioners under section 5(c) of the Act.
After considering the evidence before it on this question the High Court held that the ' tanks in question were saved under section 5(c) and they had not vested in the State under the Abolition Act.
In appeal by the State to this Court, HELD: 'Occupied land ' as defined in section 2(1) (ix) of the Act comprises broadly two types of lands : (1) four categories of land held under the tenures enumerated in sub clauses (a) to (d); and (2) comprised in Khud Kasht and 'homestead '.
To attract cl.
(c) of section 5 the tank must be shown in the first instance to be on occupied land that is on land comprised under the tenures enumerated in sub clauses (a) to (d) or in the land held as Khud kasht and homestead.
It is not necessary that the entire tank should be exclusively situated in the land held as khud kasht and land comprised in homestead.
The requirement of "he tanks in question being an occupied land will be satisfied even if part of the tank is situated in one or the other of the tenures mentioned in sub clause,,; (a) to (d) of cl.
(ix) of section 2(1) and the rest or it is included in the land held as khud kasht and the land comprised in a homestead.
That is, the ,entire area of the tank must be comprised in either the tenures or the khud kasht or homestead or in both.
Therefore it was not possible to accept the contention advanced on behalf of the appellant State that only those tanks which are on khud kasht land of the Jagirdar are saved to him.
Acceptance of such a contention will be ignoring the clear working of cl.
(ix) of section 2(1) which takes in also lands held on the various tenures referred to therein.
[871 D G] Therefore in the present case the mere fact that a part of the tanks was in the occupation of the tenants as tenure holders did not detract from the operation of the saving cl.
(c) of section 5.
The expression 'any other person ' is comprehensive enough to take in the persons who were holding the land on one or the other of the tenures enumerated in subclauses (a) to (d) of section 2(1)(ix) of the Abolition Act.
Whatever may be the extent of the tanks in the possession of the respondent, as his khud kasht or homestead and in the possession of the tenure holders the position ultimately was that the entire extent of the tanks was in :occupied land ' belonging to or held by the Jagirdar or any other person.
[872 H,873 B] 865 The judgment of the High Court must accordingly be upheld.
|
Appeal No. 710 of 1968.
Appeal from the judgment and order dated March 1, 1967 of the Mysore High Court in Sales Tax Appeal No. 8 of 1966.
928 Somanatha Iyer, R. B. Datar and M. section Narasimhan, for the appellant.
section T. Desai, Mrs. A. K. Verma, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondent.
B. Sen, Santosh Chatterjee, G. section Chatterjee and P. K. Chakravarti, for intervener No, 1. D. Goburdhun, for intervener No. 2.
The Judgment of the Court was delivered by Sikri, C.J.
In this appeal by certificate granted by the High Court of Mysore the only question involved is whether the deliveryby the respondent Hindustan Aeronautics Ltd. hereinafter referred to as the assessee to the Railway Board of railway coaches model 407, 408 and 411 is liable to sales tax under the Central Sales Tax etc.
The Commercial Tax Officer, by assessment order dated March 28, 1964, in respect of the assessment year 1958 59, included the turnover in respect of the supply of these coaches.
The Sales Tax Officer rejected the contention of the assessee that therewas no sale involved in the execution of the works contract inview of certain decisions of the High Courts; e.g., McKenzievLimited vs The State of Bombay(1) and Jiwan Singh vs State of Punjab (2).
In appeal, the Deputy Commissioner of Commercial Taxes confirmed the order.
In revision the Commissioner of Commercial Taxes also came to the same conclusion.
He observed: "The contracts specifically mentioned that the under frame shall always remain the property of the Railway Board.
On the other hand, the order placed with the assessee company here was for the 'manufacture and supply ' of railway coaches.
The payment to the assessee company is specifically referred to as 'price '.
The conditions normally included in contracts for works are absent in this order.
" He further observed : ".
I would like to reiterate here that even the actual contract is for manufacture and supply of rail coaches.
There is no mention that the rail coaches are to be constructed on the underframes of the indentor . .
If it was really a works contract the under (1) 13 S.T.C. 602.
(2) 14 S.T.C. 957.
929 frames would have been made available for construction instead of being 'supplied free of cost ' and the indentor 's lien on them would have been made clear.
The plain meaning of the contract is that the underframes were transferred to the assessee company free of cost by the Railway Board and that after construction of rail coaches on them, the rail coaches were sold to the Railway Board at the agreed price.
The agreement does not also contemplate any inspection in the course of execution as would normally be provided for in a works contract.
The only inspection is after completion and at Perembur." He thought that case of the assessee in respect of model 411 railway, coaches was Worse.
Regarding the financial arrangement between the Railway Board and the assessee, he observed "The Railway Board made only advance payments for purchase of materials and did not itself procure the material and supply them to the assessee company.
The condition that the materials become property of the Railway Board as and when purchased is only for purposes of providing adequate security for the advances.
In the circumstances, the materials can be deemed to be hypothecated to the Railway Board and the advance payments are really part payment of the final price.
The transaction relating to Rail coaches of model 411 is clearly a sale.
" He, therefore, confirmed the appellate order of the Deputy Commissioner.
The assessee then took an appeal to the High Court of Mysore under section 24(1) of the Mysore Sales Tax Act read with section 9(3) of the Central Sales tax Act.
The High Court was not satisfied with the material on record and directed that a report be sent on three points, viz : "(i) Whether and if so to what extent the assessee has drawn advance payment from the Railway Board in respect of the material utilised for completing the contracts in question; (ii) Whether any material, in respect of which no advance have been drawn, has been utilised by the assessee for completing the contracts; and (iii) Whether the assessee has used for completing the contracts any material not specifically procured for the, purposes of completing the contracts.
" 930 The Commercial Tax Officer submitted his report, and certain extracts may be reproduced below : "My findings revealed that as and when they purchased materials, they sent to the Railway Board 'an invoice ' accompanied by a list of the details regarding the materials purchased.
90 per 'cent of the value of these materials was then paid to the company after inspection of the materials by the board 's representa tive.
Invoice No. 31009 of 15 10 1956 is obtained as a sample.
This invoice shows that materials for the value of Rs. 2,60,374 12 0 were purchased by the company for 407 model coaches.
The details of the materials are given in list attached to the invoice.
The invoice and the list were sent to the board with a covering letter dated 15 10 1956 asking payment of Rs. 2,34,517 4 0 being 90 per cent of the invoice amount.
The amount of this invoice is included in the Board 's remittance note No. 1290 of 30 10 1956 and a cheque was issued to the company for the total of several such invoices.
The amount of the cheque received on 30 10 1956 was Rs. 22,90,719 0 O." He concluded : " (1) It is not possible to specify the exact amount received from the board as advance payments.
It is said that the construction was spread out more than one year and a running, account was maintained showing the debits and credits for this coaches.
(2) It is said that no materials, for which advance was not drawn, was utilised for building the coaches.
(3) It is not possible to find out whether any materials not specifically procured for the construction of coaches were used.
But it is said that there is no possibility of any other materials being used for this construction.
The constructions are said to be done at particular shed which is separately located.
No other work is undertaken in this section.
All the materials procured for constructions of coaches are said to be kept separately in this section alone.
Materials not connected with this work are not mixed up with the materials in this section.
Separate stock registers are maintained for this section.
Receipts and issues of materials for the constructions of coaches are being accounted for in this register under code numbers.
" 931 The High Court allowed the appeal and set aside the order including the turnover relating to the construction of railway coaches, models 407, 408 and 411.
Facts found by the High Court and as they appear to us are as follows On February 3, 1955, the Ministry of Railways wrote to the Hindustan Aircraft Ltd. regarding the coaching programme 1955 56.
The letter reads : "In order to book your capacity, construction of the following is planned on your works against the 1955 56 R.S.P. 1.
Third Class Coaches B.G. model 407 120 2.
Military Coaches 'M ' type model 408 60 Total :180 The intention of this intimation is to facilitate such arrangements as you may find necessary for provising for materials and for planning capacity for the question.
You should therefore treat this as a firm booking of your capacity." After discussions and settlement of terms between officers of ,the Government of India and of the assessee, the Railway Board placed orders with the assessee.
The terms agreed between the parties are found stated in a letter of the Government of India, Ministry of Railways (Railway Board) No. 57/147/RE(163) dated May 4, 1957.
This relates (to the first of the models 407.
We may extract some portions of the letter.
It is stated thus In continuation of their letter No. 56/142/ '3/Re dated 8 1 57 the Railway Board are pleased to place an order on your work for the manufacture and supply of the following coaching stock on terms and conditions stated under para 2 below : Item No. Description of stock Particular Nos.
Price per coach of Rly specification Required (without wheels Board 's and Drawing and axlesand Rolling No. under frames) Stock Programme 1957 58 384 Broad Gauge 55 B 14 180 Rs. 94,731/ Class III (Provisional) Coaches fully CSC 1119 furnished to model '407 ' 932 Following terms and conditions are relevant: (i) Price (a) The price mentioned above is for stock without wheels and axels and underframes, and is provisional.
Final price will be settled by negotiations after you have submitted your claim for the coaches ordered on you up to 1954 55 Rolling Stock Programme on the basis of the wages and material escalator approved by the Board.
(b) The final price when settled shall be subject only to the Standard Wages and material escalator clauses given below. . (c) The final payment on completion of this order shall be subject to examination and check of your books by the Chief Administrative Officer, Integral Coach Factory, Perambur, Madras.
(ii) Wheelsets and Underframes The Wheelsets and Underframes for the stock will be supplied to you free of cost f.o.r.
your work siding.
(iv) Delivery The delivery of the above stock f.o.r.
your works siding is required to commence after the completion of the stock ordered on your works against 1956 57 R.S.P. and required to be completed by January 1957, or earlier.
(v) Inspection Authority The inspection of this stock shall be carried out by a representative (C.M.E. Southern Railway) before the coaches are despatched.
(vi) Terms of payment (a) Advance 'on account ' payment to the extent of 90% of the value of the materials shall be made to you on receipt of materials and on production of a certificate from the Inspecting Authority.
(b) Payment of full contract price, less 'on account ' payment already will be made on deli very of coaches in complete condition and good working order, duly certified by the Inspecting 933 Authority on the lines of procedure laid down vide Board 's letter No. 57/142/6/M dated 4 2 1952 (Copy enclosed).
(vii) Other terms of Contract.
(i). . . (ii) If and when sales tax on this order becomes payable under law, such payments, when made, will not be on your account.
The Railway will not, however, be responsible for payment of the sales tax paid by you under misapprehension of law.
There is an indemnity bond in respect of this contract and we may set it out fully.
Standing Indemnity for advance payment against contract relating to Railway Board 's order for construction and delivery of all metal III class B.G. coaches now pending under orders Nos.
52 142/4/M dated 16th February, 1952 and 53/142/4/M dated 3rd March, 1953 and against contracts in respect of future orders that may be given by the Railway Board from time to time, by the Hindustan Aircraft Ltd., Bangalore represented by General Manager hereinafter called the Company in favour of the President of Union of India.
lie Hindustan Aircraft Ltd., hereby undertake to hold at their works at Bangalore for and on behalf of the President of the Union of India, and as his property in trust for him the Stores and articles in respect of which advances are made to them under Railway Board 's letters, No .
52,/142/4/M dated 16th February, 1952 and 53/142/4/M dated 3rd March, 1953 and hereafter to be made to the Company under future orders from the Railway Board from time to time.
The said stores and articles shall be such as are required of the purpose of the pending and future contracts and the advances made and to be made are without prejudice to the provisions of the contract as to rejection and inspection and any advance made against stores and articles rejected or found unsatisfactory on inspection shall be, refunded immediately to the President of the Union of India.
The Company shall be entirely responsible for the safe custody and protection of the said articles and stores against all risks till they are duly delivered to the 12 L736Sup CI/72 934 .lm15
President of the Union of India or as he may direct and shall indemnify the President of the Union of India against any loss, damage or deterioration whatsoever in respect of the said stores and articles while in our possession.
The said articles and material shall at all times to be open to inspection of any officer authorised by Government.
Should any loss of damage occur or a refund become due, the President of the Union of India shall be entitled to recover from the Company compensation for such loss or damage or the amount to be refunded without prejudice to any other remedies available to him by deduction from any sum due or any sum which at any time hereafter may become due to the Company under this or any other contract.
" We have set out the terms of the Indemnity Bond in great detail because the learned counsel for the appellant has strongly relied on the terms thereof.
The text of the invoice sent by the assessee for the purpose of receiving 90% advance may be seen from the covering letter dated October 15, 1956 relating to one of the invoices.
The letter reads : "On account payment of 90% on material pro cured for rail coaches 407 and 408 model VI order.
Further to our letter No. Al/Inv/1 169 dated 8 10 56 enclosing our invoice for Rs. 42,892 15 0 we enclose herewith our invoice No. 31009 dated 15 10 1956 in duplicate for Rs. 2,34,517 4 0 being 90% of materials procured in October 1956.
Kindly arrange payment of the invoice alongwith the invoice already sent.
Please instruct your resident representative to check the stock of materials as per lists attached to our invoices and send them to the Deputy Financial Adviser and Chef Accounts Officer, Integral Coach Factory, Perambur, so that he may send his represen tative to check the value of the materials.
" On these facts we have to decide whether there has been any sale of the coaches within the meaning of the Central Sales Tax Act.
We were referred to a number of cases* of this Court and the High Courts, but it seems to us that ultimately the answer must depend upon the terms of the contract.
The answer to the (1) 16S.T.C.518 McKenziesv.
State of Maharashtra.
(2) [1965] 2S.C.R.782 Patnaik & Co. vs State of Orissa.
935 question whether it is a works contract or it is a contract of sale depends upon the construction of the terms of the contract in the light of the surrounding circumstances.
In this case the salient features of the contract are as follows : (1) The Railway books capacity of the assessee for the pur pose of construction of railway coaches.
(2) Advance on account is made to the extent of 90% of the value of the material on the production of a certificate by the inspecting authority.
(3) The material used for the construction of coaches before its use is the property of the Railway.
This is quite clear from para I of the Indemnity Bond set out above.
No other meaning can be given to the words in the bond to the effect that "the Hindustan Aircraft Ltd. hereby undertake to hold at their works at Bangalore for and on behalf of the President of the Union of India and as his property in trust for him the Stores and articles in respect of which advances are made to them.
" It seems to us clear that the property in the materials which are used for the construction of the coaches becomes the property of the President before it is used.
(4) It seems that there is no possibility of any other material being used for the construction as is borne out from the report written by the Commercial Tax Officer.
(5) As far as the coaches of models 407 and 408 are concerned, the wheelsets and underframes are supplied free of cost.
(6) In the order the words used are "manufacture and supply of the following coaches." (7) The material and wage escalator and adjustments which are mentioned in the contract are neutral factors.
On these facts it seems to us that it is a pure works contract.
We are unable to agree that when all the material used in the construction of a coach belongs to the Railways there can be any sale of the coach itself.
The difference between the price of a coach and the cost of material can only be the cost of services rendered by the assessee.
If it is necessary to refer to a case which is close to the facts of this case, then this case is more in line with the decision of 936 this Court in State of Gujarat vs Kailash Engineering Co.(1) than any other case.
The only difference as far as coach model No. 41 1 is con cerned is that in that case the wheelsets and underframes are not supplied free of cost but otherwise there is no essential difference in the terms.
This does not make any difference to the result.
In the result the appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.
(1) 19 S.T.C. 13.
| IN-Abs | The correspondence between the Railway Board and the respondent (assessec regarding the terms and conditions for the manufacture and supply of railway coaches, and the indemnity bond in respect of the contract, disclosed that,.
(i) The Railway booked capacity of the assessee for the purpose of construction of railway coaches; (ii) an advance, on account, was made to the extent of 90% of the value of the material on the production of a certificate by the inspecting authority.
(iii) the material used for the construction of coaches before its use was the property of the railway; (iv) there was no possibility of any other material being used for the construction, and (v) the words used in the contract were, 'manufacture and supply of the following coaches. ' On the question whether there was a sale of railway coaches liable to sales tax.
or only a works contract, HELD : The answer to the question whether a contract is a works contract or a contract of sale depends upon the construction of the terms of the contract in the light of surrounding circumstances.
[935 A B] (1) In the present case.
when all the material used in the construction of a coach belonged to the Railways there cannot be any sale of the coach itself.
It was a pure works contract, the difference between the price of a coach and the cost of material being only the cost of service rendered by the assessee.
[935 G H] (2) Whether the wheels sets and under frames were supplied free of cost or not makes no essential difference, [936 A B] (3) The material and wage escalator and adjustments regarding final price mentioned in the contract are neutral factors.
[935G] State of Gujarat vs Kailash Engineering Co., 19 S.T.C. 13 (S.C.) followed.
|
Appeals Nos. 1845 and 1846 of 1968.
Appeals by special leave from the judgment and order dated January 10, 1968 and October 20, 1967 of the Mysore High Court in Writ PetitiOns Nos.
1519 of 1067 and 1216 of 1965 respectively.
Jagdish Swarup, Solicitor General of India and section P. Nayar, for the appellants (in all the appeals).
section section Javali and M. Veerappa, for respondent No. 1 (in C.As.
184 1 and 1946 of 1968 ).
section L. Bhatia for respondents Nos. 1 and 2 (in C.A. No. 50 of 1969.
994 section K. Mehta, K. L. Mehta and K. R. Nagaraja, for the Intervener (in C.A. No. 1845 of 1968).
The Judgment of the Court was delivered by Khanna, J.
Whether the criterion to determine the seniority of R avi Varma and Ganapathi Kini respondents should be length of service in accordance with the Office Memorandum dated June 22, 1949 issued by the Ministry of Home Affairs, as claimed by the said respondents, or whether it should be the date of confirmation, as claimed by the appellants, is the main question which arises for decision in civil appeals Nos. 1845 and 1846 of 1968 which have been filed by the Union of India and two others by special leave against the judgment of Mysore High Court.
Similar question arises in respect of the seniority of Suresh Kumar and Tara Chand Jain, respondents in civil appeal No. 50 of 1969 which has been filed by the Union of India and two others on a ,certificate granted by the Punjab and Haryana High Court against the judgment of that Court reversing in Letters Patent appeal the ,decision of the single judge and issuing a writ in favour of those respondents.
The High Court held in all the cases that the seniority of the concerned respondents should be determined on the basis of the length of service in accordance with the above ,mentioned Office Memorandum.
Before giving the facts of the three cases, it would be pertinent to refer to two Office Memoranda issued by the Ministry of Home Affairs.
One of the memoranda is dated June 22, 1949.
It was mentioned in this memorandum that the Government of India had under consideration the question of the fixation of seniority of ;displaced government servants and temporary employees in the various grades.
Employees of the Central Government who were displaced from their offices in Pakistan, according to the memorandum, had been absorbed in offices under the control of the same administrative ministry or on nomination by the Transfer Bureau of the Ministry of Home Affairs in other offices.
All those persons had been appointed, with a few exceptions, on tem porary basis.
The Ministry of 'Home Affairs accordingly conveyed the following decision : "It has now been decided in consultation with the Federal Public Service Commission that the question of seniority in each grade should also be examined in the same context and specific rules suitable for each service prescribed in framing those instructions.
The question of seniority of Assistants in the Secretariat was recently examined very carefully in consultation with all the Ministries and Federal Public Service Commis 995 sion and the decisions reached are incorporated in para 8 of the 'Instructions for the initial constitution of the grade of Assistants ' an extract of which is attached.
It has been decided that this rule should generally be taken as the model in traming the rules of seniority for other services and in respect of persons employed in any particular grade seniority should, as a general rule, be determined on the basis of the length of service in that Grade irrespective of whether the latter was under the Central or Provincial Government of India or Pakistan.
It has been found difficult to work on the basis of 'comparable ' posts or grades and it has there fore been decided that 'Service in an equivalent Grade ', should, generally be defined as service on a rate of pay higher than the minimum of the time scale of the grade concerned.
The seniority of persons appoi nted on permanent or quasi permanent basis before the 1st January, 1944 should, however not be disturbed.
" Direction was accordingly issued by the Ministry of Home Affairs that the principles given in the Memorandum be borne in mind in determining the seniority of 'Government servants of various categories employed under the Ministry of Finance, etc. ' On December 22, 1959 another Office Memorandum was issued by the Ministry of Home Affairs on the subject of the general principles for determining seniority of various categories of persons employed in Central services.
Material part of this memorandum was as under: "The instructions contained in this Ministry 's Office Memorandum No. 30/44/48 Apptts, dated the 22nd June, 1949, were issued in order to safeguard the interests of displaced Government servants appointed to the Central Services after partition.
As it was not possible to regulate the seniority of only displaced Government servants by giving them credit for previous service, the instructions were made applicable to all categories of persons appointed to Central Services.
The principles contained in the 22nd June, 1949, orders were extended to (i) ex Government servants of Burma appointed to Central Services; and (ii) the employees of former part 'B ' States taken over to the Centre as a result of Federal Financial_ Integration.
996 The instructions contained in this Ministry 's Office Memorandum No. 32/10/49 CS dated the 31st March , 1950 and No. 32/49 CS(C), dated the 20.h September, 1952 similarly regulate the seniority of candidates with war service appointed to the Central Services.
The question has been raised whether it is necessary to continue to apply the in structions contained in the Office Memoranda cited above.
Displaced Government servants have by and large been absorbed in the various Central Services and their seniority has been fixed with reference to the previous service rend red by them.
Similarly, the seniority of ex employees of the Government of Burma and of Part 'B ' States as we I as of candidates with war service has already been determined in accordance with the instructions cited above.
As the specific objects underlying the instruction is cited above have been achieved, there is no longer any reason to apply those instructions in preference to the normal principles for determination of seniority.
It has, therefore, been decided in consultation with the Union Public Se vice Commission, that hereafter the seniority of all persons appointed to the various Central Services after the date of these instructions should be determined in accordance with the General principles annexed hereto.
The instructions contained in the various office memoranda cited in paragrah I above are hereby cancelled, except in regard to determination of seniority of persons appointed to the various Central Services prior to the date of this Office Memorandum.
The revised General principles embodied in the Annexure will not apply with retrospective effect, but will come into force with effect from the date of issue of these 'orders, unless a different date in respect of any particulate service/ grade from which these revised principles are to be adopted for purposes of determining seniority has already been or is hereafter agreed to by this Ministry. ', Relevant parts of paragraphs 2, 3 and 4 of the Annexure to this Memorandum were as under : "2 Subject to the Provision of para 3 below, persons appointed in a substantive or officiating capacity to a grade prior to the issue of these general principles shall retain the relative seniority already assigned to them or such seniority as may hereafter be assigned to them under the existing orders applicable to their cases 997 and shall en bloc be senior to all others in that grade.
Subject to the provisions of para 4 below, permanent officers of each grade shall be ranked senior to persons who are officiating in that grade.
Direct Recruits : Notwithstanding the provisions of para 3 above, the relative seniority of all direct recruits shall be determined by the order of merit in which they are selected for such appointment, on the recomendations of the U.P.S.C. or other selecting authority, persons appointed as a result of an earlier selection being senior to those appointed as a result of a subsequent selection.
Ravi Varma, respondent No. 1 in civil appeal No. 1845 of 1968.
was appointed as an Inspector in the Central Excise Collectors in Madras on 27 5 47 and was confirmed on 7 4 56.
Ganapathi Kini respondent No. 1 in civil appeal No. 1846, was appointed as an inspector in the Central Excise Collectorate in Madras on 28 5 47.
In view of the war service rendered by Ganapathi Kini, his service for purposes of seniority was computed with effect from 10 10 46 and he was confirmed on 7 4 56.
Ganapathi Kini and Ravi Varma were shown at serial Nos. 115 and 141 in accordance with the length of service in seniority list of inspectors prepared in 1959.
Subsequently on the directions of the Central Board of Revenue contained in letter dated October 19, 1962, a revised seniority list was prepared in 1963 by computing seniority from the date, of conifirmation.
In the revised list Ganapathi Kini and Ravi Varma were shown at serial, Nos. 149 and 150, junior to persons to whom they had been shown senior in the earlier seniority list.
Ganapathi Kini and Ravi Varma thereupon filed petitions under article 226 of the Constitution of India praying for quashing the revised seniority list prepared in 1963.
The main ground taken in the writ petitions was that the seniority should be determined according to length of service in terms of Office Memorandum dated June 22, 1949 of the Ministry of Home Affairs.
Impleaded in the writ petitions as respondents were the Union of India, the Central Board of Revenue and the Collector of Central Excise as also those inspectors of Central Excise who, according to the petitioners, were junior to them but who on account of being shown senior to the petitioners in the revised seniority list, had been appointed as Senior Grade Inspectors of Central Excise.
The above mentioned writ petitions were resisted by the appellants.
The learned judges of the Mysore High Court referred to the memoranda dated June 22, 1949 and December 22, 1959 L736SupCI/72 998 and held that the altered rule embodied in the Memorandum dated December 22, 1959 for the determination of seniority would be inapplicable to persons appointed before June 22, 1949 like Ganapathi Kini.
Argument was advanced on behalf of the appellants that on July 3, 1957 the Central Board of Revenue had again adopted the rule that the date of the confirmation should form the basis for determination of seniority.
This argument did not find favour with the learned judges,and it was observed "But what is however clear is that in the case of a person like the petitioner who was appointed before June 22, 1949 the rule made by the Ministry of Home Affairs on that date was what constituted the basis for the determination of seniority and not the rule which was revived by the Central Board of Revenue on July 3, 1957.
" Direction was accordingly issued that Ganapathi Kini 's seniority should be determined on on basis of the formula contained in the Office Memorandum dated June 22, 1949 and the revised seniority list be rectified accordingly.
In the petition filed Ravi Varma the High Court made a short order when, after 'referring the decision in the case of Ganapathi Kini, the learned judges granted similar relief to Ravi Varma.
Suresh Kumar, respondent No. 1 and Tara Chand Jain, res pondent No ' 2 in civil appeal No. 50 of 1969 were appointed as Lower Division Clerks in the Medical Stores Depot, Karnal under the Directorate General of High Services on October 9, 1950 and November 26 1951 respectively.
Both of them were con firmed on March 31, 1960.
In the Seniority list which was Prepared in accordance with Office Memorandum dated June 22, 1949 Suresh Kumar and Tara Chand Jain, respondents, were shown at serial Nos. 32 and 34 in accordance with their length of Service.
Subsequently Memorandum dated June 19, 1963 Was received from the Directorate General of Health Services in which there was a reference to the Ministry of Home Affairs office Memorandum date December 22, 1959.
It was stated in the Memorandum from the Directorate General of Health Services that scheduled castes ' and scheduled tribes candidates who were confirmed in reserved vacancies would rank senior to temporary, including quasi permanent persons irrespective of their position in the seniority list.
A revised seniority list was thereafter prepared and a number of scheduled castes candidates who had been recruited later but had been confirmed earlier than Suresh Kumar and Tara Chand Jain were shown senior.
Suresh Kumar and 999 Tara Chand Jain were thus shown at serial Nos. 40 and 42 in the revised seniority list Suresh Kumar and Tara Chand Jain thereafter filed petition tinder article 226 and 227 of the Constitution of India for quashing the instructions contained in the Memorandum dated June 19, 1963 issued by the Directorate General of Health Services is well its the revised seniority list and other consequential reliefs.
Impleaded is respondents in the petition were the Union or India, the Director General of Health Services, the Deputy Assistant Director General Medical Stores, as well astoother schedule castes employees of the Medical Stores Depot Karnal who had been shown senior to the petitioners in the revised seniority list.
The above petitions were resisted by the appellants and were dismissed by the learned single judge.
On Letters Patent appeal the judgment of the single judge was reversed and it was held thatSuresh Kumar and Tara Chand Jain having been appointed prior to December 22, 1959 were Governed by the rule of seniority contained in the Office Memorandum dated June 22, 1949 issued by the Ministry of Home Affairs.
This position, in the opinionof the learned judges, was not affected by the subsequent OfficeMemorandum issued by the Ministry of Home Affairs.
So far asthe Memorandum dated June 19, 1963 issued by the Directorate General of Health Services was concerned, it was found to be not in consonance with the Office Memoranda issued by the Ministry of Home Affairs on June 22, 1949 and December 22, 1959.
Assuch the Memorandum issued by the Directorate General of Health Services, according to the learned judges, could not affect the seniority of Suresh Kumar and Tara Chalid Jain.
In the result the revised seniority list was held to be invalid and theUnion of India and two other appellants were directed to prepare a revised seniority list in accordance with the original seniority of Suresh Kumar and Tara Chand Jain.
The learned Solicitor General on behalf of the appellants has at the outset referred to Memoranda dated June 22, 1949 and December 22, 1959 issued by the Ministry of Home Affairs and has argued that after the issue of the latter Memorandum the seniority of all Central Government employees should be determined by the date of their confirmation and not oil the basis of the length of service.
let this connection, we find, that the of a large number of Government employees After the partition of the country from areas now forming part of Pakisthan resulted in a situation wherein the Government had to review the Jules relating to seniority, As most of those displaced Government servants had been employed on temporary, basis and as it was felt that they should be given some weigh@age in the matter of seniority on compassionate grounds, the rule was evolved that the seniority 1000 should be determined on the basis of the length of service in equivalent grades.
The seniority of persons appointed on permanent basis or quasi permanent basis before January 1, 1944 was, however, left undisturbed.
Further, as it was not possible to regulate the seniority of only displaced Government servants by giving them credit for previous service, the instructions were made applicable to all categories of persons appointed to Central services.
Office Memorandum dated June 22, 1949 was consequently issued.
The above principles were also extended to other category of Government employees, including those with war service.
The matter was reviewed thereafter in 1959.
The Government then found that displaced Government servants had by and large been absorbed in the various Central services and their seniority had been fixed with reference to the previous service rendered by them.
Same was found to be the position of other Government servants who had been given the benefit of the principles contained in Memorandum dated June 22,.1949.
As the objects underlying the instructions of June 22, 1949 had been achieved and it was no longer considered necessary to apply those instructions in preference to the normal principle for determination of seniority, it was decided that the seniority of Central Government employees would henceforth be determined in accordance with the general principles contained in Annexure to the Office Memorandum issued by the Ministry of Home Affairs on December 22, 1959.
One ,of those principles was that permanent officiating of each grade would I ranked senior to persons who were, officiating in that grade.
The effect of that, as submitted by the learned Solicitor General, was that the seniority was to be determined by the date of confirmation and not on the basis of length of service as was the rule contained in the Office Memorandum dated June 22, 1949.
The Office Memorandum dated December 22, 1959, however, expressly made it clear that the general principles embodied in the Annexure thereto were not to have retrospective, effect.
In ,order to put the matter beyond any Pale of controversy, it was mentioned that 'hereafter the seniority of all persons appointed to the various Central Services after the date of these instructions should be determined in accor dance with the General principles annexed hereto '.
It is, therefore, manifest that except in certain cases with which we are not concerned, the Office Memorandum dated December 22, 1959 and the provisions laid down in the Annexure thereto could not apply to persons appointed to the various Central services before the date of that Memorandum.
It may also be mentioned that while dealing with the above Memorandum, this Court in the case of Mervyn Coutindo & Ors.
1001 vs Collector of Customs, Bombay & Ors.
(1) observed that these principles were not to apply retrospectively but were given effect to form the date of their issue, subject to certain reservations with which we are not concerned.
It has next been argued by the learned Solicitor General that whatever might be the positioned in respect of the employees in other Central services, so far as the clerks, supervisors and inspectors under the Central Board of Revenue were concerned, a decision was taken that for purposes of promotion, the permanent employees should have precedence before nonpermanent employees.
Our attention in this connection has been invited to letter dated March 15, 1958 sent by the Central Board of Revenue to all Collectors of Central Excise.
In this letter there was a reference to an earlier letter dated July 3, 1957 from the Board and it was mentioned that the instructions contained in the earlier letter that for purposes of promotion from ministerial grade to inspectors grade, permanent clerks would first be considered before considering persons who were non permanent, should be followed in respect of promotions to other grades also.
The Solicitor General accordingly contends that the direction contained in the Memorandum dated December 22, 1959 that it could not apply to employees appointed before that date would not hold good in the case of clerks, supervisors and inspectors functioning under the Central Board of Revenue.
It is, in our opinion, not necessary to go into this aspect of the matter because we find that the Central Board of Revenue as per letter dated August 27, 1971 addressed to all Collectors of Central Excise, gave fresh instructions regarding the principles of seniority.
In this letter there was a reference to the Office Memorandum dated December 22, 1959 issued by the Ministry of Home Affairs and it was stated : "In supersession of all previous orders on the subject, it has now been decided that in so far as the nongazetted staff in the Central Excise, Customs and Narcotics Departments and other subordinate offices are conceded, the seniority of persons appointed to various posts and services after receipt of these orders should be regulated in accordance with the Ministry of Home Affairs O.Ms.
referred to above.
" It would follow from the above that so far as the non gazetted staff 1 in the Central Excise, Customs and Narcotics Departments and other subordinate offices of the Central Board of Revenue are (1) [1966]3 S.C.R. 600.
1002 concerned, the question of seniority would have to be decided in accordance with the Office Memorandum dated 19 10 1959.
As the said Office Memorandum has, except in certain cases with which we are not concerned, applied the rule of seniority contained in the Annexure thereto only to employees appointed after the date of that Memorandum, there is no escape from the conclusion that the seniority of Ganapathi Kini and Ravi Varma, respondents, who were appointed prior to December 22, 1959, would have to be determined on the basis of their length of service in accordance with Office Memorandum dated Julie 22, 1949 and not on the basis of the date of their confirmation.
In civil appeal No. 50 of 1969 the learned Solicitor General has referred to Office Memoranda dated January 28, 1952, April 20, 1961 and March 27, 1963 issued by the Ministry of Home Affairs to show a departure from the rule of seniority for the benefit of members of scheduled castes and scheduled tribes.
Office Memorandum dated January 28, 1952 makes provision for communal representation in services for candidates to scheduled castes and scheduled tribes as also the Anglo Indian community.
The Memorandum gives a model roster which should be applied in filling the vacancies.
Perusal of the Memorandum shows that it relates only to recruitment and has nothing to do with the rule of seniority.
Office Memorandum dated April 20, 1961 deals with the ques tion of seniority of direct recruits who were confirmed in an order different from the original order of merit.
According to the Memorandum, it often happens that a scheduled caste or scheduled tribe candidate occupying a lower position in the merit list is appointed permanently to a reserved vacancy, while candidates above him in the merit list are not appointed at that time.
If such candidates are appointed in the following year, they are note entitled to a higher seniority on the ground that in the previous year they had obtained a higher position in the merit list.
It is plain that the above Office Memorandum did not deal with the question of seniority on the basis of length of service as contained in Office Memorandum dated June 22, 1949 but with the question a, to what would be the effect if a direct recruit scheduled caste or scheduled tribe candidate though occupying a lower position in the merit list, is confirmed earlier in a reserved vacancy.
We are in the present case not concerned with any merit list nor with any question of seniority based on such a list.
As such, Office Memorandum dated April 20, 1961 is also of not any material help to the appellants.
It may be stated that the counsel for the appellants in the High Court conceded that the above Memorandum had no direct relevance in the present controversy.
1003 The third Office Memorandum dated March 27, 1963 referred to by the learned solicitor General deals with the subject of maintenance of roster for giving effect to the reservations provided for scheduled castes and scheduled tribes ' in Central Government services.
This Memorandum has a bearing only on the question of recruitment and provides no guidelines for determining seniority.
We, thus, find that none of the three Office Memoranda relied upon by the Solicitor General is of any material assistance to the appellants.
We may now advert to the Memorandum dated June 19, 1963 issued by the Directorate General of Health Services.
As? mentioned earlier, it was after the receipt of this Memorandum that the seniority list of class III employees of the Government Medical Stores Depot, Karnal was revised and the seniority was determined on the basis of the date of confirmation and not on the basis of length of service.
The above Memorandum from the Directorate General of Health Services expressly refers to the Office Memorandum dated December 22, 1959 issued by the Ministry of Home Affairs and seeks implementation of that.
It is no doubt true that a direction was given in the Memorandum of the Directorate General of Health Services that scheduled caste and scheduled tribe candidates confirmed in reserved vacancies should be ranked senior to temporary, including quasi permanent persons, irrespective of their position in the seniority list, but such a direction went beyond the rule of seniority contained in the, Office Memorandum dated December 22, 1959 issued by the Ministry of Home Affairs in respect of employees appointed before that date.
As mentioned earlier Office Memorandum dated December 22, 1959 did not disturb the, seniority of Central Government employees who had been appointed prior to the date of that Memorandum, except in certain cases with which we are not concerned.
It is not disputed that according to the Government of India Allocation of Business Rules, 1961 general questions relating to recruitment, promotion and seniority in Central services like the one with Which we are concerned, have to be dealt with by the Ministry of Home Affiars.
As Suresh Kumar and Tara Chand Jain, respondents, were appointed prior to December 22, 1959 their seniority was governed by the rule of length of service as contained in Office Memorandum 1004 dated June 22, 1949 and not by the rule based upon date of confirmation as contained in the Annexure to the Memorandum dated December 22, 1959.
Reference was made by the learned Solicitor General to the case of Roshan Lal Tandon vs Union of India(1) wherein it has been laid down that the service rules may be framed and altered unilaterly by the Government.
No occasion for invoking the above dictum arises in this case because the learned counsel for the contesting respondents have not questioned the right of the Government to frame and alter unilaterly the service rules.
In the result, all the three appeals fail, and are dismissed with costs.
One hearing fee.
G.C. Appeals dismissed.
| IN-Abs | In order to provide for the seniority of Central Government servants displaced from Pakistan the Home Ministry by Office Memorandum dated June 22, 1949 laid down that the seniority of all Central Government servants in the same grade shall be governed by the length of their service in that grade.
By 1959 the object underlying that memorandum had been achieved.
Accordingly by another memorandum dated December 20, 1959 the Home Ministry decided that in respect of persons appointed after that date the general rules annexed to the memorandum shall apply, one of those being that seniority shall be governed by the date of confirmation and not length of service.
In 1957 the Central Board of Revenue issued a circular whereby seniority in the offices under it was to be determined on the basis of date of confirmation.
In 1962 a revised seniority list of employees under the Central Board of Revenue was prepared on the basis of date of confirma tion.
As a result respondents G and R who were Inspectors of Central Excise lost several positions in the seniority.
These respondents had been appointed in 1947 and confirmed in 1956.
They filed writ petitions in the High Court of Mysore.
The High Court held that the memorandum of 1949 applied to their case and their senority must be decided on the basis of length of service and not the date of confirmation.
S and T were employees under the Directorate General of Health Services, Government of India.
They had joined service in 1950 and 1951 respectively.
In the seniority list, which had been prepared on the basis of length of service in accordance with the Office Memorandum ,of 1949 their positions were 32 and 34.
Subsquently Memorandum dated June 19 1963 was issued by the Directorate General of Health Services in which it was stated that Scheduled Castes and Scheduled Tribes candidates who were confirmed in reserved vacancies would rank senior to temporary, including quasi permanent persons respective of their positions in the seniority list.
As a result of the,application of this principle S and T lost seniority by several positions.
They filed writ Petitions in the High Court of Punjab and Haryana.
The Single Judge dismissed their petitions but the Division Bench allowed them on the ground that the Memorandum dated June 19, 1963 issued by the Directorate of Health Services was not in consonance with the Home Ministry 's Memoranda 1949 and 1959.
Against the judgments of the High Courts the Union of India and others appealed to this Court.
Dismissing the appeals, 993 HELD: (1) The office Memorandum dated December 22, 1959 expressly made it clear that the general principles embodied in the annexure thereto were not to have retrospective effect.
In order to put the matter beyond any pale of controversy, it was mentioned that "hereafter the seniority of all persons appointed in the various Central Services.
after the date of these instructions should be determined in accordance with the General principles annexed hereto".
It was therefore, manifest.
that except in certain cases with which the present appeals were not concerned laid down in the Annexure thereto could not apply to persons ap sions laid down in the Annexure thereto could not apply to persons appointed to the various central services before the date of that Memorandum.
[1000 6] There was thus no escape from the conclusion that the seniority of G and respondents who were appointed prior to December 22, 1959 would have to be determined on the basis of their length of service in accordance with the Office Memorandum dated June 22, 1949 and not on the.
basis of date of their confirmation.
This position was confirmed by the Central Board of Revenue in its letter dated August 27, 1971 addressed, to all Collectors of Central Excise.
[1002 D; 1001 E] Mervyn Coutindo & Ors.
vs Collector of Customs, Bombay & Ors.
; , referred to.
(ii) It was no doubt true that a direction was given in the Memoran and R respondents who were appointed prior to December 22, 1959 would and Scheduled Tribe candidates confirmed in reserved vacancies should be ranked senior to temporary, including quasi permanent persons irrespective of their position in the seniority list but such direction went beyond the rule of seniority contained in the office Memorandum dated.
December 22, 1959 issued by the Ministry of Home Affairs in respect of employees appointed before the date.
It was not disputed that according to the Government of India allocation of Business Rules, 1961 general questions relating to recruitment promotion and seniority in Central ' services had to be dealt with by the Ministry of Home Affairs.
As S and.
T respondents were appointed prior to December 22, 1959 their seniority was governed by the rule of length of service as contained in the Annexure to the Memorandum dated December 22, 1959.
[1003 E H]
|
Appeal No. 1650 of 1970.
Anneal from the Judgment and order dated January 31, 1970 of the Bombay High Court in April No. 94 of 1967.
section T. Desai, P. C. Bhartari.
Ajit Mehta.
Kirit Mehta, J. B. Dadaichanji O. C. Mathur and Ravinder Narain, for the appellant.
14 L736SuPCT/72 966 B. Sen, section K. Aiyar and R. N. sachthey, for the respondents.
The Judgment of the Court was delivered by Dua, J.
The Colaba Land and Mills Co., Ltd., (in liquida tion) was ordered by the Bombay High Court on October 7, 1959 to be wound up under the provisions of the Companies Act, 1 of 1956 and the Official Liquidator was appointed its liquidator.
Earlier on May 1, 1959 the Official Liquidator had been appointed by the High Court its provisional liquidator.
On August 23, 1966 the Income tax Officer (Companies Circle) concerned issued six different notices under section 148 of the Income tax Act, 1961 proposing to reopen the assessment of the Company and to re assess it in respect of the assessment years 1950 51 to 1955 56.
On December 31, 1966, the Income tax Officer served further notices under section 142(1) of the Income tax Act upon the Official Liquidator calling upon him to produce accounts and documents speci fied at the back of the notices and to furnish any information called for by the said officer.
At the foot of the said notices it was stated that failure on the part of the Official Liquidator to comply with the terms of those notices would not only result in exparte assessment against the Company but might also entail penalty under section 271 of the Income tax AcL Certain negotiations followed between the Official Liquidator and the Inspecting Assistant Commissioner of Income tax but they were infructuous.
On an application made by the Official Liquidator in the High Court questioning the jurisdiction of the Income tax Officer to issue the said notices or to proceed with the reassessment of the Company without the leave of the High Court winding up the Company, Vimadlal J., on 28th September, 1967 held that the income tax authorities were not entitled to commence the assessment or reassessment proceedings contemplated against the Colaba Land and Mills Co., Ltd., or to continue the same without obtaining leave of the Court under section 446(1) of the (Act No. 1 of 1956) (hereinafter called the Act).
The learned Judge on this view granted an injunction restraining the Incometax Officer from assessing or re assessing the said Company for the assessment years 1950 51 to 1955 56.
On appeal by the Income tax Officer and the Union of India before the appellate bench of the High Court against the order of injunction, the Division Bench (Modi and Desai, JJ.) reversed the order of the learned single Judge and set aside the injunction issued by him.
Before the appellate bench two contentions were raised on behalf of the Income tax Officer: (1) that notices for reassessment issued under section 148 were not legal proceedings within the meaning of that phrase as used in section 446(1) of the Act, and (2) that, assuming the re assessment proceedings started under the 967 said notices to be legal proceedings, leave of the Company Court under section 446(1) of the Act was not necessary because the Incometax Officer had exclusive jurisdiction to make re assessment and to determine the tax liability.
The proceedings by way of assessment before the Income tax Officer, according to the contention were outside the pale of jurisdiction of all civil courts including the Company Court.
The appellate bench did not consider it necessary to decide the first contention because, on the authority of Damji Valji Shah vs Life Insurance Corporation of India(1), the second contention deserved to be accepted and that was considered sufficient to conclude the appeal.
The Official Liquidator, after securing a certificate of fitness from the High Court under article 133(1)(c) of the Constitution has appealed to this Court and the only question which requires consideration here is, if it is necessary for the Income tax Officer to obtain leave of the liquidation court when he wants to re assess the company for escaped income in respect of past years.
Section 446 of the Act reads : "(1) When a winding up order has been made or the Official Liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, against the company, except by leave of the Court and subject to such terms as the Court may impose.
(2) The Court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of (a) any suit or proceeding by or against the company; (b) any claim made by or against the company (including claims by or against any of its branches in India); (c) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding up of the company; whether such suit or proceeding has been instituted or is instituted, or such claim or question has arisen or arises or such application has been made or is made before or (1) ; 968 after the order for the winding up of the company, or before or after the commencement of the Companies ,(Amendment) Act, 1960.
(3) Any suit or proceeding by Or against the company which is pending in any Court Other than that in which the winding up of the company is proceeding may, notwithstanding anything contained in any other law for the time being in force, be transferred to and ,disposed of by that Court.
(4) Nothing in sub section (1) or sub section (3) shall apply to any proceeding pending in appeal before the Supreme Court or High Court." To appreciate and understand the precise scope of this section so far as it concerns us in the present controversy, we consider it pro per to turn to the scheme of the Act on this aspect.
Chapter II of Part VII of the Act beginning with section 433 deals with winding up by the Court.
Section 439 provides for applications for winding up and section 441 tells us when the winding up of a company is to be deemed to commence.
Section 442 which confers power on courts to stay or restrain proceedings against the company reads "442.
At any time after the presentation of a winding up petition and before a winding up order has been made, the company or any creditor or contributory may (a) where any suit or proceeding against the company is pending in the Supreme Court or in any High Court, apply to the Court in which the suit or proceeding is pending for a stay of proceedings therein; and (b) where any suit or proceeding is vending against the company in any other Court, apply to the Court having jurisdiction to wind up the company, to restrain further proceedings in the suit or proceeding; and the Court to which application is so made may stay or restrain the proceedings accordingly, on such terms as it thinks fit.
" Section 444 enjoins the Court making an order for the winding up of a company to cause intimation thereof to be sent forthwith to the Official Liquidator and the Registrar appointed under the .
Official Liquidators attached to the High Courts are appointed by the Central Government under section 448 and the Registrars by the Central Government under section 609 of the Act.
969 It is the duty of the petitioner in the winding up proceedings and also of the company to file under section 445 a certified copy of the order of winding up with the Registrar who has to notify in the Official Gazette that such an order has been made.
Such order is to be deemed to be a notice of discharge of the officers and employees of the company except when the business of the company is continued vide section 445 (3).
Then comes section 446, which has already been set out.
The present sub section
(2) of this section was substituted for the old one in 1960 by Act 65 of 1960 and sub & (4) was also added by that Act.
Sub section (2) is on the lines of section 7 of the Presidency Towns Insolvency Act, 1909, section 4 of the and section 45B of the Banking .
The object of this sub section appears to be to empower "the court as in exercise of insolvency jurisdiction to decide, all claims made by or against any company and other questions whatsoever so that winding up proceedings might be expedited".
Subsections (2) and (3) both seem to have been inserted to give effect to the recommendation of the Company Law Committee Report contained in para 207(c), namely, that "all suits by or against a company in winding up should, notwithstanding any provisions in any law for the time being in force, be instituted in the court in which the winding up proceedings are pending".
This was considered to be to quote the exact words "on balance an advantage to all concerned, including the parties which have a claim against the companies, to institute suits relating to its affairs in the Court where the winding up proceedings are pending".
In the Indian Companies Act, 1913, section 171 provided for preventing litigation against a company in the process of being wound up and it read as : " 171.
When a winding up order has been made or a provisional liquidator has been appointed no suit or other legal proceeding shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose.
" The words underlined were inserted by the Companies Amend ment Act, 1936 which followed the English Act.
It is hardly necessary to point out that company legislation in India has, ever since the first enactment of 1850 (Registration of Joint stock Companies Act, No. XLIII of 1850) broadly been following the lines of development of the company law in England.
The object of section 171 was designed to achieve was to prevent all litigation against the company in the process of being wound up except with the consent of the court.
We have reproduced this section because the decisions to which reference has been made by Shri Desai in the very beginning of his arguments relate to the cons 970 truction of this section by the Federal Court of India and by this Court.
The Federal Court in The Governor General in Council vs
Shiromani Sugar Mills Ltd.(1) while construing this section held that the words "other legal proceedings" in this section comprise any proceedings by the revenue authorities under section 46(2) of the Indian Income tax Act and accordingly, before forwarding the requisite certificate under section 46(2) to the Collector, which would put the machinery for the collection of the arrears of land revenue into motion, the Income tax Officer should have applied under section 171 of the Indian Companies Act for leave of the winding up Court.
The passage on which Shri Desai specifically relied is where, disagreeing with the observations of a Full Bench of the Lahore High Court in Shakuntla vs The People 's Bank of Northern India Ltd. (In Liquidation,)(2), Spens, C.J. observed that the expression "or other legal proceedings" in section 171 need not and, therefore, should not be confined to "original proceedings in a court of first instance analogous to a suit initiated by means of a petition similar to a plaint".
The learned Chief Justice there went on to observe : "Section 171 must, in our judgment, be construed with reference to other sections of the Act and the general scheme of administration of the assets of a company in liquidation laid down by the Act.
In particular, we would refer to section 232.
Section 232 appears to us to be supplementary to section 171 by providing that any creditor (other than Government) who goes ahead, notwithstanding a winding up order or in ignorance of it with any attachment, distress, execution or sale, without the previous leave of the Court, will find that such steps are void.
The reference to 'distress ' indicates that leave of the Court is required for more than the initiation of original proceedings in the nature of a suit in an ordinary Court of law.
Moreover, the scheme of the application of the company 's property in the pari passu satisfaction of its liabilities, envisaged in section 211 and other sections of the Act, cannot be made to work in coordination, unless all creditors (except such secured creditors as are ' outside the winding up in the sense indicated by Lord Wrenbury in his speech in Food Controller vs Cork(3) are subjected as to their actions against the property of the company to the control of the Court.
Accordingly, in our judgment, no narrow construction should be placed upon the words 'or other legal proceeding ' in section 171.
In our judgment, the words can and should be held (1) (2) Lah.
(3) 971 to cover distress and execution proceedings in the ordinary Courts.
In our view, such proceedings are other legal proceedings against the company, as contrasted with ordinary suits against the company.
" In that case a company was ordered to be wound up in April, 1942 and an order of assessment to income tax of the profits made by the company in the year ending May 31, 1940 was made in 1943 and the Income tax Officer, without obtaining leave of the winding up court, commenced proceedings for recovery of tax as If it were an arrear of land revenue.
It was on these facts that it was observed that the words "or other legal proceedings" can and should be held to cover distress and execution proceedings.
This expression was not held to cover assessment proceedings to which apparently no objection was raised by the parties though they were represented by eminent counsel.
The decision of this Court to which Shri Desai has next referred is M. K. Ranganathan vs Government of Madras(, ').
The head note which gives a clear idea of the ratio of this decision is in these words "The secured creditor is outside the winding up and can realise his security without the leave of the winding up Court, though if he files a suit or takes other legal proceedings for the realisation of his security he is bound under section 171 of the Indian Companies Act to obtain the leave of the winding up Court before he can do so although such leave would almost automatically be granted.
It is a legitimate rule of construction to construe words in an Act of Parliament with reference to words found in immediate connection with them.
It is also a well recognized rule of construction that the legislature does not intend to make a substantial alteration in the law beyond what it explicitly declares either in express words or by clear implication and that the general words of the Act are not to be so construed as to alter the previous policy of the law, unless no sense or meaning can be applied to those words consistently with the intention of preserving the existing policy untouched.
Held, therefore, that having regard to the context in which the words 'any sale held without leave of the Court of any of the properties ' added in section 232(1) by the amending Act XXII of 1936 have been used in aposition with "any attachment, distress or execution put into force without leave of the Court against the estate or effects" it would be a legitimate construction to (1) ; 972 be put upon them that they refer only to sales held through the intervention of the Court and not to sales effected by the secured creditor outside the winding up and without the intervention of the Court, and that the amendment was not intended to bring within the sweep of the general words sales effected by the secured creditor outside the winding up.
Held accordingly that in the present case the sale effected by respondent No. 2 as the receiver of the trustees of the debenture holders in July 1954 was valid and binding on all parties concerned and could not be chal lenged as it was sought to be done by the Official Receiver.
" In this case the observations already reproduced from the judgment of the Federal Court in Shakuntla 's case (supra) were approved.
It may also be pointed out that in this decision this Court observed that the winding up court assures pro rata distribution of the assets of the company in the same way in which the court under the Presidency Towns Insolvency Act or the ensures such distribution of assets.
Section 232(1) of the Act of 1913 which was held supplemental to section 171 was also stated to have reference to legal proceedings in the same way as such proceedings were envisaged by section 171.
These two decisions in our opinion do not lay down that assessment proceedings under the Income tax Act should be held to be within the contemplation of section 171 of the Indian Companies Act, 1913.
The next decision to which reference has been made by Shri Desai is Union of India vs India Fisheries (P) Ltd. (1).
In that case the respondents, Fisheries (P) Ltd., had been directed to be wound up by the winding up court and an Official Liquidator had been appointed by an order of the High Court in October, 1950.
The head note in that case gives a clear idea of the facts and the decision.
It reads : "The respondent company was directed to be wound up and an official liquidator appointed by an order of the High Court in October, 1950.
In December 1950 the respondent was assessed to tax amounting to Rs. 8737 for the year 1948 49.
A claim made for this tax on the official liquidator was adjudged and allowed as an ordinary claim and certified as such in April, 1952.
The Liquidator declared a dividend of 9 1/2 annas in the Rupee in August, 1954 and paid a sum of Rs. 5188 to the Department, leaving a balance of Rs. 3549.
(1) 973 In June, 1954, the Department made a demand from the respondent and was paid Rs. 2565 as advance tax for the year 1955 56.
On a regular assessment being made for that year, only Rs. 1126 was assessed as payable so that a sum of Rs. 1460, inclusive of interest, be came refundable to the respondent.
However, the Income Tax Officer, purporting to exercise the power available to him under section 49E of the Income Tax Act, 1922, set off this amount against the balance of Rs. 3549 due for the year 1948 49.
A revision petition filed by respondent in respect of this set off was rejected by the Commissioner of Income tax.
Thereafter, petition under article 226 filed by the respondent to set aside the orders of the Income Tax Officer and Commissioner was allowed by the High Court, on the ground that the demand for Rs. 8737 in respect of 1948 49, being adjudged and certified came to have all the incidents and character of an unsecured debt payable by the liquidator to the Department; it was therefore governed by the provisions of Company Law and no other remedy or method to obtain satisfaction of the claim was available to the creditor.
In the appeal to this Court it was contended on behalf of the appellant that section 49E gave statutory power to Income Tax Officer to set off a refundable amount against any tax remaining payable and that this power was not subject to any provision of any other law.
Held the Income Tax Officer was in error in applying section 49E and setting off the refund due to the respondent.
The effect of sections 228 and 229 of the Companies Act, 1913, is, inter alia, that an unsecured creditor must prove his debts and all unsecured debts are to be paid pari passu.
Once the claim of the Department has to be proved and is proved in liquidation proceedings, it cannot, by exercising the right under section 49E get priority over other unsecured creditors and thus defeat the very object of sections 228 and 229 of the Companies Act.
Furthermore, if there is an apparent conflict between two independent provisions of law, the special provision must prevail.
Section 49E is a general provision applicable to all assessees in all circumstances; sections 228 and 229 deal with proof of debts and their payment in liqui 97 4 dation.
Section 49E can be reconciled with sections 228 and 229 by holding that section 49E applies when insolvency rules do not apply.
" In our opinion this decision is of no greater assistance to the appellant on the narrow point which requires determination by us.
On the contrary to some extent it goes against Shri Desai because the assessment made in December, 1950, after the appointment of the Official Liquidator was assumed to be in order.
It may be recalled that in Shiromani Sugar Mills case (supra) the assessment made after the winding up order was not challenged though on the argument addressed by Shri Desai before us it could have been challenged.
The ratio decidendi or the principle accepted and applied in none of the decisions cited supports the appellant 's contention on the precise point of assessment of tax.
Shri Desai has next referred us to a more recent decision of this Court in Balwant Singh vs L. C. Bharumal, Income tax Officer, New, Delhi.(1) In this case the Income tax Officer was held to be a court for the purpose of section 195 (1) (b), Cr. P. C. though it was added that the Income tax Officer could not be treated as a re venue court and, therefore, neither section 476 nor section 479 A, Cr. P. C. would be applicable.
This decision has been cited for the purpose of contending that if the expression "other legal proceeding" in section 446 is to be construed to mean a proceeding in a court, then, the Income tax Officer must be considered to be a court when holding assessment or re assessment proceedings.
This contention may be disposed of with the observation that merely because the Income tax Officer is considered to be a court for the purpose of section 195 (1) (b), Cr. P. C. it does not necessarily follow that the said officer must be considered to be a court for the purposes of section 446 of the Act.
There is no justification for extending the scope of this decision beyond its own facts.
The decisions which apparently seem to lend more direct support to the appellants contention are Union of India vs Seth Spinning Mills Ltd., (In Liquidation) (2) and Mysore Spun Silk Mills Ltd., (In Liquidation), In re Official Liquidator vs Commissioner of Income tax, Bangalore(").
Both of them are decisions by single Judges, the former by the Punjab High Court and the latter by the Mysore High Court.
In Seth Spinning Mills case (supra) it was observed "that section 171 of the Indian Companies Act, 1913 provides that when a winding up order has been made no suit or other legal proceeding shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose.
The language of this section is wide enough to include proceedings under the Income tax Act.
(1) [1968]70 I.T.R.89(S.C.) (2) (3) 975 No leave of the court has been obtained.
In view of this the claim of the petitioner for Rs. 4,000 on account of the penalty order passed on 14th April, 1956 cannot be entertained".
in this case the Union of India through the Commissioner of Income tax had applied to the learned single Judge, who was apparently functioning as a company Judge, praying that the department 's claim amounting to Rs. 16,500 should have been admitted by the Official Liquidator and that his refusal to do so was not justified in law.
This amount, it appears, consisted of the penalty imposed by the Income tax Department.
Part of the penalty was imposed by means of an order passed prior to the company 's going into liquidation but a sum of Rs. 4,000 related to the penalty imposed after the date of winding up.
The learned single Judge while dealing with that petition observed : "Section 171 of the Indian Companies Act, 1913, provides that when a winding up order has been made no suit or other legal proceedings shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose.
The language of this section is wide enough to include proceedings under the Income tax Act.
No leave of the court has been obtained.
In view of this, the claim of the petitioner for Rs. 4,000 on account of the penalty order passed on 14th April, 1956, cannot be entertained.
" In the Mysore case it appears that in the course of winding up of the mills in liquidation large sums of money came into the hands of the liquidator which could not be immediately applied for distribution of dividends to the creditors.
Those moneys were invested pursuant to the relevant provisions of the Companies (Court) Rules.
The question arose whether in respect of the receipts of income the liquidator was liable to pay income tax on those receipts.
The learned single Judge, after discussing the scheme of the Companies Act, observed : "The liquidator is only an officer of the court.
Unlike a receiver in the case of insolvency, properties of the insolvent do not vest in him but come within the control of the court.
All his actions are subject to the control of the court for which purpose the court issues to him appropriate directions from time to time in the course of winding up.
No court or other authority (subject to the exception contained in sub section (4) of section 446 of the Companies Act) can take any proceedings or attach or otherwise reach any of the matters, the winding up court treats the liquidator as its special 97 6 officer specially charged with the duty of representing the company and protecting its interests in winding up.
In the light of the above principles, it is the duty of the court to see that all liabilities of a company are properly met in accordance with the provisions of the law and the special provisions in that behalf contained in the Companies Act.
Liability to income tax is also one of the liabilities which the court is expected to provide for in the course of winding up.
Such being the position, the question is whether, because the liquidator does not answer the description of the principal officer as defined in the Income tax Act, the liability, if any, of the company for payment of income tax itself comes to an end and therefore the winding up court may ignore that liability.
" The Court thereafter observed that the corporate existence of the company continues even after the winding up order; but after the winding up order the question of payment of income tax has to be dealt with or answered on a joint application of the terms or provisions of the Income tax Act and the Companies Act.
After so observing the court proceeded : "that even after a winding up order is passed, the company continues to be a person within the meaning of section 4 of the Income tax Act, that therefore any receipt in the course of winding up which would attract liability to income tax under appropriate provisions of the Income tax Act would be liable to income tax or for payment of tax under Income tax Act, but that before any action can be taken by the appropriate Incometax Officer under the Income tax Act for the purpose of quantification or collection of the income tax he should obtain the leave of the winding up court under section 446 of the Companies Act, and further that the collection of the tax can only be by securing the orders of the winding up court for payment of tax in the light of the appropriate provisions of the Companies Act.
" In this case so far as collection of the tax assessed is concerned there can scarcely be any difficulty in agreeing with the view taken there.
But it is only when the court said that for the purpose of quantification of the income tax also leave under section 446 of the Act ha , to be obtained that we have to consider if this view 977 is correct.
It is on this observation that Shri Desai has principally relied.
The decisions of the Federal Court and of this Court already cited by Shri Desai, it may be recalled, do not support this view.
Reference by Shri Desai has also been made to Abdul Aziz Ansari vs The State of Bombay(1) in which assessment proceedings under the Bombay Sales Tax Act, 1946 were considered to be legal proceedings for the purpose of continuance of those proceedings after repeal of the Bombay Sales Tax Act, 1946 by section 48(2) of the Bombay Sales Tax Act, 3 of 1953.
We do not think this decision is of any assistance for considering the question whether assessment or re assessment proceedings can be considered to be legal proceedings as contemplated by section 446 of the Act.
The learned counsel for the appellant has also drawn our attention to Shiromani Sugar Mills vs Governor General in Council(2) where, after referring to section 171 of the Companies Act, 1913 it was held by the Allahabad High Court, that initiation by the Income tax Officer of steps to recover the amount of assessment under section 46 of the Income tax Act of 1922 and the prosecution by the Collector of those steps amounted to "commencement" or "proceeding with" a "suit or other legal proceeding.
" Needless to point out that this is the view which the Federal Court on appeal upheld in the decision already referred to.
The further submission pressed by Shri Desai that section 446 of the Act is a special provision and section 148 of the Income tax Act a general provision of law was sought to be supported by reference to India Fisheries case(3).
It may here be pointed out that in that case it was, while dealing with section 49E of the Income tax Act, that this Court observed that the revenue could not, by exercising the right under that section get priority over other unsecured creditors, and it was in this context that it was said that there being apparent conflict between two independent provisions of law the special provision must prevail.
In order to understand and appreciate the binding force of a decision it is always necessary to see what were the facts of the case in which the decision was given and what was the point which had to be decided.
Thus considered India Fisheries case(3) lends no assistance to Shri Desai and we are unable to construe the observations in that decision to support Shri Desai 's contention that section 446 of the Act is a special provision as against section 148 of the Income tax Act under which Income tax Officers hold proceedings for assessment or re assessment of income tax and that therefore the former should prevail over the latter.
(1) A.I.R. 1958 Bom.
(2) I.L.R. 1945 Allahabad 352.
(3) 978 Turning now to the Income tax Act it is noteworthy that section 148 occurs in Chapter XIV which beginning with section 139 pres cribes the procedure for assessment and section 147 provides for assessment or re assessment of income escaping assessment.
This section empowers the Income tax Officer concerned subject to the provisions of sections 148 to 153 to assess or re assess escaped income.
While holding these assessment proceedings the Income tax Officer does not, in our view, perform the functions of a court as contemplated by section 446(2) of the Act.
Looking at the legislative history and the scheme of the Indian Companies Act, particularly the language of section 446 read as a whole, it appears to us that the expression "other legal proceeding" in sub section
(1) and the expression "legal proceeding" in sub section
(2) convey the same sense and the proceedings in both the sub sections must be such as can appropriately be dealt with by the winding up court.
The Income tax Act is, in our opinion, a complete code and it is particularly so with respect to the assessment and re assessment of income tax with which alone we are concerned in the present case.
The fact that after the amount of tax payable by an assessee has been determined or quantified its realisation from a company in liquidation is governed by the Act because the income tax payable also being a debt has to rank pari passu with other debts due from the company does not mean that the assessment proceedings for computing the amount of tax must be held to be such other legal proceedings as can only be started or continued with the leave of the liquidation court under section 446 of the Act.
The liquidation court, in our opinion, cannot perform the functions of Income tax Officers while assessing the amount of tax payable by the assessees even if the assessee be the company which is being wound up by the court.
The orders made by the Income tax Officer in the course of assessment or re assessment proceedings are subject to appeal to the higher hierarchy under the Income tax Act.
There are also provisions for reference to the High Court and for appeals from the decisions of the High Court to the Supreme Court and then there are provisions for revision by the Commissioner of Income tax.
It would lead to anomalous consequences if the winding up court were to be held empowered to transfer the assessment proceedings to itself and assess the company to income tax.
The argument on behalf of the appellant by Shri Desai is that the winding up court is empowered in its discretion to decline to transfer the assessment proceedings in a given case but the power on the plain language of section 446 of the Act must be held to vest in that court to be exercised only if considered expedient.
We are not impressed by this argument.
The language of section 446 must be so construed as to eliminate such startling consequences as investing the winding up) court with the powers of an Income tax Officer conferred on him by the Income 979 tax Act, because in our view the legislature could not have intended such a result.
The argument that the proceedings for assessment or re assessment of a company which is being wound up can only be started or continued with the leave of the liquidation court is also, on the scheme both of the Act and of the Income tax Act, unacceptable.
We have not been shown any principle on which the liquidation court should be vested with the power to stop assessment proceedings for determining the amount of tax payable by the company, which is being wound up.
The liquidation court would have full power to scrutinise the claim of the ' revenue after income tax has been determined and its payment demanded from the liquidator.
It would be open to the liquidation court then to decide how far under the law, the amount of Income tax determined by the department should be accepted as a lawful liability on the funds of the company in liquidation.
At that stage the winding up court can fully safeguard the interests of the company and its creditors under the Act.
Incidentally, it may be pointed out that at the bar no English decision was brought to our notice under which the assessment proceedings were held to be controlled by the winding up court.
On the view that we have taken, the decisions in the case of Seth Spinning Mills Ltd., (in Liquidation) (1) and the Mysore Spun Silk Mills Ltd., (In Liquidation) (2) do not seem to lay down the correct rule of law that the Income tax Officers must obtain leave of the winding up court for commencing or continuing assessment or reassessment proceedings.
For the foregoing reasons we have no hesitation in dismissing the appeal with costs.
S.C. Appeal dismissed.
| IN-Abs | A company (in liquidation) was ordered by the High Court to be wound up and the official liquidator was appointed its liquidator.
Thereafter the I.T.O. issued notices under section 148 of I.T. Act proposing to reopen the assessment of the Company in respect of the assessment years 1950 51 to 1955 56.
The I.T.O. further notified the official liquidator to produce accounts and documents specified at the back of the notice.
The official liquidator made an application before the High Court questioning the jurisdiction of the I.T.O. to issue the said notices without the leave of the High Court, as required under section 446(1) of the companies Act.
The learned single Judge of the High Court issued an injunction restraining the I.T.O. to reassess the said Company.
On appeal, the appellate bench of the High Court reversed the order and set aside the injunction.
On appeal to this Court only one question arose for determination as to whether it was necessary for the I.T.O. to obtain leave of the liquidation court when he wants to reassess the company for escaped income in respect of the past years.
Dismissing the appeal, HELD : The Income Tax Officer need not obtain leave of the winding up court for commencing or continuing assessment or reassessment proceedings. 'Me Income tax Act is a complete Code and section 147 empowers the Income, Tax Officer to assess or reassess escaped income.
Further while holding these assessment proceedings, the Income Tax Officer does not perform the functions of a Court as contemplated by section 446(2) of the Act.
The liquidation court cannot perform the functions of Income Tax Officers while assessing the amount of tax payable by the assessees even if the assessee be the Company which is being wound up,, by the Court.
It would lead to anomalous consequencs if the winding up Court were to be held empowered to transfer the assessment proceedings to itself and assess the Company to Income tax.
[978 B D] Grovernor General in Council vs Shiromani Sugar Mills Ltd. , Shakuntala vs The Peoples ' Bank of Northern India Ltd. (in liquidation).
Lab. 760 and M. K. Ranganathan vs State of Madras.
; , referred to and discussed.
|
Appeal No. 1675 of 1970.
Appeal by special leave from the Award dated February 18, 1970 of the Industrial Tribunal, Rajasthan, Jaipur in Case No. 1.T. 12 of 1967.
G. B. Pai, P. N. Tiwari and O. C. Mathur, for the appellant.
M. K. Ramamurthi and Vineet Kumar, for the respondent, 653 The Judgment of the Court was delivered by P. Jagamohan Reddy, J.
This Appeal is by Special '.
Leave against the Award of the Industrial Tribunal, Rajasthan directing the payment of a bonus of Rs. 1,21,000/ apart from an amount of Rs. 90,000/ already disbursed to the workmen of the Appellant for the year 1962 63.
The dispute for the bonus year beginning 1st July '62 and ending 30th June '63 was raised by the workmen because the Company which had admittedly made profits, did not pay them a bonus though a gratuity of one month was given to them.
The following dispute was therefore referred to the Tribunal: "Whether workmen of M/s. J.K. Synthetic Ltd., Kota are entitled to any bonus for the year 1962 63 and whether payment of one month 's wages as gratuity by the management can be regarded as payment towards bonus for the, year in question?".
The Mazdoor Union (hereinafter called 'the Union ') on behalf of the Workmen contended that on the basis of the calculation,; of available surplus they were entitled to a bonus of 60% in accordance with the bonus formula which will entitle them to a five months wages apart from the one month 's wages already paid to them.
The first statement of computation filed on behalf of the workers was obviously incorrect because it did not take into account the various prior charges such as Income Tax, return on reserves, rehabilitation reserve etc.
which are deductible under Full Bench formula as approved and accepted by this Court from% time to time.
It therefore filed another revised return showing an available surplus of Rs. 5.34 lakhs.
The management on the other hand challenged the validity of the claim as according to it there was no available surplus for distribution even though they had already paid one month 's bonus wrongly styled as gratuity.
The calculations given by it were also found to be equally wanting.
As such it filed a revised calculation showing a net deficit of Rs. 72.35 lakhs.
It may however, be mentioned that as pointed ' out by the Tribunal, there was no dispute with regard to any of the eight items which comprised the computation of gross profits amounting to Rs. 62.16 lakhs.
The Union also did not dispute the deduction of interest on debentures of Rs. 0.06 lakhs; share transfer fee of Rs. 0.05 lakhs; the notional normal depreciation of Rs. 30.57 lakhs; and the return on share capital of Rs. 7.50 lakhs.
It had however challenged the deduction of Rs. 4.1 lakhs received as dividend on shares as extraneous income which was being claimed as a deduction by the management.
It also disputed an amount of Rs. 1, 11,000/ shown as return on reserves employed in the business and Rs. 75.89 lakhs shown as the annual share required for rehabilitation.
The method of calculation of income tax amounting to Rs. 15.23 lakhs was also objected to.
The four" 654 items upon which the Tribunal was called on to adjudicate therefore were: ( 1 ) Deduction of Rs. 4.
10 lakhs received as dividend on shares from the gross profits as extraneous income; (2) Rs. 1, 11,000/ as return on reserves employed in business; (3) Rs. 75.89 lakhs as annual share required for rehabilitation, and (4) Rs. 15.23 lakhs towards Income tax.
With respect to the first issue the Tribunal felt that even though there was share capital available to the Appellant, instead of utilising it as working capital it had borrowed amounts to work the Nylon factory for which they had to pay an interest of over Rs. 5 lakhs.
In these circumstances it disallowed the claim for deduction on the ground that it would be unfair to allow the management to treat the income from Investments as extraneous income and still reduce the profits by raising loans and pay interests resulting in demunition of the surplus.
On the second issue the objection of the Union for a deduction of Rs. 1,11 lakhs as return on reserves employed as working capital was disallowed on the ground that the statement M.W. 2/1 produced by Talwar, established that the excess of liability over the assets was utilised as working capital during the course of the bonus.
The claim of the management for deduction of Rs. 75.89 lakhs as share required for rehabilitation was however disallowed, as the oral and documentary evidence produced on behalf of the Management did not according to the Tribunal either establish that the life of the Plant and machinery was only 10 years for 1961 62 Block (hereinafter called 'the first Block ') and 11 years for 1962 63 Block (hereinafter called 'the second Block ') nor was the deviser of six years for both the first and the second Block reasonable.
It found that the more reasonable multiplier was 13 years for machinery purchased in respect of the first Block and 14 years for machinery purchased in respect of, the second Block and likewise a reasonable deviser for these two Blocks would be four years and two years respectively.
In so far as rehabilitation requirements for buildings was concerned the Union did not raise any dispute to the claim of the management amounting to Rs. 0.90 lakhs.
As there was also no dispute about the original cost of plant & machinery, the Tribunal by applying the multiplier and deviser as aforesaid computed the annual rehabilitation replacement for plant, machinery and buildings as follows : Rupees in lakhs Block Origi Mul Repla Break Balan Funds Net Life Annu of nal tip cement down ce avail Repla al re plant lier cost value able cement quire & Mach cost cost ment 61 62 133 004 522 .006 65 525 35113 28412 07 1331 70 62 63 15 00 2 0 30 00 0 . '75 29 25 29 25 14 2 10 33.80 655 Rehabilitation replacement for machinery. .33.80
Rehabilitation replacement for building (as per Company calculation). . . . . . 0.90 Total 34.70 Accordingly the additional rehabilitation to be providedfor was calculated as under Funds available : Depreciation upto 31 3 62. .
Rs. 15 .68 lakhs General reserves . . 12.00 Investments . . . . 85.60 113 28 Annual rehabilitation replacement. . 34.70 Less : Depreciation provided during the year30 57 _________________ Additional rehabilitation to be provided . 4.23 In so far as Income tax calculation of Rs. 15.18 lakhs was accepted being in accordance with the calculations under the Income Tax Act with respect to which it was said the Union did not find itself in a position to contest.
The Tribunal after giving its finding on the matters in issue computed the available surplus as follows: 1.
Gross profit. .
62 11 lakhs 2, Deduct prior charges: Rs. 1.
Notional normal depreciation. . 30.57 lakhs 2.
Direct tax. . . . . 15.18 3.
Return on share capital. . . 7.50 4.
Return on reserves. . . .1.11 5.
Additional requirement for rehabilitation4 23 58.59 Available suprlus . .
Rs. 3 .25 lakhs of the 60% payable as bonus would come to Rs. 2,1 1,000/ .
As the Company had already disbursed Rs. 90,000/ , the Tribunal directed payment of the balance of Rs. 1,21,000/ .
Before us only two items of controversy have been urged namely:(1) relating to extraneous income of Rs. 4.10 lakhs and(2) relating to rehabilitation requirement amounting to Rs. 75.89 lakhs, the first of which the Tribunal disallowed while in respect of the second it only admitted Rs. 4.23 lakhs.
With respect to the first item, the disallowance of Rs. 4.10 lakhs, the management not only claimed this amount but also Rs. 7.5 lakhs as return on paid up capital of Rs. 125 lakhs @ 6% per annum.
Obviously even on a cursory glance it would appear that the management was seeking to obtain double benefit in respect of investments 656 made out of the paid up capital.
The reasons which impelled the Tribunal to reject the claim of the management have, already been noticed and it would therefore be unnecessary to reiterate them.
It however, appeared to the Tribunal that if the Company wanted to exclude income from investments it cannot also be allowed 6% return on that part of the share capital which is invested elsewhere and at the same time be allowed to treat the income of Rs. 4.10 lakhs earned therefrom as extraneous income, because apart from deducting income tax on this amount the Company also meets the expenses of administration and management in respect of the said investments.
In this view it sustained the objection of the Union.
The return on paid up capital is one of the prior charges admissible under the Full Bench formula as approved by this Court.
It is based on the principle that while the claim of labour to a share in the profits by way of bonus is in furtherence of social justice, the claim of the capital for a fair return to the investor and also to keep the industry running efficiently which will in the long run enure for the benefit of labour is equally based upon that principle.
If therefore any amount is earned from the employment of capital unconnected with the business of the Company, the labour cannot claim the right to participate in its returns.
Apart from this if any reserves are utilised for working capital whether these reserves are depreciation reserves or any other, a return in respect of these also is allowed as a prior charge at a reduced rate because utilisation of such reserves would obviate the borrowing from outside sources for which a higher interest has to be paid and which in the long run will not be for the benefit of the workers.
These principles have been laid down by this Court as well accepted in Industrial adjudication.
While it is true that the Company has the discretion to invest its capital in various activities it cannot on that account deprive the workmen of the benefits of the returns derived therefrom unless of course the investments in such activity is extraneous to the activities of the Company, in the earning of which they had not made any contribution.
Whether in any particular case the return on investments amounts to an extraneous income will depend on the facts and circumstances of each case.
So far as the case before us is concerned there can be no doubt that the return from the investments is a return on a part of the paid up capital of the Company which is invested for the purpose of earning an income.
It cannot therefore be construed as extraneous income.
In Workmen of M/s. Hindustan Motors Ltd. vs M/s. Hindustan Motorv Ltd. & Anr.,(1) to which one of us was a party (Vaidialingam, J.) no doubt where the income of the Company was from interest on (1) 1. 657 fixed deposits, it was treated as extraneous income because it was held that it accrued to the Company without any contribution by the workmen.
At the same time the Company was not permitted on equitable ground to claim the interest paid by it on its borrowings as business expenditure.
Further in that case even the income received by the Company from its foreign collaborators as commission on sales effected by the said collaborators of their own cars in India was treated as extraneous income to which the Company 's workmen made no contribution and was therefore not to be taken into account in calculating the available surplus.
In the recent case of MI? Gannon Dunkarley & Co. Ltd. vs Their Workmen(1), by a reference to the decision in the Hindustan Motor 's this principle was again reiterated.
In that case one of the question which this Court considered was whether dividends received from trade investments should be deducted from the gross profits for calculating the surplus available for bonus.
It was held that "these trade investments have to be treated as capital assets of the Company forming part of their trading activities.
The income accruing from these dividends must therefore be re lated to the business of the Company as a whole and hence the income from these dividends has to be included in the income for purposes of calculation of surplus available for bonus".
In this view we think the Tribunal was justified in disallowing the deduction of Rs. 4.10 lakhs and in fact on behalf of the Appellant it was frankly conceded before us that the claim in respect of the said item cannot be pressed on any tenable or valid grounds.
This brings us to the only remaining controversy, the provi sion for rehabilitation requirement.
The claim for a prior charge on this account like any other prior charge has to be established by evidence but As this item results in a substantial deduction from the gross profits and reduces available surplus, materially, effecting the claim of the employees for bonus, each constituent element which is necessary for computing the amount to be provided for must be proved by satisfactory evidence and cannot be left to surmises and conjectures.
It is idle to suggest that as the employees have not in any particular case given any evidence or have not produced any material to controvert the claim of the management that claim must be admitted, because it is the management that is in possession of all the relevant material and is accordingly required to satisfactorily substantiate that claim.
The elements which are important for the computation of annual rehabilitation requirement, is, the price of the assets at the original cost, the period for which these assets can be used before requiring rehabilitation and the probable increase in the cost of rehabilitation, due to rise in prices, devaluation etc.
The probable increase in the price of assets at the time of the rehabilitation over the original (1) L3SupCI/72 658 cost is the multiplier, as it is measured in terms of multiples of the original cost.
The number of years after which the asset requires replacement, rehabilitation or modernisation is termed the deviser because the probable cost on a future date has to be provided annually and therefore has to be divided by the number of years at the end of which the amount would be required.
There is in this case no dispute between the parties as to the original cost of the plant and machinery which is for the first block Rs. 133.00 lakhs and for the second block Rs. 15.00 lakhs.
The only controversy is about the multiplier and the deviser which has been adopted by the Tribunal.
The Appellant had in its written statement claimed the multiplier for each of the two blocks as six and the deviser for the first block as 10 and for the second block as 11 but as we have already noticed earlier the Tribunal has accepted the multiplier as 4 for the first block and 2 for the second block and the deviser as 13 and 14 respectively.
Even in respect of these the learned Advocate for the Appellant admitted that he is not in a position to contest the reasonableness of what has been adopted by the Tribunal but the Respondent has challenged the very basis adopted by the Tribunal as being more dependent on guess work than on any evidence or material before it.
On behalf of the management the right of the Union to chal lenge the multiplier and deviser, in the absence of an Appeal by it is strenuously contested but in our view there is little force in this objection.
The appeal by the employer is against the grant of bonus to the employees which implies that the method of computation of the gross profits, as well as of the available surplus and the rate at which the bonus is granted can be subjected to scrutiny.
It is needless to recount the several priorities that have to be deducted and the items in respect of which amounts have to be added, before arriving at the available surplus.
In an Appeal, the several steps which have to be taken for computation of the available surplus either in respect of the actual amounts or the method adopted, can be challenged.
If so the Union, even where it has not appealed against the Award, can support it on a method of computation, which may not have been adopted by the Tribunal but nonetheless is recognised by the Full Bench formula of this Court so long as in the final result the amount awarded is not exceeded.
We are supported in this view by a decision of this Court in Management of Northern Railway Cooperative Society Ltd. vs Industrial Tribunal, Rajasthan, Jaipur & Anr.(1) where it was held that the Respondents were entitled to support the decision of the Tribunal even on grounds which were not accepted by the Tribunal or on other grounds which (1)[1967] 2 S.C.R. 476.
659 may not have been taken notice of by the Tribunal while they were patent on the face of the record.
A passage from the case of Ramanbhai Ashabhai Patel vs Dabhi Ajithkumr Fulsinji & Ors.
(1), will give the reasons adopted by this Court for the aforesaid view.
That no doubt was an election appeal but it was said that though the rules framed by this Court in exercise of its rule making powers do not contain any provisions analogous to Order XLI Rule 22 of the Civil Procedure Code, which permits a party to support the Judgment appealed against upon a ground which has been found against him in the Judgment, it was held that this Court has the jurisdiction to sustain the Judgment on grounds which have been found against the Respondent.
Mudholkar, J. speaking for himself, Gajendragadkar, C.J., Wanchoo, Hidayatullah, and Raghubar Dayal, JJ. after considering whether the provisions of Order XVIII, Rule 3 of the Rules of this Court which requires parties to file statement of the case could limit it only to those contentions which deal with the points found in favour of that party in the Judgment appealed from, observed at page 724: "Apart from that we think that while dealing with the appeal before it this Court has the power to decide all the points arising from the Judgment appealed against and even in the absence of an express provision like O.XLI, R. 22 of the Code of Civil Procedure it can devise the appropriate procedure to be adopted at the hearing.
There could be no better way of supplying the deficiency than by drawing upon the provisions of a general law like the Code of Civil Procedure and adopting such of those provisions as are suitable.
We cannot lose sight of the fact that normally a party in whose favour the Judgment appealed from has been given will not be granted special leave to appeal from it.
Considerations of justice, therefore, require that this Court should in appropriate cases permit a party placed in such a position to support the judgment in his favour even upon grounds which were negatived in that Judgment".
In the view we have taken, we will have to consider the plea on behalf of the Respondents that the rehabilitation requirement has not been properly established, but this need only be entertained if we come to the conclusion that the main contention that the rehabilitation requirement has not been properly computed and if so computed there will be no available surplus for awarding bonus to the employees.
(1) ; 660 The learned Advocate for the Appellant as we said earlier has not seriously insisted on the adoption of the multiplier and the deviser claimed by the Appellant but on the other hand contends that even if the multiplier and the deviser as adopted by the Tribunal is followed the trade investments amounting to Rs. 85.6 lakhs cannot be said to be available for computation of rehabilitation requirement.
On this assumption while not disputing the computation of the Tribunal in respect of the original cost which as we have earlier mentioned has not been disputed, even by accepting the multiplier, the break down value and the deviser as adopted by the Tribunal the annual amount required would be Rs. 10.71 lakhs and not Rs. 4.23 lakhs as computed by the Tribunal.
The only variation between the computation of the appellant and that of the Tribunal is in respect of the funds available which according to the Tribunal is Rs. 113.28 lakhs including the trade investment of Rs. 85.6 lakhs and according to the Appellant it is Rs. 27.8 lakhs comprising of only two items namely depreciation of Rs. 15.68 lakhs and general reserve of Rs. 12 lakhs.
If this computation isaccepted then there will be a negative balance of Rs. 2.9 lakhs.
This result is arrived at as follows : Gross profits . . . . . .Rs. 62.11 lakhs 1.
Notional normal depreciation.
30.57 lakhs 2.
Direct tax . . . .
Rs. 15 .18 3.
Return on share capital. .
7 .50 4.
Return on reserves. . .
1 .11 5.
Additional requirement for rehabilitationRs.
10 .71 Rs.65.
07" Negative balance.
( ) Rs. 2 .96 lakhs It will be observed that the prior charges comprised in items 1 to 4 are not really in dispute.
It is only the additional requirement for rehabilitation that is the bone of contention between the parties and this is challenged on two grounds; firstly that the trade investment of Rs. 85.6 lakhs are available funds for rehabilitation requirement as admitted by the Appellant to be so available in the statement which it furnished to the Tribunal; secondly that no claim for rehabilitation requirement has been substantiated.
On the first ground it is contended that the question, what was the: available amount for the annual requirement was specifically before the Tribunal, and that it was the case of the management and not of the workmen that an amount of Rs. 1,23,90,000/ was available consisting of Rs. 26.30 lakhs towards depreciation, Rs. 12 lakhs towards general reserves and Rs. 85 6 lakhs towards investments.
In these circumstances the Tribunal was not called upon to investigate the question as to what exactly was the nature of the investments or whether any of 661 them were realisable or were not available for meeting the rehabilitation requirements.
Further there was no grievance made in this behalf in the Special Leave Petition and therefore the management is, it is submitted stopped from challenging before his Court the validity of inclusion of this amount in the amount available for rehabilitation.
It is further submitted that assuming that this question can be agitated, in the absence of any specific investigation as to the nature of the investments and more particularly when the management itself had shown this amount as being available, the Appellant cannot be permitted to say that it is not available.
The contention of the respondents proceeds on a basic error namely that the Appellant had held out that the trade investments were available for rehabilitation requirement.
This is not so.
In the amended written statement filed on 4 7 69 after obtaining the permission of the Tribunal on 3 7 69, the Appellant claimed the annual share required for rehabilitation as Rs. 93,56,207/ .
Even in the statement filed earlier on 10 4 69 it showed two amounts as being available namely depreciation of Rs. 26.31 lakhs and general reserves of Rs. 12 lakhs.
It is submitted by the Appellant that only when the arguments were completed on behalf of the Company on 9 12 69, having regard to the claim made by it for deduction of Rs. 4.1 lakhs as extraneous income derived from the trade investments, the corpus of Rs. 85.6 lakhs which earned that income was also shown as available and a statement to 'hat effect was filed on the same day to facilitate the Tribunal in arriving at an Award.
In as much as we are not allowing the deduction of Rs. 4.1 lakhs as extraneous income, the question whether the corpus should be treated as being available also has to be considered in the light of the decisions of this Court.
The Appellant in our view is fully justified in urging this contention before us, as it cannot be said that this was not raised before the Tribunal.
The Tribunal had ample opportunity of considering this aspect since it did specifically consider the nature of the income therefrom.
Assuming for the present that the adoption by the Tribunal of the multiplier and deviser can be justified, though the validity of the Tribunal 's award in this behalf has been seriously challenged 'before us, the question to be determined is whether the investments of the Appellant amount to Rs. 85.6 lakhs is available for rehabilitation which in turn will depend upon whether these investments are made in the course of the business of the Company or are unconnected with its business and only invested with a view to earning extraneous income.
The principles upon which rehabilitation grant is to be calculated as laid down by this Court is that the depreciation reserves, or in the case of other reserves only if they are available as liquid assets and cash and not earmarked for any specific purposes, are deemed to be available and can be taken into account in computing the annual requirement.
The 662 depreciation reserve, the object of which is to meet the requirement of replacement, rehabilitation and modernisation at a future date is considered to be always available whether it is in the form of a liquid asset or not.
It is obvious that even this amount will not achieve the purpose of recouping the cost of replacement of the wasted assets and it is for that reason the claim of the industry for rehabilitation in addition to the admissible depreciation has been recognised.
Then there are the general reserves, capital reserves and development reserves all of which will be considered to be available if they are in the form of liquid assets or cash.
The question in some of these cases will be whether they are considered to be the capital assets of the Company kept in that form in the course of its business or kept as investments outside the business of the Company for the purposes of earning an extraneous income.
If it is the former then they are available but if it is the latter they cannot be brought into account for calculating the rehabilitation requirement.
As it happens in most cases the claim by the employer is that the reserves are either wholly or partly not available because they have been used as working capital and consequently the, amount to be utilised should not be excluded from the amount claimed towards rehabilitation.
The principles governing what deductions should be made from out of reserves before calculating the amount in respect of rehabilitation for the bonus year were set out in the Full Bench formula and have been restated in the Associated Cement Co. Ltd. vs Its Workmen(1).
The two items according to that decision that are to be taken into consideration are the general reserves available to the employer and the reserves which have been reasonably earmarked for specific purposes of the industry.
In explaining what was meant by availability of the reserves or the earmarking for specific purposes Subba Rao, J. as he then was in Khandesh Spinning & Wvg.
Mills Co. Ltd. vs Th.? Rashtriya Girni Kamgar Sang Jalgaon(2), observed at page 845 846 : "We do not think that by using the said words this Court meant to depart from the well recognized principle that if the general reserves have not been used as working capital, they cannot be deducted from the rehabilitation amount.
The reserves may be of two kinds.
Moneys may be set apart by a company to meet future.
payments which the Company is under a contractual or statutory obligation to meet, such as gratuity etc.
These amounts are set apart and tied down for a specific purpose and, therefore, they are not available to the employer for rehabilitation purposes.
But the same thing cannot be said of the general reserves : they would be available to (1) @ 970.
(2) ; 663 The use of the words "reasonably earmarked" is also deliberate and significant.
The mere nominal allocation for binding purposes, such as gratuity etc.
in the Company 's books is not enough.
It must be ascertained by the Industrial Court on the material placed before it whether the said amount is far in excess of the requirements of the particular purpose for which it is so earmarked and whether it is only a device to reduce the claim of the labour for bonus".
What is meant by the above observations in the Khandesh Spinning & Wvg.
Mills case was later explained by Wanchoo J, as he then was in Bengal Kagazkal Mazdoor Union & Anr.
vs The Titaghur Paper Mills Co. Lid.(1).
This was what was said at page 54 "All that that decision lays down is that that part of the reserves which go to make up the working capital which is in the shape of raw materials etc.
or earmarked reserve will not be deducted from the I gross rehabilitation amount; it does not lay down that all cash reserves in the shape of depreciation reserve, general reserve, renewal reserve and so on and also in the shape of investments and advances cannot be deducted from the gross rehabilitation amount as they may be used as working capital next year".
Now the question of trade investments unconnected with the purposes of the industry fell for consideration in the National Engineering Industries Ltd. vs Its Workmen (2).
In this case the Company had an investment of Rs. 18.22 in shares, which were treated by this Tribunal as liquid assets available for rehabilitation.
But the Company contended that this investment can either be treated as a trading transaction carried out in the ordinary course of business or as a capital asset.
If it was the former then it should have been allowed the loss of Rs. 1.72 lakhs as trading expenditure but instead the tribunal had added the profits therefrom to the gross profits, thereby treating the investment as capital asset.
It could not therefore deduct Rs. 18.22 lakhs as a fund available for rehabilitation cost.
Negativing this contention of the Company, Shelat J, observed at page 796 797 : "We fail to see any contradiction on the part of the Tribunal.
The balance sheet for the year 1957 58 contains two schedules; Schedule A shows fixed assets and schedule B shows trade investments of the value of (1) (2) ; 664 Rs. 18,21,571/ .
The Company not being an investment Company the investment of Rs. 18.22 acs in shares of other joint stock Companies prima facie represents extra capital not required as working capital for otherwise the Company could not have spared this amount for investment in the stocks of other Companies.
The Tribunal was right in treating this investment as a capital asset and in refusing to treat the loss therefrom as trading expenditure. 'the Tribunal at the same time could deduct this amount from the rehabilitation cost because that amount was available to meet the rehabilitation cost.
The investment in shares could easily, if the Company was so minded, be converted into cash and utilised for replacement of its worn out machinery".
In Gannon Dunkerley 's case also these principles were reiterated.
It was held in that case that in calculating rehabilitation grant one of the principles which this Court has laid down is that the depreciation reserve must always be deducted irrespective of the fact whether it is available or not as a liquid asset.
In addition other reserves like general reserve are also to be deducted if they are available as liquid reserves and are not ear marked for any specific purpose.
The capital reserve and the development reserve can also be deducted if there is material to show that they existed in the form of liquid assets or cash.
The question would be whether they are capital assets of the Company kept in that form in the course of its business or whether they have been treated as investments outside the business for the purposes of earning extraneous income.
If they are investments made in the course of its business they are to be treated as part of the capital but otherwise if they are extraneous to the business they do not form part of the reserves available for rehabilitaion.
It may be observed that in the National Engineering Industries Ltd. vs lts Workmen(1), an exception had been made in the case of an investment Company the investment of which is to be treated as working capital employed in the business of the Company.
The Companies Act placed restrictions on the purchase of shares by one Company, of shares of any other body corporate except to the extent and except in accordance with the restrictions and conditions specified in Sec.
372 of that Act as amended by Act 65 of 1960.
373 it is enjoined on Companies investing after 1st April 1952 in shares of any other body corporate in exercise of the limit specified in sub section (2) and the second proviso to the said sub section of Sec. 372 to obtain the authority of 'he Central Government within six months from the commencement of the Act and if such authority and approval is not so obtained 665 the Board of Directors must dispose of the investments in excess of the limits specified in the aforesaid provision within two years from the commencement of the Act.
It is also provided by Sec.
372(10) that after the commencement of the Companies Amendment Act a statement should be annexed to the balance sheet giving the details of, the investments acquired; the bodies corporate in the same group, of which the shares have been acquired, whether the investments are existing or not, and the nature of the said investments.
An exception however has been made by the proviso to the said sub section in the case of investment Companies (which are those whose principal business is the acquisition of shares etc.) that it shall be sufficient if the investments, existing on the date as at which the balance sheet to which the statement is annexed has been made out From these provisions it is contended that the balance sheet in this case shows only those details which are required to be given by an investment Company which is also consistent with the plea,, ,that the investments of the Appellant were made prior to 1952 when it was an investment Trust Company and these investments, which are the same exceeded the limits prescribed by the Companies Amendment Act without having to conform to the conditions of having either to obtain approval of the Central Government or to dispose of the excess within two years i.e. by 31st March 1962.
On behalf of the Respondents however it is submitted that there has been no finding by the Tribunal that the Company is an Investment Company or that the investments were made prior to, 1952 as an Investment Company which would entitle it to treat those investments as not available for the purposes of rehabilitation within the exception indicated in the National Engineering Industries case.
In our view this submission has no force.
There is ample justification in the contention of the Appellant 's Advocate that the Tribunal did advert to the fact that the Company invested initially a capital of Rs. 75 lakhs as an investment Trust Company and from its inception these investments have been made and that it is only after the amendment in 1960 when it was not possible for it to invest further amounts that it changed its name, increased its capital and started the present industry.
On this, aspect of the matter the Tribunal stated thus : "Originally the Company was floated as J. K. Investments Trust Ltd. It had a share capital of Rs. 75 lakhs.
They invested this amount and some loans in debentures and loans.
Due to amendments in Company law they had to stop further investment from 1960 onwards and changed the name of the Company to J. K. Synthetics Limited, raised additional Rs. 50.00 lacs 666 share capital and started this Nylon factory.
Thus to date the share capital of the Company is Rs. 125.00 lacs including the old share capital of Rs. 75.00 lacs of J. K. investments Trust Ltd. Now instead of utilising the old share capital and loans invested in debentures the Company took separate loans to work the Nylon factory for which according to the balance sheet they had to pay over Rs. 5 lacs as interest on loans".
It is also apparent from Schedule 'E ' statement forming part of the balance sheet as at 30th June, 1963 that a list of trade investments held by the Appellant have been given.
There are two notes attached thereto.
Note (1) states Investments in the Companies marked with asterisks exceed ten per cent of their respective subscribed capital.
These investments were acquired before the commencement of the Companies (Amendment) Act, 1960, while Note (2) states The Total investments of the Company exceed thirty per cent of its subscribed capital.
These investments were acquired before the commencement of the Companies (Amendment) Act, 1960.
Having regard to these undisputed facts it appears to us clear that the trading investments were made prior to 1960 when the Company Was an Investment Company, as such these investments are not connected with the activities of the Company, are extraneous to its business and do not form part of the reserves available ,for rehabilitation.
In the circumstances the Tribunal is not justified in including this amount in the amounts available for rehabilitation purposes.
While this is so and the result of the non exclusion of Rs. 85.60 lakhs would result in a negative balance, the respondents as we have already held are entitled to challenge the claim for rehabilitation on the ground that the essential requisites have not been established by any cogent or sufficient evidence.
In computing the requirements for rehabilitation as has been stated often, regard must be had, to two imponderables out of the three main elements because one of them namely the original cost of the asset is specifically ascertainable while the other two have to be established as near as possible which might to some extent involve an estimate based on evidence deducible therefrom.
These two imponderables are the multiplier and the deviser.
Unless all these elements are determined the amount required for rehabilitation cannot be ascertained.
of course the scrap value of the old assets has also to be ascertained but this does not involve any difficulty because normally it is taken as 5% of the value of the assets at cost.
Even so the determination of the amount for rehabilitation no doubt poses problems but it is suggested that a reasonable method would be to divide them into blocks, accord 667 ing to the nature of the asset and the year in which the assets have been acquired.
The cost of the separate blocks has then to be ascertained and their probable future life has to be estimated.
Once this estimate is made it becomes possible to anticipate approximately the year when the plant and machinery would need replacement and the probable price of such requirement at a future date when the asset requires replacement.
In determining this difficult question the Tribunal as already observed must have before it all available evidence from which a reasonable and probable adjudication can be made in respect of these essential requisites.
The Respondent 's Advocate submits that the Tribunal while quite properly rejecting the evidence produced on behalf of the Appellants indulged in guess work when it adopted arbitrarily the multiplier and the deviser.
It is his case that the determination of the life of machinery depends on various factors such as for instance nature of the machinery, its quality, the nature of the industry, the efficiency of workmen etc.
In the Hindustan Motor 's case, Bhargava, J, after examining the several cases relating to this aspect of the matter observed at page 319 : "The life of machinery of one particular factory need not necessarily be the same as that of another factory.
Various factors come in that affect the useful life of a machinery.
There is, first the consideration of the quality of machinery installed.
If the machinery is purchased from a country producing higher quality of machines, it will naturally have longer life than the machinery purchased from another country where the quality of production is lower.
Again, the articles on which the machinery operates may very markedly vary the life of a machine.
If, for example, a machine is utilised for grinding of cement the strain on machine will necessarily not be the same as on a machine which operates on steel or iron".
In the Honorary Secretary South India Millowners ' Association & Ors.
vs The Secretary, Coimbatore District Textile Workers ' Union(1), to which a reference had been made in the above case, after accepting, on the facts of that case, that the life of the textile machinery was adopted as 25 years, this Court laid down the following principle at p. 933.
"We are not prepared to accept either argument because, in our opinion, the life of the machinery in every case has to be determined in the light of evidence adduced by the parties".
(1) [1962] 2 Supp.
S.C.R. 926.
668 The Advocate on behalf of the Appellant on the other hand says that the Full Bench Formula for determining rehabilitation as accepted in Associated Cement Companies(1) case laid down an elastic measure for determining the probable cost which was to be estimated "as near actualities or realities as possible".
At pages 967 968 Gajendragadkar J, as he then was observed : "The estimate about the probable life of the plant and machinery 'is itself to some extent a matter of guess work and any anticipation, however, intelligently made, about the probable trend of prices during the interven ing period would be nothing but a guess.
That is how, in determination of this problem, several imponderables face the tribunals.
One of the points which raises a controversy in this connection is : What level of prices should the tribunal consider in making its calculations about the probable cost of replacement. .
It seems to us that in order to enable the Tribunal to make an estimate in this matter as near actual ties of realises as possible it is necessary that the Tritunal should be given full discretion to admit all relevant evidence about the trend in price levels .
The problem of determining the probable cost of replacement itself is very difficult; but the difficulty is immediately increaser when it is remembered that the claim for rehabilitation covers not only cases of replacement pure and simple but of rehabilitation and modernisation.
In the context rehabilitation is distinguished from ordinary repairs which go into the working expenses of the industry.
It is also dis tinguished from replacement .
That is why we think it is necessary that the tribunals should exercise their discretion in admitting all relevant evidence which would enable them to determine this vexed question satisfactorily".
Keeping these observations in view what we must see is whether the Tribunal was justified on the evidence in adopting the particular multiplier and the deviser.
The stand taken by the management is that it had produced sufficient evidence in support of its own multiplier and deviser and in any case the learned Advocate says the Tribunal is right in arriving at its own conclusion.
In fact it is submitted, the management had made an application for appointment of an assessor to assist the Tribunal as an expert for determining the several questions appertaining to the computation of rehabilitation requirements, but that was rejected as the Tribunal did not feel any necessity for it and there is nothing more which the management could do in the circumstances.
(1)[1959] S.C.R. 925 @970.
669 It is pointed out that the Nylon industry was a new industry at the time when it was started and the evidence of the General Manager, who had been with the Company from the initial stages and throughout the negotiation for purchase of the machinery, says that according to the manufacturers the life of the machinery could only be six years.
That apart the management also produced sample invoices for each year and adduced the evidence of the Manager to prove what would be the cost of rehabilitation.
In fact it is said that the Appellant was fortunate in having actual invoices of machinery purchased because the Company had only then expanded its undertaking.
The Tribunal rejected the oral evidence on the ground that the witnesses produced by the management were no experts and they did not throw any material light on the matters to be adjudicated by it.
It also rejected the documentary evidence on the ground that the machinery which was said to have been purchased was not the same as was sought to be replaced and in any case there was not sufficient evidence for it to accept the multiplier and deviser as claimed by the management.
Whether this criticism is valid or not will depend largely on what in fact weighed with the Tribunal in arriving at the multiplier and the deviser.
No doubt the employer did make an appli cation to the Tribunal as noticed earlier and the same was rejected on 5 8 69 as it did not find it necessary to appoint an assessor.
The application itself was for requesting the Tribunal to appoint an assessor if it thinks necessary.
The management cannot without discharging its duty of placing all the necessary material before the Tribunal ask it to appoint an assessor who would be useless without that material.
We do not think in the circumstances the Tribunal was wrong in rejecting the application.
The Tribunal considered the evidence of S/Shri Jain, Aggarwal and that there had been hundred per cent increase in prices also machinery worth about Rs. 10 lakhs had already been replaced and that there had been hundred percent increase in prices also due to devaluation.
The witness was however, not able to give any details as to when the replacement of the parts and machinery took place even though the management kept the record of the replacement of the machinery.
He could not also explain what exactly was the impact of the devaluation of Rupee on prices.
He did not see the quotations of the machinery.
It was therefore concluded that his statement both with regard to the life of the machinery and the replacement cost was quite us less and was based on hearsay.
Shri Aggarwal 's evidence was also considered unsatisfactory, both with respect to the estimate of the replacement cost and the life of the machinery.
His calculations were based on a comparison of the original cost of machinery in invoices exhibit M. 1, M. 2 and M. 3 and their cost in 1967, as given in the corresponding invoices exhibit M. 4, M. 5 and M. 6 and the devalua 670 tion of the Rupee.
The Tribunal then considered the discrepancy between the machines mentioned in various exhibits.
No doubt there is some justification in the comment of the learned Advocate by the Tribunal merely because the machines mentioned therein for the Appellant that some of these invoices were not relied upon were different in size and weight to those which were installed in the factory.
Undoubtedly there would be a variation because the ingenuity of the inventor and technician is not static and as time goes on there are improvements, renovations and changes that make the machine more sophisticated and efficient.
While this is so the question is whether satisfactory evidence has been produced to prove the total cost of rehabilitation and also the life of the machinery.
The evidence of Talwar was equally found to be defective.
He was greatly relying on the Handbook of Chemical Engineers by John Parry, for establishing the life of the machinery.
He said that in that Book the life of a Chemical plant working in three shifts is shown to be 11 years.
He also admitted that the Author gives only the guideline for Income tax purposes only.
An extract of the Parry 's Handbook was also given by the Tribunal, which stated its conclusions as under : "In view of the above said infirmities it is evident that the management 's claim for rehabilitation is very much inflated.
The selection of the average multiplier is rather arbitrary or at least quite generous to the management and their estimate about the life of the machinery is slightly conservative.
From the available evidence on record he then proceeds to make his own estimates which as far as the life of the machinery is concerned was placed between that adopted for textile machinery of 25 years and the life given in he Chemical Engineers Handbook of 11 years.
It said after referring to the statement in the Chemical Engineer 's Handbook that the life of a Chemical machinery must be more than II years in America where they work efficiently to the maximum capacity of the machinery.
It was observed here the working conditions being different the machinery is likely to last longer and certainly due to poor economic conditions in the country the management also cannot afford to discard such valuable machines in eleven years only.
The life of the plant therefore must be more than 11 years.
On the other hand the ordinary life of textile machinery is taken to be 25 years or more.
In this view of the matter if we take the life of the machinery as 14 years it would still be on the side of the conservative estimate".
671 Regarding the multiplier the Tribunal said that : "The 1961 62 Block of the machinery would require replacement according to our estimate in 1975 76.
The Company 's claim of six times the original cost based on a comparative study of invoices exhibit M. 1 to M. 3 on the one hand and exhibit M. 4 to M. 6 on the other is very much inflated .
The Company has not produced the current price list also of the machinery or any price indices indicating the trend of prices of machines.
The prices of machines are more stabilised than prices of consumer goods.
The production of the machines has also gone up in the country and it is not impossible that by 1975 we might manufacture our own machines for Nylon factory also.
Even otherwise the prices of imported machines are not likely to be more than four times.
Therefore, in our opinion the multiplier should only be four for the block of 1961 62.
In awards also relied upon by Shri Talwar even though they considered only prewar block of machines, in no case they allowed a multiplier of six.
For the block of machines installed in the accounting year, ordinarily the unit is taken as the multiplier but as there has been in the meantime deva luation of the rupee we think it would on the whole be fair to adopt two as a suitable multiplier for the block installed in the accounting year".
It appears to us that this is an unsatisfactory way of determining the two most important factors required for computing the rehabilitation requirement.
The evidence produced before the Tribunal consisted only of a few invoices which were to serve as samples of the price of machines to show that they have gone up.
We are not impressed with the submission of the learned Advocate for the Appellant that a complete set of invoices in respect of all the Departments of the industry which required rehabilitation had been placed before the Tribunal.
Indeed the very application for appointment of Assessor demonstrably contradicts this assumption.
In this application the management stated that it did , 'examine S/Shri section section Aggarwal, A. C. Talwar as its expert witnesses and have filed some invoices by way of example to show the trend in rising cost in plant and machinery.
With regard to useful life of the plant the Respondent places reliance on Chemical Engineer 's Handbook IVth Edition by John Parry" (emphasis ours).
It is apparent from this application that the management was relying only on a few sample invoices which they said they had produced while depending heavily only on Parrv 's Handbook for ascertaining the life of the machinery and the probable cost.
672 We have also gone through the evidence of the three witnesses and the invoices referred to and we think that the Tribunal rightly rejected this evidence as not being of much assistance.
It is quite probable that the price of the indigenous industry as appearing from the bulletin of the Reserve Bank of India has gone up but that does not furnish a basis for arriving at any specific multiplier or deviser for the Appellant 's plant.
All that the invoices produced before the Tribunal establish is only the probable cost of machinery of 2 1/2 lakhs, in an attempt to prove the cost of replacement of plant and machinery worth Rs. 825 lakhs.
The Tribunal was therefore, amply justified in saying that the only evidence given is of the few invoices the value of which is only 2 1/2 % of the requirement of the replacement cost which in our view is not sufficient to establish, how many machines in each Department of the industry are required, what is the nature of those machines and what is the probable cost of each of those machines.
We are far from satisfied that the management has placed before the Tribunal any satisfactory evidence much less sufficient evidence to arrive at a multiplier and deviser nor has the Tribunal any bases for arriving at its own multiplier and deviser except it be on a pure conjecture and guess work.
The result is that though the appellant is able to succeed in one of the main points of his Appeal, the Appeal will have to be dismissed as the Respondents are able to sustain the Award on other grounds.
The circumstances of the case justify a direction for each party to bear its own costs.
S.C. Appeal dismissed.
| IN-Abs | A dispute for Bonus was raised by the workers of the Appellant company before the Tribunal for the Bonus year 1962 63, as the appellant company which made profit during the year, did not pay any bonus to the workers; but only a gratuity of one month was paid to them.
According to revised returns filed by the workers, there was an available surplus of Rs. 5.34 lakhs; but according to the management, there was a deficit.
There were two main points of dispute : (1) the workers challenged the deduction of Rs. 4.1 lakh received as dividend by the company as extraneous income.
According to the management however, as the company invested part of the paid up capital in hares which earned an income of Rs. 4.1 lakh, the company was entitled to claim this amount as an extraneous income because the workers had made no contribution in its earning and so this amount should be deducted from the gross profit.
(2) The workers also disputed Rs. 75.89 lakhs shown by the management as the annual share required for rehabilitation.
The management divided the plant and machinery of the company into two blocks.
The original cost of the plant and machinery for firdt block was 133.00 lakhs and Rs. 15.0 lakhs for the second block.
The appellant company claimed the `multiplier ' (which is the probable increase in the price of assets at the time of rehabilation over the original cost) for each of the two blocks as 6 and the `deviser ' (number of years after which the asset require s replacement) for the first block as 10 and for the second block as 11.
The Tribunal decided the first point against the management because even though there was share capital available to the appellant, instead of utilising it as working capital, it had borrowed amounts to work the Nylon factory for which it bad to pay an interest of over Rs. 5 lakhs.
In these circumstances, it disallowed the claim for deduction on the ground that it would be unfair to allow the management to treat the income from investments as extraneous income and still reduce the profits by raising loans and pay interests resulting in diminution of the surplus.
On the second point the Tribunal admitted only a fraction of the total amount as annual share required for 'rehabilitation.
It held the 'Multipliee as 4 for the first block and 2 for the second block and the 'deviser ' as 13 and 14 respectively.
After deducting the prior charges from the gross profits, the tribunal computed the available surplus to be Rs. 3.25 lakhs and of this, 60 per cent payable as bonus would come to Rs. 2,11,000/ .
As the company bad already distributed Rs. 90,000 the tribunal directed payment of the balance of Rs. 1,21,000/ a# bonus.
In appeal by special leave, a further point was agitated before the Court as to whether the Respondent can challenge a finding by the Tribunal in the absence of an appeal by it.
Dismissing the appeal, HELD, : (i) Since the dividend in the present case is the return from investment , of part of the paid up capital of the company which is invested for the purpose of earning an income, it cannot be construed as 652 ,extraneous income and the Tribunal is justified in disallowing tile dividend on shares as a valid deduction.
The return on paid up capital is one of the prior charges admissible as a valid deduction and if any amount is .earned from the employment of capital unconnected with the business of the company, the labour cannot claim the right to participate in its returns.
Further if any reserve is utilised for working capital, whether this .reserve is depreciation reserve or any reserve, a return in respect of they are also allowed as prior charges, at a reduced rate.
The company has the discretion to invest its capital in various activities; but it cannot deprive the workmen of the benefits of the returns derived therefrom unless the investments in such activity is extraneous to the activities of the company, in the earning of which the workers had not made any contribution.
In the present case, the return from the investments is a return on a part ,of the paid up capital which is invested for the purpose of earning an income and therefore, it is not extraneous income as claimed by the management.
[656 G B] (ii) The elements which are important for the computation of annual rehabilitation is the price of the asset at original cost, the period for which these assets can be used before requiring rehabilitation due to rise in prices, devaluation etc.
In other words, for computation of annual rehabilitation, the 'multiplier ' and the 'deviser ' is to he found out.
In the present case, the management failed to place satisfactory evidence before the Tribunal to arrive at a proper 'multiplier ' and 'deviser ' and in absence of any proof as to how and on what basis the Tribunal had arrived at its own 'multiplier ' and 'deviser ' on a pure conjecture and guess work, the appeal cannot be sustained.
Further, the Tribunal is not justified in including the trading investments to be available for the purpose of re habilitation as these investments were made prior to 1960 when the company was an investment company and as such these investments were not connected with the activities of the present company, which was floated only in 1960.
[666 G] (iii)In appeal, the respondents are entitled to challenge or support the judgmentin his favour given before the High Court even upon grounds which are negatived in the judgment.
Workmen of M/s. Hindustan Motors Ltd. vs M/s. Hindustan Motors Ltd. & Anr. ; , M/s. Gannon Dunkerley & Co. vs Their Workmen, , Management of Northern Railway Cooperative Society Ltd. vs Industrial Tribunal, Rajasthan; , , Ramabhal Ashabhai Patel vs Dabhai Ajit Kumar Fulshingji ; , Associated Cement Co. Ltd. vs Its Workmen, , Khandesh spinning & Wvg.
Mills Co. Ltd. vs Rashtriya Gir Kamgar Samiti Jalgoan, ; , Bengal Kagazkar Mazdoor Union vs Titaghar Paper Mills Co. Ltd., , National Engineering Indnstries Ltd. vs Its Workmen, ; and Honorary Secretary, Coimbatore District Textile Workers Union [1962] Supp. 2 S.C.R. 926, referred to.
|
Appeal No. 1207 of 1968.
Appeal by special leave from the judgment and order dated May 10, 1967 of the Punjab and Haryana High Court in Letters Patent Appeal No. 159 of 1966.
V. C. Mahajan and R. N. Sachthey, for the appellants.
M. C. Setalvad, M. C. Bhandare, Rameshwar Nath, T. R. Bhasin and Lalit Bhasin, for the respondent.
The Judgment of the Court was delivered by Shelat, J.
The respondent company carries on business as hoteliers and conducts several hotels including the 'Cecil Hotel ' at Simla.
Besides conducting hotels, it also carries on restaurant business.
As part of its business as hoteliers, the company receives guests in its several hotels to whom, besides furnishing lodging, it also serves several other amenities, such as public and private room, bath with hot and cold running water, linen, meals during stated hours etc.
The bill tendered to the guest is an all inclusive one, that is to say, a fixed amount for the stay in the hotel for each day and does not contain different items of each of the aforesaid amenities.
That is, however, not the case in its restaurant business where a customer takes his meal consisting either of items of food of his choice or a fixed menu.
The primary function of such a restaurant is to serve meals desired by a customer, although along with the food, the customer gets certain other amenities also, such as service, linen etc.
The bill which 939 the customer pays is for the various food items which he consumes or at a definite rate for the fixed menu, as the case may be, which presumably takes into account service and other related amenities.
The respondent company, as such hoteliers, has been registered as a dealer under the Punjab General Sales Tax Act, XLVI of 1948 and has been filing quarterly returns and paying sales tax under that Act.
On September 2, 1958 the company applied for a declaration that it was not liable to pay sales tax in respect of meals served in the said Cecil Hotel to the guests coming there for stay.
In support of its plea, the company raised the following contentions : (1) that the, hotel receives guests primarily for the purpose of lodging, (2) that when so received, the management provides him with a number of amenities incidental to such lodging and with a view to render his stay in the hotel comfortable including meals at fixed hours, (3) that the transaction between the company and such a guest is one for the latter to stay and not one of sale of food stuffs supplied as one of the incidental amenities, (4) that the bill given by the company and paid by the guest is one and indivisible, that is, a fixed amount per day during his stay in the hotel and does not consist of separate items in respect of the several amenities furnished to him including meals served to him, and (5) that the transaction so entered into does not envisage any sale of food since the guest cannot demand a rebate or deduction if he were to miss a meal or meals, nor is he entitled to carry away or deal with in any manner the food served at his table, if a part of it remains unconsumed.
It is, on the other hand, the management which has the right to deal with such unconsumed remainder as it likes.
Such a position, therefore, is inconsistent with a sale under which the property in the whole must pass to the purchaser, and who can deal with the remainder in any manner he likes.
The Sales Tax Officer rejected the company 's application on the ground that the transaction Which takes place between the management and a resident guest takes in both lodging and boarding and the hotel charges include consideration for both.
A revision under section 21 of the Act by the company to the Commissioner met the same fate.
The company then filed a writ petition for an order quashing the said decision as also the notices issued by the Sales Tax authorities under the Act.
The grounds put forward in the writ petition were almost the same which the company had previously urged in its application for declaration.
There was no dispute regarding the facts stated in the writ petition and particularly with regard to the fact that the transac 940 tion which a visiting resident enters into with the management is one and indivisible, that the bill charged on him is likewise one and indivisible, that the charges are for each day of stay, and that that being so, the bill was incapable of being split up into separate charges for each of the amenities furnished and availed of by such a visiting resident.
The dispute was as to the nature of the transaction and whether such transaction included sale of food stuff supplied at various meals supplied to such a customer.
The High Court, on a consideration of the arguments urged before it and relying mainly upon the decision of this Court in Madras vs Gannon Dunkerley and Co. Ltd.(, '), to the effect that where a transaction is one and indivisible it cannot be split up so as to attract the Sales Tax Act to a part of it , allowed the writ petition.
It held that a transaction between a hotelier and his resident visitor did not involve a sale of food when the former supplied meals to the latter as one of the amenities during his residence, and that if there was one inclusive bill, it was incapable of being split up in the absence of any rates for the meals agreed to between the parties as part of the transaction between the two.
The High Court also held that the transaction was primarily one for lodging, that the board supplied by the management amounted to an amenity considered essential in these days in all properly conducted hotels, and that when so supplied, it could not be said to constitute a sale every time a meal was served to such a resident visitor.
This appeal, by special leave, is filed against this view of the High Court.
The question in this appeal, it would appear, arises in the present form for the first time.
There are, therefore, no previous decisions to guide its determination.
It would, however, be helpful to consider certain decisions both of this Court as also of the High Courts, in which different types of transactions which came up before them for consideration in sales tax cases have been dealt with and which might throw some light upon the problem before us.
In a case arising under the Assam Sales Tax Act, 1947 though there was no express sale in respect of gunny bags in which rice, an exempted commodity, was supplied to Government, they were held to form assessable turnover.
There was, however, in that case evidence that the assessees had charged the Government for those bags (Mohanlal Jogani Rice & Atta Mills V. Assam) (2).
In D. Masanda and Co. vs Commissioner of Sales Tax(3), the question was whether photographic materials imported and (1) ; (3) [1957] 8 S.T.C. 370.
(2) [1953] 4 S.T.C. 129.
941 used in the process of manufacturing photographic work, copies of which were supplied by the assessee to a customer, was a transaction involving sale of those materials.
The High Court held that such a transaction did not cease to be a sale merely because the materials were not sold directly in their original form but in another form, forming the, components of the finished product, namely, the copies of the photograph, and that the transaction was not merely the performance of skilled services but the supply of finished goods.
This was, however, a border line case.
The transaction might well be considered as one of service, during performance of which, a transfer of certain materials, in respect of which there was no contract for sale, either express or implied, may be said to have taken place.
An illustration of such a kind is furnished by the case of United Bleachers Ltd. vs Madras(1).
In that case the assessee bleached and dyed, calendered, pressed and folded unbleached yarn and cloth manufactured by his custo mer textile mills.
The bills issued by the assessee contained, (a) bleaching charges, and (b) charges for stitching, folding, stamping, baling etc., but did not contain separately charges for the materials used for those ' purposes.
The Revenue contended that there was transfer of those materials and separately assessed the charges of those materials holding that though the assessee did not specifically deal in those materials, a portion of the profit earned in the business of bleaching and calendering could legitimately be attributed to the packing materials and the transaction involved a sale of them for consideration.
On a reference, the High Court held that the case was one of contract of service as distinguished from a sale of a principal commodity, such as rice in Assam case (supra) and salt in Varasuki and Co. vs Madras(1) On the other hand, where a contract is to supply such commodity in a packed condition, it could be inferred, though the contract might not be express that the intention of the parties was to give and accept delivery of the goods in a packed condition and not to take the principal commodity alone so that in the contract of sale of such a commodity there was implicit the sale of packing material as well.
Even in a contract of service such as bleaching and calendering where the goods after such processing are delivered packed a sale of packing, materials is possible, quite apart from the contract of service.
The question in such cases would be one of evidence, whether there is such a contract beside the one of service.
Where however there are no such distinct contracts and the contract is one and indivisible, the essential part of which is one of service, packing would be part of or incidental to the service, and unless an intention to charge for the materials used in the packing can be spelt out, the Revenue would not be (1) [1960] 9 S.T.C. 278.
(2) [1950] 2 S.T.C. 1. 942 entitled to split up the contract, estimate approximately the charges for such materials and treat them as chargeable on the mere ground that the transaction involved transfer of packing materials, whose value must have been taken into consideration while fixing charges for the service.
Such an implied contract of supply of packing materials was inferred in a contract of service, namely, drying raw tobacco in Krishna and Co. Ltd. vs Andhra Pradesh But the decision in that case did not rest on there being a transfer of packing materials in favour of the customer.
There was evidence that such a transfer was for consideration, inasmuch as the amounts charged as remuneration for service also contained charges for the packing materials though such charges were not separately shown in the assessee 's accounts.
In such a state of evidence it would be possible for the Court to infer a separate implied contract of sale of packing materials and not as part of the service of drying raw tobacco and delivering it in packed condition.
The difficulty which the Courts have often to meet with in construing a contract of work and labour, on the one hand, and a contract for sale, on the other, arises because the distinction between the two is very often a fine one.
This is particularly so when the contract is a composite one involving both a contract of work and labour and a contract of sale.
Nevertheless, the distinction between the two rests on a clear principle.
A contract of sale is one whose main object is the transfer of property in, and the delivery of the possession of, a chattel as a chattel to the buyer.
Where the principal object of work undertaken by the payee of the price is not the transfer of a chattel qua chattel, the contract is one of work and labour.
The test is whether or not the work and labour bestowed end in anything that can properly become the subject of sale; neither the ownership of materials, nor the value of the skill and labour as compared with the value of the materials, is conclusive, although such matters may be taken into consideration in determining, in the circumstances of a particular case, whether the contract is in substance one for work and labour or one for the sale of a chattel(1).
In Patnaik and Co. vs Orissa (3), a difference of opinion arose because of the fine distinction between the two types of contract.
The contract there was for constructing and fixing bus bodies on the chassis supplied by the Orissa Government.
The contract, infer alia, provide that the appellants were to construct the bus bodies in the most substantial and workmanlike manner (1) [1956] 7 S.T.C. 26.
(2) Halsbury 's Laws of England, 3rd Ed.
34, 6 7.
(3) [1965] 16 S.T.C. 364. 943 both as regards materials and otherwise in every respect in strict compliance with the specifications and should deliver them to the Governor on or before the dates specified therein.
The majority rejected the contention that that was a contract of work and labour and held that the transaction was one of sale.
The question primarily was one of construction of the contract, and the majority held that both the agreement and the sale related to one kind of property, namely, the bus bodies.
The reason for so.
holding was stated to be that it was clear from the contract that the property in the bus bodies did not pass on their being constructed on the chassis, but only when the vehicles including the bus bodies were delivered.
Such a contract was unlike a building contract or a contract under which a movable is to be fixed on to another chattel or on the land, where the intention plainly is not to sell that article but to improve the land or the other, chattel and the consideration is not for the transfer of the chattel but for the work and labour done and the materials furnished.
The contract in question was to manufacture a bus body and fix it on the chassis supplied and transfer the bus body so constructed for consideration.
In Madras vs Gannon Dunkerley and Co. Ltd.(1) the main question was as regards the vires of the Madras General Sales.
Tax Act, 1939, as amended by Madras Act XXV of 1947 which widened the definition of 'sale ' by including, inter alia, in it a transfer of property in the goods involved in the execution of a works contract.
Under this definition, the Sales Tax authority brought into chargeable turnover the materials used in the constructiOn works carried out by the company.
This Court held that a power to enact a law with respect to tax on sale of goods under entry 48 of List 11 in the 1935 Constitution Act must, to be intra vires, be one relating in fact to a sale of goods and that a Provincial Legislature could not, in the purported exercise of its power, tax transactions which were not sales, by enacting that they should be deemed to sales, that to construe a transaction as sale there should be an agreement relating to goods to be supplied by passing title in those goods, and that it was of the essence of such a concept that both the, agreement and the sale should relate to one and the same subject matter.
The conclusion arrived at was that in a building contract, even if it were to be disintegrated, there was no passing of title in the materials as movables in favour of the other party of the contract.
The contract was one and indivisible, there was no sale of materials, and consequently, there was no question of title to the materials used by the builders passing to the other party to the contract.
Even where the thing produced under a contract is movable property, the materials in (1) ; 944 corporated into it might pass as a movable.
But there would be no taxable sale if there was no agreement to sell the materials as such.
In arriving at this conclusion, the Court relied upon Appleby vs Myres(1) and the observations of Blackburn, J., at 659 660 of the report to show that thread stitched into a coat which is under repair becomes part of the coat, but in a contract for repairing the coat the parties surely did not enter into an agreement of sale of that thread.
In Andhra Pradesh vs Guntur Tobaccos Ltd.(2), the transaction was for redrying tobacco entrusted to the respondent company by its customers.
The process involved the keeping of the moisture content of tobacco leaf at a particular level and for that purpose the leaf had to be packed in bales, in water proof packing material, as it emerged from the reconditioning plant.
The tobacco was then returned to the customer packed in costly packing material.
In the, company 's charges for redrying there was no separate charge for the value of such packing material.
It was held that the redrying process could not be completed without the use of the packing material, that packing formed an integral part of that process, and that although the redried tobacco was returned together with the packing materials there was no sale of those materials as there was no intention on the part of the parties to enter into any transaction of sale as regards those materials.
The mere fact that in such a contract of work or service property in goods which belonged to the party performing service or executing the work stands transferred to the other party is not enough.
To constitute a taxable sale, the Revenue has to establish that there was a sale, distinct from the contract of work or service, of the property so passing to the other party.
Thus, in consider whether a transaction falls within the purview of sales tax it becomes necessary at the threshold to determine the nature of the contract involved in such a transaction for the purpose of ascertaining whether it constitutes a contract of sale or a contract of work or service.
If it is of the latter kind it obviously would not attract the tax.
From the decisions earlier cited it clearly emerges that such determination depends in each case upon its facts and circumstances.
Mere passing of property in an article or commodity during the course of the performance of the transaction in question does not render it a transaction of sale.
For, even in a contract purely of work or service, it is possible that articles may have to be used by the person executing the work and property in such articles or materials may pass to the other party.
That would not necessarily ,convert the contract into one of sale of these materials.
in ,every case the Court would have to find out what was the primary (1) [1867] L.R.2C.P.651.
(2) ; 945 object of the transaction and the intention of the parties while entering into it.
It may in some cases be that even while entering into a contract of work or even service, parties might enter into separate agreements, one of work and service and the other of sale and purchase of materials to be used in the course of executing the work or performing the service.
But, then in such cases the transaction would not be one and indivisible, but would fall into two separate agreements, one of work or service and the other of sale.
What precisely then is the nature of the transaction and the intention of the parties when a hotelier receives a guest in his hotel ? Is there in that transaction an intention to sell him food contained in the meals served to him during his stay in the hotel ? It stands to reason that during such stay a well equipped hotel Would have to furnish a number of amenities to render the customer 's stay comfortable.
In the supply of such amenities do the hotelier and his customer enter into several contracts every time an amenity is furnished ? When a traveler, by plane or by steam ship, purchases his passage ticket, the transaction is one for his passage from one place to another.
If, in the course of carrying out that transaction, the traveler is supplied with drinks or meals or cigarettes, no one would think that the transaction involves separate sales each time any of those things is supplied.
The transaction is essentially one of carrying the passenger to his destination and if in performance of the contract of carriage something is supplied to him, such supply is only incidental to that services, not changing either the pattern or the nature of the contract.
Similarly, when clothes are given for washing to a laundry, there is a transaction which essentially involves work or service, and if the laundery man stitches a button to a garment which has fallen off, there is no sale of the button or the thread.
A number of such cases involving incidental uses of materials can be cited.
none of which can be said to involve a sale as part of the main transaction.
The transaction in question is essentially one and indivisible.
namely, one of receiving a customer in the hotel to stay.
Even if the transaction is to be disintegrated, there is no question of the supply of meals during such stay constituting a separate contract of sale.
since no intention on the part of the parties to sell and purchase food stuff supplied during meal times can be realistically spelt out.
No doubt, the customer, during his stay, consumes a number of food stuffs.
It may be possible to say that the property in those food stuffs passes from the hotelier to the customer at least to the extent of the food stuffs consumed by him.
Even if that be so, mere transfer of property, as aforesaid, is not conclusive and does not render the event of such supply and con 946 sumption a sale, since there is no intention to sell and purchase.
The transaction essentially is one of service by the hotelier in the performance of which meals are served as part of and incidental to that service, such amenities being regarded as essential in all well conducted modem hotels.
The bill prepared by the hotelier is one and indivisible, not being capable by approximation of being split up into one for residence and the other for meals.
No doubt, such a bill would be prepared after consideration of the costs of meals, but that would be so for all the other amenities given to the customer.
For example, when the customer uses a fan in the room allotted to him, there is surely no sale of electricity, nor a hire of the fan.
Such amenities, including that of meals, are part and parcel of service which is in reality the transaction between the parties.
Even in the case of restaurants and other such places where customers go to be served with food and drink for immediate consumption at the premises, two conflicting views appear to prevail in the American courts.
According to one view, an implied warranty of wholesomeness and fitness for human consumption arises in the case of food served by a public eating place.
The transaction, in this view, constitutes a sale within the rules giving rise to such a warranty.
The nature of the contract in the sale of food by a restaurant to customers implies a reliance, it is said, on the skill and judgment of the restaurant keeper to furnish food fit for human consumption.
The other view is that such an implied warranty does not arise in such transactions.
This view is based on the theory that the transaction does not constitute a sale inasmuch as the proprietor of an eating place does not sell but "utters" provisions, and that it is the service that is predominant, the passing of title being merely incidental( ', ').
The two conflicting views present a choice between liability arising from a contract of implied warranty and for negligence in tort, a choice indicative of a conflict, in the words of Dean Pound, between social interest in the safety of an individual and the individual interest of the supplier of food.
The principle accepted in cases where warranty has been spelt out was that even though the transaction is not a sale, the basis for an implied warranty is the justifiable reliance on the judgment or skill of the warrant or and that a sale is not the only transaction in which such a warranty can be implied.
The relationship between the dispenser of food and one who consumes it on the premises is one of contractual relationship, a relationship of such a nature that an implied warranty of wholesomeness reflects the reality of the transaction involved and an express obligation understood by the parties in the sense that the customer does, in fact, rely upon such dispenser (1) Corputs Juris Section, Vol 77,1215 1216.
947 of food for more than the use of due care.
(see Cushing v Rodman(1).
A representative case propounding the opposite view is the case of F. W. Woolworth Co. vs Wilson(2), citing Nisky vs Childs Co.(3), wherein the principle accepted was that such cases involved no sales but only service and that the dispenser of food, such as a restaurant or a drug store keeper serving food for consumption at the premises did not sell and warrant food but uttered and served it and was liable in negligence, the rule in such cases being caveat emptor.
In England, a hotel under the Hotel Proprietors Act, 1956 is an establishment held out by the proprietor as offering food, drink, and if so required, sleeping accommodation, without special contract, to any traveller presenting himself and who appears able and willing to pay a reasonable sum for the services and facilities provided.
This definition, which is also the definition, of an inn, still excludes, as formerly, boarding houses, lodging houses and public houses which are merely alehouses and in none of which there is the obligation to receive and entertain guests.
An innkeeper, that is to say, in the present days a hotel proprietor, in his capacity as an in keeper is, on the other hand, bound by the common law or the custom of the realm to receive and lodge in his inn all comers who are travellers and to entertain them at reasonable prices without any special or previous contract unless he has some reasonable ground of refusal (4) .
The rights and obligations of hotel proprietors are governed by statute which has more or less incorporated the common law.
The contract between such a hotel proprietor and a traveller presenting himself to him for lodging is one which is essentially a contract of service and facilities provided at reasonable price.
The transaction between a hotelier and a visitor to his hotel is thus one essentially of service in the performance of which and as part of the amenities incidental to that service, the hotelier serves meals at stated hours.
The Revenue, therefore, was not entitled to split up the transaction into two parts, one of service and the other of sale of food stuffs and to split up also the bill charged by the hotelier as consisting of charges for lodging and charges for food stuffs served to him with a view to bring the latter under the Act.
The conclusion arrived at by the High Court is one with which we agree.
Consequently, the appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.
(1) 104 American L.R. 1023; Srs. 864, 868.
(2) Srs.
(3) 103 N.J. Law 464.
(4) Halsbury 's Laws of England, 3rd Ed., Vol. 21, 445 446.
| IN-Abs | The respondent company was running the business of a hotelier and was registered as a dealer under the Punjab General Sales Tax Act, 1948.
It applied for a declaration that it was not liable to sales tax in respect of meals served to the guests staying in the hotel on the grounds that : (1) the hotel receives guests primarily for the purpose of lodging; (2) when so received the management provides him with a number of amenities including meals at fixed hours, incidental to such lodging and with a view to render hi , stay comfortable; (3) the transaction between the respondent and the guests is one for the latter to stay and not one of sale of food stuffs supplied; (4) the bill given by the respondent and paid by the guest is one and indivisible, being a fixed amount per day during his stay in the hotel and does not consist of separate items in respect of the several amenities furnished to him, and (5) the transaction does not envisage any sale of food since the guest cannot demand a rebate or deduction if he were to miss a meal or meals nor is he entitled to carry away or deal with, in any manner, the food served on his table if a part of it is not consumed.
The department rejected the company 's application but the High Court allowed its writ petition.
Dismissing the appeal to this Court, HELD : The transaction is one essentially of service in the performance of which and as part of the amenities incidental to that service, the hotelier serves meals at stated hours.
The Revenue, therefore, was not entitled to split up the transaction into two parts one of service and the other of sale of food stuffs and to split up the bill charged as consisting of charges for lodging and charges for food stuffs served with a view to bring the latter under the Act.
[947 F G] The distinction between a contract of sale and a contract of work and service is fine especially when the contract is a composite one involving both.
In considering whether a transaction is a sale falling within the purview of sales tax it is necessary to determine the nature of the contract involved on the facts of each case.
A contract of sale is one whose main object is the transfer of property and delivery of possession of a chattel to the buyer; but the mere passing of property in an article or commodity during the course of the performance of a transaction does not render it a transaction of sale when there is no intention to sell and purchase.
When the principal object of work undertaken by the payee of the price is not the transfer of a chattel qua chattel the contract is one of work and labour.
The test is whether or not the work or labour bestowed ends in anything that can properly become the subject of sale; neither the ownership of the materials nor the value of the skill 938 and labour as compared with the value of materials is conclusive, although such matters may be taken into consideration.
In every case the court would have to find out what is the primary object of the transaction and the intention of the parties while entering into it.
[942 D G: 944 F G. H] The transaction in the present case is one and indivisible, namely, one of receiving a customer in the hotel to stay.
The bill is not capable of being split up into one for residence and another for sale of meals.
Amenities including meals, are part and parcel of the service which, in reality, is the transaction between the parties.
Even if it was to be disintegrated the supply of meals during such stay does not constitute a separate contract of sale, since no intention on the part of the parties to sell and purchase the food stuffs supplied during meal time can be spelt out.
[945 G H; 946 A C] Madras vs Gannon Dunkerley & Co. Ltd., ; , Mohanlal Jogani Rice & Atta Mills.
vs Assam [1953] 4 S.T.C. 129, Masanda & Co. vs Commissioner of Sales tax, [1957] 8 S.T.C. 370, United Bleachers Ltd. vs Madras, (1960) 9 S.T.C. 278, Krishna & Co. Ltd. vs Andhra Pradesh, [1956] 7 S.T.C. 26, Patnaik & Co. vs Orissa, [1965] 16 S.T.C. 364, Andhra Pradesh vs Guntur Tobaccos Ltd. ; and English Law and United States Law, referred to.
|
Appeal No. 171 of 1967.
Appeal from the judgment and decree dated April 12, 1966 of the Patna High Court in Appeal from Original Decree No.445 of 1963.
1006 D. V. Patel and U. P. Singh, for the appellant.
C. B. Agarwala, Umesh Chandra singha , R. Goburdhun and D. Gob urdhun, for respondent No. 1.
The Judgment of the Court was delivered by Mitter, J.
This is an appeal from a judgment of the Patna High Court reversing the decree in favour of the plaintiff appellant declared to be the duly installed Mahant of Turki Math and of all its subsidiary maths and as such entitled to possession of the properties covered by the decree.
The, undisputed facts are as follows.
In the village of Turki in North Bihar there is a Math or as that of the Kabirpanthi Bhagatatha Vairagi sect established over a century back.
There are asthals subordinate to the principal one at Turki located in different districts of Bihar.
Devolution of the Mahantship has always been from a Guru to his Chela.
Defendant No. 2 executed a deed dated December 17, 1951 nominating the first defendant as Ms successor to the Mahantship and a second deed on September 15, 1952 surrendering his right to the Mahantship in favour of the first defendant with, immediate effect.
The suit of the appellant was launched in 1959 for a declaration that he himself was the duly installed Mahant of saddar asthal Turki in the circumstances mentioned in the plaint, that the second defendant had ceased to be the Mahant by his, voluntary of retirement and the first defendant being a junior Chela could have no right or Claim to the Mahants.
As a corollary to the above declaration, he also asked for a decree for recovery of possession of all the properties of the asthal including those which had been purported to be transferred by the first two defendants.
The appellant made a two fold claim in his plaint.
It was his case that under the tenets and the customs of the asthal and Bhagataha sect of Kabirpanthies, the devolution of the office of Mahantship is always from a Guru to the senior celebate Chela ,either, on the death of.
the Mahant for the time being or by the said Mahant nominating.
his successor by deed and himself retiring from the Mahantship In either case, after the death or retirement of the Mahant for the time being, the senior chela succeeds to the Mahantship and is ' duly installed on the Gaddi after the perfomance of Bhandara in an assemblage of Mahants and sadhus of the sect and respectable persons of the locality at which The Chaddar of Mahanthi is bestowed on the new Mahant by the Mahant of Acharya Math Dhanauti in the District of Saran.
The deeds of 1951.
and 1952 being in violation of the ancient custom of the asthal, the first defendant was never of the as or became the Mahant of Turki nor was any Chaddar ceremony 1007 performed at any requisite ceremony in recognition of such succession. 'The appellant had filed a suit in the court of the Subordinate Judge at Muzaffarpur in the year 1953 for declaration of his riots and for setting aside the deeds of 1951 and 1952.
After the suit was pending for some time,, a compromise was arrived at whereby it was agreed that the appellant should assume the office of Mahantship and take possession of all the properties of the Math.
The appellant put his signature on a sheet of blank paper for recording the terms of settlement.
He had actually assumed the office of the Mahant of Turki in April 1954, and an elaborate ceremony was performed on the 16th February 1956.
whereat he was installed.
as the Mahant of Turki and given the Chaddar of Mahanti by the Acharya of Dhanauti before a big gathering.
A document known as the Surat Hall was prepared regarding the plaintiff 's installation.
This bore the signature, of innumerable persons.
This was followed by his taking, charge of all the properties of the saddar and subordinate asthals.
The first two defendants thereafter dispossessed him and being unsuccessful in proceedings under the Code of Criminal Procedure for securing possession of the math and its properties, he was compelled to file the suit.
Respondents 1 And 2 filed a joint written statement.
They pleaded that the custom and usages of the Turki Math relating to devolution of Mahantship was for the Mahant for the time being nominating a fit and proper person as his successor from amongst his Chelas irrespective of his seniority and the person so nominated invariably became the Mahant on the demise or retirement of the; incumbent Mahant.
A ceremony of installation of the new Mahant on the Gaddi and the bestowing of a Chaddar on him were not essential for establishing his title to this office in place of the retiring or the deceasing Mahant.
The defendants denied the factum of the installation of the appellant relied on in the plaint.
According to them the appellant had at all times knowledge of the nomination of the first defendant by the deed of December 17, 1951 and his appointment with immediate effect by the, deed of September 15, 1952.
It was on realisation of the weakness of his case that he had approached the defendants for a compromise agreeing, to given up his claim in the suit of 1953.
He had appended his signature to the petition of compromise in that suit being fully conversant with the terms thereof.
The two main issues framed by the trial court and relevant for the disposal of this appeal bear on the custom governing the succession to the Mahantship of the Turki Math and the right of the incumbent mahant to nominate a junior Chela in preference to a senior Chela.
Issues were also framed by the trial court as to whether an installation ceremony was an essential pre requisite 1008 to a Mahant 's lawfully functioning as such and whether the plaintiff had factually been installed as a Mahant of the Turki Math.
The findings of the trial court were as follows : 1.From 1899 onwards only senior Chelas had succeeded their Gurus.
2.According to the custom of the Muth the Mahant had the right to nominate his successor and the choice rested upon the senior Chela unless he suffered from any disqualification or was found to be unfit for the office.
The right of nomination was not absolute but was subject to the approval of others.
3.An installation ceremony was not essential to complete the title of the Mahant.
Such a ceremony had been performed in the ease of the plaintiff in 1956 and he became the Mahant of Turki although not in possession of the properties thereof at the ,time of the suit.
The High Court rejected the custom as to succession set up by the plaintiff.
It found 1.Since the time of the founder, Chaturbhuj Gosala, six Mahants had occupied the office of whom three were described as junior Chelas by some of the witnesses on the defendant 's side.
The evidence did not establish that there was an invariable custom of the senior Chela being nominated by the outgoing Mahant.
2.The Mahant in office had an undoubted right to nominate his successor and ordinarily the right of appointment was exercised in favour of the senior Chela but the choice was exercised in favour of a celebrate chela taking into account his all round ability and character.
The second defendant had as a matter of fact nominated one Ganesh Bhagat as his successor even before the deed of nomination of 1951 in favour of the first defendant.
This nomination of Ganesh Bhagat was cancelled as he was found to be unfit.
Compared to the plaintiff, the first defendant was decidedly superior in learning, ability and conduct : as the main function of the Mahant was to propagate the Kabirpanthi cult and the maintenance of a peaceful and harmonious atmosphere in the mutt where people were expected to congregate for religious discussion and discourses and other benevolent functions the choiceof the, first defendant by the second defendant in preference to the plaintiff was not undeserved and must be taken as final.
The High Court did not examine the question as to whether an installation ceremony was necessary to perfect the title of Mahantship in view of the concession by counsel for the plaintiff Differing from the finding of the trial court, the High Court held that no ceremony of installation of the plaintiff had been performed in 1956 as alleged in the plaint.
1009 4.The deeds of nomination and surrender in 1951 and 1952 by the first defendant were valid and binding.
The general law as to succession to Mahantship is now well settled by innumerable decisions of the Judicial Committee of the Privy Council and some decisions of this Court.
It will be enough to quote some passages from Mukharji 's book on the Hindu Law of Religious and Charitable Trusts.
The learned author states (third edition, p. 257): "Once a Mutt is established, succession to headship takes place within the spiritual family according to the usages that grow up in a particular institution.
" "The, primary purpose of a Mutt. is to encourage and foster spiritual learning by maintenance of a competent line of teachers who impart religious instructions to the disciples and followers of the Mutt and try to strengthen the doctrines of the particular school or order of which they profess to be adherents.
" At page 269 : "In a Mutt. it is the custom or practice of a particular institution which determines as to how a successor is to be appointed.
" Three aspects have to be borne in mind in connection with the question of succession to the office of a Mahant (p. 269): "The first is that if the grantor has laid down any particular rule of succession, that is to be given effect to.
Secondly, in the absence of any grant the usage of the particular institution is to be followed; and in the third place, the party who lays claim to the office of a Mohunt on the strength of any such usage must establish it affirmatively by proper legal evidence.
The fact that the defendant is a trespasser would not entitle the plaintiff to succeed even though he be a disciple of the last Mohunt, unless he succeeds in proving, particular usage under which succession takes place in the particular institution.
" At p. 270 : "Generally speaking, the Mutts are divided into three classes according to the different ways in which the heads or superiors are appointed.
These, three descriptions of Mutts are Mourasi, Panchayati and Hakimi.
In the first, the office of the Mohunt is hereditary and devolves upon the chief disciple of the existing Mohunt 1010 who moreover usually nominates him as his successor; in the second, the office is elective, the presiding Mohunt being selected by an assembly of Mohunts.
In the third, the appointment of the presiding Mohunt is vested in the ruling power or in the party who has endowed the temple In a Mourasi Mutt the chela or disciple of the last Mohunt succeeds to the office when there are more, chelas than one the eldest generally succeeds, but a junior chela may succeed if he is found more capable and if he is selected by the last Mohunt is his successor In various institutions the custom is that in order to entitle a chela to succeed, be must be appointed or nominated by the reigning Mohunt during his life time or shortly before his death and this may be done either by a written declaration or some sort of testamentary document.
In other cases again, the nominee is formally installed in the office and some sort of recognition is accorded to him by the members of the particular sect either during the life time of the last Mohunt or when the funeral ceremonies of the latter are performed." At p. 273.
"When the Mohunt has the right to appoint his successor, he may exercise the right by an act inter vivos or by will." At p. 274 : "In a Mourashi Mutt it is possible for the Mohunt to make over the endowment during his life time to his chela whom he appoints as a successor." At p. 275: "In many cases when a successor is appointed by Mohunt, he is installed in office with certain ceremonies,This cannot be deemed to be essential.
" Admittedly Turki was a Mourasi Mutt The evidence as to custom adduced in the case Is both documentary and oral.
The oral evidence which will be noted hereafter is discrepant and mostly of persons who were not disinterested.
The documentary evidence undoubtedly furnishes more reliable testimony being ante item motam and brought into existance at a time when the plaintiff was not on the scene and when no dispute as to succession to ship was raging.
1011 The earliest document exhibited in this case is that of 1899 executed by Mahant Lal Bahadur Bhagat in favour of Ram Bhagat describing him as the senior chela, able, clever, literate and by all means tit for the Mahantship.
Mahant Ram Bhagat in his turn nominated Mahadeo Bhagat as his successor by a deed of November 1910.
Like the document of 1899 this deed also describes the nominee as able, clever and fit to discharge the duties of the Mahant Mahadeo Bhaaat however is not described as the senior Chela but only as a disciple of the executant.
By a deed of August 1937 Mahant Mahadeo Bhagat nominated Narsingh Bhagat, defendant No. 2 as his successor describing the latter as his only disciple worthy, clever and fit in all respects for the Gaddi.
By a document of June 1947 Narsingh Bhagat nominated one Ganesh Bhagat as his successor to the Gaddi.
This nomination was cancelled by Narsingh Bhagat on the ground of unfitness of the nominee for the office but mention is made in this docu ment of 1947 of the practice and custom relating to the succession to the office of the Mahant.
This document goes against the contention of the plaintiff that by custom the senior Chela was eligible to the office in preference to all others.
It recites : "It has been the practice in the Asthal from the time of my predecessors that the Gadinashin leads a life of Brahmacharya and he does not marry.
One Mahanth Gadinashin appoints and nominates his able Brahmachari disciple as Gadinashin and future successor during his lifetime.
After the death of his Guru, the rightful disciple becomes heir and Gadinashin of the Asthal of the Sadar Nath at Turki.
I the executant thought it proper to make over the management of the property under a will, according to previous custom and appoint Ganesh Bhagat as my successor.
" This was followed by a description of the nominee as literate, able and efficient.
The document of December 1951 by Narsingh Bhagat in favour of Girija Nandan Bhagat.
the first defendant.
describes the nominee as fit and qualified in all respects to be the Mahant and recites the custom as in the case of Ganesh Bhagat.
The trial Judge 's view that the nominations if 1899, 1910 and 1937 'being invariably in favour of the senior disciple went a long way to establish the custom relied on by the plaintiff was not accepted by the High Court.
Apparently the trial Judge was of the view that Mahadeo Bliagat who became the Mahant in 1910 was the only disciple of Ram Bhagat and it was therefore not felt necessary to mention him is the senior chela Quite a number of defendants ' witnesses made statements to the effect that Ran .
Bhagat had a number of Chelas.
The trial Judge obviously over locked the statement of the plaintiff in his cross examination that 1012 Ram Gossai had 5 or 6 Chelas and he himself had seen all of them.
A fairly large number of witnesses stated that the qualifications for a person 's nomination to the Mahantship did not depend only on seniority but on ability to manage, celibacy, adherence to religious principles and a habit of serving sadhus, fakirs and visitors besides a good moral character.
Some even suggested that it was the ablest Chela who was made the Mahant.
Making due allowance for the witnesses who came to support the case of the party examining them, the oral testimony unquestionably leads us to hold that in the matter of nomination of a successor to the Mahantship seniority was not the decisive factor but that ability and efficiency in management coupled with a good moral character and adherence to the religious rites practised at the mutt and a spirit of service to sadhus etc.
all entered into consideration in the selection of a successor by a Mahant.
This conclusion is fortified by the documents exhibited.
As already noted they do not support the plaintiff 's version that invariably the senior Chela was selected.
In our view the document executed by Narsingh Bhagat in favour of Ganesh Bhagat sets out the custom as to succession fairly accurately.
The argument advanced on behalf of the appellant that the plaintiff was installed as the Mahant of Turki in 1956 before a wide gathering of sadhus and respectable persons at which the Chaddar ceremony was performed does not merit any elaborate or serious consideration.
As noted already, the trial, court did not take the view that the performance of the Chaddar ceremony was an essential pre requisite to a person becoming a Mahant and before the High Court counsel for the plaintiff expressly gave up that point.
Although the trial court found in favour of the plaintiff that such a ceremony had actually been performed, the High Court came to a different conclusion.
One of the reasons which prompted the High Court to take this view was that the document evidencing the installation ceremony styled the Surat Hall had not been produced in any court of law before the institution of the suit of 1959 although litigation in respect of the properties of the mutt and the plaintiff 's right to possession were being canvassed before ,courts of law.
The High Court also relied on the fact that a res pectable and reliable witness like the Mahant of the Acharya Mutt denied having signed this document exhibit 1 and no attempt was made on behalf of the plaintiff to controvert the said denial by examination of a hand writing expert.
Reliance was also placed by the High Court on the fact that the plaintiff who filed a petition under sections 107 and 145 Cr. P.C. against the first defendant and 12 others on 8th December, 1956 described himself as the Mahant of Chanwa Math and made no reference in the petition itself to the installation ceremony at Turki.
The High Court also ,did not believe the plaintiff 's version that he had signed a blank 1013 sheet of paper to be used as a compromise petition in the earlier suit filed by him and nothing has been shown to us as to why we should take a different view.
In the result we hold that the plaintiff was unable to discharge the onus which lay on him to substantiate the custom as to succession pleaded in his plaint.
He also failed to establish that he had in fact been installed as the Mahant of the said Math.
The appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.
| IN-Abs | Three aspects have to be borne in mind in connection with the question of succession to the office of a mohunt : (i) if the rounder or endower has laid down any particular rule of succession, that is to be given effect to; (ii) in the absence of the above the usage of the particular institution, is to be followed; and (iii) the party who lays claim to the, office on the strength of any such usage must establish it affirmatively.
The fact that the defendant is a trespasser would not entitle the plaintiff to succeed, un less he succeeds in proving the particular usage under which he claims.
[1 009 E G] In a Mourasi mutt the office of the mohunt is hereditary and devolves upon a disciple of the existing mohunt who usually nominates him as the successor.
Though generally the senior disciple succeeds, a junior disciple may succeed if he is found more capable and if he is selected by the last mohunt as his successor.
The appointment or nomination is done by the reigning mohunt during his life time or shortly before his death and it is possible for the mohunt to make over the endowment during his lifer time to the successor.
[1010 B D, F] In the present case, the mutt was a Mouriasi mutt and the second respondent was its mohunt.
He nominated the first respondent as his successor by a deed.
and by a second deed, surrendered to him his right to, the office of mohunt.
The appellant claimed the office as the senior disciple on the contention that the devolution to the office was to the senior disciple according to the tenets and customs of the sect which established the mutt.
The trial court decreed the suit but the High Court set aside the decree Dismissing the appeal to this Court, HELD : The appellant had not discharged the onus which lay on him to substantiate the custom pleaded by him.
The documentary evidence, which was ante litern motam did not support the appellant 's case that invariably only the senior disciple was selected.
On the contrary, the entire evidence in the case led to the conclusion that in the matter of nomination of a successor to the office of mohunt seniority was not the decisive factor, but that ability and efficiency in management coupled with a good moral character, adherence to the religious rites practised at the.
mutt and a spirit of service to the sadhus etc.
entered into consideration in the selection of a successor.
[1012 A D]
|
Appeal No. 213 of 1967.
Appeal from the Judgment and order dated February, 17th 1965 of the Patna High Court in First Appeal No. 113 of 1960.
M. C. Chagla, D. P. Singh, section C. Agarwal, V. J. Francis, R. Goburdhun and D. Goburdhun, for the appellant.
M. C. Setalvad, Sarjoo Prasad, A. G. Ratnaparkhi and Rajiv Shah, for respondent No. 1.
The Judgment of the Court was decided by Hegde, J.
In this appeal by certificate we are to consider the effect of the will executed by one Raghunath Prasad Singh, on August 31, 1938.
The said testator died very soon after the execution of the will leaving behind him his widow Jageshwar Kuer, 72 his daughter Satrupa Kuer and his two grand daughters Talkeshwari Devi (the appellant herein) and Sheorani.
The appellant and Sheorani are the daughters of Sukhdeo Prasad Singh, the son of the testator who had predeceased the testator.
Jageshwar Kuer died in November 1948 and Sheorani Devi on November 1, 1949 without leaving any issue.
The dispute in this case is as to who is entitled to the properties devolved on Sheorani under the provisions of the will left by the testator.
For deciding that question we have to refer to the relevant provisions of the will.
the genuineness or validity of which is not in dispute.
The will in question provides that after the death of the testator a portion of his properties (detailed in the will) was to devolve on Jageshwar Kuer absolutely and the remaining properties are also to devolve on her but therein she was to have only a life interest.
The will further provides that after her death "the entire property will be treated as 16 annas property out of which 5 annas 4 pies(five annas four pies) share constituting proprietary interest will pass to Shrimati Satrupa Kuer alias Nan daughter of me, the executant and her heirs as absolute owners and the remaining 10 annas 8 pies (annas ten and eight pies) share will pass to both the minor grand daughters, (1) Shrimati Talkeshwari Kuer alias Babu and (2) Shrimati Sheorani Kuer alias Bachan in equal shares as absolute proprietary interest" (cf. 4 of the will).
Clause 5 of the will says : "That if one of the two grand daughters named above, dies issueless, then under such circumstances the other living grand daughter will enter into possession and occupation of the entire 10 annas 8 pies and become the absolute owner thereof.
" At the time of the death of the testator, the appellant as well as Sheorani Kuer were minors.
After the death of Jageshwar Kuer, the appellant and her sister Sheorani Kuer divided the ten annas eight pies share of the properties which devolved on them in equal shares and each one came into possession of her share of the properties.
Immediately after the death of Sheorani Kuer, the appellant instituted a suit for possession of the properties that fell to the share of Sheorani Kuer purporting to base her claim on clause 5 of the will to which we have earlier made reference.
That suit was resisted by the first defendant, the husband of Sheorani.
He claimed that he was entitled to those properties as the heir of his wife.
The trial court dismissed the plaintiff 's suit and the decision of the trial court was upheld by the High Court.
It was contended on behalf of the appellant that in view of clause 5 of the will, the appellant is entitled to the suit properties 73 as Sheorani Kuer had died issueless.
This contention, as mentioned earlier, did not find favour either with the trial court or with the appellate court.
They have held that on a proper leading of the will as a whole, it is clear that clause 5 ceased to be operative on the death of Jageshwar Kuer, thereafter caluse 4 of the will was the only operative clause so far as the rights of the appellant and Sheorani ware concerned.
It is undisputed that the duty of the court is to find out the intention of the testator but that intention has to be gathered from the language of the will read as a whole.
I+ is clear from clause 4 of the will that the testator wanted to give to his grant daughters an absolute right in the properties that were to devolve on them after the death of his wife, Jageshwar Kuer.
The estate bequeathed under clause 4 of the will is not a conditional estate.
Clause 5 of the will relates to devolution and it does not provide for any divestment of an estate which had vested.
The estate that vested on Sheorani was an absolute one.
The will does not provide for the divestment of that estate.
It is plain from the language of clause 5 of the will that it refers to the devolution, which means when the properties devolved on the two sisters on the death of Jageshwar Kuer.
We are, unable to accept the contention of Mr. M. C. Chagla, learned Counsel for the appellant that there is an , conflict between clause 4 and clause 5 of the will.
Clause 5 in our judgment would have come into force if the contingency mentioned therein had happened before the properties absolutely devoted on the two sisters.
Clause 5 cannot be considered as a defeasance clause.
If the testator wanted that the bequest made to any of his grand daughters should stand divested on the happening of any contingency, then he would have said so in the will, assuming that he could have made such a provision.
But the will nowhere says that the properties bequeathed to the appellant and her sister should cease to be their properties on their dying issueless.
Obviously what the testator intended was that if any of his grand daughters dies issueless before the devolution took place then the entire property should go to the other granddaughter.
To our mind the intention of the testator is plain from the language of the will.
To find out the effect of the will before us we have to look to sections 1 4 and 131 of the .
Section 124 says : "Where a legacy is given if a specified uncertain event shall happen and no time is mentioned in the will for be occurrence of that event, the legacy cannot take effect, unless such event happens before the period when the fund bequeathed is payable or distributable." L864 Sup.
CI/72 74 Illustration (ii) to that section says "A legacy is bequeathed to A, and in the case of his death without children, to B.
If A survives the testator or dies in his lifetime leaving a child, the legacy to B does not take effect.
" If section 124 applies to the facts of the case, as we think it does, then it is clear that the legacy claimed by the appellant is unavailable as the contemplated contingency did not occur before the fund bequeathed was payable or distributable.
Section 124 deals with devolution.
But as we shall presently see section 131 deals with divestment of an estate that had vested.
Mr. Chagla contends that the governing provision is section 131.
That section says: "A bequest may be made to any person with the condition super added that, in case a specified uncertain event shall happen, the thing bequeathed shall go to another person, or that in case a specified uncertain event shall not happen, the thing bequeathed shall go over to another person." had already vested.
It speaks of an estate going over to another person.
As seen earlier clause 5 of the will is not a defeasance clause.
A case somewhat similar to the one before us came up for consideration before the Judicial Committee of the Privy Council in Norendra Nath Sircar and anr.
vs Kamal Basini Dasi(1) Therein a Hindu at his death left three sons, the eldest of full age and the other two minors.
In his will were the directions "My three sons shall be entitled to enjoy all the movable and immoveable properties left by me equally.
Any one of the sons dying sonless, the surviving son shall be entitled to all the properties equally".
Interpreting this clause the Judicial Committee held that those words gave a legacy to the survivors contingently on the happening of a specified uncertain event, which had not happened before the period when the property bequeathed was distributable, that period of distribution being the time of the testator 's death.
In arriving at this conclusion, the Judicial Committee relied on section 111 of the Indian Succession Act, 1865.
That provision is similar to section 124 of the .
For the reasons mentioned above we are in agreement with the courts below that the suit brought by the appellant is un sustainable.
This appeal is accordingly dismissed with costs.
Appeal dismissed.
K.B.N. Appeal dismissed.
| IN-Abs | By clause 4 of a will the testator bequeathed to his grand daughters T and S an absolute right in the properties that were to devolve on them after the death of his wife.
, Clause 5 further provided that if one of the two grand daughters were to die issueless the other living grand daughter was to enter into possession of the entire property as absolute owner.
After the death of the testator 's wife T and S divided the properties which devolved on them in equal shares.
On S dying issueless T instituted a suit for possession of the properties that fell to the share of S basing her claim on clause 5 of the will.
The suit was dismissed.
Dismissing the appeal, HELD : Clause 5 of the will relates to devolution, it does not provide for any divestment of an estate which had vested.
The estate that vested in S under clause 4 of the will was not a conditional estate, it was an absolute one.
The will does not provide for the divestment of that estate.
Clause 5 would have come into operation if the contingency mentioned therein had happened before the properties absolutely devolved on T and section What the testator intended was that if any of his grand daughters died issueless before the devolution took place then the entire property should go to another grand daughter.
The intention of the testator is plain from the language of the will.
[73 E] Section 124 of the applies to the facts of the case and not section 131.
The legacy claimed by the appellant is unavailable as the contemplated contingency did not occur before the fund bequeathed was payable or distributable.
Section 131 provides for the divestment of an estate which had already vested; it speaks of an estate going over to another person.
[74B] Norendra Nath Sircar and anr.
vs Kamal Basini Dasi, I.L.R. , referred to.
|
Appeal No. 357 of 1967.
Appeal from the judgment and order dated December 9, 1963 of the Calcutta High Court in Appeal from Original Order No. 110 of 1960.
B. Sen, Sadhu Singh, Jagmohan Khanna, R. N. Kapoor and section K. Dholakia, for the appellants.
G. L. Sanghi, B. Dutta and section P. Nayar, for the respondents.
87 The Judgment of the Court was delivered by P. Jaganmoban Reddy, J.
This is an appeal by certificate under Article 1 3 3 ( 1 ) (b) of the Constitution against the judgment of the Calcutta High Court which dismissed an appeal from an order of the single Judge of that Court discharging a rule granted by it to the appellants calling on the respondents the Collector of Customs and others to show cause why certain orders under various sections of the Sea Customs Act and the Foreign Exchange Regulation Act should not be quashed and why a written complaint made by the respondents under the Foreign Exchange Regulation Act and the case pending in the Court of the Presidency Magis trate, Calcutta, should not be stayed.
The appellant is a registered partnership firm carrying on business of importers, exporters, commission agents, brokers and general merchants.
It consists of two partners, Girdhari Lal Gupta and Pooran Mal Jain.
On the 25th October 1958.
the Cashier of the appellant Bhagwandeo Tiwari handed over a consignment of wooden case to the Swiss Airways at Dum Dum Airport for being sent by air freight to Hongkong.
According to ,the consignment note, the consignment was being sent by one Ramghawan Singh of Karnani Mansions, Park Street, Calcutta, who in fact was a fictitious person.
The Shipping Bill showed that the consignment purported to contain Rassoglla, Achar, Papar and dried vegetables and it was being sent to one Ishwar Lal, 41, Wyndham St., Hongkong who is also alleged to be, a fictitious person.
After the consignment was accepted and when The Customs examined it for clearance on 25th October 1958 before its onward despatch to Hongkong, there was found concealed in a specially made secret cavity on the battens nailed to the inner sides of the case, Indian currency notes of Rs. 51,000/ .
An investigation was set on foot and on 22nd January 1959 a search warrant was issued by the Presidency Magistrate, pursuant to which the Customs Officers caused a search to be made of the office of the firm and the residences of the appellant 's partners.
In the course of search account books and other documents were seized.
This investigation revealed that the Cashier, Bhagwandeo Tiwari had signed the consignment note as Ramchandra which, as the subsequent writings showed, were in his hand.
Even the consignment note appears to have been typed on the typewriter of the appellant firm.
It was further alleged that from a comparison of the consignment note with a letter admittedly sent out by the appellant firm and signed by one of its partners, Girdhari Lal Gupta, it became evident that the slip seized from the office of the appellant firm had contained entries, to show that Bhagwandeo Tiwari was the person who actually transported and booked the offending consignment in question and that he made an entry 88 of Rs. 123.73 being the Air freight paid for its transport to Hongkong which was the exact amount shown on the consignmer the account slip was in his handwriting, and that the expense note.
Bhagwandeo Tiwari, it was said, had in fact admitted the and charges shown therein were also found in the books of account of the appellant firm.
In view of this evidence, the customer authorities served a notice on the appellant firm on April 2, 1959 by which after setting out in detail the aforesaid facts and after pointing out that the exportation of Indian currency out of India was in contravention of section 8 (2) of the Foreign Exchange Regulations Act 1947 read with the Reserve Bank of India Notification dated 27 2 1951 as specified therein, it was asked to show cause and to produce within four days of the receipts of the notice, the permit, if any, of the Reserve Bank of India, for export of the Indian currency and if it did not do so, it would be liable for prosecution under section 23(1) read with section 8(2) of the Foreign Exchange Regulations Act.
On 13 4 1959, the appellant firm replied to the notice denying that the firm had anything to do with the despatch of the box containing currency notes; that it was not aware of any person by the name of Ramghawan Singh or Ishwar Lal, or that Bhagwandeo Tiwari had ever despatched the consignment in question or visited any Air office in connection therewith.
It may be mentioned en passant that in the High Court, in the reply affidavit affirmed on 11 1 1960 to the affidavit in opposition, Girdhari Lal Gupta, one of the partners of the firm went even to extent of denying that Bhagwandeo Tiwari was the Cashier of the firm, notwith standing the fact that in the earlier reply to the show cause notice as also in the Writ Petition, it was tacitly assumed that he was the Cashier.
Apart from the criminal prosecutions that were launched against the partners, in the penalty proceedings which were initiated by the aforesaid show cause notice, the firm was held to be knowingly concerned in the offence and accordingly, a fine of Rs. 1,000/ was imposed on it under section 167(3) of the Sea Customs Act with a further personal liability of Rs. 1,000/under section 167(37) of the said Act.
It was further fined Rs. 51,0001 under section 167(8) of the Act read with section 23 (1) of the Foreign Exchange Regulations Act.
Apart from these fines, the currency notes of Rs. 51,000/ which were seized were confiscated.
This order was challenged before the single Judge of the Calcutta High Court who, as already stated, had issued a rule but later discharged it.
Against that order an appeal was filed 89 Reddy, J.) but that also was dismissed.
Of the four points that were urged in that appeal, the first three have been reiterated before us on behalf of the appellant, viz. : (1) Currency notes are not 'goods ' and there fore the provisions of section 167(3), (8) and (37) of the Sea Customs Act are not attracted; (2) A 'firm ' is not a legal entity and therefore it cannot be a 'person within the meaning of any of the above provisions of law; (3) Even if a firm be a person within the meaning of the said provisions no penalty can be imposed on the firm or any of its members unless it appears from the evidence that the members of the firm had consciously taken any steps to violate the provisions of law; even so only the particular member against whom there is evidence of guilt can be held liable.
Before dealing with the above contentions it will be necessary to consider the relevant provisions of the Foreign Exchange Regulations Act as also those under the Sea Customs Act, Sections 8(1), 23(a), (b), (1A), 23A, 23B and 23C of the Foreign Exchange Regulations Act and section 19, 167(3).
(8) and (37) of the Sea Customs Act are relevant for the purpose of this appeal.
These are given below : 8 (1).
The Central Government may, by notification in the Official Gazette, order that, subject o such exemptions, if any, as may be contained in the notification, no person shall, except with the general or special permission of the Reserve Bank and on payment of the fee, if any, prescribed bring or send into India any gold or silver or any currency notes or bank notes or coin whether Indian or foreign.
Explanation The bringing or sending into any port or place, in India of any such article is aforesaid intended to be taken out of India without being removed from the ship or conveyance in which it is being carried shall nonetheless be deemed to be a bringing L864SupCI/72 90 or as the case may be sending, into India of that article for the purposes of this section.
(2) 23(1) If any person contravenes the provisions of section 4, section 5, section 9 or sub section (2) of section 12 or of any rule, direction or order made thereunder, he shall (a) be liable to such penalty not exceeding three time, , the value of the foreign ex change in respect of which the contravention has taken place, or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement in the manner hereinafter provided, or (b) upon conviction by a Court, be punish able with imprisonment for a term which may extend to two years, or with fine, or with both.
23(1A) Whoever contravenes (a) any of the provisions of this Act or of any rule, direction or order made thereunder, other than those referred to in subsection (1) of this section and section 19 shall, upon conviction by a court, be punishable with imprisonment for a term which may extend to two years, or with fine or with both; (b) any direction or order made under sec tion 19 shall, upon conviction by a court, be punishable with fine which may extend to two thousand rupees.
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 subsection (1) of section 13 shall be deemed to have been imposed under section 19 of the (8 of 1878), and all 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.
23B. Whoever attempts to contravene any of the provisions of this Act or of any rule, direction or order made thereunder shall be deemed to have contravened that provision, rule, direction or order, as the case may be.
23C(1) If the person committing a contravention is a company, every person who, at the time the contravention was committed, was incharge of, and was responsible, to the company for the conduct of the business of the Company as well as the company, shall be deemed to be guilty of the contravention and Shall be liable to be proceeded against and punished accordingly Provided that nothing contained in this sub section shall render any such person liable to punishment, it ' he proves that the contraven tion took place without his knowledge or that he exercised ill due diligence to prevent such contravention.
(2) Notwithstanding anything contained in subsection (1), where a contravention tinder this Act has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly".
: "19.
The Central Government may from time to time, by notification in the official Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified descrip tion into or out of India across any customs frontier as defined by the Central Government.
The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the 9 2 same with reference to such offences respectively Offences Section of Penalties.
this Act to which offence has reference.
1 2 3 3.
If any person ship or General such person shall be aid on the shipment or lan liable to a penalty ding of goods, or knowing not exceeding one keep or conceal, or knowingly thousand rupees.
permit or procure to be kept or concealed to be shipped or landed or intended to be shipped or landed, contrary to provision of this Act; or if any person be found to have 11 been on board of any vessel liable to confiscation on account of the commission of an offence under (No. 4) of this section, while such vessel is within any bay, river, creek or arm of the sea which is not a port for the shipment and landing of goods.
If any goods, the importation 18 & 19 such good shall or exportation of which is for be liable to the time being prohibited or rest to confiscation; restricted by or under Chapter IV of this and Act, be imported into or exported from India contrary to such prohibition any person conc or restriction or erned in any such offence shall be liable to a pena lty not exceedig three times the value of the goods, or not exceeding one thousand rupees.
if any attempt be made so to import or export any such goods; or if any such goods be found in any package produced to any officer of Customs as containing no such goods; or if any such goods, or any dutiable goods, be found either before or after landing or shipment to have been concealed in any manner on board of any vessel within the limits of any port in India; or if any goods, the exportation of which is prohibited or restricted as aforesaid, be brought to any wharf in order to be put on board of any vessel for exportation contrary to such prohibition or restriction.
93 37.
If it be found, when any 86 & 137 such package, tog goods are entered at, or brought ether with the to be passed through, a whole of the good custom house, either for contained therein importation or exportation, that shall be liable to confiscation, and every person concerned in any such offence shall liable to a pen lty not exceeding one thousand rupees.
(a)the packages in which they are contained differ widely from the description given in the bill of entry or application for passing them; or (b) the contents thereof have been wrongly described in such bill or application as regards the denominations, characters, or conditions according to which such goods are chargeable with duty or are being imported or exported; or (c) the contents of such packages have been misstated in regard to sort, quality, quantity or value; or (d)goods not stated in the bill of entry or application have been concealed in, or mixed with, the articles specified therein, or have apparently been packed so as to deceive the officers of Customs.
and such circumstance is not accounted for to the satisfaction of the Customs Collector.
" A perusal of these provisions would show that no gold or silver or any currency notes or Bank notes or coin, whether Indian or foreign, can be sent to or brought into India, nor can any gold, precious stones or Indian currency or foreign exchange other than foreign exchange obtained from an authorised dealer can be sent out of India without the general or special permission of the Reserve Bank of India.
These restrictions by virtue of section 23A of the Foreign Exchange Regulation Act are deemed to have been imposed under section 19 of the and all the provisions of the latter Act shall have effect accordingly except section 183 thereof shall have the effect as if for the word 'shall ' therein the word 'may ' were substituted.
What section 23A does is to incorporate by reference the provisions of the by deeming the restrictions under section 8 of the Foreign Exchange Regulation Act to be prohibitions and restrictions under section 19 of the .
The contention is 'that since section 19 restricts the bringing or taking by sea or by land goods of ,my specified description into or out of India, these restrictions are not applicable to the bringing in or taking out the currency notes which are not goods 94 within the meaning of that section, and, therefore, the appellant is not guilty of any contravention of section 19 of the and cannot be subjected to the penal provisions of the said Act.
This argument, in our view, is misconceived, because firstly, it is a well accepted Legislative practice to incorporate by reference, if the Legislature so chooses, the provisions of some other Act in so far as they are relevant for the purposes of and in furtherance of the scheme and objects of that Act and secondly, that merely because the restrictions specified in section 8 of the Foreign Exchange Regulation Act are deemed to be prohibitions and restrictions under section 19 of the , those prohibitions and restrictions are not necessarily confined to goods alone but must be deemed for the purposes of the Foreign Exchange, Regulation Act to include therein restrictions in respect of the articles specified in section 8 thereof, including currency notes as well.
The High Court thought that there is no definition of goods in the and that contained in the Sale of Goods Act which excludes money is inapplicable inasmuch as that Act was a much later statute than the .
It is, however, unnecessary to consider this aspect because even if the currency notes are not goods, the restrictions prescribed in section 8 of the Foreign Exchange Act cannot be nullified by section 23A thereof which incorporates section 19 of the .
We cannot attribute to the Legislature the intention to obliterate one provision by another provision of the same Act.
On the other hand, we construe it as furthering die object of the Act which is to restrict the import into or export out of India of currency notes and to punish contravention of such restrictions.
The second contention that because the firm is not a legal entity, it cannot be a person within the meaning of Section 8 of the Foreign Exchange Regulation Act or of section 167 (3), (8) and (37) of the , is equally untenable.
There is of course, no definition of 'person ' in either of these Acts but the definition in section 2 (42) of the . or section 2(3) of the Act of 1868 would be applicable to the said Acts in both of which 'person ' has been defined as including any company or association or body of individual,, whether incorporated or not.
It is of course contended that this definition does not apply to a firm which is not a natural person and has no legal existence, as such clauses (3), (8) and (37) of section 167 of the are inapplicable to the appellant firm.
In our view, the explanation to section 23C clearly negatives this contention, in that a company for the purposes of that section is defined to mean any body corporate and includes a firm or other association of individuals and a Director in relation to a firm 9 5 means a partner in the firm.
The High Court was clearly right in holding that once it is found that there has been a contravention of any of thee provisions of the Foreign Exchange Regulation Act read with by a firm, the partners of it who are in charge of its business or are responsible for the conduct of the same, cannot escape liability, unless it is proved by them that .he contravention took place without their knowledge or the exercised all due diligence to prevent such contravention.
There is, also no warrant for the third submission that unless it appears from the evidence that members of the firm had consciously taken any steps to violate the provisions of law and even then only the particular members against whom there is evidence of guilt, can alone be held liable.
This contention was said to be based on a decision of this Court in Radha Krishan Bhatia vs Union of India and others,(1) that as the 'person concerned ' specified in section 167(8) of the is the person actually involved or engaged or mixed up in contravening the restrictions imposed under the Foreign Exchange Act or the , he must be the person who must be, shown to be actually concerned.
That was also a case under section 167(8) of the where, in fact, a number of gold bars held to be smuggled were recovered from the person of the ,appellant.
The single Bench of the Punjab High Court ha( allowed the Writ Petition of the appellant on ',he ground that the Collector had not recorded a finding that the appellant was connected with the act of smuggling gold into the country.
This finding was set aside on a Letters Patent Appeal and the writ petition was dismissed.
This Court held that the concern of the appellant in the commission of the offence must be at a stage prior to the completion of the offence of illegal importation of gold into the country.
The mere finding of fact recorded by the Collector of Customs about the smuggled old being recovered from the person of .he appellant was not sufficient to conclude that the appellant was concerned in the illegal importation of gold into the country and, therefore, liable for penalty under section 167(8) of the Act.
What the order of the Collector of Customs must show is that be had considered the question of the person being concerned in the commission of the offence of illegal importation of the goods.
It should further indicate that the matters he had considered had a bearing on the question and the reasons for his arriving at that conclusion.
This has really no bearing on the question before us because under section 23B, even an attempt to contravene any of the provisions of the Act or of any rule, direction or order made thereunder shall be deemed to have contravened that provision, rule, direction or order as the (1) 96 case may be.
in respect of this very incident where the petitioners were prosecuted it was held by this Court in Girdhari Lal Gupta and another vs D. N. Mehta, Assistant Collector of Customs and another,(1) that Girdhari Lal Gupta, one of the two partners and Bhagwandeo Tiwari, Cashier, have been rightly convicted under the provisions of the Foreign Exchange Regulation Act for contravention of the restrictions imposed under section 8(2) read with section 23(1A) of the Foreign Exchange Regulation Act.
In that case it was contended that there is no evidence to show that the contravention took place with the knowledge of Girdhari Lai Gupta or that he did not exercise due diligence to prevent such contravention.
That contention was negatived because he had 'not only stated under section 342, that he alone looks after the affairs of the firm but it had been found that there were entries in his account books.
It is true, that the relevant provisions of the are penal in character and the burden of proof is on the Customs authorities to bring home the guilt to the person alleged to have committed a particular offence under the said Act by adducing satisfactory evidence.
But that is not to say that the absence of direct evidence to connect a person with the offence will not attract the penal provisions to establish the guilt in a criminal proceeding of the type which the customs authorities have to take.
The evidence of the kind which has been adduced in this case would be sufficient to lead to the conclusion that the partner of the firm was interested in or involved in attempting to export Indian currency notes out of India.
As observed by this Court in Thomas Dana vs The State of Punjab(2), while dealing with section 167 of the , that "All criminal offences 'are offences but all offences in the sense of infringement of law are not criminal offences.
Likewise, the other expressions have bean used in their generic sense and not as they are understood in the Indian Penal Code or other laws relating to criminal offences .
Out of more than 82 entries in the schedule to section 167, it is only about a dozen entries which contemplate prosecution in the criminal sense, the remaining entries contemplate penalties other than punishments for a criminal offence".
In the Additional Collector of Customs vs Sita Ran? Agarwal(3), to which the High Court has referred, while dis missing the appeal from the judgment of the Calcutta High Court, this Court had stated that "the High Court was right when it observed that if any one is interested or consciously takes any step whatever to promote the, object of illegally bringing bullion into the country, then even if no physical connection is established between him and the thing brought, he will be guilty.
" In that case, the respondent, Sita Ram Agarwal who was seen moving (1) ; (3) Civil Appeal No. 492/162 decided on 14 9 62.
(2) [1959] Suppl.
(1) S.C.R. 274, 97 in the company of one Bhola Nath Gupta on the western Pavement of Jatindra Mohan Avenue, Calcutta, had proceeded in the direction of a taxi which had come to the place where they were, and on a signal being flashed, a Chinese national alighted therefrom, shook hands, with the respondent after which all the three boarded the taxi.
A police constable who was on the spot raised an alarm and secured the respondent and his companion with the help of the members of the public.
All of them were taken to the police station for the purpose of interrogation but the Chinese national tried to get away and started to run.
He was chased and eventually secured.
Before his apprehension.
however, he was seen to drop three packets which were found to contain 23 bars of illicit gold.
The respondent was charged as a person concerned in the offence of attempting to import contraband gold under section 167(8) of the .
The High Court while holding that there was no evidence to establish that he was in conscious relation with the gold, observed, "in order that a person may be said to be so concerned, some facts have to be proved which will establish that he was in conscious relation with the gold in one or other of the several successive steps preceding its actual receipt into the country".
In order that he was concerned in the offence, the High Court further pointed out that there need be no physical connection between the gold and the person charged and "if the offence did not relate to his being concerned in the importation of the gold.
but related to his having something to do with smuggled gold, the position might have been different".
The facts of the instant case clearly disclosed, as was observed by the High Court, " a well laid plain".
We have earlier stated that the currency notes were secreted in a cavity and were sought to be despatched out of the country in a package which ostensibly looked inocuous.
containing eatables.
The manner in which the attempt was made was to hood wink the Customs officials and escape their detection.
Further, the consignor and the consignee were not shown as real persons but were fictitious so that even if the attempt to smuggle out of the country the currency notes was detected, the real persons could not be traced.
The charges and expenses incurred in connection with the despatch found in the entries in the books of account of the firm were the same a those relating to the offending package which was being despatched to Hongkong.
The freight mentioned in the account slip the exact amount which appears on the consignment note in respect of that offending package.
The amount sought to be sent is half a lakh of rupees which can hardly be within the means of the Cashier.
leading to the inescapable inference that the firm through its partners was concerned in the attempt to transgress the restrictions under section 8 of the Foreign Exchange Regulation Act and liable to penal action by virtue of section 23A 98 under the provisions of the .
On these facts as established, the High Court came to the conclusion and in our view rightly, that it was not unreasonable to infer that it was the firm which was interested in sending the currency notes out of India in a clandestine manner.
In this view, the appeal has no merits and it is dismissed with costs.
S.N. Appeal dismissed.
| IN-Abs | The appellant, a partnership firm having 2 partners, carried, on business of importers and exporters, etc.
The Cashier of the firm handed over a wooden case, to the Swiss Airways at Dum Dum for being sent to Hong Kong by air.
According to the consignment note, the consignment was being sent by one R. of Karnani mansions, Calcutta, who was a fictitious person.
The shipping bill showed that the consignment purported to contain food and dried vegetables and was sent to 1, of Hong Kong, also a fictitious person.
After the consignment was accepted and when customs examined it for clearance, it was found that it contained Rs. 51,000 in Indian currency.
On investigation, a search warrant was issued by the Presidency Magistrate and the office of the firm and the residence of partners were searched.
In the course of search, accounts books and other documents were seized.
Investigation revealed that the Cashier, had signed the consignment note as Rs, which, as the subsequent writings showed, were in his hand.
Even the consignment note appears to have been typed on the type writer of the appellant firm.
Thereafter, Customs authorities served a notice, on the appellant pointing out that exportation of Indian currency out of India was in contravention of section 8 (2) of the Foreign Exchange Regulations Act, 1947 read with Reserve Bank Notification dated 27 2 1951 as specified therein and it was asked to show cause and to produce within 4 days the permit, if any, of the Reserve Bank of India, failing which, it would be liable for prosecution under Section 23(1) read with section 8(2) of the Foreign Exchange Regulations Act.
The appellant denied that the firm bad anything to do with the case.
Apart from criminal prosecutions against the partners, a fine of Rs. 1,000 under section 167(3) of the Sea Customs Act with a further personal liability of Rs. 1,000 section 167(37) of the Act was imposed against the firm.
It was further fined Rs. 51,000 section 167(8) of the Act read with section 23(1) of the Foreign Exchange Regulations Act.
Apart from these, the currency notes of Rs. 51,000 which were seized, were also confiscated.
This order was challenged before the single judge of the Calcutta High Court who issued a rule but later discharged it.
An appeal against that order was also dismissed.
In appeal to this Court, three points, raised before the Appellate Court were also reiterated : (1) Currency Notes are not 'goods ' and therefore, the provisions of section 167(3), (8) and (37) of the Sea Customs Act are not attracted.
(2) A firm is not a legal entity and therefore, it cannot be a 'person ' within the meaning of any of the above provisions of law.
(3) Even if a 'firm ' be a 'person, no penalty can be imposed on the firm or any of its members unless the members have consciously taken any step to violate the provisions of law; 8 6 even so, only the partner member against whom there is evidence of guilt can be held liable.
Dismissing the appeal, HELD :P (i) section 23A of the Foreign Exchange Regulations Act, incorporates, by reference, the provisions of the Sea Customs Act by deeming the restrictions under section 8 of the Foreign Exchange Regulations Act, to be prohibiting and restricting under section 19 of the Sea Customs Act.
The legislature can always incorporate by reference, the provisions of some other Act, if they are relevant for the purposes of the scheme and object of that Act.
Restrictions specified in section 8 of the Foreign Exchange Regulations Act are deemed to be prohibitions and restrictions mentioned under section 19 of the Sea Customs Act.
The prohibitions mentioned under section 8 are not necessarily confined to goods alone but must be deemed, for the purposes of Foreign Exchange Regulations Act, to include therein restrictions in respect of the articles specified in section 8 thereof, including currency notes as well.
[94 B] (ii) Although there is no definition of the word 'person ' in either of.
the Acts, the definition in section 2(42) of the or Section 2(3) of the Act of 1863 would be applicable to the present Acts.
in both of which, person has been defined as including any Company or association, or body of individuals whether incorporated or not.
Further, the explanation to section 23C clearly envisages that a company for the purposes of that Section is defined to mean any body corporate and includes a firm or other association of individuals and a Director in relation to a firm also means a partner of the firm.
Therefore, for "he purposes of Foreign Exchange Regulations Act and Sea Customs Act.
a registered partnership firm L is a 'legal entity '.
[94G] (iii) From the evidence, it was clear that the appellant attempted to hoodwink the customs officials (currency notes secreted in a cavity), that the consigner and consignee were not shown as real persons, the charges and expenses incurred.
in connection with the despatch were found in the entry in the books of account of the firm that the amount, sought to be sent was half a lakh of rupees which could hardly be within the mean ', of the Cashier and the High Court was right in holding that it was the firm which was interested in sending the currency notes out of India .,II a clandestine manner.[198 A] Radha Krishna Bliatia vs Union of India & Ors., Thomas Dana vs The State of Punjab, [1959] Supp. 1 S.C.R. 274 and Additional Collector of Custo is vs Sita Ram Agarwal, C.A. No. 492 of 1962 decided on 14 9 1962 referred to and distinguished.
|
AppealS Nos. 101 , 102 and 103 of 1951.
Civil Appeal No. 101 of 1951 was an appeal from the Judgment and decree dated the 13th March, 1946, of the Chief Court of Avadh at Lucknow in First Civil Appeal No. 132 of 1943 arising out of the Judgment dated the 25th September, 1943, of the Court of Special Judge, 1st Grade, Sitapur in E. E. Act Suit No. 27/1 of 1938.
Civil Appeals Nos. 102 and 103 of 1951 were appeals from the Judgment and Decree dated the 13th March, 1946, of the Chief Court of Avadh at Lucknow in Execution of Decree Appeals Nos. 103 of 1944 and 23 of 1945 arising out of the Judgment dated the 16th November, 1944, of the Court of Additional Civil Judge, Lucknow, in Miscellaneous Case No. 70 of 1944.
B. I. Bishan Singh for the appellant.
M. C. Setalvad (Nazimuddin Siddique, with him) for the respondent.
January 21.
The Judgment of the Court was delivered by MAHAJAN J, 561 MAHAJAN J.
Shortly stated, the factS giving rise to these three appeals are these On the 4th July, 1933, Rai Bahadtir Lala Hari Kishen Das obtained from the court of The civil judge, Sitapur, a final compromise decree in the sum Of Rs. 3,88,300 2 6 with pendente lite and future interests ' and costs, on the foot of two simple mortgages executed in his favour in 1928 and 1931 by Thakur Raghuraj Singh.
The Judgment of the Court was delivered by MAHAJAN J.
561 MAHAJAN J. Shortly stated, the factS giving rise to these three appeals are these On the 4th July, 1933, Rai Bahadtir Lala Hari Kishen Das obtained from the court of The civil judge, Sitapur, a final compromise decree in the sum Of Rs. 3,88,300 2 6 with pendente lite and future interests ' and costs, on the foot of two simple mortgages executed in his favour in 1928 and 1931 by Thakur Raghuraj Singh.
It was provided in the compromise that Raghtiraj Singh mould within a week sell to Hari Kishen Das at agreed prices some villages out of the mortgaged property selected by him and sufficient to satisfy the decree.
He reserved to himself the right to get back the sold villages after five years and before the expiry of fifteen years on payment of the stipulated prices.
The computation of the price of the sold lands was to be made in the manner laid down in clause (6).
Hari Kishen Das made a selection of eight villages, and deeds of sale and relinquishment in respect of them were duly prepared and executed on 4th July, 1933 Before they could be presented for registration, the parties received information that a notification for assumption by the Court of Wards of the management of the talukdar 's estate had been issued and that it was likely to render the conveyances ineffectual.
In view of the impending notification the sale transaction felt through and a refund was obtained of the amount spent on the stamp papers, On the 20th January, 1934, the Court of Wards decided that it would not take the estate under its supervision.
Hari Kishen Das then revived his demand against the judgment debtor for the completion of the sale deeds but the judgment debtor did not pay any heed to his request with the result that on 26th May, 1934, he made an application for execution of the compromise decree.
To the execution of this decree a number of objections were raised by Raghuraj Singh.
Before the disposal of these objections the U.P. Agriculturists ' Relief Act (XXVII of 1934) and the U.P.
Encumbered Estates Act (XXV 562 of 1934) came into operation.
Under the provisions of Act XXVII of 1934, the judgment debtor became entitled to the amendment, of the decree by reduction of interest, and for payment of the decretal sum in instalments.
Under the other Act, a landlord debtor whose property was encumbered could apply to the court for the administration of his estate for liquidation of his debts.
Raghuraj Singh was not slow in seeking the aid of these laws to reduce the amount of his indebtedess and to save his property.
He made applications under both the Acts.
In the application under the Relief Act he prayed for the scaring down of the amount of the decree and for instalments.
In the application under section 4 of the Encumbered Estates Act he asked for liquidation ,of his debts by the civil judge.
On the 11th January, 1936, the civil judge of Sitapur altered the decretal amount of Rs. 3,88,300 2 6 to Rs. 3,76,790 4 3 exclusive of costs and future interest and directed Raghuraj Singh to pay the money in twelve equal annual instalments payable in the month of December of each year, the first instalment being payable in December, 1936, and also provided that in the case of default in payment of three instalments, the whole amount then due would become immediately payable.
Against this order, Hari Kishen Das filed an application in revision to the Chief Court and was successful in having the amended decree set aside on 15th February, 1938.
In the proceedings commenced under the Encumbered Estates Act on 29th October, 1936, Raghuraj Singh obtained an order under section 6 of the Act but this order was eventually quashed by the Board of Revenue on 13th August, 1938, and the debtor 's application under section 4 was dismissed.
Having succeeded in his application in revision in the Chief Court, Hari Kishen Das revived the proceedings in execution of the compromise decree and called upon Raghuraj Singh to execute a sale deed in respect of the selected villages in his favour.
On his failure to comply with this demand, the court 563 executed a deed of sale in his favour on 24th February, 1939, and in due course delivered to him possession of the property covered by the deed.
Thakur Raghuraj Singh died in the year 1941, leaving him surviving the present appellant as his successor in interest.
An appeal had been taken by him against the decision of the Chief Court dated 15th February, 1938, setting aside the amended decree to His Majesty in Council.
By an order of His Majesty in Council passed on 20th January, 1944, the decision of the Chief Court dated 15th February, 1938, was reversed and the amended decree passed by the Civil Judge of Sitapur on 11th January, 1936, was restored.
Liberty was given to the appellant to apply to the court of the civil judge, Sitapur, for such relief as he might be entitled to with reference to the recovery of possession of the property.
In view of the decision of the Privy Council, Bhagwant Singh (appellant) made an application for restoration of possession and for recovery of profit:,, wrongfully realized by Hari Kishen Das and after his death by his adopted son Sri Kishen Das.
This application was strenuously resisted by the creditor and it was pleaded by him that even under the amended decree a sum of Rs. 4,31,148 9 9 including interest and costs had become due to the decreeholder on the date of the sale since three instalments which had till then fallen due had remained unpaid and the default clause had come into operation and the sale in execution could not be set aside, as it has not caused any injury to the judgment debtor and had not in any way caused loss to him in the absence of proof that he had the money to pay the instalments.
The subordinate judge allowed the application for restitution conditional on Bhagwant Singh paying within two months the accumulated sum that had fallen due to the decreeholder under the unpaid instalments up to the date of the order.
He held that the arrears up to December, 1943, came to Rs. 3,58,914 8 9, and deducting from this amount the net profits 73 564 realized during the period of his possession amounting to Rs. 73,294 8 5 and the costs of appeal allowed by the Privy Council, a. sum of Rs. 2,85,620 074 was due and directed that if this amount was not deposited in court within two months, the application would stand dismissed.
Bhagwant Singh applied for extension of time but this application was summarily dismissed.
Rai Sabib Sri Kishen Das and Bhagwant Singh both appealed to the Chief Court against this decision.
The appeal of Sri Kishen Das was numbered as 103 of 1944.
His contention was that the judgment debtor was not entitled to restitution at all.
The appeal of Bhagwant Singh was numbered as 23 of 1945.
His grievance was that he wag entitled to restitution without any condition.
The Chief Court allowed the decreeholder 's appeal (103 of 1944) with costs and dismissed the judgment debtor 's appeal (23 of 1945) but without costs, and dismissed the application of the judgment debtor for restitution on the 13th March, 1946.
Appeals 102 and 103 of 1951 arise out of this decision.
Appeal No. 101 of 1951 arises out of another decision of the Chief Court dated 13 th March, 1946, which confirmed the decree dated 26th September, 1943, of the special judge of Sitapur under the Encumbered Estates Act.
The facts about this matter are these : As already stated, on 28th October, 1936, Thakur Ragburaj Singh applied under section 4 of the U.P.
Encumbered Estates Act (XXV of 1934) for administration of his estate so as to liquidate his debts amounting to about 14 lakhs.
on 13th August, 1938, the Board of Revenue quashed the proceedings under the Encumbered Estates Act initiated by Thakur Raghuraj Singh.
As no order for stay of execution proceedings was obtained by Raghuraj Singh from the Chief Court or the Privy Council, the civil judge to whom the exe cution proceedings had been transferred, on 13th 565 February, 1939, ordered the judgment debtor to execute a sale deed and on his making a default the civil judge on 24th February, 1939, executed a sale deed on behalf of the judgment debtor in, favour of Rai Bahadur Hari Kishen Das.
The U.P.
Encumbered Estates Amendment Act (XI of 1939) came into operation after this sale.
It allowed the applicants to amend their applications, proceedings in respect of which had been quashed previously.
On the 10th October, 1939, Raghuraj Singh applied for amendment of his application.
This application was allowed by the sub divisional officer who passed an order under section 6 of the U.P.
Encumbered Estates Act on 18th October, 1939, and forwarded the amended application to the special judge, first grade, Sitapur.
On 31st July, 1940, the special judge passed an order to the effect that the proceedings would start afresh.
Raghuraj Singh went up in revision to the Chief Court against this order contending that the proceedings should not be deemed as fresh proceedings.
The Chief Court dismissed the revision on 9th December, 1940.
On a notification issued under section 11 of the Encumbered Estates Act, Hari Kishen Das filed objection on 14th August, 1942, under section 11 claiming that the villages sold to him were his property and were not liable to be attached and sold for the debts of Raghuraj Singh.
This objection was contested by the debtor.
The special judge by his decree dated 25th September, 1943, declared Rai Bahadur Hari Kishen Das to be the proprietor of all the eight villages included in the sale deed of 24th February, 1939.
Against the decree of the special judge an appeal was filed in the Chief Court which confirmed that decree on 13th March, 1946.
Appeal No. 101 of 1951 now before us is directed against that decree.
This appeal can be shortly disposed of.
The proceedings under the Encumbered Estates Act having been quashed by the Board of Revenue in August, 1938, the sale held in February, 1939, was unaffected by the bar imposed by section 7 of the Act.
In 566 view of the decision of the Chief Court dated 9th December, 1940, the appellant could not be allowed to agitate the point that the proceedings should have been deemed to be pending in February,.1939, because of the provisions of the amending Act.
This point was stressed before us by the learned counsel for the appellant and he contended that the provisions of the amending Act XI of 1939 should have been given retrospective operation and the date of his original application should have been treated as the date of the start of the proceedings under the Encumbered Estates Act.
This contention, in our opinion, was rightly negatived in the courts below, and it was rightly held that the order made under section 6 on 18th October, 1939, was made on a fresh application under section 4.
of the U.P.
Encumbered Estates Act preferred on 10th October, 1939, and this could not affect the validity of the sale deed executed at a time when no application under section 4 was pending.
It was argued in the courts below that the sale deed was a nullity because it was executed while execution proceedings were pending before the collector under schedule III of the Code of Civil Procedure.
The point was not argued before us in this appeal.
This appeal therefore fails and is dismissed with costs.
As regards appeals Nos. 102 and 103, the main point for decision is whether in the circumstances of this case the appellant was entitled to restitution by way of restoration of possession and grant of mesne profits after the reversal of the compromise decree by the Privy Council and the restoration of the amended decree as passed by the civil judge under the Relief Act.
Having regard to the provisions of section 144 of the Code of Civil Procedure, the Chief Court was of the opinion that the sale in 1939 was inevitable and could not have been avoided if the amended decree had been then in force and that if it was set aside it would confer on the appellant an advantage to which his predecessor was not entitled, he having defaulted 567 in the payment of three instalments before the sale took place.
The following passage from the judgment of the Chief Court expresses the view that it took on this point : "For purposes of section 144 we have in the words of the section 'to place, the parties in the position which they would have occupied but for such decree or such part thereof as has been varied or reversed. ' So placing them the issue which falls for determination is whether the judgment debtor would have paid the accumulated amount of three instalments namely Rs. 1,37,839 1 11 in December, 1939.
On the evidence the lower court has come to the conclusion with which we agree that Thakur Raghuraj Singh owed no less than rupees fourteen lakhs to other creditors, and computing the value of the entire landed property at the rate specified in the compromise of 1133, it was only rupees nine lakhs.
Lal Bhagwant Singh produced no evidence to establish that his father was otherwise in a position to pay the amount of three instalments in December, 1938.
We may mention that no objection has been taken at the bar to the estimate of indebtedness or to the evaluation of the estate.
Taking them, therefore, to be correct it is impossible to believe that the judgment debtor could have prevented the sale on 24th February, 1939, if the parties were then governed by the decree of 1936.
The result which followed was inevitable and cannot be attributed solely to the erroneous order passed by this court in February, 1938.
" In our opinion, no exception can be taken to the judgment of the Chief Court in the facts and circumstances of this case and both these appeals would therefore have to be dismissed.
On account of the order of His Majesty in Council the amended decree passed by the civil judge, Sitapur, on 11th January, 1936, must be deemed to have been subsisting all along.
All the terms of the compromise were embodied in the amended decree and there was no difference in the two decrees except for the reduction of 568 the sum due from Rs. 3,88,300 2 6 to Rs. 3,76,790 4 3 and the reduction of pendente lite and future interest and for provision for instalments.
The compromise decree with the necessary adaptations and amendments became the amended decree and was enforceable as such.
It gave the judgment debtor, an opportunity to satisfy the decree by instalments if he committed no default and to save the property from being sold in satisfaction of it but in case the whole amount of the decree became due according to its terms or if any portion of it remained unpaid, it yet had to be satisfied in the same manner as the original compromise decree.
During the pendency of the decreeholder 's, appeal before the Chief Court the judgment debtor did not obtain any order staying the operation of the amended decree.
He was thus bound to carry out the terms of that decree but he failed to pay any of the instalments that fell due in 1936 or 1937.
The third instalment, it is true, fell due in December, 1938, after the amended decree had been set aside by the Chief Court but the judgment debtor had appealed for its restoration to the Privy Council.
He should therefore have taken steps to protect himself against being in default with payment of three instalments.
In order therefore to avoid the default which he would otherwise commit by nonpayment of the third instalment it was obligatory on him to pay or offer to pay to the decree holder an amount equal to the amount of one instalment so that three instalments will not be in arrears, or to obtain an order from the Privy Council absolving him from complying with the terms of the amended decree set aside by the Chief Court, even if it was eventually restored.
Failing that, he should have obtained a fresh order from the Privy Council fixing the instalments and time for the payment.
He, however, did nothing and adopted the attitude that he need make no payment and considered himself absolved from satisfying either the original decree or the amended decree.
The result of this attitude was that the whole of the decretal amount became due on his 569 failure to pay the third instalment provided for under the amended decree in December, 1938, and he thus lost the benefit of paying the decretal amount by instalments.
The amount due from him in February, 1939 under the decree was the same sum for which the property was sold in execution of the original decree.
In this situation it cannot be said that there was any alteration in the position of the parties by thePrivy Council setting aside the compromise decree and restoring the decree passed by the civil judge, Sitapur, in 1936.
The position would have been the same if that decree was a subsisting one and was in execution.
If the judgment debtor could have shown that he was in a position to pay the aggregate amount of the instalments in December, 1938, or at least one instalment so that he could not be said to have defaulted in the payment of three instalments, then the sale made in February, 1939, could not possibly be regarded as one under the amended decree but could only have been made in consequence of the original compromise decree, and that compromise decree having been superseded and the amended decree having been restored, the sale held under the reversed decree would surely have to be set a side.
On the other hand, if the sale could not have been avoided even if the amended decree which was eventually restored had been in operation at the time of the sale by reason of default of payment of three instalments and the sale was also a necessary consequence under the decree of the civil judge and was inevitable, then it cannot be said that the sale held in February, 1939, was the result and consequence of the reversed decree.
It is true that it is one of the first and the highest duty of a court to take care that its acts do not injure any of the suitors and if any injury was caused to the judgmentdebtor by the sale held in February, 1931, it was our duty to undo the wrong caused to him.
It, however, cannot be said that in this case any wrong has been done to the judgment debtor which we are called upon to redress.
It is not possible to hold that he 570 was under no obligation to satisfy either one or the other of the two decrees, and that he was absolved from satisfying the instalment decree because it had been set aside by the Chief Court and he was also absolved from satisfying the original decree because it was later on set aside by the Privy Council.
Having himself appealed to the Privy Council for the restoration of the instalment decree, it was obligatory on him to carry out the terms of that decree if he wanted to take advantage of its provisions.
Having defaulted in this, he must take its consequences, which are now different from the consequences of the original decree.
Indeed, if in this case the prayer of the judgment debtor for restitution was granted, it would result in doing not only an injustice but a wrong to the decreeholder and the court would not be acting fairly and rightly towards him.
As already said, in February 1939 both under the original decree and the amended decree a sum of over rupees four lakhs became due to him and he was entitled to got a sale of the villages selected by him in his favour towards satisfaction of this decretal debt.
If this sale is set aside and possession of eight villages is restored to the judgment debtor and mesne profits are decreed in his favour, the decreeholder would be deprived of the fruits of his decree which is certainly not the purpose of restitution in law or equity; it would place the judgment debtor in a position of advantage to which he is not entitled.
The executing court decreed restoration of possession of the eight villages in favour of the appellant conditional on his paying the amount due to the decreeholder under the amended decree till the date of that order.
This obviously favourable order passed in his favour by the trial judge was not availed of by the judgment debtor as he has no means whatsoever to make any payment.
An order of restitution in the manner asked for in the circumstances of this case would be contrary to the principles of the doctrine of restitution which is that on the reversal of a judgment the law raises an obligation on the party to the record who received the 571 benefit of the erroneous judgment to make restitution to the other party for what he had lost and that it is the duty of the court to enforce that obligation unless it is shown that restitution would be clearly contrary to the real justice of the case.
The decreeholder in the present case has derived no advantage* to which he was not entitled and the judgment debtor has lost nothing.
In either event he had to discharge and satisfy the decretal debt due from him whether under the first decree or under the second and that debt could only be discharged by sale of the villages selected by the decreeholder.
In the words of Rankin C. J. in Dayal.
Sardar vs Tari Deshi(1), the judgmentdebtor is not entitled to recover the properties except upon showing that the sale was in substance and truth a consequence of the error in the reversed decree.
The sale being inevitable under the amended decree the 'judgment debtor was clearly not entitled to restitution.
It was held in, Gansu Ram vs Parvati Kuer (2), that where a judgment debtor could not have paid even the reduced decretal amount and the sum realized at the sale was less than the decretal amount the situation could not have been altered in any way had the decree been modified before, instead of after the sale, and the judgment debtor could not invoke the provisions of section 144, except by showing that the sale was in substance and truth a consequence of the error in the original decree.
, The observations made in this case have apposite application to the facts and circumstances of this case.
For the reasons given above we are of the opinion that there is no merit in either of these appeals and we dismiss both of them with costs.
Appeals dismissed.
(1)(1932) I.L.R. , (2) A.I.R. 1941 Pat.
| IN-Abs | Under a compromise decree the amount due to the plaintiff was fixed by mutual consent and it was further agreed that the defendant should within one week of the date of the decree convey to the plaintiff immoveable properties sufficient to satisfy the decree.
The U. P. Agriculturists Relief Act of 1934 having come into force, the decree was subsequently amended by the Civil Judge by reducing the amount and directing that the amount may be paid in 12 annual instalments with the condition that if three instalments were in default the whole amount was to become immediately payable.
The amended decree was set aside by the Chief Court in 1938.
The decree holder applied for execution, and a sale deed was executed by the Civil Judge in 1939 for the entire decree amount.
The Privy Council reversed the decree of the Chief Court and restored the amended decree of the Civil Judge in 1944.
The judgment debtor applied for restoration of the properties with mesne profits by way of restitution: Held, confirming the decree of the Chief Court, that, as the judgment debtor bad not obtained any order staying the operation of the amended decree pending the dereeholder 's appeal to the Chief Court he was bound to carry out the terms of the amended decree, and, as the Privy Council had merely restored the amended decree without altering the provisions as to payment by instalments or extending the time for payment by instalments and its decree did not in any way alter the position of the parties as it stood under the amended decree, and, the sale was not in consequence of any error in a decree which was reversed on appeal by the Privy Council, the judgment debtor was not entitled to restitution.
Dayal Sardar vs Tari Deshi (I.L.R. and Gansu Ram vs Parvati Kuer (A.I.R. 1941 Pat. 130) approved.
560 The judgment debtor in the above mentioned case applied tinder section 4 of the U. P.
Encumbered Estates 'Act, 1934, for administration of his estate in 1936 but the proceedings were quashed by the Board of Revenue in 1938.
As no order for stay of execution was obtained, a sale was effected in execution of the decree in February, 1939.
The U. P. Encumbered Estates (Amendment) Act, 1939, came into force after the date of the sale and the judgment debtor applied on the 10th October, 1939, foe amending his former application, but it was ultimately decided by the Chief Court that the amendment application of 1939 must be treated as fresh proceedings: Held, confirming the decision of the Chief Court, that as the proceedings which were started in 1936 were quashed by the Board of Revenue in 1938, the sale held in February, 1939, was unaffected by the bar imposed by section 11 of the Act.
The order made on the application of the 10th October was an order on a fresh application under section 4 and it had no retrospective effect and could not affect the validity of the sale effected when no application under section 4 was pending.
|
Appeal No. 1533 of 1971.
Appeal by special leave from the judgment dated September 18, 1971 of the S.D.O./Arbitrator, Muzaffarnagar in Election Petition No. 140 of 1970.
AND Civil Appeals Nos.
1797 and 1798 of 1971.
, Appeals by spe cial leave from the judgments dated September 18, 1971 of the District Magistrate/Registrar, Co operative Societies, Saharanpur in Appeals Nos. 6 and 8 of 1971 under section 98 (i) (h) U.P. Co Societies Act.
AND Special Leave Petition (Civil) No. 3254 of 1971 From the judgment dated September 16, 1971 of the Registrar, Co operative Societies/District Magistrate Saharanpur in Appeal 'No. 5 of 1971 under section 98 (i) (h) Co operative Societies Act.) J. P. Goyal and V. C. Parashar, for the appellants (in C.As.
1533 and 1797 of 1971) and the petitioners (in S.L.P. No. 3268 of 1971) R. K. Garg, S.C. Agrawal and R. K. Jain, for the appellants ,(in C.A. No. 1798 of 1971) and the Petitioners (in S.L.P. No. 3254 of 1971) C. B. Agarwal and P. P. Juneja, for respondents Nos. 7, 8 and 1 to 13 (in C.A. 1533 of 1971) 151 O. P. Rana, for respondents Nos. 7 and 12 (in C.A. No. 1797 of 1972) and respondent No. 7 (in C.A. No. 1798 of 1971).
M. C. Setalvad, R. K. Garg, section C. Agarwal and R. K. Jain, for the intervener.
The Judgment of the Court was delivered by Ray, J.
These three appeals are by special leave.
Civil Appeal No. 1533(N) of 1971 is by special leave against the judgment dated 18 September, 1971 of the Arbitrator setting aside the election of the Management Committee of the Co operative Cane Development Union, Shamli in an election petition filed under rule 229(2) of the Co operative Societies Rules, 1967 framed under the Uttar Pradesh Co operative Societies Act, 1965.
Civil Appeal No. 1797 of 1971 is by special leave against the order of the District Magistrate and Registrar, Co operative Societies Sharanpur dismissing an appeal filed under section 98(i)(h) of the U.P. Cooperative Societies Act, 1965 against an order of the Arbitrator under section 70 and 71 of the U.P. Co operative Societies Act.
1965 setting aside the election of the Sahkari Ganna Vikas Samiti Ltd., Iqbalpur, District Saharanpur.
Civil Appeal No. 1798 of 1971 is against the order and judgment dated 16 September, 1971 of the District Magistrate, Saharanpur dismissing an appeal under section 98(i)(h) of the U.P. Co operative Societies Act, 1965 against the order of the Arbitrator under sections 70 and 71 of the U.P. Co operative Societies Act, 1965 setting aside the election of ,the Sahkari Ganna Vikas Samiti Ltd., Lhaksar, District Saharanpur.
Special Leave Petition (Civil) No. 3254 of 1971 is for leave to appeal against the order of the Registrar, Co operative Societies in appeal under section 98(i)(h) against the order of the Arbitrator under sections 70 and 71 of the U.P. Co operative Societies Act, 1965 setting aside the election of Sahkari Ganna Vikas Samiti, Sarsawa.
Special Leave Petition (Civil) No. 3268 of 1971 is for leave to appeal against the order of the District Authority, Bulandsbahr setting aside the election of the Committee of Management of the Co operative Cane Development Union Ltd. on an application under rule 229 of the U.P. Co operative Societies Rules, 1968.
These matters raise a common question.
These Co operative 'Societies held their annual general meeting under the provisions of section 32 of the Uttar Pradesh Co operative Societies Act, 1965 (hereinafter called the Act).
At the general meetings the members of the Committee of Management of the Society were elected by members of the Society.
The, Registrar of the U.P. Co operative Societies issued a circular dated 5 November, 1969 interpreting rule 409 of the U.P. Co operative Societies Rules, 1968 (hereinafter called the Rules) and laid down the principle that all the members of the general body "of the Co operative 152 Society would" exercise their right of vote in filling all the seats of elected Directors.
" The question in the present appeals is whether the Registrar had power to issue the circular interpreting rule 409 and secondly whether that interpretation is correct in terms of the Act and the Rules.
The Act deals with Co operative Societies and inter alia their members and their Committee of Management.
The relevant sections for the purpose of present appeals and special leave petitions are sections 20, 29 and 32 of the Act.
Section 20 of the Act speaks of vote of members.
Under that section, a member of a Co operative Society shall notwithstanding the quantum of his interest in the capital of the Society have one vote in the affairs or the Society.
There are four provisos to section 20.
Proviso (a) deals with nominal or associate members who have no right of vote.
Proviso (b) deals with a co operative society, the State Warehousing Corporation or a body corporate being a member of such society in which case each delegate of such co operative society, State Warehousing Corporation or body corporate shall have one vote.
Proviso (c) deals with the State Government or the Central Government being a member of such society in which case a nominee of the State Government or the Central Government shall have one vote.
Proviso (d) deals with a group of members or any class of members partaking in the affairs of the society through a delegate or delegates each delegate having one vote.
Section 29 of the Act deals with the Committee of Manage ment.
The management of every co operative society shall vest in a committee of management.
The term of the election members of the committee of management shall be such as may be provided in the rules and the bye laws of the society.
After the expiry of the term the co operative society shall at the annual general meeting elect members for the committee of management as provided in section 32(i)(b) of the Act.
If a society fails to elect members for the committee of management the Registrar shall call upon the society by order in writing to elect such members within three months from the date of the communication of the order.
If the society still fails to elect the members for the committee of management, the Registrar may himself nominate such persons as under the rules and the bye laws are qualified for being elected as members of the committee of management.
Within six months from the date of nomination made by the Registrar, the Registrar shall call a general meeting for electing members of the committee of management.
Section 32 of the Act speaks of annual general meeting which shall be held once in 'a co operative year.
A co operative year means the year commencing the first day of July and ending on the 30th June of next following.
One of the purposes of the annual 153 general meeting is election of the members of the committee of management in accordance with the provisions of the rules and of the bye laws of the society.
Rule 409 is as follows "For the purposes of election to the membership of the committee of management a co operative society may, with the previous sanction of the Registrar (a) divide its membership into different groups on territorial or any other rational basis, and (b) also specify the number or proportion of the member of the committee of management in such a manner that different areas or interests, as the case may be, in the society may, as far as may be, get suitable representation on the committee or management." In order to appreciate as to how rule 409 comes up for consideration in the present case it is necessary to refer to facts in Civil Appeal No. 1533 (N) of 1971 as a typical case.
The Shamli Cane Development Union Ltd., Shammli, U.P. was registered under the .
It was deemed to be registered under the Act.
The society had its bye laws with regard to the formation of the committee of management and its election including the election of the Chairman and the Vice Chairman.
The bye laws provided for a committee of management consisting of 14 members.
The committee of management elects a Chairman and a Vice Chairman.
The delegates constituting the general body of the society are divided into 14 constituencies.
Each constituency elects one Director.
The delegates of the members of the society in a constituency elect a member of each single member constituency.
The 14 members of the committee are elected on that basis whereby each delegate of each constituency exercises one vote for electing a member of that constituency.
The Secretary of the society fixed 13 October, 1970 as the date for filing the nomination for the office of the committee of management.
17 October, 1970 was the date for scrutiny of nomination papers.
19 October, 1970 was the date for withdrawal of nomination papers.
28 October, 1970 was the date of poll.
By a letter dated 14 October, 1970 the Registrar, Cooperative Societies directed that "the election of the members of the managing committee shall be done by all the representatives of the area of the society and not by the representatives of the related constituencies alone.
This means that every representative L864Sup.
CT/72 154 shall have as many votes as the members are to be elected".
In short, the Registrar 's interpretation of rule 409 as well as the letter stated that each delegate would vote for 14 members of the committee of management and thus each delegate would exercise 14 votes.
The rival contentions which fall for determination are whether the right of vote for election of a member of the committee of management is confined to the delegates of the members of that particular constituency or whether a delegate would have the right to vote for all the constituencies constituting the committee of management.
As to the power of the Registrar to interpret rule 409 it win appear that the rule does not confer any power on the Registrar to interpret or to express views to guide the rights of members to vote at the annual general meeting for the purposes of election of the committee of management.
On the contrary, under rule 409 the Co operative Society may with the previous sanction of the Registrar (i) divide its membership into different groups on territorial or any other rational basis and (ii) also specify the number or proportion of the members of the committee of management in such a manner that different areas or interests, as the case may be, in the society may, as far as may be, get suitable representation on the committee of management.
Therefore, under rule 409 a co operative society can divide its membership into different groups on territorial or any other rational basis for the purposes of election of the members of the committee.
The rule also empowers the society to apportion the membership of the committee of management amongst different groups into which the membership is divided.
The number or proportion of members of the com mittee of management will have to be apportioned in such a manner that the different areas or interests into which the membership of the society are divided may obtain suitable representation on the committee of management.
The entire purpose of division of membership into different groups and specifying suitable representation of such group on the committee of management is to emphasise the, right of the particular group to send its representative to the committee.
To illustrate if a society is divided into 14 separate groups on a territorial.
basis and one member of the committee of management is allotted to each group and if delegates of one group have the right to cast 14 votes two consequences will follow.
First, the right of choosing a representative of the constituency will be not confined to that constituency but will be enlarged to outsiders in other constituencies.
Secondly, a member of the committee from one constituency may be elected by a majority of votes from delegates of other constituencies.
If delegates residing outside a territorial constituency 155 take part at the election for member of a committee from territorial constituency within which he is not a resident it will not only amount to enlarging the right of representation beyond ones territorial basis but also deny the delegates within the constituency the right of electing their own representative.
It was said on behalf of the appellants that section 20 of the Act speaks of a member of the co operative society having one vote in the affairs of the society with the result that each member is entitled to exercise as many votes as the members of the committee of management.
Accent was placed on the words 'affairs of the society ' and it was said that the constitution of the committee of management was one of the principal affairs of the society and therefore each member would entitled to cast as many votes as the strength of the committee of management.
The fallacy lies in overlooking the significant words in section 20 of the Act that a member shall have one vote.
It may also be noticed that if each member exercises by way of illustration 14 votes in regard to 14 members of the committee each member shall be "exercising 14 votes in the affairs of the society.
Under rule 409 the principal matters to be kept in the fore front are these.
First, the society will divide the constituencies on territorial basis or any other rational basis.
By territorial basis is meant territory where the member will reside.
Residence is therefore the relative requirement of territorial basis.
If any other rational basis like occupation or vocation is determined to be the basis of a constituency the persons falling within the cons tituency will satisfy that test.
Secondly, the society will specify the proportion of members of the committee in such a manner that different areas or interests may get suitable representation.
The inherent idea is that such areas or interests will obtain representation.
If membership is on territorial basis, the different areas will get representation according to the interest of such territories.
Again, if occupational or vocational or professional tests are created for dividing groups such interests will have to be given suitable representation Representation is therefore with reference to areas or interests.
Judged by these principles the impeached circular of the Registrar suffers from the vice of giving the members the right of 'casting vote in constituencies to which they do not belong.
This strikes at the basic root of right of representation.
This also reads as under the principle of one member one vote which is made into a rule of law in the Act.
[155 E G] The words 'affairs of the society ' cannot be equated with the Constituencies to give each member a right to vote for each constituency.
That would defeat the purpose of section 20 and rule 409.
The basic idea of a representative for each constituency 156 depends on the mandate of the respective constituency and not of other constituencies.
That is why section 20 of the Act speaks of, one member having one vote irrespective of shareholding.
It means equality of votes, of members.
The constitution of the committee of management is indisput ably one of the affairs of the society.
If each member exercises franchise with respect to the representation from his constituency he is not in any manner prevented from having a right to partake in the affairs of the society through a member elected from the constituency.
Some reliance was placed by counsel for the appellants on rule 105 in support of the contention that every member would have one vote for each member of the committee of management.
Rule 105 occurs in Chapter VII relating to meetings and speaks of matters before a committee being decided by a majority of votes of the members present.
That rule obviously has no reference to election but only to passing of resolution by majority at meetings.
It is obvious that members of the committee of management will have the right to vote at all matters at the meeting and matters will be decided by a majority of votes.
The impeached circular of the Registrar is illegal and unwarranted Registrar has no power to interpret rule 409.
The Registrar has equally no power to express view with regard to conduct of the election and regulate the voting rights by giving the members more than one vote.
The society is to frame rules for elections.
Rules require the sanction of the Registrar.
The rules and the bye laws cannot be in derogation of the statute and statutory rules.
At an election of members of the committee of management one member will have only One vote for the constituency to which he belongs.
The result is that the elections which were held following the circular of the Registrar are bad.
For these reasons the three appeals fail and are dismissed.
The two special leave petitions are also dismissed.
Parties will pay and bear their own costs.
G.C. Appeals dismissed.
| IN-Abs | Under section 32 of the U.P. Cooperative Societies Act, 1965 the business to be conducted at the annual general meeting of a society includes inter alia election of the committee of management of the society.
Under Rule 409 of the Act namely the Cooperative Societies Rules, 1967 a Cooperative society may, for the purpose of the election of the Committee of management, with the previous sanction of the Registrar of Cooperative Societies (a) divide its membership into different groups on territorial or any other rational basis, and (b) also specify the number or proportion of the members of the committee of management in such a manner that different arm or interests, as the case may be, in the society may, as far as may be, get suitable representation on the committee of management.
On 5 November 1969 the Registrar issued a circular interpreting Rule 409 and laid down the principle that "all the members of the general body" of the cooperative society would "exercise their right of vote in filling all the seats of elected Directors".
The elections in the cooperative societies concerned in the present appeals were held according to the aforesaid directions given by the Registrar.
The elections were challenged and set aside in proceedings under the Act.
On the question whether the circular interpreting Rule 409 issued by the Registrar was valid, this Court, HELD : Under rule 409 the principal matters to be kept in the forefront are these.
First, the society will divide the constituencies on territorial basis or any other rational basis.
By territorial basis is meant territory where the member will reside.
Residence is therefore the relative re quirement of territorial basis.
If any other rational basis like occupation or vocation is determined to be the basis of a constituency the persons falling within the constituency will satisfy that test.
Secondly, the society will specify the proportion of members of the committee in such a manner that different areas or interests may get suitable representation.
The inherent idea is that such areas or interest will obtain representation.
If membership is on territorial basis the different areas will get representation according to the interest of such territories.
Again, if occupational or professional tests are created for dividing groups such interests will have to be given suitable representation.
Representation is therefore with reference to areas or interests.
Judged by these principles the impeached circular of the Registrar suffered from the vice of giving the members the right of casting vote in constituencies to which they did not belong.
This strikes at the basic root of the fight of representation.
This also reads as under the principle of one member one vote which is made a role of law in the Act.
[155 E G] 150 The words 'affairs of the society ' in section 20 cannot be equated with the constituencies to give each member a right to vote for each constituency.
That would defeat the purpose of section 20 and rule 409.
The basic idea of representation for each constituency depends on the mandate of the respective constituency and not of other constituencies.
That is why section 20 of the Act speaks of one member having one vote irrespective of shareholding.
It means equality of votes of members.
[155 H] The impeached circular of the Registrar was illegal and unwarranted.
The Registrar has no power to interpret rule 409.
The Registrar has equally no power to express view with regard to the conduct of the election and regulate the voting rights by giving members more than one vote.
The society is to frame rules for elections.
The rules and the bye laws cannot be in derogation of the statute and statutory rules.
At an election of members of the committee of management one member will have only one vote for the constituency to which he belongs.
[156 E] The result was that the elections which were held following the circular of the Registrar were bad.
|
Appeal No. 1308 of 1970.
Appeal by special leave from the order dated September 8.
1970 of the Calcutta High Court in Income Tax Reference No. 50 of 1971.
N. A. Palkhivala, Veda Vyasa, T. A. Ramachandran and D. N. Gupta, for the appellant.
Y. section Desai, section K. A iyar and H. D. Sharma, for the respondent.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave from an order of the Calcutta High Court directing the Income tax Appellate Tribunal, 'B ' Branch, Calcutta, to draw a statement of case relating to four questions of law which, it was stated, arose out of the order of the Tribunal in the matter of assessment of the appellant which was the assessee in respect of the assessment year 1962 63.
The Appellate Tribunal had rejected the application of the Commissioner of Income tax requiring it to refer those questions to the High Court.
The High Court, on being moved, issued a rule nisi and then made it absolute after full arguments without giving any reasons, whatsoever.
140 The assessee is a 100% subsidiary of Imperial Chemical In dustries Ltd., incorporated in the United Kingdom (hereinafter referred to as I.C.I. for convenience).
I.C.I. advanced large amounts by way of loans to the assessee from time to time.
This, it was claimed, was done for subscribing to shares in three Indian Companies called Indian Explosives Ltd., Alkalai & Chemical Corporation of India and Atic Industries Private Ltd., (hereinafter called as I.E.L., A.C.C.I and ATIC respectively).
Subsequently the assessee transferred the shares in the aforesaid companies at par to I.C.I. in satisfaction of the loans advanced by that company.
The Income tax Officer applied section 52 of the Income tax Act, 1961 (hereinafter called the 'Act ') and assessed the assessee to capital gains.
The Appellate Assistant Commissioner took the contrary view and held that on the facts which had been established, the assessee was not liable to capital gains under the aforesaid section.
The Tribunal upheld the decision of the Appellate Assistant Commissioner by a detailed and well reasoned order.
Broadly, the case of the assessee was that I.C.I. wanted to make investments in India in sterling currency.
The assessee was already in existence but the other three companies which have been mentioned, were incorporated later.
I.C.I. devised a scheme by which it could make the investment as desired by it and by which it could also take advantage of the tax relief which could be availed of by the new enterprises under section 15(C) and 56.(A) of the Income tax Act, 1922.
The scheme in short was that I.C.I. would arrange to let the assessee hold shares in the three com panies by investing the money which was to be given by I.C.I. to the assessee.
The modus operandi was that I.C.T. would give that money by way of loans to the assessee who agreed that the shares in the three companies would be transferred to I.C.I. in satisfaction of the loans at par or issue price as and when desired by I.C.I. All this was done after negotiations with the concerned Department of the Government of India at the highest level and with the approval of the Reserve Bank of India.
The entire scheme was conceived and was put into operation prior to 30th November 1956 when the Finance Bill was introduced reimposing capital gains tax which had remained abolished for certain years.
There was a provision for charging interest by the I.C.I. from the assessee at a rate not exceeding 1/2% above the Indian Bank rate which came to 51% per annum but the interest was not to exceed in any case the dividends received by the assessee from those shares.
It was claimed on behalf of the assessee that this arrangement was advantageous both to I.C.I. and the assessee, I.C.I. having taken the risk (of depreciation in shares or otherwise) attached to the new business pioneering adventures, ensured that capital appreciation of the shares, if 'any, also went 141 to itself.
The assessee did not suffer any disadvantage because it had to pay no interest if no dividend was received and it could keep and get the benefit of any dividend in excess of 5 1/2%.
As a result of I.C.I. investments being held through the assessee instead of directly, I.C.I. achieved an advantage of saving tax in U.K. amounting to pound 68,000 in the relevant years.
In 1959 the structure of Indian taxation regarding the grossing up of dividends was radically changed and by the Finance Act 1959, the system of grossing up of dividends (under section 16(2) and 18(5) of 1922 Act) was abolished and intercorporate dividends became liable to income tax at each stage.
Thus, the dividends passing from the three companies through the assessee to I.C.I. became liable to tax stages.
This affected the net return of I.C.I. on its investments in the three companies substantially.
In these circumstances, it was decided by I.C.I. that the investments in the three companies should 'he held by it directly.
For that reason it called upon the assessee in February 1961 to transfer to it the aforesaid shares in the three companies at the issue price in satisfaction of the sterling loans in accordance with the previous agreements.
The approval of the Reserve Bank to these transfers was received in February 1961 and the transfers were made in March/April 1961.
According to the assessee there was no question of the transfer of shares having been affected with the object of avoidance or reduction of the liability of the assessee to capital gains which alone could attract the applicability of section 52 of the Act.
Section 52 is in the following terms "Consideration for transfer in cases of under statement: Where the person who acquires a capital asset from an assessee is directly or indirectly connected with the assessee and the Income tax Officer has reason to believe that the transfer was effected with the object of avoidance or reduction of the liability of the assessee under section 45, the full value of the consideration for the transfer shall, with the previous approval of the Inspecting Asstt.
Commissioner, be taken to be the fair market value of the capital asset on the date of the transfer".
The necessary ingredients of the section are (i)there should be a direct or indirect connection between the person who acquires a capital asset and the assessee; (ii) the Income tax Officer should have reason to believe that the transfer was effected with the object of avoidance or reduction of the liability of the assessee to capital gains; (iii) if the first two conditions are satisfied then the full value of consideration for the 142 transfer can be taken to be the fair market value of the capital asset on the date of the transfer.
As regards the first requirement, that was admittedly satis fied in the present case.
The second requirement could be satisfied only if there was any cogent material on which the Income tax Officer could have reason to believe that the transfers were effected with the object of avoidance and reduction of liability to capital gains.
It is abundantly clear that the intention with which a particular transfer is made and the object which is to be achieved by such transfer is essentially a question of fact the conclusion relating to which is to be arrived at on a consideration of the relevant material.
In other words, before the Income tax Officer can have any reason to believe that a transfer was effected with the object mentioned in the section facts must exist showing that the object was to avoid or reduce the liability to capital gains.
The Tribunal examined fully the correspondence and the other material with regard to each of the three Indian companies in which the investment had been made of the money advanced by I.C.I. to the assessee.
We may briefly notice the discussion relating to each company.
It was in or about 1949 that I.C.I. was asked by the Government of India to consider the manufacture of commercial Lasting High Explosives in India.
Negotiations advanced more towards October 1953 when the representatives of I.C.I. met the officials of the Government of India.
The Tribunal referred to the minutes of the meeting held on October 1, 1953 as also on the 6th October 1953.
In the final draft of the Declaration of Intention dated November 5.
1953, it was mentioned that the Government had agreed that if T.C.I. made a loan to the assessee the latter would hold the shares in I.E.L. and that the loan "may be repaid by a transfer of the shares to I.C.I. at any time".
On 21st December 1954, the assessee applied to the Reserve Bank of India for formal sanction for borrowing Rs. 160 lakhs from I.C.I. for the purchase of shares in I.E.L. in terms of the agreement dated November 5, 1953.
It was stated in the letter that I.C.I. would charge no interest until such time as the shares began to yield dividends.
The loans were advanced from 30th September 1954 to 30th June 1957 by the I.C.I. to the assessee of the equivalent of Rs. 160 lakhs in Sterling.
The other correspondence relating to the aforesaid amount was also noticed by the Tribunal.
In 1958 there was a Rights Issue by I.E.L. I.C.I. agreed to give a loan of Rs. 80 lakhs to the assessee to cover the Sterling requirement of I.E.L. The assessee was to take up shares of that amount.
The terms of the loan were that I.C.I. had the right to acquire at any time the shares held by the assessee in I.E.L. 143 at par in satisfaction of the loan and the rate of interest payable on the loan was to be I% above the Indian Bank rate.
This was followed by other correspondence and a resolution which was recorded on 30 9 1958 containing terms of the second loan of Rs. 80,00,000/ .
It is not necessary to refer to the other correspondence looked into by the Tribunal with regard to that loan.
On 15 2 1961 the assessee was called upon by I.C.I. to transfer the investments in satisfaction of the loans.
After the sanction was obtained from the Reserve Bank of India, the shares were transferred at par.
The Tribunal referred to the undisputed facts relating to the circumstances in which the scheme for advancing the loan to the assessee for investment in I.E.L. came to be mooted and was ultimately approved by the Government.
This is what the Tribunal said : "The above background would show that the idea was not to make the assessee the real beneficial owner of the shares.
The fact that the shares should be held only for a time beneficially by the assessee is clear from the "Declaration of Intention" dated 5 11 1953".
Before the Tribunal the counsel for the Department had accepted the position that if there was an arrangement or agreement before the reintroduction of capital gains tax he would have no case.
According to him, until the transfers were actually made of the shares, there was no agreement on which the parties could have gone to court in order to obtain the share transfers at par in favour of I.C.I.
The Tribunal proceeded first to examine whether there was any kind of understanding between the assessee and I.C.I. regarding the transfer of shares at par.
After recapitulating the correspondence and the relevant facts, the Tribunal came to the following conclusion: "Taking this along with the minutes of the meeting with the officials of the Government of India, in October 1953, it is clear that the whole idea of I.C.I. throughout was to make some funds available to the assessee so that the shares could be acquired in its name and that the shares could be transferred to I.C.I. as and when it demanded".
It was, however, stated by the Tribunal that taking into account the correspondence and the documents referred to earlier it was satisfied with the assessee 's case that the transfer of shares to London at issue price or at par was throughout the basis of the advances of loans to the assessee.
It is necessary to reproduce paragraph 31 of the order of the Tribunal : "In October 1953, there was no mention of any capital gains tax being revived.
At that time the asses 144 see could not have had any idea of avoiding or reducing any liability to capital gains tax.
The learned counsel for the department laid some emphasis on the fact that there was no enforceable arrangement.
The question as to whether there was an enforceable arrangement or not is not really material.
What we have to find out is whether the object in putting through these transactions of taking over the shares at par or at issue price was one of avoidance or reduction of liability to capital gains tax.
That object does not get established by the mere absence of an enforceable arrangement.
Having regard to the assessee being the subsidiary of I.C.I., there is nothing surprising about the arrangement not being so formal or not being put through after complying with all the necessary legal formalities.
The absence of formal agreement is thus understandable in this context and cannot by itself suggest anything in favour of the department.
Businessmen are not always motivated by legalistic considerations.
Even taking that the arrangement was only binding morally and not legally, still so long as the assessee wanted to fulfil a moral obligation and had not the capital gains tax in mind, it cannot be said that the transaction was entered into with the object of avoidance or reduction of liability to capital gains tax".
The Tribunal proceeded to say "We have to find out the object of the, transaction.
It is removed in point of time from the result.
In such a case one cannot try to infer the object from the results.
We really have to put ourselves at a point of time when the transaction was conceived.
Taking the materials before us, we consider that there is nothing to suggest that the parties had the capital gains tax in their mind in 1953 and later when they put through the aforesaid transactions.
We have, therefore, to hold that the factual requisites of section 52 have not been established here".
In dealing with the second Company, namely, A.C.C.I it was pointed out by the Tribunal that the scheme for manufactur ing Polythene was placed before the Government of India by a letter of the assessee dated 13 12 1955 addressed to Mr. H. V. R. lengar, Secretary, Minister of Commerce & Industry, in which it was specifically stated that to enable the assessee to subscribe for the new shares I.C.I. would lend the subscription monies to the assessee on the understanding that at a later date I.C.I. could acquire at the issue price these new shares in satisfaction of its 145 loan.
The Tribunal dealt with all the relevant facts relating to the loan advanced to A.C.C.I. including those stated in the affidavits of P. T. Manzies dated 17 8 1966 and U. R. Newbery dated 10 1 1967 and considered that the transaction relating to this Company was not in any way different from those relating to the I.P. L. ATIC, the third Company was incorporated primarily for the manufacture of certain Dye stuffs.
On 29 12 1955 I.C.I. agreed to advance Rs. 25 lakhs as loan to the assessee.
The shares acquired under the loan could be transferred to I.C.I. on request by the latter at the issue price.
I.C.I. waived its right to interest on the loan until the commencement of the period in respect of which ATIC paid the dividend.
There was a further loan of Rs. 35,00,000 on the same terms.
These shares were age subsequently required to be transferred to I.C.I. in February 1961.
The Appellate Assistant Commissioner had referred to the affidavits which had been filed on behalf of the assessee and had mentioned that the Department had not cross examined the deponents.
Before the Tribunal the counsel for the Department stated that he accepted the affidavits as correct in so far as facts were concerned but he only disputed the inferences therefrom.
The Tribunal in this connection observed: "In our opinion, once the facts mentioned therein are taken as correct, the inference that the transaction was not for *he purpose of avoiding or reducing liability to capital gains tax has to follow".
Finally the Tribunal, as stated before, confirmed the decision of the Appellate Assistant Commissioner that the material on record did not justify the conclusion of the Income tax Officer that the object of the transfer of the shares of all the three Companies by the assessee to I.C.I. was the avoidance of liability to capital gains which would attract the applicability of section 52 of the Act.
The Commissioner of Income tax asked for a reference on six questions.
The Tribunal again examined the further contentions of the Department in its order dated 28 7 1969 by which it declined to make the reference on the ground that no question of law arose out of the order of the Appellate Tribunal, Only four questions appear to have been pressed for being referred.
As regards question No. 1 (which was No. 3 before the Tribunal) it was pointed out that it proceeded on the basis that there was some dispute about the construction of the correspondence or documents.
The Tribunal observed that there was no such dispute and it had not been suggested that a particular expression in any letter or document had been wrongly construed.
Regarding question No. 2 (which was No. 4 before the Tribunal), the Departmental representative was asked to particularise the docu 146 ments or evidence omitted from consideration.
He referred to certain documents and evidence which according to him had not been considered by the Tribunal.
The Tribunal made it cleat that all the relevant materials which had been referred to had been considered by it.
These materials were distributed over four bulky volumes of typed records and, therefore, each document could not have been mentioned in the order.
Nothing relevant was actually over looked.
At any rate the documents on which particular reliance was placed on behalf of the Department were considered and the Tribunal observed that the grievance of omission of materials from consideration related to irrelevant matters.
As regards (the other two questions, the Tribunal observed that the charge of perversity was only a disparate attempt at extracting a question of law where, none existed and that the object or intention of an assessee was always a question of fact.
It was a factual inference to be drawn from other facts.
It was pointed out that on the construction of section 52, the parties had not joined, any issue.
We may now mention the four questions which the High Court directed to be referred : 1. "whether on the facts and in +he circumstances of the case and on a proper construction of the documents referred to and/or considered by it the Tribunal was right in arriving at the finding that the transfer of the shares to Imperial Chemical Industries Ltd., London at the issue price or par was throughout the basis of the advance of loans to the assessee ? 2.
Whether, in arriving at the said finding the Tribunal misdirected itself in law in basing the said finding on evidence covering some matters only and ignoring, evidence on other essential matters ? 3.
Whether, on the facts and in +,he circumstances of the case and particularly in view of the finding that there was no enforceable agreement making it obligatory upon the assessee to transfer the shares to Imperial Chemical Industries Ltd., London, at par or issue price the conclusion of the Tribunal that the transfer of the shares by the assessee to the latter company at par was not effected with the object of avoidance or reduction of the liability of the assessee to capital gains tax was unreasonable or perverse ? 4.
Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding, that 147 section 52 of the Income tax Act, 1961, was not applicable to the facts of the case ? On the analysis of section 52 of the Act made by us at a previous stage and the clear, cogent and precise findings and conclusions of the Appellate Tribunal, we are wholly unable to comprehend, how any question of law of the nature sought to be referred arose; or arises from the order of the Appellate Tribunal.
It is unfortunate that in a case of this nature and magnitude, the High Court did not choose to record a speaking order to enable us to appreciate the reasons which prevailed with it for directing the four questions to be referred.
The jurisdiction in the matter of reference can be exercised (i) when the point for determina tion is a pure question of law such 'as construction of a statute or document of title; (ii) when the point for determination is a mixed question of law and fact.
While the finding of the Tribunal on the facts is final its decision as to the legal effect of those findings is a question of law, (iii) a finding on a question of fact is open to attack as erroneous in law when there is no evidence to support it or if it is perverse.
Where, however, the finding is one of fact, the fact that it is an inference from other basic facts will not alter its character as one of fact (See Sree Meenakashi Mills Ltd. vs, Commissioner of Income tax, Madras(1).
In that case it was held that there was no question of construction of any statutory provision or document of title.
The issues which arose for determination, whether the sales entered in books of the ap pellant in the names of the intermediaries were genuine, and if not, to whom the goods were sold 'and for what price, were all questions of fact.
Their determination did not involve the application of any legal principles to facts established by the evidence.
The findings of the Tribunal were amply supported by evidence and were eminently reasonable.
It, therefore, followed that there was no question which could be referred to the Court under section 66(1) of the Income tax Act 1922.
The same principles will apply when a reference is sought under section 256 of the Act.
We are altogether unable to see how findings of the Appellate Tribunal that the transfer of shares in the present case was not made with the intention or object of avoidance or reduction of liability to capital gains were not questions of fact and did not depend on inference of facts from the evidence or the material before the Tribunal.
It can well be said that the determination of the question whether the object of the assessee was to avoid or reduce its liability to capital gains by making the transfers in question did not involve the application of any legal principles to the facts established by the evidence.
The findings of the Tribunal were amply supported by evidence and were eminently reasonable.
It (1) 148 is true that the amount involved is very large but that cannot Justify a reference as under section 256 of the Act neither the Appellate Tribunal could make a reference nor could the High Court direct the reference to be made to it by the Tribunal on pure questions ,of fact.
The learned counsel for the Commissioner has sought to invite our attention to certain parts of the order of the Tribunal and, in particular, to the statement extracted by us at an earlier stage about the question whether the assessee had held the shares beneficially and the point which was debated before the Tribunal whether there was any binding legal agreement between the assessee and I.C.I. for transfer of the shares at par.
We are unable to see how these matters were relevant for the purpose of determining the intention or object under lying the transfer of the shares to I.C.I. by the assessee.
Once the Tribunal came to the conclusion which was purely one of fact that before there was any proposal to reimpose capital gains tax which came to be embodied in the Finance Bill towards the end of November 1956, the scheme had been fully evolved between the assessee and I.C.I. of making the loans by the latter to the former for being invested in the three companies and that the shares would be transferred at par by the assessee to I.C.I. whenever desired, the applicability of section 52 could not be attracted as the same depended on certain facts which must exist or must be found and which had not been so found by the Tribunal.
In the result the appeal is allowed and the order of the High ,Court is hereby set aside.
The assessee shall be entitled to its costs in this Court.
V.P.S. Appeal allowed.
| IN-Abs | After negotiations in 1953 with the concerned Department of the Government of India and the Reserve Bank, a Company, incorporated in U.K. advanced large sums by way of loans to its subsidiary in India, namely the assessee, for subscribing for shares in some Indian Companies.
The correspondence showed that the U.K. Company had the right to acquire at any time the shares at par, in satisfaction of the loans.
In 1961, the assessee transferred the shares when called upon by the U.K. Company to do so.
The Income tax Officer applied section 52 of the Income tax Act, 1961, and assessed the assessee to capital gains tax, which was not in existence in 1953 but was Reintroduced in the Finance Bill of 1959.
The Income tax Officer held that the object of the transfer was to avoid or reduce the assessee 's liability to capital gains tax.
The Appellate Assistant Commissioner however, held that the assessee was not liable to capital gains tax, and the Appellate Tribunal, after an elaborate discussion of the correspondence, confirmed the order, holding that the transfer was not effected with that object.
The Department applied to the Tribunal to refer the questions, (i) whether certain documents were not properly construed, (ii) whether the Tribunal ignored evidence on essential matters, (iii) whether the finding of the Tribunal was perverse, and (iv) whether section 52 was not applicable, as arising out the Tribunal 's order.
The Tribunal rejected the application.
The Department then moved the High Court and the High Court directed the Tribunal to state a case in relation to the four questions, but the High Court did not give any reasons for doing so.
Allowing the appeal to this Court, HELD : The High Court can exercise its jurisdiction in the matter of reference, (a) when the point for determination is a pure question of law, such as, the construction of a statute or a document of title; (b) when the point for determination is a mixed question of law and fact (While the findings of the Tribunal on the facts are final, its decision as to the legal effect of the findings is a question of law.
Where, however, the finding is one of fact, the fact that it is an inference from other basic facts will not alter its character as one of fact); and (c) when a finding on a question of fact is perverse.
[147C E] The necessary ingredients of section 52 are : (i) there should be a direct or indirect connection between the person who acquires a capital asset and the assesee; (ii) the income tax officer should have reason to believe that the transfer was effected with the object of avoidance or reduction of the liability of the assessee to capital gains; and (iii) if the first two conditions 139 are satisfied then the full value of consideration for the transfer may be taken to be the fair market value of the capital asset on the date of the transfer.
The intention with which a particular transfer is made and the object which is to be achieved by such transfer are essentially questions of fact, the conclusion relating to which, are to be arrived at on a consideration of relevant material; that is, before the income tax officer can have any reason to believe that a transfer was effected with the object mentioned in the section facts, must exist showing that the object was to avoid or reduce the liability to capital gains.
[141 H; 142 A D] In the present ease, the orders of the Tribunal show that there was no dispute as to the construction of any expression in any letter or document, that no relevant evidence was overlooked, that the inference was drawn from other facts and, that no question was raised on the construction of section 52.
When the Tribunal found, as a fact, that before there was any proposal to reimpose the capital gains tax which had remained abolished for some time, the scheme between the assessee and the U.K. Company bad been fully evolved, the applicability of section 52 could not be attracted.
The findings of the Tribunal that the object mentioned in the section could not be held to be established from the mere absence of a formal agreement between the assessee and the U.K. Company, is not perverse, but is supported by evidence and is eminently reasonable.
in view of the clear, cogent and precise findings and conclusions of the Tribunal, the High Court, should at least have recorded a speaking order showing how the questions of law of the nature sought to be referred arose from the order of the Tribunal.
[146 B D; 141 A C, F; 148 C.D] Shree Meenakshi Mills Ltd. vs C.I.T., Madras, , followed.
|
minal Appeal No. 123 of 1968.
Appeal by special leave from the judgment and order dated May 3, 1968 of the Patna High Court in Criminal W.J.C. No. 17 of 1968 and Criminal Miscellaneous Case No. 447 of 1968.
B. C. Ghose, section N. Misra and A. K. Nag, for the appellant.
D. Goburdhun, for the respondent.
The Judgment of the Court was delivered by Shelat, J.
This appeal, by special leave, is.
against the dismissal by the High Court of Patna of the Writ Petition and an application under section 561A of the Code of Criminal Procedure, for a writ of habeas corpus and an order of a like nature.
filed by the appellant.
Both of them were heard together as they contained common allegations and both were dismissed by a common judgment.
In the two aforesaid proceedings, the case of the appellant was that he was arrested on February 18, 1968, that since then he had been detained in custody without being informed of the grounds for his arrest and detention and also without having been produced before a Magistrate either within 24 hours after his detention as required under the Code, or even thereafter.
On February 21, 1968, he was removed to Darbhanga jail where he was threatened that he would be falsely involved in several cases of dacoity unless he made certain incriminating statements which the police wanted him to make.
He made two applications from jail one on February 25, 1968, and the other on February 28, 131 1968 to the Sub Divisional Magistrate.
The first was not received at all by the Magistrate, while the second was received but after 'a long time, and was rejected.
He also alleged that thereafter he made two further applications, one dated March 22.
1968 and the other dated March 27, 196,8 wherein he applied for directions to the police to 'furnish him with particulars of offences charged against him and for bail, but that he received no order on either of them.
On these allegations, he claimed release forthwith from detention and the quashing of the criminal proceedings against him.
In the counter affidavit filed by the State before the High Court, it was stated that one Bilat Sahni and one Baleshwar Paswan made confessions before the Magistrate at Samastipur on 23rd and 24th January, 1968 confessing their own guilt and implicating the appellant and certain other persons, in about eight dacoity cases, all having been committed in that locality, Thereupon, the appellant was arrested on February 17, 1968 He was produced before the Sub Divisional Magistrate of Samastipur on February 18, 1968, but was remanded to police custody by the said Magistrate for four days on an application by the police therefore.
On February 21, 1968, the appellant was once again produced before the same magistrate and on an application by the police he was remanded to jail custody.
The affidavit alleged that the appellant was involved in as many as nine dacoity case; wherein remand orders had been passed from time to time and that that was how he had, since February 21, 1968, been detained as an under trial prisoner.
On April 19, 1968, an identification parade was held in connection with one, of the said nine cases whereat the relevant complainant identified the appellant.
The case of the State was that the appellant was one of the three leaders engaged with certain hardened criminals in the aforesaid several dacoity cases, that it Was not true that he was unaware of the case against him or that he was not produced before the magistrate or that he was kept in prison without proper remand orders having been passed by the Magistrate.
Five contentions were raised before the High Court, viz., (1) that the appellant was never produced before any magistrate within 24 hours after his arrest or even thereafter; hence his detention was in breach of article 22 of the Constitution, (ii) that although the order sheet, in respect of Laheriasarai Police Station Case No. 1 of 1968, records that the appellant had been produced before the Magistrate on several days set out therein, that order sheet had been falsely made; (iii) that the magistrates had no power to detain the appellant in jail in excess of 15 days in all, (iv) that even if he had the power to remand him in excess of 15 days in all, the condition for passing such orders was not 13 2 satisfied, and (v) that no remand order was factually ever passed.
None of these contentions was accepted by the High Court, and the High Court, therefore, dismissed, as aforesaid, both the applications on May 3, 1968.
Mr. Ghose, who appeared for the appellant before the High Court and who appeared before us also raised the following points: (1) that the appellant was not produced before any magistrate either on February 18, 1968 or on any other date thereafter, (2) that the appellant was never informed of the ,,rounds for his arrest, and detention thereafter, (3) that no custody warrant was ever issued warranting the jail authorities to keep the appellant in jail custody, and (4) that assuming that the said remand orders were passed, the appellant could not be kept in jail custody for more than 15 days in the whole.
On the basis of these four points he urged that the appellant 's arrest .and detention were illegal and that therefore he was entitled to be released forthwith and the criminal proceedings instituted against him by the police quashed.
Mr. Ghose also made a point that the jail Superintendent did not produce before the High Court the jail records which would show his having been taken out of the jail for being produced before the Magistrate when the magistrate decided the applications for remand by the police and passed the remand orders said to have been passed by him and that instead the jail Superintendent produced his report, thus disabling the appellant from establishing his case as laid in his writ petition.
We may at this stage dispose of Mr. Ghose 's last point in regard to the non production of the jail record before the High ,;Court.
It is true that the appellant did ask for production of that record first in the writ petition, and then on April 22, 1968 to which date the hearing of the writ petition was adjourned.
But the order sheet maintained by the High Court in connection with the writ petition and the said application under section 561A of the Code shows that when the writ petition came up for admission, the learned Judges called for the record of the Magistrate 's Court and report from the jail superintendent regarding the dates on which the appellant was said to have been produced before the Magistrate for the purpose of the hearing of the remand applications.
It appears that on April 22, 1968, to which date the writ petition was made returnable, neither the record of the Magistrate 's Court nor the report of the jail Superintendent had arrived.
On that day, the appellant made an application for his production in Court at the time of the hearing and for the production of the jail record.
The High Court, how ever, rejected the prayer for his production in Court and as regards the jail record ordered as follows: 133 so far as the production of the record of the jail is concerned, an express reminder by telegram may be sent to the Superintendent of jail to send the report already called for immediately, if possible by a special messenger.
A reminder may also be sent to the Court concerned to send the records immediately, if possible, by a special messenger.
" The High Court does not seem to have pressed for the produc tion of the jail record as it presumably thought that the Court 's record would show the dates when the appellant was produced before it and the Superintendent 's report would make that point clear.
It 'appears from that order that the appellant also was content with the production of the Superintendent 's report and did not press for the calling of jail record.
The judgment of the High Court also shows that that was also the case when the High Court heard the writ petition and the said section 561A application.
Neither the order sheet nor the judgment of the High Court seems to warrant the allegations made in para 28 of the Special Leave Petition that repeated prayers were made for the production of the jail record.
In any event, no prejudice appears to have been caused to the appellant 's case since the jail record could not have proved anything more than what the jail Superintendent 's report proved.
The report, which was before the High Court, clearly pointed out that the appellant was remanded to jail custody on February 21, 1968 by the Sub Divisional Magistrate, Sadar in the case under section 395 of the Penal Code.
The next date for his appearance was fixed on March 5, 1968, but the appellant refused to go to the Magistrate 's Court on that day as also on March 20, 1968 and April 4, 1968, on the ground that the identification parade for him had not yet been held and his going to and appearing in the Court would expose him to possible witnesses. 'Me Magistrate, therefore, had to postpone his production before him to April 18, 1968 when the appellant was produced and once again remanded to jail custody till the, next date, that is, May 2, 1968.
The report of the jail Superintendent, thus, frankly conceded that the appellant could not be produced on the dates above stated and that the Magistrate, therefore, had to pass remand orders in his absence.
It is clear from the report that the appellant himself had refused to appear and be present before the Magistrate when he heard the remand applications.
therefore, cannot legitimately make a grievance that those orders were passed in his absence.
Those orders could be passed validly in his absence if his presence at the time could not be secured.
This has been held by the majority judgment of this 134 Court recently in Rai Narain vs Superintendent, Central jail, New Delhi.
(1) We now proceed to consider the remaining points in the order in which Mr. Ghose raised them.
The first point urged before us was that the appellant was not produced before a magistrate within 24 hours after his arrest as required by section 167 of the Code of Criminal Procedure, or even later and that therefore his arrest and the detention were bad in law.
The order sheet of the Laheriasarai Police Station Case No. 1(i)68 produced before the High Court shows that the appellant was produced before the Magistrate on February 18, 1968, that is, within 24 hours after his arrest and that the Magistrate remanded him to jail custody on the application by the police until March 5, 1968.
So far there is no difficulty because these entries in the order sheet are corroborated by the report of the Superintendent of jail.
The order sheet, however, has entries dated March 5, 1968, March 20, 1968 and April 4, 196 8 when remand orders are shown to have been made, each for a period of 15 days, and further that the appellant was produced before the Magistrate on each of those three occasions.
That, as the High Court has rightly observed, was not correct as the jail Superintendent 's report clearly showed that the appellant had refused to go from the jail for fear that he would be seen or be shown to probable witnesses.
No reason has been shown as to why we should not agree with the aforesaid observation of the High Court, viz., that the Magistrate had wrongly recorded that the appellant was produced before him and that the remand orders were passed in his presence.
The wrong entries made by him, however, do not mean that the remand orders were not in fact passed by him though he did so in the absence of the appellant.
Such orders, as already pointed out, can be lawfully passed if ail accused person cannot for some reason or the other be brought before the Magistrate.
It is, therefore, not possible to say that remand orders were not passed or that consequently his detention in the jail was without a valid basis.
In the High Court no such contention, viz., that remand orders were not passed on those three dates appears to have been raised.
Indeed, the allegation that the appellant was never produced before the Magistrate is belied by an elaborate order made by the Magistrate on March 28, 1968 when the appellant was represented by counsel.
At that stage his counsel did not argue that the appellant was never produced before the Court or that no remand orders were ever, passed.
The argument urged at that time was that the proceedings at that stage attracted section 167 of the Code, that the stage had not yet reached when section 344 would operate and that therefore the Magistrate bad no power to remand the appellant to jail custody for more than 15 days in the whole.
That contention was (1) Writ Petition No. 330 of 1970, dcc.
on September 1, 1970.
135 rejected by the Magistrate holding that there was an inquiry before him, and that therefore, section 344 applied and he was competent, therefore, to pass remand orders from time to time so long as each of those orders was not for a period in excess of 15 days.
By that very order, the Magistrate rejected the bail application made by the appellant 's advocate holding that the investigation in the cases of dacoity in which the appellant was concerned was going on at that stage and that release of the appellant on bail would hinder its progress.
The next contention was that the appellant was never informed of the grounds of his detention and that that being so, his detention was invalid.
Paras 3, 4 and 35 of his writ petition did not charge that at the time of his arrest he was not informed of the grounds for his arrest and that even when he filed his writ petition he was not informed of those reasons, and that that constituted breach of article 22(1).
This allegation is without any foundation.
All throughout, his case was that the police had tortured him and threatened to involve him in a number of dacoity cases unless he made certain incriminating statements which they wanted from him.
What were those incriminating statements which the police were trying to get from him ? From the fact that the police were wanting him to make those statements, he must have realised that those statements were related to the cases for which he had been arrested.
Next, in the application he made from jail to the Magistrate on February 28, 1968, he alleged that the senior Sub Inspector of Police came to him on February 19, 1968, first abused him and then later on asked him "to admit that offence and promised that by doing so I would be discharged".
According to that application he refused to admit the offence whereupon he was assaulted by the police.
It also appears that he knew that an identification parade was going to be held and therefore had refused to be taken out of jail for being produced before the Magistrate.
All these facts negative the suggestion of his being kept in ignorance of the reasons for his arrest or the cases charged against him.
The third contention was that no valid custody warrant was issued by the Magistrate enabling the jail authorities to detain the appellant in the Darbhanga jail and licence the detention must be held to be without any legal authority.
In support of the argument, counsel pointed out the custody warrant dated February 18, 1968 which according to him must be deemed to have been cancelled is at the foot of it there is the Magistrate 's endorsement that the appellant was instead remanded to police custody.
Assuming that to be so, there is nothing to show that on February 21, 1968 when the Magistrate ordered the appellant to be taken into jail custody, a fresh custody warrant had not been issued by him.
The Magistrate, while passing that order, must have known that the 136 jail authorities would not accept the appellant in jail unless the police taking him there produced a custody warrant.
There is no reason to think first that the Magistrate had not issued such, a warrant, and secondly, that the jail Superintendent inducted the appellant in the jail without such a warrant.
The contention, in our view is wholly without any basis.
The last contention of Mr. Ghose was, firstly, that the remand orders passed by the Magistrate were under section 167 and not section 344, as the latter section did not apply at that stage, and secondly, that even if section 344 applied, the Magistrate could not order detention for more than 15 days in the whole.
167 appears in Ch.
XIV which deals with information and investigation.
As its language shows, it deals with the stage when a person is arrested by the police on information that an offence has been committed.
In providing that such a person must, in terms of section 61, be produced before a magistrate within 24 hours after his arrest, the section reveals the policy of the legislature that such a person should be brought before a magistrate with as little delay as possible.
The object of the section is two fold, one that the law does not favour detention in police custody except in special cases and that also for reasons to be stated by the magistrate in writing, and secondly, to enable such a person to make a representation before a magistrate.
In cases falling under section 167, a magistrate undoubtedly can order custody for a period at the most of 15 days in the whole and such custody can be either police or, jail custody.
Sec. 344, on the other hand, appears in Ch.
XXIV which deal with inquiries and trials.
Further, the custody which it speaks of is not such custody as the magistrate thinks fit as in section 167, but only jail custody, the object being that once an inquiry or a trial begins it is not proper to let the accused remain under police influence.
Under this section, a magistrate can remand an accused person to custody for a term not exceeding 15 days at a time provided that sufficient evidence has been collected to raise a suspicion that such an accused person may have committed an offence and it appears likely that further evidence may be obtained by granting a remand Thus, section 167 operates at a stage when a person is arrested and either an investigation has started or is yet to start, but is such that it cannot; be completed within 24 hours.
Sec. 344, on the other hand, shows that investigation has already begun and sufficient evidence has been obtained raising a suspicion that the accused person may have committed the offence and further evidence may be obtained, to enable the police to do which, a remand to jail custody is necessary.
The fact that section 344 occurs in the Chapter dealing with inquiries and trials does not mean that it does not apply to cases in which the process of investigation and 137 collection of evidence is still going on.
That is clear from the very language of sub section
1 A under which the magistrate has the power to postpone the commencement of the inquiry or trial.
That would be the stage prior to the commencement of the inquiry or trial which would be the stage of investigation.
(see A. Lakshamanrao vs Judicial Magistrate(1).
Therefore, it is not as if the stage at which the Magistrate passed the remand orders was still the stage when section 167 applied and not section 344.
The decision of the Orissa High Court in Artatran vs Orissa(2), to the effect that section 344 does not apply at the stage of investigation and can apply only after the Magistrate has taken cognizance of and issued processes or warrant for the production of the accused if he is not produced before him cannot, in view of A. Lakshamanrao 's case(1) be regarded as correct.
The power under section 344 can be exercised even before the submission of the charge sheet, (cf.
Chandradip vs State(3) and Ajit Singh vs State(4), that is, at the stage when the investigation is still not over.
If the view we hold is correct that section 344 operated, the Magistrate, provided he complied with the condition in the Explanation, was competent to pass remand orders from time to time subject to each order being not for a period exceeding 15 days.
There can be no doubt that the Magistrate had satisfied that condition.
The judgment of the High Court in para 11 points out that the prosecution case was that the appellant had himself made a confession before the police.
That was in addition to a confession by two others which implicated the appellant in the commission of offences under section 395 of the Code.
In our view none of the contentions raised on behalf of the appellant can be sustained.
The appeal, therefore, fails and has to be rejected.
K.B.N. Appeal dismissed.
(1) ; (2) A.I.R. 1956 Orissa 129.
(3)(1955)Bihar Law Journal Reports, 323.
| IN-Abs | In the appeal against the order of the High Court dismissing the appellant 's petition for a writ of habeas corpus the appellant urged that he was not produced before a magistrate within 24 hours after his arrest as required by section 167 of the Code of Criminal Procedure or even later; that he was never informed of the grounds for his arrest; that no custody warrant was ever issued warranting the jail authorities to keep the appeal]ant in jail custody; that the remand orders passed by the magistrate were tinder section 167 and not under section 344 of the Code, as the latter section did not apply at the stage of investigation and that even if section 344 applied the magistrate could not order detention for more than 15 days in the whole.
He also urged that the Jail Superintendent did not produce before the High Court the jail records but only produced his report, thus disabling the appellant from establishing his case.
Dismissing the appeal, HELD : (1) The order sheet produced before the High Court showed that the appellant was produced before the magistrate within 24 hours after his arrest and that the magistrate remanded him to jail custody.
Though the order sheet had entries showing that on subsequent occasions when remand orders were made the appellant was produced before the magistrate, the High Court has found that the Magistrate had wrongly recorded that the appellant was produced before him on those occasions.
However, the wrong entries made by him do not mean that the remand orders were not in fact passed by him though he did so in the absence of the appellant.
Such orders can be lawfully passed if an accused person cannot for some reason or the other be brought before the magistrate.
[134 E F] Rai Narain vs Superintendent, Central Jail, New Delhi, Writ Petition No. 330 of 1970, decided on Sept. 1, 1970, referred to.
(ii) The facts negative the suggestion of the appellant being kept in ignorance of the reasons for his arrest.
[135 F] (iii) There is no reason to think that the magistrate ordered the appellant to lie taken into jail custody without custody warrant.
[136 A] (iv) section 167 operates at a stage when a person is arrested and either an investigation has started or is yet to start, but is such that it cannot be completed within 24 hours.
Section 344, on the other hand, shows that investigation has already begun and sufficient evidence has been obtained raising a suspicion that the accused person may have committed the offence 130 and further evidence may be obtained, to enable the police to do which a remand to jail custody is necessary.
The fact that section 344 occurs in the Chapter dealing with inquiries and trials does not mean that it does not apply to cases in which the process of investigation and collection of evidence is still going on.
Therefore, it is not as if the stage at which the Magistrate passed the remand orders was still the stage when section 167 applied and not section 334.
The Magistrate, provided he complied with the condition to the Explanation, was competent to pass remand orders from time to time subject to each order being not for a period exceeding 15 days.
The Magistrate had satisfied that Condition.
[136 G] View contra in Artatran vs ATR 1956 Orissa 129 disapproved.
A Lakshamanrao vs Judicial Magistrate, ; , Chanaraatn vs State, and Ajit Singh vs State, (1970) 76 Crl.
L.H. 1075, referred to The appellant was content with the production of the superintendent 's report.
No prejudice was caused to the appellant 's case since the jail record could not have proved anything more than what the jail superintendent 's report proved.
|
Appeal No. 1166 of 1971.
Appeal by special leave from the Award dated December 19, 1970 of the Central Government Industrial Tribunal, Jaipur in Case No. CIT 10 of 1968.
M. C. Setalvad, K. K. Jain, C. N. Sharma, C. section Patel and Bishamber Lal, for the appellant.
M. K. Ramamurthi and J. Ramamurthi, for the respondent.
The Judgment of the Court was delivered by Mitter, J.
This is an appeal by special leave from an award of the Central Government Industrial Tribunal, Rajasthan directing the reinstatement of one Bhisham Verma in the service of the appellant with full back wages.
The facts are as follows.
The appellant is a public limited company with its registered office at Sawaimadhopur in the State of Rajasthan.
It has a cement factory at the said place besides a limestone quarry at Phallodi situate at a distance of 24 kms.
from the cement factory.
It has two separate sets of Standing Orders for the workmen employed in the factory and in the quarries.
Both sets of Standing Orders were certified in accordance with the provisions of the Industrial Employment (Standing Orders) Act,1946.
The Standing Orders applicable to the workmen employed in the factory were certified in the year 1954 while those applicable to the workmen of the quarries were certified in the year 1961.Up to April 1967 both sets of Standing Orders provided for superannuation of the workmen at the age of 55 with a stipulation for extension up to 60 years if a workman was found fit to work.
On a dispute having been raised for the raising of the age of superannuation of the workmen at the cement factory, a settlement was arrived at between the appellant and the respondent (a registered trade union of the employees) on 16th December 1966 whereby it was agreed that Standing Order No. 21 applicable to the cement factory be amended by raising the age of superannua(ion from 55 to 58 years without making any provision for further 298 extension.
A joint application following upon the agreement was moved by the appellant and the respondent for modifying the, Standing Order No. 21 with respect to the age of superannuation which was accordingly done.
Nothing was however done with regard to the age of superannuation of the, employees at the quarry, the relevant clause in the Standing Order remaining unaltered.
On April 3, 1968 the appellant intimated the said Bhisham Varma, incline driver at the quarry, that he "had exceeded the age of retirement on 3 4 1968" and as such he was given "notice of retirement in accordance with clause 21 of the Standing Orders of the quarries with effect from the close of work on 2 5 1968".
On April 30, 1968 the said workman wrote to the appellant that although according to the service file he had completed the age of 55 years as indicated, his proper age according to his horoscope was about 50 years and his service record should be amended accordingly.
The appellants ' reply to the above dated July 9, 1968 was to the effect that his case had been reexamined and that his retirement, as already intimated on 3 4 1968 would stand.
The Union took up the cause of the worker and addressed a letter on July 18, 1968 to the Regional Labour Commissioner requesting that arrangements may be made to put the worker back to work and take proper legal proceedings.
On behalf of the workman it was represented that he had been working in the company since October 11, 1957, that the Personnel Manager of the, quarry had, given orders dismissing him from service on April 3, 1968 and that in spite of objections made by the workman that there was a mistake in the papers of the company with regard to his age which was 50 as supported by his horoscope and doctor 's certificates the action of the quarry manager was illegal and contrary to service contract.
The record does not show what if any other steps were taken by the parties when the Central Government made an order of reference under section 10(1) (d) of the Industrial Disputes Act ,reading : "Whether the action of the management of the Jaipur Udyog Limited, P.O. Phallodi Ouarry, Sawaimadhopur in terminating the services of Bhisham Varma, incline driver, with effect from 9th July 1968, on grou nds of superannuation was legal and justified ? If not to what relief is he entitled ? Before the Tribunal, the respondent Union filed a statement of claim wherein after reciting the action taken by the appellant and the representation made by the workman it was stated that the quarry and the cement factory were under one and the same management and there was complete financial integrality between the activities of the company at both the places.
It was also said 299 that workmen could be transferred from one place to another and that a,.
a result of the settlement mentioned, the company could not retire any workman before he attained the age of 58 years.
The settlement was said to apply to the workmen employed.
at both the places.
The Union further submitted that the company could not insist on two sets of conditions of service covering different sections of the same workmen in the same establishment, that the age of retirement was not a subject mentioned in the Schedule to the Industrial Employment (Standing Orders) Act and as such.
no Standing Order could be certified on this topic.
In its reply to the above, the company took the stand that the settlement arrived at in respect of the cement works Karmachari Sangh, Sawai Madhopur was not ipso facto applicable to the quarry inasmuch as the proper authority under the in respect of the cement works was the Government of Rajasthan whereas the appropriate Government in respect of the quarries was the Government of India.
It was said further that in pursuance of the settlement arrived at in 1966 the Standing Orders were amended by the Certifying Officer of the Government of Rajasthan as a result whereof the age of superannuation in the works at Sawai Madhopur was raised to 58.
This however did not alter or modify the position prevailing in the quarries which were governed by a separate set of orders certified by the Certifying Officer of the Government of India.
The Tribunal took the view that the cement factory and the quarries were two units of the same establishment and that consequently there should be a uniform set of rules for the workmen of the company as a whole and it was immaterial that in the case of one unit the Standing Orders had to be certified by the Certifying Officer of the Government of India and in the other by the Officer appointed by the Government of Rajasthan.
The Tribunal was further of the view that the clause as to superannuation could not be provided in the Standing Orders under the relevant Act and certification could not attach enforceability to them even on the ground that the workers did not challenge such provision before the Certifying Officer.
In the result the Tribunal held that there could not be a lower age limit of superannuation for workmen at the Phallodi Quarry specially in view of the fact that workmen were admittedly transferable from one place to the other.
As a consequence of the above finding, the Tribunal quashed the order and directed the reinstatement of the workman with full back wages.
On behalf of the company the first contention raised by Mr. Setalvad was that the Tribunal had gone wrong in construing the order of reference to include a dispute as to whether it was open to the company to have two sets of Standing Orders providing for 300 different ages of superannuation.
Mr. Setalvad argued that in view of the correspondence terminating with the representation by the Union to the Conciliation Officer, it was abundantly clear that the dispute between the parties was whether or not the company was justified in coming to the conclusion +hat the workman concerned had reached the age of 55 on April 3, 1968 and as such was to be superannuated in terms of the Standing Orders.
The letter of the 9th July 1968 by the Company to the workman reads as follows Please refer to your application dated 30 4 1968 received by us on 8 5 1968 along with a copy of your horoscope in Hindi.
The Management has reexamined your case and come to a final conclusion that your retirement from the service of the company as intimated to you vide our memo No. Pq/B/186 dated 3 4 68 should stand.
You are, therefore, directed to collect your dues, if any, from our Accounts Department on any working day after producing necessary clearance certificate.
" Of necessity, reference had to be made by the Tribunal to ,the application of the workman dated April 30, 1968 with a copy of his horoscope.
The said latter expressly complained of the alleged inaccuracy in the service record pertaining to him according to which the writer had not completed the age of 55 years on the 3rd April.
The workman 's representation was that his age had been inaccurately recorded, , ',hat his proper age was 50 and that the records should be corrected accordingly.
In our view, if the Tribunal had taken care to examine what was the dispute between the parties when the Government made ,the order of reference it would have had no difficulty in realising that no dispute was raised either by the workman or the Union that the age of superannuation governing the workman was not 55 years.
It was certainly open to the workman to contend that his age of superannuation should be fixed at 58 and not 55 years and it would have been equally open to the Union to raise the point in their representation to the Conciliation Officer.
If that had been done, the Government of Rajasthan could have property made a reference of a dispute between the parties regarding the correct age of superannuation and the adjudication of the dispute regarding the superannuation of the workman concerned on that basis.
Nothing was however shown to us, apart from the documents already referred to, to enable us to find that any question had been raised before the Government of Rajasthan relating to the age of superannuation of the workmen at the quarries or that there was any basis for apprehension of such a dispute and it was therefore not open to the Tribunal to enlarge the ambit of the dispute between the parties by reference to the difference in the 301 age of superannuation under the two sets of Standing Orders.
Mr. Setalvad drew our attention to the judgment of this Court in Tile Sindhu Resettlement Corporation Ltd. V. The Industrial Tribunal of Gujarat & Ors.(1) for the proposition that unless a dispute was raised by the workman with their employer it could not become an industrial dispute.
Respondent No. 3 before this Court in that case was employed by the appellant as an accounts Clerk at Gandhidham in the year 1950.
Some years thereafter his services were placed at the disposal of the subsidiary.
company of the appellant.
The respondent was appointed in the said subsidiary company on a different set of conditions of service.
He worked with that company up to February 1958 when his services were terminated after payment of retrenchment compensation and other dues by the said subsidiary company.
The respondent then went to the appellant and requested that he might be given posting orders.
The appellant declined to do so on the ground that the post which he was occupying in 1953 had been permanently filled up.
Thereupon the respondent demanded retrenchment compensation from the appellant also.
As the representations of the respondent were not fruitful, conciliation proceedings were started and ultimately, on the report of the Conciliation Officer, the State of Gujarat referred the dispute to, the Industrial Tribunal.
The matter referred for adjudication was, "whether the said respondent should be reinstated in the service of the appellant and be paid back wages from 21st February, 1958.
" The Tribunal directed reinstatement and payment of back wages.
In allowing the appeal, this Court observed that the respondent workman had only asked for payment of retrenchment compensation and did not raise any dispute for reinstatement.
According to this Court (see p. 522): ".
the evidence produced clearly showed that no such dispute (i.e. relating to reinstatement) had ever been raised by the respondent with the management of the appellant.
If no dispute at all was raised by the respondents with the management, any request sent by them to the Government would only be a demand by them and not an industrial dispute between them and their employer.
Relying on the above decision Mr. Setalvad argued that in order that a reference can be construed to embrace a particular dispute it must be shown that a demand had been made by the workman and not accepted by the employers so as to give rise to a dispute which in the view of the Government required adjudication.
Mr. Ramamurty on behalf of the respondents drew our attention to the provisions of section 10(1) of the and in particular to clauses (c) and (d) thereof.
He argued that it was open to the appropriate Government in an appropriate case to (1) ; 302 refer a dispute along with any matter appearing to be connected with or relevant to the dispute and no objection could be taken to the award of a Tribunal where the Tribunal had not transgressed the limits of cls.
(c) and (d) of section 10(1) of the Act.
It was further contended that the proper age of superannuation applicable to the company as a whole was so intimately connected with or relevant to the dispute which actually arose between the parties prior to the order of reference as to lead us to hold that the Tribunal had not gone beyond its jurisdiction in construing the order of reference to embrace an adjudication as to proper age of superannuation of a workman like Bhisham Verma.
In our view, the finding of the Tribunal that the Company could not fix a lower age limit of superannuation for workmen at the quarries went beyond the scope of reference which had to be gathered from the circumstances preceding the Government Order.
The Tribunal never addressed itself to the point of view of the workman that his proper age was only 50 and not 55; nor did it come to a finding that the true age of the workman being 50 years in 1968 there was no question of his superannuation in that year.
Mr. Setalvad raised a further point that so, long as the quarried, had a different set of Standing Orders prescribing a different age of superannuation from that fixed under,the Standing Orders relating to the cement works, the tribunal could not have disregarded the Standing Orders as it had purported to do and lay down that the age of superannuation of all workmen should be 58 as found" by it.
Our attention was drawn to section 2 (g) of the Industrial Employment (Standing Orders) Act and to section 3(2) of the said Act under which provision had to be made in Standing Orders for all matters set out in the Schedule to the Act.
According to Mr. Setalvad, item 8 of the Schedule reading: "Termination of employment, and the notice thereof to be given by employer and workmen." allowed the framing of Standing Orders with regard to age of superannuation.
Mr. Ramamurty on the other hand contended that this item could not possibly embrace such a matter as the age of superannuation but was limited to voluntary acts of the employer or the workmen to put an end to the employment without any question of superannuation.
Arguments were advanced at some length by counsel on either side on this point, but in the view which we have taken on the first point as to the jurisdiction of the Tribunal, we find it unnecessary to decide this point.
in the result we hold that the award of the Tribunal was in competent as the dispute which it sought to adjudicate upon was not the one referred.
The award will therefore be set aside, but in the circumstances of the case, we make no order as to costs.
S.C. Award set aside.
| IN-Abs | The appellant, a public Limited Company, had a Cement Factory and at a distance, a limestone quarry.
it had two standing orders for the workman employed in the factory and in the quarries.
Upto April, 1967, both sets of standing orders provided for superannuation of the workmen at the age of 55 with a stipulation for extension upto 60 years if a workman was found fit to work.
After a dispute at the Cement Factory, a settlement was arrived at by which it was agreed that the standing order applicable to the Cement Factory be amended by raising the age of superannuation from 55 to 58 without making any provision for further extension and accordingly, the amendment was made.
Nothing was, however, done with regard to the superannuation age of the employees at the quarry.
On April 3, 1968, the appellant intimated the incline driver at the quarry that he had reached the age of retirement on 3 4 68 and accordingly he was given notice of retirement in terms of the standing order.
On April 30, 1968, the said workman wrote to the appellant that although service records showed him to be 55 years of age, his proper age according to his horoscope, was about 50 years and so his service records should he amended accordingly, but the appellant refused.
The Union took up the cause of the worker and requested the Regional Labour Commissioner to put the worker back to work.
On a reference under section 10(1) (d) of the Industrial Disputes Act, the Tribunal took the view that the Cement Factory and the quarries were two units of the same establishment and so, there should be a uniform set of rules for the workmen of the Company as a whole.
In the result, the Tribunal held that there could not be a lower age limit of superannuation for workmen at the quarry specially in view of the fact that workmen were admittedly transferred from one unit to the other.
As a consequence, the Tribunal quashed the order of dismissal and directed the reinstatement of the workman with full back wages.
It was contended by the Company before this Court that the Tribunal was wrong in construing the order of reference to include a dispute as to whether it was open to the Company to have two sets of standing orders providing for different ages of superannuation.
According to the appellant, the dispute between the parties was whether or not the Company was justified in coming to the conclusion that the workman concerned had reached the age of 55 on April 3, 1968, and as such, was to be superannuated in terms of the standing orders, Setting aside the award, HELD : The Tribunal had not taken care to examine what was the dispute between the parties when the government made the order of reference.
No dispute was ever raised either by the workman or the Union that the age of superannuation governing the workman was not 297 55 years.
The finding of the Tribunal that the Company could not fix a lower age limit of superannuation for the workman at the quarries went beyond the scope of reference.
The Tribunal never addressed itself to the point of view of the workman that his proper age was only 50 and not 55; nor did it come to a finding that the true age of the workman being 50 years in 1968, there was no question of his superannuation in that year.
[302 C] The Sindhu Resettlement Corporation Ltd. vs The Industrial Tribunal, Gujarat & Ors. ; referred to.
|
Appeals Nos. 901 to 903 of 1971.
Appeals by special leave from the judgment and order dated May 13, 1971 of the Andhra Pradesh High Court in Writ Petitions Nos.
6090 of 1970, 221 of 1971 and 543 of 1971 respectively.
section V. Gupte, P. section Shankar and P. P. Rao, for the appellants (in C.A. No. 901 of 1971).
P. section Shankar and P. P. Rao, for the appellants (in C.A. Nos.
902 and 903 of 1971).
V. M. Tarkunde and K. Rajendra Chowdhary, for the respon dents (in C.A. No. 901 of 1971).
G. Narasimhulu and P. A. Chowdhry, for the respondent (in C.A. No. 902 of 1971).
A. Subba Rao, for the respondent (in C.A. No. 903 of 1971).
The Judgment of the Court was delivered by Vaidialingam, J.
These three appeals, in which the State of Andhra Pradesh is the first appellant, by special leave, are directed against the judgment and order dated May 13, 1971 of the Andhra Pradesh High Court in a batch of writ petitions, striking down Rule 9, in the Rules relating to the selection of candidates for admission to the Integrated M.B.B.S. Course in the Government Medical College in the Andhra Pradesh area, issued G.O. No. 1.648/Health dated July 23, 1970 as also under G.O. No. 1793,/Education dated September 23, 1970, regarding reservation of seats, in professional colleges for Backward Classes together with the annexure to the said notification containing the 250 list of Socially and Educationally Backward Classes.
The Addl.
Director of Medical and Health Services, Hyderabad and Principal, Government Medical College, Guntur, are also appellants Nos. 2 and 3 respectively in the appeals.
The Government of Andhra Pradesh by G.O. No. 1648/ Health dated July 23, 1970 announced Rules for the selection and admission of students to the Integrated M.B.B.S. Course in the Government Medical Colleges, in the Andhra area.
The rules provided a pattern of allotment of seats by reference to certain.
qualifying examinations.
The candidates eligible for admission to the Integrated M.B.B.S. Course, being largely taken from the students who had passed the qualifying examination for the Pre University Course and those who had passed the Higher Secondary Course (Multipurpose), the rules provided for a pattern of earmarking seats for the students according to the qualifying examinations taken by them.
It may be mentioned at this stage that the H.S.C. Course (Multipurpose) students are called Multipurpose candidates since they pass their examinations from Multipurpose Schools.
Rule 8 dealt with the pattern of allotment of seats in respect of qualifying examination.
Rule 9 outlined the procedure for selection.
Rule 10 provided that all the reservations would be subject to the order of merit of marks obtained in the entrance test by the students in the relevant category of reservations, namely, P.U.C. and H.S.C. Rule 24 provided that the selections made under the Rules will be subject to any rules or orders that may be made in regard to the reservation of seats for Socially and Educationally Backward Classes of students, having regard to the recommendations made by the Andhra Pradesh Backward Classes Commission.
But there was a condition that such Rules or Orders should have been made by the Government before the finalisation and communication of the selection of candidates.
On June 20, 1970, the Backward Classes Commission appointed by the State, 'a couple of years back, made its report re garding the various categories of persons who are to be treated as belonging to Backward Classes and recommended reservation of 30% of seats to persons belonging to the Backward Classes.
The State by G.O. No. 1793/Education, dated September 23, 1970 announced reservation of 25% of the seats in the M.B.B.S. Course for candidates belonging to the various Backward Classes enumerated therein on the basis of the report of the Backward Classes Commission.
In or about August, 1970, the validity of the entrance test provided under the Rules issued by the G.O. ' No.
1648 of 1970 was challenged before the High Court of Andhra Pradesh in a batch of writ petitions Nos. 3859, 3881, 3955 and 4052 of 1970.
The challenge was on the ground that 251 the State had no power or authority to determine admission by reference only to the result of the entrance test there by ignoring the results of the qualifying examinations taken by a candidates These writ petitions were dismissed by a learned Single Judge of the High Court on September 5, 1970.
But on Letters Patent Appeals by the candidates, a Division Bench of the High Court on September 18, 1970 reversed the order of the Single Judge and struck down the provisions regarding holding of entrance test for admission to Government Colleges as illegal.
The State came to this Court in Civil Appeal Nos.
2161A and 2162B of 1970.
This Court by its judgment dated February 11, 1971 allowed the appeals holding that the Government could hold an entrance test for selection eligible candidates for admission to the medical course in the colleges run by the Government.
The said decision is State of Andhra Pradesh and another vs Narendranath and others (1).
On the basis of the decision of this Court in the above appeals the Government on February 12, 1971, published an additional list of candidates selected on the basis of the entrance test for admission to the Integrated M.B.B.S. Course.
On December 27, 1970, the respondent in Civil Appeal No. 901 of 1971, who was a P.U.C. candidate filed in the High Court Writ Petition No. 6090 of 1970 challenging the validity of the classification of candidates into two categories as P.U.C. and H.S.C. (M.P.) and reserving 40% of seats to the latter as also the G.O. No. 1793/Education dated September 23, 1970 specifying certain classes as being Socially and Educationally backward and providing for them a reservation of 25% of seats in the colleges.
Certain other candidates belonging to the H.S.C. (M.P.) category had filed writ petitions challenging G.O. No. 1793 of 1970 regarding the reservation made for the Backward Classes.
The P.U.C. candidate contended that the classification and reservation of 40% of seats for the H.S.C. (M.P.) candidates was vio lative of article 14 of the Constitution and that it was arbitrary and illegal.
In particular he contended that he has obtained more marks than some of the H.S.C(M.P.) candidates at the entrance test and that he was entitled to admission in preference to such candidates.
Both the P.U.C. as well as the H.S.C.(M.P.) writ petitioners attacked G.O. No. 1793 of 1970 regarding reservation of 25% of seats for the Socially and Educationally Backward Classes as violative of article 15(1) read with article 29 and that it has not been saved by article 15 (4).
According to them the classification of Backward Classes was not made on any reliable material and in the enumeration of such classes, the, various principles laid down by this Court have not been given due regard.
(1) 252 The State contested the writ petitions on various grounds.
Regarding rule 9 of G.O. No. 1648 of 1970, the stand taken by the State was that the P.U.C. and H.S.C. (M.P.) candidates formed two distinct categories and they did not form part of the same class.
It was further contended that the State was entitled to lay down the principles regarding the source from which the candidates are to be selected to the medical colleges which are run by the Government and that in providing for equal distribution of seats to the P.U.C. and H.S.C. (M.P.) candidates, no discrimination has been made and there has been no violation of article 14.
Regarding G.O. No. 1793 of 1970, the State referred to the appointment of a high powered commission to exhaustively in vestigate and report as to the persons who are to be considered as Backward Classes for the purpose of reservation being made in their favour.
The Commission had gone into the matter and after considering the educational and social backwardness of the various classes of citizens in the State in the light of the various principles and tests laid down by this Court, had submitted its report on June 26, 1970 enumerating the various classes of persons who are to be treated as Backward Classes.
The report accepted by the Government had also given the reasons for such classes being treated as backward.
The High Court by its judgment, under attack, allowed the writ petitions and also directed the State to give admissions to the writ petitioners to the 1st Year Integrated M.B.B.S, Course.
The High Court has held that the only basis for selection for the 1st Year Integrated M.B.B.S. Course in relation to the H.S.C. and P.U.C. candidates is the marks obtained by them at the entrance test provided by the, rules framed under G.O. No. 1648 of 1970.
According to the High Court when once rules have been framed in that manner, the selection of candidates from these categories must only be of those who have obtained the highest number of marks in the said test irrespective of the fact as to which category they belonged.
In view of the fact that the selection is sought to be made by earmarking 40% of seats to the H.S.C. (M.P.), the latter are having an unfair advantage over the P.U.C. candidates, who will be denied admission, though they have obtained higher number of marks.
In this view the High Court held that rule 9 providing for reservation of 40% to the H.S.C. (M.P.) framed under G.O. No. 1648 of 1970 was illegal as being discriminatory and as such offends article 14 of the Constitution.
The said rule was struck down in consequence.
Regarding the enumeration of Backward Classes by the Backward Class Commission, and the order of the Government, G.O. No. 1795 of 1970, reserving 25% of seats in the Colleges, 253 the High Court held that the Government order violate& article 15 (1) read with article 29 and that the reservation was not saved by article 15 (4).
It is the view of the High Court that, proper investigation and collection of data have not been done by the Commission in accordance with the principles laid down by this Court in its various decisions.
On the other hand, the High Court has held that the Commission has merely enumerated the various persons belonging to a particular caste as Backward Classes, which is contrary to the decisions of this Court.
We will deal further with this aspect when we advert to the validity of G.O. No. 1739 of 1970.
Suffice it to say that the High Court struck down the said Government Order as violative of article 15(1) and that it was not saved by article of the Constitution.
The High Court declared that the writ petitioners were entitled to be admitted to the Integrated M.B.B.S. Course in the Medical Colleges in the Andhra area.
Before us, on behalf of the appellants Mr. S.V. Gupte, learned counsel has attacked the findings of the High Court striking down Rule 9, issued under G.O. No. 1648 of 1970, as well as the reservation of seats made in the Professional Colleges for the Backward Classes by G.O. No. 1793 of 1970.
We will first deal with the validity of Rule 9 issued under G.O. No. 1648 of 1970 reserving 40% of seats for the H.S.C. (M.P.) candidates.
Before we consider the contentions urged in that regard by Mr. Gupte, on behalf of the State and Mr. Tarkunde, on behalf of the respondents, it is necessary to broadly refer to some of the material rules issued under G.O. No. 1648 of 1970.
The rules were issued as annexure to this Government Order.
It was specifically stated in the said Government Order that the rules specified in the annexure have to be followed in respect of admissions of students to the Integrated M.B.B.S. Course in the Government Medical Colleges in the Andhra area including Bhadrachalam Division of Khammam District and Mungala Division of Nalgonda District from the academic year 1970 71.
Rule I referred to the availability of 550 seats in the 1st Year Integrated M.B.B.S. Course in the four Government Medical Colleges, referred to therein the Andhra area.
Rule 2 dealt with reservation of seats (viz.) for candidates outside the State, candidates distinguished in N.C.C., Presidents ' Scouts and Guides and children of exhibit Servicemen and Armed personnel; and candidates belonging to Scheduled Caste and Scheduled Tribes, women candidates etc.
Rule 3 deals with the age and educational qualifications.
Regarding educational qualifications it is provided that candidates possessing the minimum qualifications of H.S.C. 254 (M.P.), I.S.C., P.U.C. and A.I.H.S.C. or equivalent qualifications are eligible to appear in the Entrance Test.
But there was a .proviso to the effect that in the qualifying examination the candidates should have taken up physical sciences and biological sciences and must have obtained not less than 50% of marks in ,.those subjects put together.
But in respect of candidates belonging to Scheduled Castes and Scheduled Tribes, the provision is that they should obtain not, less than 40% of marks in those Subjects put together in their qualifying examination.
Rule 4 dealt with basis and method of admission.
Clause (i) of this rule provides that all candidates who, have applied for admission and are found eligible will be required to take Entrance Test to be conducted by the Director of Medical and Health Services.
The said rule also dealt with the holding of the Entrance Test at the centres specified therein.
Clause (v) specifically provided that the Entrance Test will consist of four papers of 50 marks each in (a) subject of Physical Science (Chemistry and Physics), (b) subject of Biological Science, (Zoology and Botany).
,Clause (vi) provided for the examinations in Chemistry and Physics being held in 'the morning and the remaining two i.e. Zoology and Botany, in the evening session and that answers will be written in separate answer books and that the Entrance Test will be conducted in a single day.
The said rule also provided for the standard of test, type of the test and the medium of the test.
Rule 6 deals with the method of admission.
It provides that based on the result of the Entrance Test, a separate Master List of eligible candidates will be prepared in order of merit and that the selection will be made keeping in view the various reservations mentioned therein.
It may be mentioned at this stage that the reservations refered to therein are for Scheduled Castes and Schedule Tribes, Women candidates, children of exhibit Servicemen etc.
There is no reservation referred to therein either of H.S.C. or P.U.C. candidates.
Rule 7 deals with the distribution of seats.
The total number of seats available is stated to be 550.
But the actual number of seats available to be filled up on the basis of merit at the Entrance Test is given as 532.
The said rule also provides for the distribution of seats to certain reserved groups such as Scheduled Castes and Scheduled Tribes, women candidates etc.
Here again there is no reservation for H.S.C. or P.U.C. candidates.
Rule 8 deals with the pattern of allotment of seats in respect of qualifying examination.
The seats are distributed as follows : 40% each to Multipurpose and P.U.C. candidates; 5% to M.Sc.
255 and B.Sc.
candidates; 4% for N.C.C., President 's Scouts and Guides and exhibit Servicemen and 11% strictly in the order of merit in the Entrance Test from the general pool.
Rule 9 deals with the procedure for selection.
Clause (D) dealing with the Multipurpose and P.U.C. candidates, refers to the fact that the total seats available are 545 and that according to the pattern of distribution, 40% of the seats are reserved for Multipurpose and 40% for P.U.C. (including I.S.C.)".
The said clause further provides that the rate of seats to be filled up by the candidates from the P.U.C./Multipurpose and allied qualification holders should be done so as to keep the number of seats according to the ceiling, i.e., 40% as per the pattern of allotment for each group.
It is this provision that was really struck down by the High Court.
Rule 10 specifies that all reservations would be subject to the order of merit of marks obtained in the Entrance List.
The other rules are not material.
From a perusal of the rules, referred to above, two aspects underlying the scheme of selection broadly emerge : (1) that there is to be an Entrance Test for all the applicants for the admission to the 1st Year Integrated M.B., B.S. Course; and (2) that the result of the Entrance Test is to form the basis for admission to the medical course.
Under rule 3 (2) candidates possessing the minimum qualification of H.S.C. (M.P.), I.S.C., P.U.C. ,and A.I.H.S.C. or equivalent qualification are eligible to appear in the Entrance Test.
Therefore, it is clear that all the candidates possessing these qualifications are to be put on a par and are qualified to take the Entrance Test.
We have already referred to the fact that there is a proviso that the candidates excepting those belonging to the Scheduled Castes and Scheduled Tribes should have obtained in their qualifying examination not less than 50% of marks in Physical and Biological Sciences put together in their qualifying examination.
There is no distinction made between a P.U.C. or Multipurpose candidate.
Both of them, in order to become eligible to appear in the Entrance Test, must have secured not less than 50% marks in their qualifying examinations in the two Physical and Biological Sciences put together.
The only relaxation, or exception, if it may be so called, is regarding the candidates, belonging to the Scheduled Castes and Scheduled Tribes.
These candidates should have secured not less than 40% of the marks in those subjects in their qualifying examination.
Rule 4 emphasises that all eligible candidates who have applied for admission are bound to take the Entrance Test conducted by 87 Sup.
Cl/72 256 the Director of Medical and Health Services.
All the candidates, who take the Entrance Test, must take all the, four papers, referred to therein.
Here again, it will be seen that there is no distinction made between a P.U.C. and a Multipurpose candidate.
Both of them must have obtained not less than 50% marks under rule 3 in Physical and Biological Sciences in their qualifying examinations, and both of them will have to appear for those subjects in the Entrance Test, which is common to all the candidates.
Rule 6 specifically provides for the admission being made on the bases of the results of the Entrance Test.
Rule 7 regarding distribution of seats specifically refers to 532 seats being available to be filled up on the basis of merit in the Entrance Test.
But when we come to rules 8 and 9, it is stated in the former that 40% each is to be allotted on the basis of qualifying examination to Multipurpose and P.U.C. students and the latter refers to distribution in the same proportion to the two sets of candidates on the basis of the result of the Entrance Test.
This is so, notwithstanding the fact that rule 10 provides even in respect of candidates for whom reservations have been made, their selection will be in the order of merit of marks obtained in the Entrance Test.
When the scheme of the rules clearly shows that the basis of selection for the 1st Year Integrated M.B., B.S. Course is according to the result of the Entrance Test, the question is whether the reservation of 40% of seats for the H.S.C. candidates under rule 9 is valid ? Under this rule though a P.U.C. candidate may have got higher marks than a H.S.C. candidate, he may not be able to get admission because 40% of the seats allotted to the P.U.C. candidates would have been filled up; whereas a H.S.C. candidate who may have got lesser number of marks than a P.U.C. candidate may be eligible to got a seat because of 40% quota allotted to the H.S.C. candidates has not yet been completed.
Does this amount to an arbitrary discrimination violative of article 14 ? Prima facie having due regard to the scheme of the rules and the object sought to be achieved, namely, of getting the best students for the Medical Colleges, the provision is discriminatory and it has no reasonable relation to the object, sought to be achieved.
Mr. Gupte, learned counsel for the State urged that the P.U.C. and H.S.C. candidates form two separate categories and that unless such reservation of seats is made, the H.S.C. candidates may not be able to get adequate number of seats in the Medical Colleges.
He further contended that the Medical Colleges being run by the Government, it is open to the State to specify the sources from which the candidates will have to be selected for admission to those Colleges.
He also pointed out that such a categorisation of students into two separate groups as P.U.C. and H.S.C. has been held to be valid by the High Court.
257 Mr. Tarkunde, learned counsel for the respondents, on the other hand, urged that whatever may have been the circumstances that originally existed when the High Court then upheld the division into separate groups of P.U.C. and H.S.C. students, when once the rules clearly specify that there is to be a common Entrance Test and that selections are to be made only on the basis of the results of such a test, the reservation of 40% in favour of the H.S.C. candidates is arbitrary, unjust and discriminatory and as such it violates article 14 of the Constitution.
We are in agreement with the contention of Mr. Tarkunde regarding this aspect and, in our opinion, the High Court was justified in striking down the provision regarding reservation of 40% of seats to the H.S.C. candidates under rule 9.
We have already indicated the scheme of the Rules as well as the basis for selection, as could be gathered fro in these rules.
We will now briefly advert to the decisions referred to by the learned counsel on both sides.
Mr. Gupte drew our attention to the following decisions, In Gullapalli Nageswara Rao and others vs Principal Medical College, Guntur and others,(1) the High Court had considered the provision made in a rule by the Government regarding reservation of 1/3rd of total number of seats in favour of Multipurpose candidates in the Pre Professional Course in medicine.
The rule, no doubt, provided that admission for the said course should be both from the category of Multipurpose and P.U.C. students on the basis of merit.
Nevertheless a reservation of 1/3rd of the total number to be admitted was made in favour of H.S.C.
This reservation was attacked as being arbitrary and unjust.
On behalf of the State it was urged that the said reservation is not hit by article 14 as it was necessary to afford equal opportunities to Multipurpose candidates.
The High Court considered in this connection the syllabus for study prescribed for the P.U.C. and H.S.C. candidates in their respective courses.
The High Court held that the Multipurpose candidates have to study more subjects than the P.U.C. candidates and that their examinations also covers a course extending over a period of four years.
In this view the High Court held that, the H.S.C. candidates are at a disadvantage in the matter of securing higher percentage of marks in their optional subjects, whereas a P.U.C. candidate had a distinct advantage over them.
It was further held that in such a situation there are possibilities of P.U.C. candidates securing higher percentage of marks in their optional subjects than the Multipurpose candidates and securing on the basis of the result of their qualifying examination a larger number of seats in the Pre Professional Course in medicine.
Ultimately, the reservation of 1/3rd number (1) A.I.R. 1962 A.P. 212.
258 of seats in favour of the H.S.C. candidates was held by the High Court.
It must be noted that at the time when the High Court deal(.
with the matter, there was no uniform Entrance Test to be taken, by both the P.U.C. and the H.S.C. candidates as is the position at present.
On the other hand, the selection to the Pre Professional Course in medicine was then made on the basis of the marks obtained in the optional subjects by the respective students in their previous course of study.
The above decision, in our opinion, has no application to the facts of the present case.
The fact that the High Court approved of reservation in the circumstances then existing will not help the State in the case before us.
The next decision to which our attention was drawn by Mr. Gupte is P. Sagar and others vs State of Andhra Pradesh, represented by Health Department, Hyderabad and others(1).
To this decision we will have to revert when we deal with the validity of reservation made for the Backward Classes under G.O. No. 1793 of 1970.
But so far as the question of reservation for the P.U.C. and H.S.C. students is concerned, it is seen that certain rules provided for reservation of percentage of seats for the candidates belonging to the H.S.C. and P.U.C.
Here again the rule was that 1/3rd of the total number of seats in all categories put together should be given to the H.S.C., Multipurpose and I.S.C. candidates and that at least 50% of the seats should be given to the P.U.C. candidates.
It appears that the reservation of 50% of seats for P.U.C. candidates was challenged as being unjust.
It was urged before the High Court that the H.S.C. (Multipurpose) Examination is very difficult and as such those candidates will not be able to secure higher marks as compared to the P.U.C. candidates and in support of this contention the earlier decision in Gullapalli Nageswara Rao and others vs Principal Medical College, Guntur and others(, ') was relied on.
But we find that during the course of the hearing the Advocate General intimated the High Court that the Government was aware that the reservation of 50% seats to the P.U.C. candidates was working a hardship on the Multipurpose candidates and that the rules were being amended.
It was later on represented that rules had also been amended.
Therefore, the High Court ultimately held that in view of the amendment to the rules, it was not necessary to consider the challenge with respect to the reservations made for the Multipurpose and the P.U.C. candidates.
Here again, it is to be stated that there was common Entrance test for all the candidates belonging to the P.U.C. and H.S.C. categories.
On the other hand, the selections were made on the basis of the marks obtained by them in their qualifying examinations.
It was further held in the said decision that even (1) A.I.R. 1968 A.P. 165.
(2) A.I.R. 1962 A.P. 212.
259 in the basis that the qualifying examinations taken by the P.U.C. and H.S.C. candidates were equal, still the reservation is not invalid as discreminatory under article 14 of the Constitution.
But hereagain it is to be noted that selection were made on the basis of the marks obtained in the qualifying examinations and not on the basis of marks obtained in a common Entrance Test held for all the candidates uniformly.
This decision is also, more or less similar to the one in Gullapalli Nageswara Rao and others vs Principal Medical College, Guntur and others.(1) The decision in Sagar and others vs State of Andhra Pradesh (2 ) had also to deal with the reservation of seat in the Professional Colleges for the Backward Classes on the basis of the G.O. which was then in force.
It was held that the said reservation was not saved by article 15 (4).
The decision of the High Court striking down the reservation for the Backward Classes alone was challenged by the State in this Court in State of Andhra Pradesh and another vs P. Sagar.
(3) This Court upheld the decision of the High Court.
We will have to refer to the above sections of the High Court Rs well as of this Court when we deal with the second aspect which arises for consideration before us regarding the reservation made for the Backward Classes under G.O. No. 1793 of 1970.
Mr. Gupte then referred us to the decision in Chitra Ghosh and another vs Union of India and others.
(4) That decision related to a challenge made by certain students who were denied admission to the Maulana Azad Medical College, New Delhi.
The said college was established by the Government of India.
Of the 125 students, who are to be admitted annually, 15% of the seats are reserved for Scheduled Caste candidates and 5% for candidates belonging to the Scheduled Tribes, 25 % of the seats (excluding the seats reserved for Government of India nominees) were reserved for girl students.
In particular 23 seats were reserved to certain categories and they were to be filled up by the candidates who were nominated by the Central Government.
The categories to which the said nomination had to be so made were as follows (1) Sons/daughters of residents of Union Territories specified below including displaced persons registered therein and sponsored by their respective Administration of Territory : (a) Himachal Pradesh, (b) Tripura, (c) Mani pur, (d) Naga Hills, (e) N.E.F.A. and (f) Andaman.
(1) A.I.R. 1962 A.P. 212.
(2) A.I.R. 1968 A.P. 165.
(3) (4) ; 260 (2) Sons/daughters of Central Government servants posted in Indian Missions abroad.
(3) Cultural Scholars.
(4) Colombo Plan Scholars.
(5) Thailand Scholars.
(6) Jammu & Kashmir State Scholars.
The appellants therein had obtained about 62.5% marks and were domiciled in Delhi.
According to them, they were entitled to admission on the basis of merit and would have been so admitted but for the reservations, which were filled by the nominations made by the Central Government.
It was their further contention that the students who had been so nominated by the Central Government and got admission had obtained less percentage of marks than the appellants.
Mainly the power of the Central Government to make the nominations was challenged on the ground that the provision for reservation in favour of such nominees of Central Government was not based on any reasonable classification and suffered from the vice of discrimination and hence the reservation was hit by article 14 read with cls.
(A) and f (iv) of article 15 and Cl.
(ii) of article 29.
This Court rejected the contention and held that neither cls.
(i) and (iv) of article 15 nor cl.
(ii) of article 29 violated.
In support of the challenge of discrimination under article 14, it was claimed by the appellants that merit being the sole criteria for admission, the provisions made for reservation for candi dates to be nominated by the Central Government, introduced discrimination, or it had no reasonable nexus to the object sought to be achieved.
After a reference to the provisions made in respect of each of the categories to be nominated by the Central Government on merits, it was held that the classification in all those cases was based on intelligible differentia, which distinguished them from the group to which the appellants belonged.
In particular, Mr. Gupte relied on the following observations in the said decision "It is the Central Government which bears the financial burden of running the medical college.
It is for it to lay down the criteria for eligibility.
From the very nature of things it is not possible to throw the admission open to students from all over the country.
The Government cannot be denied the right to decide from what courses the admission will be made.
That essentially is a question of policy and depends inter alia on all overall assessment and survey of the requirements of residents of particular territories and other categories of persons for whom it is essential to provide facilities for medical 261 education.
If the sources are properly classified whether on territorial, geographical or other reasonable basis, it is not for the courts to interfere with the manner and method of making the classification.
The next question that has to be determined is whether the differentia on which classification has been made has rational relation with the object to be achieved.
The main purpose of admission to a medical college is to impart education in the theory and practice of medicine.
As noticed before the sources from which students have to be drawn are primarily determined by the authorities who maintain and run the institution e.g., the Central Government in the present case.
In Minor P. Rajendran vs State of Madras(1) it has been stated that the object of selection for admission is to secure the best possible material.
This can surely be achieved by making proper rules in the matter of selection but there can be no doubt that such selection has to be confined to the sources that are intended to supply the material.
If the sources have been classified in the manner done in the present case it is difficult to see how that classification has no rational nexus with the object of imparting medical education and also of selection for the purpose.
" Based upon these observations, Mr. Gupte, contended that the sources for selecting candidates as well as the reservation made in respect of admission to the Maulana Azad Medical College have both been approved by this Court as valid and not violative of Art, 14.
On this analogy, the counsel urged, the present classification of P.U.C. and H.S.C. into two categories and the reservation of 40% for H.S.C. candidates are valid.
In our opinion, the above decision does not lead to the result contended on behalf of the State.
The special circumstances and the reasons for making the reservation to enable the Central Government to make nominations so that candidates belonging to those categories can get adequate representation by way of admission in the Medical Colleges have been elaborately adverted to by this Court and it is on that basis that this Court accepted the classification as valid.
It was further held that the said classification has got a rational relation to the object sought to be achieved.
The object was stated to he to impart medical education to the candidates belonging to those groups or area where adequate facilities for imparting such education were not available.
But the point to be noted in the said decision is that in respect of other candidates, who are not governed by any reservation, the selection on the basis of merit, namely, the marks obtained by them.
On the other hand, in the (1) ; 262 case before us, though a uniform Entrance Test has been prescribed for both the P.U.C. and H.S.C. candidates, still the selection is not made on the basis of the marks obtained in the Entrance Test.
On the other hand, the selections are made after disregarding those marks.
At any rate, so far as some P.U.C. candidates are concerned it shows a preference to the H.S.C. candidates, who may have got lesser number of marks and would not have got admission, but for the reservation of 40% made for the group to which they belonged.
It is no doubt true that it is open to the State to prescribe the sources from which candidates will be selected and also prescribe the criteria for eligibility.
In fact, in the case before us, as we have already pointed out, the rules provide for the qualifications which have to be satisfied to enable a candidate to apply and the sources from which selections will have to be made, have also been prescribed.
We have also pointed out that in respect of eligibility for applying for admission to the 1st Year Integrated M.B.B.S. Course, no distinction has been drawn between P.U.C. and H.S.C. candidates, both of whom have to get at least 50% marks in Physical and Biological Sciences.
So that clearly shows that they have been put on a par so far as eligibility is concerned.
But the discrimination is made only after the Entrance Test is over by denying admission to the P.U.C. candidates who may have got higher marks than some of the H.S.C. candidates who get admission because of the 40% reservation.
Mr. Gupte then referred us to the decision in Ganga Ram and Others V. The Union of India and others(1), wherein the classification of direct recruits and promotees into two different categories in the Accounts Department of the Railway Establishment was hold to be a reasonable classification not attracting the vice of article 14 or 16.
In that case this Court was considering a claim for promotion based upon the test of Seniority cum suitability.
After considering the background of the service concerned, it was held that the State which encounters diverse problems arising from a variety of circumstances is entitled to Jay down the conditions of efficiency and other qualifications for securing best service for being eligible for promotion in its different departments.
It was emphasised that the object sought to be achieved by the relevant provisions which were under attack was the requisite efficiency in the Accounts Department of the Railway Establishment.
It was in that connection held that the direct recruits and promotees constitute different classes or categories and such a classification is sustainable on intelligible differentia, which has a reasonable connection with the object of efficiency in the Department.
This decision also does not help the appellants as there was no distinction made inter se between the promotees and the direct (1) ; 263 recruits.
On the other hand, the same criteria was adopted for purposes of promotion to the persons forming the class of direct recruits.
Similarly, the same test was applied to the persons coming under the group of promotees.
It was under such circumstances that this Court held the classification to be valid, and the situation which this Court had to consider in that connection was entirely different, from the one before us where all the candidates belonging to both the P.U.C. and H.S.C. merge under the Rules when they take the Entrance Test.
In D. N. Chanchala etc.
vs The State of Mysore and others(1), one of the questions this Court had to consider was the validity of the university distribution of seats in the medical colleges run by the State of Mysore.
There were three Universities in Mysore State, namely, Karnatak, Mysore and Bangalore Universities.
The challenge to such distribution of seats was that candidates having lesser marks might obtain admission at the cost of another having higher marks from another university.
This Court after a reference to the different standards of examinations held in the three universities, rejected the challenge of discrimination as follows "Further, the Government which bears the financial burden of running the Government colleges is entitled to lay down criteria for admission in its own colleges and to decide the sources from which admission would be made, provided of course, such classification is not arbitrary and has a rational basis and a reasonable connection with the object of the rules.
So long as there is no discrimination within each of such sources, the validity of the rules laying down such sources cannot be successfully challenged. .
In our view the rules lay down a valid classification.
Candidates passing through the qualifying examination held by a university form a class by themselves as distinguished from those passing through such examination from the other two universities.
Such a classification has a reasonable nexus with the object of the rules, namely, to cater to the needs of candidates who would naturally look to their own university to advance their training in technical studies, such as medical studies.
In our opinion, the rules can.
not j ustly be attacked on the ground of hostile discrimi nation or as being otherwise in breach of Article 14.
" It will be seen that the above decision has empbasised that the selection which was made on the basis of the marks obtained in the qualifying examination held by each of the universities was valid and the distribution of seats in the medical colleges universitywise was also valid in view of the different standards adopted by each (1) ; 264 university.
Again it is to be noted in the said decision, there was no question of all the students of the three universities taking a common Entrance Test on the basis of which a selection was made.
This decision also does not help the appellants.
The decision in The State of Maharashtra and another vs Lok Shikshan Sansatha and others(1) which has laid down that in the matter of permitting colleges to be started in particular areas having due regard to the need of the area concerned, is essentially a matter of policy for the State which has to take a decision on overall assessment and summary of the requirements of a particular area, so long as the decision is not arbitrary or mala fide, it was further held that the courts will not interfere with the assessment made by the State in pursuance of its policy.
This decision is also of no avail to the appellants.
Mr. Tarkunde, apart from distinguishing the above decisions, for the reasons mentioned by us earlier pointed, out that in Gullapalli Nageswara Rao and others vs Principal Medical College, Guntur and others (2), the basis of classification of P.U.C. and H.S.C. was not challenged as there was no necessity for those students to take a common test as in the case before us.
He referred us to the averments in the counter affidavit filed by the Assistant Secretary to the Government in Writ Petition No. 3859 of 1970 in which conducting of Entrance Test was then challenged.
The Assistant Secretary in paragraph 9 of the said counter affidavit in respect of holding of the Entrance Test has stated that the selection of candidates for the 1st Year Integrated M.B.B.S. Course is made on the basis of marks obtained at the Entrance Examination, as such a method of selection ensures fair play and affords equal opportunity to all candidates.
He has again referred us to the fact that by introducing the method of selection by the Entrance Test the Government had done away with the reservations originally made for the P.U.C. and H.S.C. candidates and thus has offered equal opportunity to all candidates.
He has further stated that both the P.U.C. and the H.S.C. students apart from having obtained not less than 50% of marks in Physical and Biological Sciences to be eligible to apply for admission to the medical colleges, have also take the Entrance Test in the subjects mentioned in the rules.
According to the State, the result of the Entrance Test is a method of making selection to the medical colleges, thus ensuring fair play and justice.
In the same Writ Petition the Add].
Director of Medical and Health Services, (Professional Education) has referred to the necessity of holding an Entrance Test.
In this connection he refers (1) ; (2) A.I.R. 1962 A.P. 212.
265 to the marks obtained by certain P.U.C. and H.S.C. students in their qualifying examinations and also to their marks in the Entrance Test.
The Officer has stated that the marks obtained by the candidates in their qualifying examinations are not a reliable guide to assess their merits as the marks obtained by those candidates in the Entrance Test were very poor.
Therefore, it has been emphasised that the marks obtained in the Entrance Test is the guiding factor to assess the merits of both the sets of candidates for admission to the Medical College.
We have referred to the avernments contained in the counter affidavit of the two officers above as they form part of the present record and they have also been relied on for one purpose or other by both the State and the respondents.
The above averments clearly establish that even according to the State the marks obtained in the Entrance Test according to the rules is the decisive test for the purpose of considering the merits of the candidates, who seek admission to the Medical College.
These averments clearly show that there is absolutely no jurisdiction for making of special reservation of 40% in favour of H.S.C. candidates, when once a common Entrance Test is held for all the candidates and selection is made on an assessment of merit of marks obtained at the said examination.
Mr. Tarkunde referred us to Minor P. Rajendran vs State of Madras and others(1) where the validity of the scheme of districtwise distribution of seats as per the rules framed by the State of Madras, to the Medical Colleges, was challenged as violative of article 14.
The State attempted to justify the said method of districtwise distribution on the ground that if districtwise distribution is not made, the candidates from Madras City would have an advantage and would secure the largest number of seats in the Medical Colleges, which will not be justified on the basis of the proportion of population of the Madras City.
The challenge based on discrimination under article 14 was accepted by this Court and it was held that the allocation of seats districtwise results in discrimination and there is no nexus between the districtwise distribution and the object to be achieved, namely, admission of the best talent from the sources indicated in the rules.
On this ground, the allo cation of seats on districtwise basis was struck down as violative of article 14.
Similarly unitwise distribution of seats in the Medical Colleges in Tamil, Nadu was declared by this Court in Minor A. Periakeruppan and another vs State of Tamil Nadu and others(2) as violative of articles 14 and 15.
(1) ; (2) ; 266 These two decisions clearly establish that a classification which has no rational basis and has no relation to the object sought to be achieved is violative of article 14.
It is not necessary for us to refer to the various decisions laying down the contents of article 14.
Suffice it to say that it does not forbid reasonable classification.
In order to pass the test of permissible classification, two conditions must be fulfilled : (1) The classification is founded on an intelligible differentia which distinguishes persons or things that are grouped together from those left out of the group, and (2) the differentia must have a rational relation to the object sought to be achieved.
It is no doubt open to the State to prescribe the sources from which the candidates are declared eligible for applying for admission to the Medical College; but when once a common Entrance Test has been prescribed for all the candidates on the basis of which selection is to be made, the rule providing further that 40% of the seats will have to be reserved for the H.S.C. candidates is arbitrary.
In the first place, after a common test has been prescribed there cannot be a valid classification of the P.U.C. and H.S.C. candidates.
Even assuming that such a classification is valid, the said classification has no reasonable relation to the object sought to be achieved.
namely, selecting the best candidates for admission to the Medical Colleges.
The reservation of 40% to the H.S.C. candidates has .no reasonable relation or nexus to the said object.1.
Hence we agree with the High Court, when it struck down this reservation under rule 9 contained in G. No. 1648 of 1970 as violative of article 14.
The next question that arises for consideration is the correctness ,of the order of the High Court striking down the reservation of seats made for Backward Classes in the Professional Colleges under G.O. No. 1793 of 1970.
The said reservation has been struck down on the ground that it violates article 15(1) and falls outside article 15(4) of the Constitution.
The view of the High Court is very strenuously challenged by 'Mr. section V. Gupte, learned counsel for the appellants.
Mr. V. M. Tarkunde, learned counsel for the respondents, supported the various, reasons given by the High Court for striking down the said reservation.
Before we deal with the reasons given by the High Court for striking down the reservation made for the Backward Classes under the said G.O., we will refer to the circumstances under which the Backward Classes Commission was appointed and whose report has formed the basis for providing the reservation for the various ,persons mentioned therein.
267 The State of Andhra was formed on October 1, 1953 and the Andhra Pradesh State came into existence with effect from November 1, 1956.
The State of Andhra originally formed part of the Composite Madras State.
The Composite Madras State had maintained a list of Backward Classes (other than the Scheduled Castes Tribes), in that State and had made special provisions with regard to admission to educational institutions, reservation of posts in Government Service, grant of scholarships and other concessions to assist those Backward Classes.
After the formation of the Andhra State on October 1, 1953, the list maintained by the Composite Madras State was continued in the Andhra area with some modifications.
The former Princely State of Hyderabad was also maintaining a list of Backward Classes in that State, and this was also continued after the formation of Andhra Pradesh, which included Telangana area.
Thus with effect from November 1, 1956, there were two lists of Backward Classes in the State of Andhra Pradesh one for Andhra area and the other for Telangana area.
Both the lists together comprised about 146 communities 86 and 60 in the Andhra and Telangana areas respectively.
The President of India appointed in January, 1953, a Backward Classes Commission under article 341 nf the Constitution headed by Sri Kaka Kalelkar, to determine the criteria to be adopted for treating any section of the people, other than Scheduled Castes and Scheduled Tribes, as socially and educationally Backward Classes.
The said commission was also to draw up a list of such Classes on.
the basis of the criteria laid down by it.
The report of this Commission was considered by the Central Government, which issued a memorandum pointing out that some of the tests applied by the Commission were very vague.
It was further pointed out that if those tests were applied, a large majority of the Country 's population will have to be considered backward.
The Central Government decided to undertake further investigation to draw some positive and workable criteria for this purpose.
The State Governments were desired in the meanwhile to render every assistance possible to those persons who, in the opinion of the State Governments were backward.
Further attempts by the Central Government to draw up a list of Backward Classes on an All India basis did not meet with much of a success.
Even here some State Governments were in favour of adopting economic backwardness as a criteria while others were inclined to stick on to the list prepared by them on the basis of caste.
The Central Government conveyed to the State Governments on August 14, 1961 expressing its view that while the State Governments have the discretion to choose their own criteria for defining backwardness it would be better to apply economic tests rather than classifying people by their castes.
268 The State of Andhra Pradesh issued G.O. No. 1886 dated June 21, 1963 specifying a list of certain persons as belonging to Backward Classes.
The list was prepared for the purpose of selecting candidates to the seats reserved for backward communities in the Medical Colleges in Andhra Pradesh.
Under the said G.O., 25% of the seats were reserved for Backward Classes in accordance with the list contained therein.
The reservation for the Backward Classes was challenged before the Andhra Pradesh High Court by ,certain applicants on the ground that the Government order offends articles 15 and 29(2) of the Constitution.
It was alleged that the State Government acting in fraud of its powers listed more than 139 castes as socially and educationally backward.
It was the further allegation that the list had been prepared exclusively on the basis of caste.
The State Government contested the writ petitions on the ground that the Government was maintaining a list of Backward Classes based on socially and educationally backwardness of the caste and to such people 25 % of the seats had been reserved.
It was further averred that such reservation had 'been going on for a long time and the list was also being suitably revised by making additions or deletions whenever found necessary.
A learned Single Judge of the High Court in P. Sukhadev The Government of Andhra Pradesh(1) considered the validity of the impugned G.O. No. 1886 of 1.963 from two points of view: (1) whether the list of backward classes was based solely on consideration of caste; and (2) whether the Government had adopted any standard or method of determining the social and educational backwardness of the classes specified and, if so, the material upon which the Government has so acted.
The High Court held that the State on which lay the onus of supporting the classification as valid had placed no materials before the Court as to the economic condition of the various classes, their occupation and habitation and social status and their educational backwardness.
The High Court is also of the view that the enumeration of persons as B ackward Classes in the Government Order has been made almost exclusively on the basis of caste.
On these grounds the Government Order was struck down as violative of article 15 (1) and 29(2.) as being in fraud of powers conferred on the State.
After the G.O. No. 1886 of 1963 was struck down by the High Court, the State Government decided that the criteria for determining backwardness should be only economic factors and should be applied to individual family rather than to a whole caste.
The Government issued a G.O. No. 301/Education dated February 3.
1964 scrapping the then existing list of Backward Classes with (1) 269 effect from April 1, 1964 and directed that financial assistance be given to the economically poorer sections of the population, whose family income was below Rs. 1,500 / per annum.
The State Government again took up the question of drawing up a list of Backward Classes in consonance with the provisions of the Constitution.
For this purpose a Cabinet Sub Committee was constituted to draw up a list of persons who could be considered backward.
The Cabinet Sub Committee obtained information from other States and as per the advice of its Law Secretary, it was decided that certain criteria is to be adopted for determining the backwardness of the people.
The criteria included Poverty Low standard of education, Low standing of living, Place of habitation; Inferiority of occupation and caste.
The Cabinet Sub Committee having taken a decision regarding the criteria to be applied, directed the State Director of Social Welfare to check up the lists of Backward Classes which had been scrapped on February 3, 1964 and to select from those lists the castes or communities which could be considered backward on the basis of the above criteria.
The Director of Social Welfare, in consultation with the Law Secretary drew up a list of persons who could be included in the list of Backward Classes.
The said Cabinet Sub Committee considered the recommendations made by the Director of Social Welfare and accordingly drew up a Est of 112 communities which were considered as backward.
Accordingly, G.O. No. 1880/Education dated July 29, 1966 was issued with a list showing 112 communities as backward as being eligible for scholarships and reservation of seats to Professional Colleges and Government Services.
The validity of the above Government Order was again chal lenged before the High Court of Andhra Pradesh on the ground that the list was prepared solely on the basis of caste and violated the provisions of the Constitution.
Here again the students who filed the writ petitions in the High Court urged that there was no material difference between the list drawn up under this G.O. and the list which was struck down by the High Court as per G.O. No. 1886 of 1963.
The attack was that the list of 1966 was also prepared exclusively on the basis of caste.
The State attempted to justify the preparation of the list of Backward Classes as having been properly done after investigation by the Director of Social Welfare in consultation with the Law Secretary.
The State further urged that all relevant factors had been taken into account by the Director of Social Welfare before preparing the list.
The Division Bench of the Andhra Pradesh High Court in its decision in P. Sagar and others vs State of Andhra Pradesh(1) upheld the challenge leveled against the reservation made in the G.O. for Backward Classes on the ground that the State has not (1) A.I.R. 1968 A P. 165. 270 placed materials which were available before the Cabinet SubCommittee or the Council of Ministers.
The High Court is of the view that the list has been drawn up by the Director of Social Welfare and the Law Secretary, who cannot be considered in any sense to be experts and that they had made no investigation; nor collected material data for classifying the persons mentioned in the G.O. as backward.
It was further emphasised that neither the Director of Social Welfare nor the Cabinet Sub Committee had before them the population of the various classes, their economic conditions, percentage of literacy or their social and economic status.
It is the view of the High Court that no substantial change had been made from the list prepared under G.O. No. 1886 of 1963 And which had already been struck down by the High Court.
Ultimately, the High Court held that the preparation of the list of Backward Classes under G.O. No. 1880 of 1966 had been made without any material and as such the list was struck down as not being saved by article 15 (4).
We have referred rather elaborately to the list prepared by the State Government under Government Orders Nos 1986 of 1963 and 1880 of 1966 as well as the decisions of the High Court striking down those lists.
Even at the time when the earlier decision was given by the Andhra Pradesh High Court in P. Sukhadev vs The Government of Andhra Pradesh(1), the decision of this Court in M. R. Balaji and others vs State of Mysore(2) had been pronounced.
It is really on the basis of the said decision, that the High Court, on the former two occasions struck.down the reservations made under the two Government Orders on the ground that the preparation of the two lists of Backward Classes had not been made in accordance with the principles laid down by this Court.
In fact, in both the decisions the High Court has emphasised that there has been no investigation whatsoever regarding the various factors that are necessary to he obtained as laid down by this Court for the Purpose of making special provisions for the advancement of any socially and educationally Backward Classes of citizens as envisaged in article 15(4).
The sole reason given in the two decisions by the High Court for striking down the reservation is the fact that the necessary data or material, as laid down by this Court, had not been collected by the State Government.
We are again emphasising this aspect because the High Court in the decision, which is under attack before us, has relied on the above two earlier decisions, to a large extent for coming to the Conclusion that the present list of Backward Classes suffers from the same infirmity, as pointed out on the former occasion.
The High Court has further held that the same persons who had been included in the original list, as belonging to Backward Classes and which list was struck down twice, have again been included in the present G.O. No. 1793 (1) (2) [1963] Supp. 1 S.C.R. 439 271 of 1970.
In the course of the judgment, we will be pointing out that the High Court has committed a basic error in proceeding on the basis that the present lists suffers from the same vice, pointed out in he earlier decisions by the High Court.
The State of Andhra Pradesh challenged before this Court the decision of the High Court striking down the reservations made for Backward Classes as well as the preparation of list under G.O. No. 1880 of1966.
This Court in State of Andhra Pradesh and another vs P. Sagar(1) upheld the decision of the High Court striking down 'the reservation.
This Court agreed with the view of the High Court that no enquiry or investigation had been made by the State Government before preparing the list of Backward Classes enumerated in the said Government Order.
It was further held that the State had placed no materials before the Court, on the basis of which the list of Backward Classes was prepared, excepting relying on the fact that it was prepared by the Director of Social Welfare with the assistance of the Law Secretary.
It is to be noted that this Court upheld the decision of the Andhra Pradesh High Court in view of the fact that the State had made no investigation of enquiry, nor had it collected the necessary materials to ascertain the socially and educationally backwardness of the persons mentioned in the list.
The decision of this Court was rendered on March 27, 1968.
On April 12, 1968, the State Government by G.O. No. 870, appointed a Commission to determine the criteria to be adopted in considering whether any sections of the citizens of India in the State of Andhra Pradesh are to be treated as socially and educationally Backward Classes.
The Commission was also desired to prepare a list of such Backward Classes in accordance with the criteria to be adopted.
The Commission consisted of nine members, presided over by the retired Chief Justice of the Andhra Pradesh High Court.
The other members of the Commission included the members of the State legislature.
The terms of Reference have been printed as Appendix 1 in the report Submitted by the Backward Classes Commission.
A perusal of the terms of Reference shows that the Commission was desired to investigate and determine the various matters regarding the preparation of list of Backward Classes for providing a reservation in educational Institutions and also for appointments for posts in Government service.
The Commission was authorised to obtain any information that it considered necessary from the Government Departments, Collectors, Organisations, Individuals and from such other persons as it considered necessary.
It was also authorised to visit any part of the State for the purpose of investigation and enquiry.
Later on, it is seen that the retired Chief Justice of the High Court, Who was originally the Chairman of the 'Commission, resigned and (1) 87Sup Cl/72 272 the Commission was headed by a retired I.C.S. Officer.
The terms of Reference were as follows "The Commission shall (i) determine the criteria to be adopted in considering whether any sections of citizens of India in the State of Andhra Pradesh (other than the Scheduled Castes and Scheduled Tribes specified by notifications issued by the President of India under article 341 & 342 of the Constitution of India) may be treated as socially and educationally Backward Classes and in accordance with such criteria prepare a list of such backward classes setting out also their approximate numbers and their territorial distribution; (ii) investigate the conditions of all such socially and educationally backward classes and the difficulties under which they labour; and make recommendations as to the special provisions which may be made by the Government for their advancement and for prom otion of their educational and economic interests, generally and with particular reference to (1) th e reservation in educational institutions maintained by the State or receiving aid out of State funds; (2) the concessions, such as scholarships, which may be given by way of assistance; (3) the percentage or proportion of such reservation the quantum of such assistance and the period during which such reservation or assistance may be made or given; and (iii) advise the Government as to the backward classes of citizens (other than the Scheduled Castes and the Scheduled Tribes) which are not ,adequately represented in the services under the State and prepare a list of all such backward classes and make recommendation as to: (1) the reservation of appointments or posts in favour of such backward Classes, and (2) the percentage or proportion of such reservation and the period during which such reservation may be made.
273 The Commission submitted its report to the Government on June 20, 1970.
The report was placed before the State legislature as also the Andhra Pradesh Regional Committee.
The Commission in its report had drawn up a list of 92 classes, which according to it, are socially and educationally backward and have to be classified as Backward Classes and for whom reservations have to be made.
After having regard to the views expressed by the Legislature as well as the Regional Committee and after an examination of the Report, the Government issued G.O. No. 1793 of 1970.
The Government accepted the criteria adopted by the Commission for determining the social and educational backwardness of the citizens, namely, (i) the general poverty of the class or community as a whole; (ii) Occupations pursued by the classes of citizens, the nature of which must be inferior or unclean or undignified and unremunerative or one which does not carry influence or power; (iii) Caste in relation to Hindus; and (iv) Educational backwardness.
The Government also accepted the list drawn up by the Com mission in toto and declared that the castes and communities specified in the annexure to the G.O. are socially and educationally, Backward Classes for the purpose of article 15(4) of the Constitution.
Though the Commission had recommended reservation of 30% of seats for the Backward Classes in the Professional College, ,, the Government in the Order decided that only 25% of seats in the Professional Colleges should be reserved for Backward Classes, The Government also agreed to the recommendations of the Commission to the classification of the Backward classes into four groups, and directed that on the basis of the population of those four groups, the 25% reservation of seats in the Professional Colleges was to be apportioned amongst the said four groups in the proportion mentioned in the Government Order.
The Government made it clear that the acceptance of the recommendations of the Commission regarding reservations shall be in force for a period of 10 years in the first instance and the positions will be reviewed thereafter.
We have referred to the circumstances leading up to the passing of the impugned G.O. No. 1793 of 1970.
In order to appreciate the criticism made by the High Court regarding the approach made by the Commission, it is necessary to refer to the salient feature.
, , of the report of the Backward Classes Commission.
The report of the Backward Classes Commission is Annexure B before us.
As soon as the Commission was appointed, the Commission issued a questionnaire and circulated it very widely to the various authorities and organisations mentioned in its report.
The questionnaire refers to various matters regarding the criteria to be adopted for 274 ascertaining the backwardness of persons as well as the information on matters relating to the social and educational backwardness of the persons.
Apart from the distribution of the questionnaire, the Commission called for information from the Heads of all Government Departments regarding the number of persons belonging to each class or community employed in their Departments.
Information was, also asked from the Principals of Colleges, including the Professional and_Technical Colleges regarding the number of students belonging to each class or community in the, academic year 1967 68.
Similarly, the Head Masters of all the High Schools and Multipurpose High Schools in the State were also requested to furnish information regarding the total number of students belonging to each community who studied in those schools during the last 10 years as well as the number of students classwise and community wise who studied in classes VI to XI in 1968 69.
The Commission toured all the districts in the State and recorded oral evidence on oath from the representatives of a number of communities.
During the tour of the districts, the Commission visited the houses and huts belonging to different communities of the people and also made oral enquiries from the inmates about their conditions of living, their customs, relations _with other communities and their problems.
The names of places visited by the Commission together with the dates of such visits are given in Appendix IV of its Report.
The Commission also visited the neighboring States of Madras, Mysore and Kerala with a view to have discussion with the officers of those Governments, which were connected with the welfare of Backward Classes.
The report says that about 820 persons were examined at various places and that about 480 persons submitted written memoranda.
A large number of replies were received from the public to the questionnaire issued by the Commission.
The Commission has stated that it had an opportunity, during its tour and visit of the villages, of studying the living conditions and standard of life of the various communities.
The Commission has, no doubt, referred to the fact that upto date statistical information with regard to population of the several communities as well as the percentage of literacy was not available.
The difficulty was enhanced by the fact that no caste wise statistic had been collected after 1931 census.
So far as Andhra area is concerned, the figures of 1921 census were available, a$ it had been prepared on caste wise basis.
Regarding Telangana area, the 1931 census of caste wise statistic was available.
It had to estimate the 1968 population in the two areas on the basis of the respective census datas available.
The population figures for 1968 for each caste was fixed by the Commission by the percentage of the increase of the total population.
The estimate so made by the Commission is given in Appendix V of the Report.
275 Regarding literacy, the Commission adopted the percentage of student population per thousand of particular class or community in standards X and XI with reference to the average student population in the whole State.
The reasons for adopting this, procedure have been given in Chapter VI.
Though information was called for regarding the student population community wise in standards X and XI from about 2224 High Schools and Higher Secondary Schools in the State, only about 50% of the institutions sent the information regarding the student population community wise, in those two classes.
The Commission worked out an average on the basis of the replies received from the 50% of the institutions which itself comes to nearly more than 100 schools.
It is not necessary to refer to the employment statistics collected by the Commission.
The Commission itself has indicated the difficult problems it had to tackle.
Chapters IV and V deal with the constitutional provisions regarding the Backward Class as well as the general principles laid down by the High Court and this Court for ascertainment of their social and educational backwardness.
Chapter VI deals with the tests of criteria adopted by the Commission for ascertaining the social and educational backwardness of versions.
Regarding social backwardness, after a very exhaustive survey of the trade or occupations carried on by the persons concerned and other allied matters, the Commission has indicated that only such persons belonging to a caste or community who have traditionally followed unclean and undignified occupation, can be grouped under the classification of Backward Classes.
In this connection the Commission has adverted to the general poverty of the class or community as a whole, the occupation pursued by the class of citizens, the nature of which is considered inferior and unclean, undignified or unremunerative or one which does not carry influence or power, and caste in relation to Hindus.
Regarding educational backwardness, the Commission has adverted to the fact that during the past 10 years, the State has introduced many measures for the general educational advancement of its people by introducing com pulsory primary education for children and free education for boys upto Vlllth class and for (,Iris upto Xllth class. 'It has taken note of the fact that in 1968 69, free education for boys was also extended upto High School stage.
Having regard to the fact that because of literacy and educational advancement, passing in the School Final Class (XI Class) is taken as the minimum qualification for appointment in Public Service as also for admission to University and Technical Education, the Commission is of the view that it is proper to take the last two classes, 276 namely, Classes X and XI as standard for ascertaining the educational backwardness.
In this connection it has referred to the Report of the Backward Classes Committee, appointed by the Jammu and Kashmir Government, presided over by Dr. P. B. Gajendragadkar, former Chief Justice of India.
This Committee has expressed the view that the number of students on the rolls of IX and X classes should be ascertained for determining educational backwardness.
The reasons given by the said Committee for this view are quoted by the Commission in its report.
The Commission then has adverted to the fact that the average student population in classes X and XI in the State works out to about 4.55 per thousand.
On this basis, it has proceeded to apply the principle that communities whose student population in these standards is well below the State average, have to be considered as educationally backward.
Here again the Commission has referred to the fact that as only 50% of the schools had furnished figure$ with reference to the student population, it had to work out an average based on those figures applicable to the entire State.
Though the figures received from the schools show that certain groups showed a slightly higher level of education, the Commission felt in the light of their having personally seen their living conditions, the percentage supplied by the schools may not be accurate.
In view of this, the Commission has held even those persons as really backward from the educational point of view.
Chapter VII gives the list of socially and educationally Backward Classes and there is a very exhaustive note attached to each of these groups as to why the Commission regards them as socially and educationally backward.
In that Chapter the Commission has also exhaustively dealt with the names of the groups, the subdivisions in those groups, their traditional occupation and various other matters having a bearing on their social, economic and educational set up.
Appendix VI which enumerates the list of socially and educationally Backward Classes item by item gives a tabular statement containing information about the name of the community, its traditional occupation as well as its population in 1968.
Appendix VII contains a note about each of the classes enumerated by the Commission as Backwardness Classes.
Appendix VII contains information regarding the principal occupation, approximate family income, percentage of school going students in the particular groups and various other information regarding the persons mentioned in the list.
A perusal of the Appendix VII and VII shows that the traditional occupations of he persons enumerated as backward were of a very low order such as beggars, washermen, fishermen, watchmen at burial grounds etc.
The Commission had made certain recommendations regarding reservation in the Government Service and it had also made recommendations regarding other 277 assistance to be given to the Backward Classes.
In these appeals it is not necessary to refer to those recommendations.
For the purposes of these appeals it is only necessary to state that the observations made by this Court in Triloki Nath Tiku and another vs State of Jammu & Kashmir and others(1) that the principles laid down in M. R. Balaji and others vs State of Mysore (2) will equally apply for consideration on a question arising under article 16(4).
We have fairly elaborately dealt with the manner in which the Backward Classes Commission conducted its enquiries and investigation before submitting the report because that gives an idea of the complexity of the problem that it had to face as well as the volume of materials collected by it.
The main grounds on which the High Court has held invalid the enumeration of the Backward Classes as well as the reservation made for them are as follows : The Commission has classified the groups as Backward Classes mainly on the basis of caste, which is contrary to the principles laid down by this Court beginning from M. R. Balaji and others vs State of Mysore(2).
The Commission has not collected the necessary data and particulars for the purpose of ascertaining the social and educational backwardness of the groups.
The Commission has committed a very serious error in taking census figures of 1921 and 1931 for the Telangana and Andhra areas respectively and projecting those figures and arriving at a conclusion for enumeration of Backward Classes in 1968.
Certain communities whose inclusion in the list of.
Backward Classes by Government Orders Nos.
1886 and 1880 of 1963 and 1966 respectively and which had been struck down as invalid by the High Court have again been included in the list of Backward Classes.
This, according to the High Court, shows that no proper investigation has been made by the Commission, The Commission committed a mistake in adopting the average of student population per thousand of a particular class or community in the X and XI Classes with reference to the State average for the purpose of deter mining educational backwardness.
The Commission, and the Government through the vast machinery at their command should have collected more particulars on the various criteria which have been laid down by this Court for ascertaining the backwardness of a particular group or class.
The Commission has ignored the principle laid down by this Court that the social and educational backwardness of persons classified in the list should be comparable or similar to the Schedule Castes and Scheduled Tribes.
The groups in which the percentage of literacy is well above the State average have been included in the list of Backward Classes.
The Commission has further sub divided the groups into more backward and less backward classes.
(1) ; (2) [1963] SLIPP.
I S.C.R. 439.
278 We have thus indicating broadly the reasons given by the High Court for striking down the reservation made for the Backward Classes.
Mr. Gupte, learned counsel for the appellants, urged that the High Court has grossly erred in striking down the list of Backward Classes prepared by the Commission as well as the reservation made by the State.
Mr. Gupte, at one stage even urged that the view of the High Court that before a group can be included in the list of Backward Class, its social and educational backwardness must be similar or comparable to that of Scheduled Castes and Scheduled Tribes, is erroneous.
According to the learned counsel, there is no warrant for any such assumption on a clear reading of article 15 (4).
Counsel further urged that to treat article 15(4) as an "exception is also equally erroneous.
We are not inclined to accept these two contentions of Mr. Gupte because the said two principles have been laid down by this Court in M. R. Balaji and others vs State of Mysore(1), R. Chitralekha and another vs State of Mysore and others(2) and in Stale of Andhra Pradesh and another vs P. Sagar(3).
In all these decisions it has been held that article 15 (4) has to be read as a proviso or exception to articles 15(1) and 29(2).
The said decisions have also laid down that the Backward Classes for whose improvement special provision is contemplated by article 15 (4) must in the matter of their backwardness be comparable to Scheduled Castes and Scheduled Tribes.
In fact the attempt of Mr. Gupte was that the principles laid down in the above decisions require reconsideration.
It is not necessary for us to consider that aspect in this particular case because as we will be indicating later, factually the classes enumerated as Backward Classes are really socially and educationally backward, on the application of the principles laid down by this Court.
It must be pointed out that none of the above decisions lay down that social and educational backwardness must be exactly similar in all respects to that of the Scheduled Castes and Scheduled Tribes.
Those decisions also lay down that article 15(4) being in the nature of an exception, the conditions which justify the departure from article 15 (1) must be strictly shown to exist.
Therefore, we have to consider the correctness of the decision of the High Court taking into consideration also the above principles laid down by this Court.
By article 15 of the Constitution, as originally enacted, it was provided that : "(1) The State shall not discriminate, against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them.
(2) . . . . . . (1) [1963] Supp.
I.S.C.R. 439.
(2) ; (3) 279 (3) Nothing in this article shall prevent the State from making any special provisions for women and children.
" Article 29(2) provided that " No citizen shall be denied admission into any educational institution maintained by the State or receiving out of State funds on grounds only of religion, race, caste, language or any of them." In Article 46, which occurs in Part IV of the Constitution relating to the Directive Principles of State Policy, the State has been enjoined to promote with special care the educational and economic interest of the weaker sections of the people and in particular of the Scheduled Castes and Scheduled Tribes and to protect them from social injustice and all forms of exploitation.
Articles 15 and 29, as originally framed, prohibited the making of any discrimination against any citizen on the ground only of religion.
race, caste, sex, place of birth or any of them.
In State of Madras vs Shrimati Champakam Dorajrajan(1), this Court had to consider the validity of an order issued by the Government of Madras fixing the number of students for particular communities for selection of candidates for admis sion to the Engineering and Medical Colleges in the State.
The challenge was on the ground that it violated the guarantee against discrimination under article 29(2).
This Court held that the Government Order constitutes a violation of the fundamental right guaranteed to the citizens of all by article 29(2) of the Constitution, notwithstanding the Directive Principles laid down in part IV of the Constitution.
This led to Parliament addin Cl.
(iv) in article 15 by the Constitution (First Amendment) Act, 1951.
Article 15(4) is as follows : "15(4) Nothing in this article, or in clause (2) of article 29 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Sche duled Castes and the Scheduled Tribes.
" This clause contained a special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes or Scheduled Tribes.
The reservation has to be adopted to advance the interest of weaker sections of Society, but in doing so it is necessary also to see that deserving and qualified candidates are not excluded from admission to higher educational institutions.
In the determination of a class to be grouped as backward, a test solely based upon caste or community cannot be accepted as valid.
But, in our opinion, though Directive Principles contained in article 46 cannot be enforced by courts, (1) ; 280 Art, 15(4) will have to be given effect to in order to assist the weaker sections of the citizens, as the State has been charged with such a duty.
No doubt, we are aware that any provision made under this clause must be within the well defined limits and should not be on the basis of caste alone.
But it should not also be missed that a caste is also a class of citizens and that a caste as such may be socially and educationally backward.
If after collecting the necessary data, it is found that the caste as a whole is socially and educationally backward, in our opinion, the reservation made of such persons will have to be upheld notwithstanding the fact that a few individuals in that group may be both socially and educationally above the general average.
There is no gainsaying the fact that there are numerous castes in 'the country, which are socially and educationally backward and therefore a suitable provision will have to be made by the State as charged in article 15 (4) to safeguard their interest.
The question before us is whether the Backward Classes Com mission had before it the relevant data and materials for enumerating the persons included in the list as Backward Classes.
Various factors or criteria to be adopted for such enumeration have been laid down in several decisions by this Court.
In particular there is a very exhaustive discussion on all aspects bearing on this matter in M. R. Balaji, and others vs State of Mysore(1) regarding the factors to be taken into account.
for the purpose of ascertaining whether a particular class of persons are socially and educationally backward.
Though Mr. Tarkunde, learned counsel for the respondents, supported the various reasons given by the High Court for striking down the reservations made for the Backward Classes, we are of the opinion that the criticisms leveled against the report of the Backward Classes Commission by the High Court are not justified.
It may 'be that something more could have been done and some further investigation could have been carried out.
But, in our opinion, the question is whether on the materials collected by the Commission and referred to in its report, can it be stated that those materials are not adequate or sufficient to support its conclusion that the persons mentioned in the list as Backward Classes are socially and educationally backward.
We may mention in passing that we have not been able to find any definite averment in the affidavits filed by the writ petitioners that any particular group or class included in the list by the Commission is not really socially and educationally backward.
In our opinion, the Commission has taken considerable pains to collect as much relevant material as possible to judge the social and educational backwardness of the persons concerned.
When, for instance, it had called for information regarding the student population in classes X and XI from (1) [1963] Supp.
I. section C. R. 439.
281 nearly 2224 institutions, if only 50% of the institutions sent replies, it is not the fault of the Commission for they could not get more particulars.
If the Commission has only to go on doing the work of collecting particulars and materials, it will be a never ending matter.
In spite of best efforts that any commission may make in collecting materials and datas, its conclusions cannot be always scientifically accurate in such matters.
Therefore, the proper approach, in our opinion, should be to see whether the relevant data and materials referred to in the report of the Commission justify its conclusions.
In our opinion, there was sufficient material to enable the Commission to be satisfied that the persons included in the list are really socially and educationally backward.
No doubt there are few instances where the educational average is slightly above the State average, but that circumstances by itself is not enough to strike down the entire list.
In fact, even there, it is seen that when the whole class in which that particular group is included, is considered the average works out to be less than the State average.
Even assuming there are few categories which are little above the State average, in literacy, that is a matter for the State to take note of and review the position of such categories of persons and take a suitable decision.
We have been referred to various decisions particularly of this Court where reservations for Backward Classes made by the concerned State have been either accepted as valid or struck down.
But it is not necessary for us to refer to those decisions because each case will have to be considered on its own merits, after finding out the nature of the materials collected by a commission or by the State when it enumerated certain persons as forming the Backward Classes.
But one thing is clear that if an entire caste, is as a fact.found to be socially and educationally backward, their inclusion in the list of Backward Classes by their caste name is not violative of article 15 (4).
In M. R. Balaji and others vs State Of Mysore(1) it was held that caste in relation to Hindus may be a relevant factor to consider in determining social backwardness of a group or class of citizens: but it cannot be made the sole or dominant basis in that behalf.
In the said decision enumeration of persons as Backward Classes on the basis solely of caste was struck down.
In State of Andhra Pradesh and another vs P. Sagar(2) a similar list prepared by the State of Andhra Pradesh solely on the basis of caste was struck down.
In Triloki Nath and another vs State of Jammu & Kashmir and others(3), the Constitution Bench of this Court held that the members of an entire caste or community may in the social, economic and educational scale of values, at a given time be backward and may on that account be (1) [1963] Supp.
I.S.C.R. 419.
(2) (3) 282 treated as backward classes, but that is not because they are members of a caste or community but because they form a class.
Therefore, it is clear that there may be instances of an entire cast, or a community being socially and educationally backward for being considered to be given protection under article 15(4).
In M. R. Balaji and others vs State of Mysore(1), it was ob served that it is doubtful if the test of average student population in the last, three High School Classes as appropriate in determining the educational backwardness and that it may not be necessary or proper to put the test as high.
Even in respect of educational State average it was observed in the said decision that the legitimate view to take would be that classes of citizens whose average is well below the State average can be treated as educationally backward.
But here again it was emphasised that the court does not propose to lay down any hard and fast rule as it is for the State to consider the matter and decide it in a manner which is consistent with the requirements of article _ 15 (4).
These observations made by this ,Court in the above decisions have, in our opinion, been misapplied by the High Court to the case on hand.
It has proceeded on the basis that it is axiomatic that the educational average of the class should not be calculated on the basis of the student population in the last three high school classes and that only those classes whose average is below the State average, that can be treated as educationally backward.
This Court has only indicated the broad principles to be kept in view when making the provision under article 15(4).
The High Court has committed another error in that it has proceeded on the basis that the groups whose inclusion as backward classes in the 1963 and 1966 lists, prepared by the State, which were struck down by the High Court, have again been included in the present list by the Commission.
The High Court has missed the fundamental fact that those two lists were struck down by the High Court on the ground that the State had made no investigation whatsoever, nor had the State collected the relevant materials before classifying the groups as Back ward Classes.
It was on that ground that those lists were struck down by the High Court.
In fact this Court also affirmed the latter decision of the Andhra Pradesh High Court striking down the 1966 list in its decision in State of Andhra Pradesh and another vs P. Sagar(2).
Though we are not inclined to agree with the decision of the High Court that the enumeration of groups as Backward Classes by the Commission is solely on the basis of caste, we will assume that the High Court is right in that view.
There are two decisions of this Court where the list prepared of Back ward Classes, on the basis of caste had been accepted as valid.
No doubt, this Court was satisfied on (1) [1963] Supp.
I S.C.R. 439.
(2) 283 the materials that the classification of caste as Backward Classes was justified.
The first decision is Minor P. Rajendran vs State of Madras.
(1) A Constitution Bench of this Court had to consider certain rules framed by the State of Madras for selection of candidates for admission to the last Year Integrated M.B.B.S. Course.
One of the rules, the validity of which had to be considered, was rule 5 providing for reservation for socially and educationally Backward Classes, referred to in the Government Order No. 839/Education, dated April 6, 195 1, as subsequently amended.
The challenge was that the said rule violated Article 15 of the Constitution as the list prepared by the State was exclusively on the basis of caste.
The State of Madras, after giving the history as to how the list of Backward Classes was made starting from the year 1906, had referred to the fact that the list was made upto date by making necessary amendments thereto.
It was further pointed out on behalf of the State that the main criteria for inclusion in the list was the social and educational backwardness of the caste based on occupations pursued by those castes.
It was further pleaded that as the members of the caste as a whole were found to be socially and educationally back ward, they were put in the list.
The, State further pointed out that after the Constitution came into force, the list was examined in the light of article 15 (4) and the same list which continued from 1906 was adopted for purposes of article 15 (4) as the entire caste was socially and educationally backward.
This Court accepted the explanation given by the State of Madras and held that though the list shows certain castes, members of those castes were really a class of socially and educationally backward citizens.
This Court held as a fact that the list prepared by the State was caste wise, nevertheless, as the castes included in the list were as a whole socially and educationally backward, the list was not violative of article 15.
In this view rule 5 was well as the lists of Backward Classes were held to be valid.
The following observations of this Court are apposite "The contention is that the list of socially and educationally backward classes for whom rese rvation is made r. 5 nothing but a list of certain castes.
Therefore, reservation in favour of certain castes, based only on caste considerations violates article 15(1), which prohibits discrimination on the ground of caste only.
Now if the reservation in question had been based only on caste and had not taken into account the social and educational backwardness of the caste in question, it would be violative of article 15(1).
But it must not be (1) ; 284 forgotten that a caste is also a class of citizens and if the caste as a whole is socially and educationally backward reservation can be made in favour of such a caste on the ground that it is socially and educationally backward class of citizens within the meaning of article 15 (4). . .
It is true that in the present cases the list of socially and educationally backward classes has been specified by caste.
But that does not necessarily mean that caste was the sole consideration and that persons belonging to these castes are also not a class of socially and educationally backward citizens. . " The above decision has been quoted with approval in State of Andhra Pradesh and another vs P. Sagar,(1) and it was empha sised that the principles laid down therein do not make any departure from those laid down in the previous decision The next decision of this Court where a list prepared on the basis of caste, on the ground that the entire caste was socially and educationally backward was approved as valid under article 15(4) is Minor A. Pertakaruppan vs State of Tamil Nadu and others.
(2) In this decision unit wise distribution of seats for the Medical Colleges was struck down by this Court as violative of articles 14 and 15, nevertheless the list of Backward Classes, which was challenged, as having been framed on the basis exclusively of caste, was held to be valid.
This Court after referring to the decisions in M. R. Balaji and others vs State of Mysore(1) and R. Chitralekha and others vs State of Mysore(1) held ' that caste is a relevant factor in ascertaining a class for the purpose of article 15(4).
The decision in Minor P. Rajendran vs State of Madras and others(5) was also quoted with approval and the said decision was relied on as an authority for the proposition that the classification of Backward Classes on the basis of caste is within the purview of article 15 (4), if those castes are shown to be socially and educationally backward.
After a perusal of the list of Backward Classes, which was under challenge, this Court held that though the list has been framed on the basis of caste, it does not suffer from any infirmity because the entire caste was substantially socially and educationally backward.
On this basis the list of Backward Classes was held on to be valid.
It may be mentioned that the list which was under challenge was more or less substantially the same as this Court held to be valid in Minor P. Rajendran vs State of Madras and others(5).
At this stage it may be recalled that the State of Andhra Pradesh originally formed part of the composite State of Madras.
We (1) [1968] 39.C.R. 595.
(2) ; (3) [1963] Supp.
I.S.C.R. 439.
(4) ; (5) ; 285 sent for the paper book in Writ Petition No. 285 of 1970, the decision of which is reported in Minor P. Rajendran vs State of Madras and others.(1) On a comparison of the list, which was under challenge in the said decision, but accepted as correct by this Court, with the list which is under attack before us, we find that most of the groups whose inclusion in the list by the State of Madras was held to be valid are also found in the list prepare by the Backward Classes Commission appointed by the Andhra Pradesh State.
To conclude, though prima facie the list of Backward Classes which is under attack before us may be considered to be on the basis of caste, a closer examination will clearly show that it is only a description of the group following the particular occupations or professions, exhaustively referred to by the Commission.
Even on the assumption that the list is based exclusively on caste, it is clear from the materials before the Commission and the reasons given by it in its report that the entire caste is socially and educa tionally backward and therefore their inclusion in the list of Backward Classes is warranted by article 15(4).
The groups mentioned therein have been included in the list of Backward Classes as they satisfy the various tests, which have been laid down by this Court for ascertaining the social and educational backwardness of a class.
The Commission has given very good reasons as to why it had to take into account the population figures based upon the 1921 and 1931 censuses.
It was also justified in taking the average student population of Classes X and XI, especially as the said procedure has been accepted by the Committee appointed by the Jammu and Kashmir Governments, presided by Dr. P. B. Gajendragadkar, former Chief Justice of India.
That Committee took into account IX and X standards average.
The decided cases have laid down the principles for ascertaining the social and educational backwardness of a class.
The Backward Classes Commission in this case has taken considerable pains in collecting data regarding the various aspects before including a particular group as Backward Class in the list.
There is a criticism levelled that the Commission has used its personal knowledge for the purpose of characterising a particular group as backward.
That, in the circumstances of the case, is inevitable and there is nothing improper or illegal.
The very object of the Commission in touring the various areas and visiting the huts and habitations of people is to find out their actual living conditions.
After all that information has been gathered by the Commission not secretly but openly.
In fact the actual living conditions of habitation can be very satisfactorily judged (1) ; 286 and found out only on a personal visit to the areas, which will give a more accurate picture of their living conditions and their surroundings.
If the personal impressions gathered by the members of the Commission have also been utilised to augment the various other materials gathered as a result of detailed investigation, it cannot be said that the report of the Commission suffers from any vice merely on the ground that they imported personal knowledge.
In our opinion, the High Court has not been fair to the Commission when it says that whenever the Commission found the figures obtained in respect of certain groups as relating to their educational standard being higher than the State average, it adopted an ingenious method of getting over that obstacle by importing personal knowledge.
In fact the Commission has categorically stated that the information received from the various schools showed that the percentage of education was slightly higher than the State average in respect of certain small groups; but in view of the fact that their living conditions were deplorably poor, the slight higher percentage of literacy should not operate to their disadvantage.
Regarding the criticism that the Commission has divided classes into more backward and less backward, in our opinion, this is not also well founded.
On the other hand, what the Commission has recommended was the distribution of seats amongst the reserved classes in proportion to their population.
This is not a division of the Backward Classes as more backward and less backward as was the case which was dealt with by this Court in M. R. Balaji and others vs State of Mysore.(1) There was a contention raised by Mr. Tarkunde, learned coun sel for the respondents, that the total number of seats that could be given to the candidates belonging to the Backward Classes cannot exceed the percentage of reservation made in their favour.
That is, according to the learned counsel, if more than the reserved quota amongst the Backward Classes candidates, have secured seats on merit, there can be no further selection of candidates from the reserved group.
No doubt our attention was drawn to a decision of the Kerala High Court, which has held that the reservation is irrespective of some of the candidates belongings to the Backward Classes, getting admission on their own merit.
The Andhra Pradesh High Court has taken a slightly different view.
If a situation arises wherein the candidates belonging to the groups included in the list of Backward Classes, are able to obtain more seats on the basis of their own merits, we can only state that it is the duty of the Government to review the question of further reservation of seats for such groups.
This has to be emphasised because the (1) [1963] Supp.
I S.C.R. 439.
287 Government should not act on the basis that once a class is considered as a backward class, it should continue to be backward for all time.
If once a class appears to have reached a stage of progress, from which it could be safely inferred that no further protection is necessary, the State will do well to review such instances and suitably revise the list of Backward Classes.
In fact it was noticed by this Court in Minor A. Periakarauppan vs State of Tamil Nadu and others(1) that candidates of Backward Classes had secured nearly 50% of seats in the general pool.
On that ground this Court did not hold that the further reservation made for the Backward Classes is invalid.
On the other hand it was held The fact that candidates of backward classes have secured about 50% of the seats.
in the general pool does show that the time has come for a de novo comprehensive examination of the question.
It must be remembered that the Government 's decision in this regard is open to judicial review.
" The only other aspect that has to be dealt with is the quantum of reservation made for the Backward Classes.
It was held in M. R. Balaji and others vs State of Mysore(2) that the total of reservation for Backward Classes, Scheduled Castes and Scheduled Tribes should not ordinarily exceed 50% of the available seats.
In the case before us, under G.O. No. 1793 of 1970, the total reservation is only 43%.
The break up of that percentage is 25%, 4% and 14%, for the Backward Classes, Scheduled Tribes and Scheduled Castes respectively.
The quantum of reservation is thus well within the limits mentioned in the decision, referred to above.
For the reasons given above, we are of the opinion that the list of Backward Classes, as well as the reservation of 25% of seats in Professional Colleges for the persons mentioned in the said list is valid and is saved by article 15(4) of the Constitution.
We are not inclined to agree with the reasons given by the High Court that the said G.O. offends article 15 (4) of the Constitution.
To conclude, we agree with the Wings of the High Court that reservation of 40% of seats to the H.S.C. candidates to the 1st Year Integrated M.B.B.S. Course under rule 9 of G.O. No. 1648 of 1970 is invalid.
That provision has been rightly struck down by the High Court.
To that extent the judgment and orders of the High Court are confirmed.
We, however, differ from the decision of the High Court regarding the invalidity of G.O. No. 1793 of 1970.
On the (1) ; 6 L8879upCI/72 (2) [1963] Supp.
I section C.R. 439.
288 other hand we hold that the said G.O. is valid and is saved by article 15(4) of the Constitution.
The judgment and orders of the High Court to the extent of striking down the said G.O., in consequence set aside.
In the result, the judgment and orders of the High Court striking down G.O. No. 1793 of 1970 are set aside and the appeals allowed in part to that txtent.
In other respects the appeals will stand dismissed.
There will be no order as to costs in the appeals.
It has been represented on behalf of the State that the admissions already given to the writ petitioners will not be disturbed.
G.C. Appeals allowed in part.
| IN-Abs | Admission to the integrated M.B.B.S. Course in the government medical colleges in Andhra Pradesh was from two sources, namely, those who had passed the pre University Course and those who had passed the Higher Secondary Course (Multi purpose) and a student from either course had to appear at a competitive test.
By G.O. No. 1648/Health dated July 23, 1970 40% of the seats were reserved for those candidates who had passed the Higher Secondary Course (Multi purpose).
Seats.
were also reserved for Scheduled Tribes and Scheduled Caste candidates.
Apart from these there was a reservation of 25% in favour of Backward Classes as enumerated by the Andhra Pradesh Backward Classes Com mission.
This reservation was provided by G.O. No. 1793/Education.
dated September 23, 1970.
The respondents who were candidates at the entrance examination for admission to these colleges were not selected on account of these reservations.
They filed writ petitions in the High Court challenging rule 9 under which 40% reservation had been made in favour of those passing Higher Secondary Course (Multi purpose) and the aforesaid G.O. making 25% reservation in favour of the Backward Classes.
The High Court by its judgment allowed the writ petitions and directed the State to give admission to the writ petitioners in the lst year, Integrated M.B.B.S. Course.
The High Court held that the only basis for selection for the first year course is the marks obtained by a candidate ,at the entrance test.
The selection thereafter should only be on the basis of highest number of marks irrespective of the fact as to whether the candidate was from the pore university course or the higher secondary course.
Rule 9 providing for the reservation of the 40%, in favour of ' HSC (M.P.) candidates was, therefore, struck down as offending Article, 14 of the Constitution.
Regarding the 25% seats in the colleges reserved for the Backward Classes the High Court held that the government order concerned was violative of Article 15(1) of the Constitution read with Article 29 and that it was not saved by Article 15(4) of the Constitution.
In appeal by the State of Andhra Pradesh, HELD : (1) It is no doubt open to the State to prescribe the source from which the candidates are declared eligible for applying for admission to the medical colleges; but when once a common entrance test has been prescribed for all the candidates on the basis of which the selection has to be made the rule providing further that 40% of the, seats will have to be reserved for H.S.C. candidates is arbitrary.
In the first place after 248 common test has been Prescribed there cannot be a valid classification ,,of PUC and Hsc candidates.
Even assuming that such classification is valid, the said classification has no reasonable relation to the object sought to be achieved, namely, selecting best candidate for the admission to the Medical Colleges.
The reservation of 40% to the H.S.C. candidates has no reasonable relation to the said object.
Hence the High Court was right when it struck down this reservation under rule 9 contained in G.O. No. 1648 of 1970 as violative of Article 14.
[266 C E] (ii) (a) Though prima facie the list of Backward Classes which was under attack may be considered to be on the basis of caste, a closer examination would clearly show that it is only a description of the group following the particular occupations or professions, exhaustively referred to by the Commission.
Even on the assumption that the list is based exclusively on caste, it was clear from the materials before the Commission and the reasons given by it in its report that the entire caste is socially and educationally backward and therefore the inclusion of subcaste in the list of Backward Classes is warranted by article 15(4).
The groups mentioned therein have been included in the list of Backward Classes as they satisfy the various tests which have been laid down by this Court for ascertaining social and educationally backward classes.
The list of Backward Classes as well as reservation of 25% of seats in Pro fessional Colleges for the persons mentioned in the said list was valid and was saved by article 15(4) of the Constitution and the High Court was wrong balding to the contrary.
[285 C D; 287 F G] (b) The actual living conditions of habitation of the classes under investigation can be satisfactorily judged and found out only on a personal visit to the areas which will give a more accurate Picture of their living conditions and their surroundings.
If the personal impression gathered 'by the members of the commission had also been utilised to augment the various other materials gathered as a result of detailed investigation it could not be said that the report of the Commission suffered from any vice merely on the ground that they imported personal knowledge.
[285 H286 A] (c) The criticism that the Commission had divided classes into more 'backward and less backward was not well founded.
on the other hand what the Commission had recommended was the distribution of seats amongst the reserved classes in proportion to their population.
This was not a division of the Backward Classes as more backward and less backward.
[286 D] (d) If a situation arises wherein the candidates belonging to the group included in the list of backward classes are able to obtain more seats on the basis of their own, merit it is the duty of the government to review the question of further reservation of seats for such groups If once a class appears to have reached a stage of progress from which it could be safely inferred that no further protection is necessary the State will do well to review such instances and suitably revise the list of Backward Classes.
[286 H] (e) In the present case under G.O. No. 1793 of 1970 the total reservation was only 43%.
The break up of that percentage is 25%, 4% and 14% for the Backward Classes, Scheduled Tribes and Scheduled Castes respectively.
The quantum of reservation was thus well within limit mentioned in Balaji 's case.
[287 E] State of Andhra Pradesh and another vs Lavu Narendra Nath and ,Others, , Gullapalli Nageswara Rao and Others vs 249 Principal Medical College, Guntur and Others, A.I.R. 1962 A.P. 212.
P. Sagar and Others vs State of Andhra Pradesh, represented by Health Department, Hyderabad and ' Others, A.I.R. 1968 A.P. 165, State Of Andhra Pradesh and Another vs P. Sagar, , Chitra Ghosh and Another vs Union of India and Others, ; , Minor P. Rajendra vs State of Madras, ; , Ganga Ram and Others vs Union of India and Others, A.I.R. 1970 S.C. 2178, D. N. Chanchala etc.
vs State of Mysore and Others ; , State of Maharashtra and Another vs Lok Shikshan Sanasatha and Ors., ; , Minor A. Periakaruppan and Anr.
vs State of Tamil Nadu and Ors.
; , P. Sukhadev vs The Government of Andhra Pradesh, , Triloki Nath Tiku and Anr.
vs State of Jammu & Kashmir and Ors.
[1967] 2 S.C.R. 265, M. R. Balaji and Ors.
vs State of Mysore, [1963] Supp.
I S.C.R. 438, R. Chitralekha and Anr.
vs State of Mysore and Ors.
, ; , State of Madras vs Shrimati Champakam Dorairajan, ; and Triloki Nath and Anr.
vs State of Jammu & Kashmir and Ors., [1969] I S.C.R.103, referred to.
|
iminal Appeal No 64 of 1969.
Appeal by special leave from the judgment and order dated December 10, 1968 of the Punjab and Haryana High Court in.
Criminal Revision No. 1200 of 1967.
R. L. Kohli, for the appellant.
V. C. Mahajan and R. N. Sachthey, for the respondent.
The Judgment of the Court was delivered by Khanna, J.
Ishar Das appellant was convicted by the judicial magistrate 1st class Patiala for an offence under section 7(1) of the (Act No. 37 of 1954) read with section 16(1) (a) (i) of that Act and was ordered to furnish bond under section 4 of the .
Bedi, J. of the Punjab and Haryana High Court during the course of the inspection of the Court of trial magistrate, took the view that an improper order had been made in the above case by the magistrate.
The High Court thereupon of its own motion directed that a notice be issued to the appellant.
The case was thereafter posted before Bedi, J.
The learned judge referred to the fact that a minimum sentence of imprisonment for a period of six months and a fine of Rs. 1,000 had been prescribed by section 16 of the .
It was also observed that offenses under the were against the public and called for deterrent punishment.
Order was consequently made that the appellant instead of being released on his furnishing a bond, should be sentenced to undergo simple imprisonment for a period of six months and to pay a fine of Rs. 1,000.
In default of payment of fine.
the appellant was ordered to undergo simple imprisonment for a further period of one and a half month.
The appellant thereafter filed this appeal by special leave to this Court.
At the time the leave was granted.
it was ordered that the appeal would be limited to the question of sentence only.
The prosecution case is that on August 1, 1966 the Food Inspector Patiala took a sample of two cups of ice cream from the appellant from Phul Cinema canteen on payment of three rupees.
Part of the ice cream was sent for analysis to Public Analyst Chandigarh.
The Analyst reported that the ice cream was adulterated, being deficient in milk fat contents to the extent of 77 per cent and total solid contents to the, extent of 7 per cent.
The appellant was thereafter prosecuted on the allegation that he had committed an offence under section 7(1) of the read with section 16 (1 ) (a) (i) of that 314 Act.
Charge was framed on that count against the appellant and he pleaded guilty to the same.
The trial magistrate took the view that the appellant, who was aged about 20 years, was in a repentant mood.
The appellant was, in the circumstances, directed to furnish bond under section 4 of the .
The bond was thereafter furnished by the appellant.
On revision, the sentence was altered by the High Court as mentioned above.
In appeal Mr. Kohli on behalf of the appellant has referred to the matriculation certificate which was produced on behalf of the appellant and according to which the date of birth of the appellant was May 8, 1947.
It is argued that as the age of the appellant on the date of his conviction by the trial magistrate was less than 20 years, the appellant was rightly given the benefit of the provisions of the .
The High Court, according to the learned counsel, was in error in awarding the sentence of imprisonment and fine to the appellant.
As against that Mr. Mahajan on behalf of the respondent has contended that the provisions of the cannot be invoked by an accused convicted of an offence under section 7 read with section 16 of the Prevention of Food Adultera tion Act.
Mr. Mahajan has not disputed that the age of the accused was less than 20 years on the date of his conviction by the trial magistrate, but, according to the learned counsel, that fact could make no difference.
There is, in our opinion, considerable force in the stand taken on behalf of the appellant by his learned counsel and we find ourselves unable to accede to the submission made on behalf of the respondent State.
The received ,the assent of the President on May 16, 1958 and was published in the Gazette of India dated May 19, 1958.
According to subsection (3) of section 1 of that Act, it shall come into force in a State on such date as the State Government may, by notification in the Official.
Gazette, appoint, and different dates may be appointed for different parts of the State.
The fact that the Act was in force in the State of Punjab before the sample of ice cream was taken from the appellant has not been disputed before us. 'Section 3 of the Act gives power to the court to release certain offenders after admonition.
According to that section, where any person is found guilty of having committed an offence punishable under section 379 or section 380 or section 381 or section 404 or section 420 of the Indian Penal Code or any offence punishable with imprisonment for not more than two years, or with fine, or with both under the Indian Penal Code or any other law, and no previous conviction is proved against him and the Court by which the person is found guilty is of opinion that, .having regard to the circumstances of the case including the nature 315 of the offence and the character of the offender, it is expedient so to do, then, notwithstanding anything contained in any other law for the time being in force, the Court may, instead of sentencing him to any punishment or releasing him on probation of good conduct under section 4, release him after due admonition.
The relevant part of sub section (1) of section 4 and sub section (1) of section 6 of the Act read as under : "4(1) When any person is found guilty of having committed on offence not punishable with death or imprisonment for life and the Court by which the person is found guilty is of opinion that, having regard to the circumstances of the case including the nature of the offence and the character of the offender, it is expedient to release him on probation of good conduct, then, notwithstanding anything contained in any other law for the time being in force, the Court may, instead of sentencing him at once to any punishment, direct that he be released on his entering into a bond, with or without sureties, to appear and receive sentence when called upon during such period, not exceeding three years, as the Court may direct, and in the meantime to keep the peace and be of good behavior." "6(1) When any person under twenty one years of age is found guilty of having committed an, offence punishable with imprisonment (but not with imprisonment for life), the Court by which the person is found guilty shall not sentence him to imprisonment unless it is satisfied that, having regard to the circumstances of the case including the nature of the offence and the character of the offender, it would not be desirable to deal with him under section 3 or section 4, and if the Court passes any sentence of imprisonment on the offender, it shall record its reasons for doing so.
" The , as observed by Subba Rao, J. (as he then was) speaking for the majority in the case of Rattan Lal vs State of Punjab(1), is a milestone in the progress of the modem liberal trend of reform in the field of penology.
It is the result of the recognition of the doctrine that the object of criminal law is more to reform the individual offender than to punish him.
Broadly stated, the Act distinguishes offenders below 21 years of age and those above that age, and offenders who are guilty of having committed an offence punishable with death or imprisonment for life and those who are guilty of a lesser offence.
While in the case of offenders who are above the (1) ; 316 age of 21 years absolute discretion is given to the court to release ,them after admonition or on probation of good conduct, subject to the conditions laid down in the appropriate provisions of the Act, in the case of offenders below the age of 21 years, an injunction is issued to the court not to sentence them to imprisonment unless it is satisfied that, having regard to the circumstances of the case, including the nature of the offence and the character of the offenders, it is not desirable to deal with them under sections 3 and 4 of the Act.
It is Manifest from plain reading of sub section (1 ) of section 4 of the Act that it makes no distinction between persons of the age of more than 21 years and those of the age of less than 21 years.
On the contrary, the said sub section is applicable to persons of all ages subject to certain conditions which have been specified therein.
Once those conditions are fulfilled and the ,other formalities which are mentioned in section 4 are complied with, power is given to the court to release the accused on probation of good conduct.
Section 6 of the Act deals specifically with persons under twenty one years of age convicted by a court for an offence punishable with imprisonment other than imprisonment for life.
In such a case an injunction is issued to the court not to sentence the young offender to imprisonment, unless the court is of the view that having regard to the circumstances of the case including the nature of the offence and the character of the offender (it would not be desirable to release him after admonition under section 3 or on probation of good conduct under section 4 of the Act.
Sub section (1) of section 16 of the provides the punishment which may be awarded to a person found guilty of the various offenses under that Act.
According to the above sub section, such a person, in addition to a penalty to which he may be liable under section 6, with which we are not concerned, be punishable with imprisonment for a term which shall not be less than six months but which may extend to six years and with fine which shall not be less than one thousand rupees.
There follows a proviso, according to which the court May, in case of some of the offenses under the Act, for adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than six months or of fine of less than one thousand rupees or of both imprisonment for a term of less than six months and fine of less than one thousand rupees.
The question which arises for determination is whether despite the fact that a minimum sentence of imprisonment for a term of six months and a fine of rupees one thousand has been prescribed .by the legislature for a person found guilty of the offence under 317 the , the court can resort to the provisions of the .
In this respect we find that sub section (1) of section 4 of the contains the words "notwithstanding anything contained in any other law for the time being in force".
The above non obstante clause points to the conclusion that the provisions of section 4 of the would have overriding effect and shall prevail if the other conditions prescribed are fulfilled.
Those conditions are (1) the accused is found guilty of having committed an offence not punishable with death or imprisonment for life, (2) the court finding him guilty is of the opinion that having regard to the circumstances of the case, including the nature of the offence and the character of the offender, it is expedient to release him on probation of good conduct, and (3) the accused in such an event enters into a bond with or without sureties to appear and receive sentence when called upon during such period not exceeding three years as the court may direct and, in the meantime, to keep the peace and be of good behavior.
Sub section (1) of section 6 of the above mentioned Act, as stated earlier, imposes a duty upon the court when it finds a person under 21 years of age, guilty of an offence punishable with imprisonment other than imprisonment for life, not to sentence him to imprisonment unless the court is satisfied that, having regard to the circumstances of the case, including the nature of the offence and the character of the offender, it would not be desirable to deal with him under sections 3 or 4 of the Act but to award a sentence of imprisonment to him.
The under lying object of the above provisions obviously is that an accused person should be given a chance of reformation which he would lose in case he is incarcerated in prison and associates with hardened criminals.
So far as persons who are less than 21 years of age are concerned, special provisions have been enacted to prevent their confinement in jail at young age with a view to obviate the possibility of their being subjected to the pernicious influence of hardened criminals.
It has accordingly been enacted that in the case of a person who is less than 21 years of age and is convicted for an offence not punishable with imprisonment for life, he shall not be sentenced to imprisonment unless there exist reasons which justify such a course.
Such reasons have to be recorded in writing.
According to section 18 of the , the aforesaid Act shall not affect the provision of sub section (2) of section 5 of the Prevention of Corruption Act, 1947 (Act 2 of 1947).
The last mentioned provision, namely, sub section (2) of section 5 of the Prevention of Corruption Act, prescribes, in the absence of special reasons, a minimum sentence of imprisonment for a term of not less than one year for those convicted 318 under section 5 of that Act.
If the object of the legislature was that the provisions of the should not apply to all cases where a minimum sentence of imprisonment is prescribed by the statute, there was no reason to specify subsection (2) of section 5 of the Prevention of Corruption Act in section 18 of the .
The fact that out of the various offenses for which the minimum sentence is prescribed, only the offence under sub section (2) of section 5 of the Prevention of Corruption Act has been mentioned in section 18 of the and not the other offenses for which the minimum sentence is prescribed, shows that in case of such other offenses the provisions of can be invoked.
The provisions of , in our opinion, point to the conclusion that their operation is not excluded in the case of persons found guilty of offenses under the .
Assuming that there was reasonable doubt or ambiguity, the principle to be applied in Construing a penal act is that such doubt or ambiguity should be resolved in favour of the person who would be liable to the penalty (see Maxwell on Interpretation of Statutes, p. 239, 12th Edition).
It ha,,; also to be borne in mind that the was enacted in 1958 subsequent to the enactment in 1954 of the .
As the legislature enacted the despite the existence on the statute book of the , the operation of the provisions of cannot be whittled down or circumscribed because of the provisions of the earlier enactment, viz.
Indeed, as mentioned earlier, the non obstante clause in section 4 of the is a clear manifestation of the intention of the legislature that the provisions of the would have effect notwithstanding any other law for the time being in force.
We may also in this context refer to the decision of this Court in the case of Ramji Missir vs State of Bihar(1) wherein this Court while dealing with the observed that its beneficial provision,, should receive wide interpretation and should not be read in a restricted sense.
Adulteration of food is a menace to public health.
The has been enacted with the aim of eradicating that anti social evil and for ensuring purity in the articles of food.
In view of the above object of the Act and the intention of the legislature as revealed by the fact that a minimum sentence of imprisonment for a period of six months (1) [1962] Suppl.
2 S.C.,R. 745.
319 and a fine of rupees one thousand has been prescribed, the courts should not lightly resort to the provisions of the in the case of persons above, 21 years of age found guilty of offenses under the .
As regards persons under 21 years of age, however, the policy of the law appears to be that such a person in spite of his conviction under the , should not be deprived of the advantage of which is a beneficent measure and reflects and incorporates the modern approach and latest trend in penology.
Mr. Mahajan has argued that if the trial magistrate took the view that the accused appellant in view of Ms age, should not be sentenced to undergo imprisonment, the learned magistrate should still have imposed the sentence of fine as prescribed by subsection (1) of section 16 of the Act.
In this respect we are of the opinion that a sentence of fine also carries with it the consequence of imprisonment in case the accused fails to pay the fine.
As the object of is to avoid imprisonment of the person covered by the provisions of that Act, the said object cannot be set at naught by imposing a sentence of fine which would necessarily entail imprisonment in case there is a default in payment of fine.
The High Court in the present case did not consider the pro visions of the and its attention does not appear to, have been invited to the mandatory provisions of section 6 of that Act.
In view of the fact that the accused was less than 20 years of age and appeared to be in a repentant mood, the trial court took action under section 4 of the .
The High Court, in our view, was in error in interfering with the above order of the trial magistrate.
We, therefore, accept the appeal, set aside the order of the High Court and restore that of the trial magistrate.
V.P.S. Appeal allowed.
| IN-Abs | The appellant, who was less than 20 years was convicted for an offence under section 7(1) of the , and was ordered to furnish a bond under section 4 of the .
The High Court revised the sentence, because section 16 of the Prescribed a minimum sentence of imprisonment for 6 months and a fine of Rs. 1000.
Allowing the appeal to this Court, HELD : Section 4(1) of the contains the non obstante clause notwithstanding anything contained in any other law for the time being in force, and hence the section would have overriding effect and shall prevail if its other conditions are fulfilled; especially when the was enacted in 1958 subsequent to the enactment in 1954 of the .
[317 A C; 318 D E] According to section 18 of the , that Act shall not affect section 5(2) of the Prevention of Corruption Act which also prescribes a minimum sentence of imprisonment.
The fact that only one offence for which a minimum sentence of imprisonment is prescribed, has been specified shows that in the case of other such offenses, the provisions of the can be invoked [317H; 318 A C] Assuming there is some ambiguity, the principle to be applied in construing a penal statute is that such doubt should be resolved in favour of the person who would be liable to the penalty.
[318 D] Adulteration of food is a menace to public health and the has been enacted to eradicate the evil.
Therefore, courts should not lightly resort to the provisions of the probation of Offenders Act in the case of persons above 21 years of age; but the Act makes a distinction between offenders below 21 years and those above that age.
As regards person under 21 years, the policy of the law is that such a person, even in the case of conviction under the , should not be deprived of the advantage of the which is a beneficent measure and reflects and incorporates the modern approach and latest trend in penology.
[318 G H; 319 A C] As the object of the is to avoid imprisonment of a person covered by its provision, ,, that object cannot be set at naught by imposing a sentence of fine which would entail imprisonment in case of default.
[319 D] Rattan Lal vs State of Punjab ; and Ramji Missir vs State of Bihar [1962] Supp. 2 S.C.R. 745, referred to. 313
|
o. 2 of 1972.
Appeal by Special Leave from the judgment and order dated April 13, 1970 of.
the Allahabad High Court in Special Appeal No. 1074 of 1968.
M. C. Setalvad, P. N. Tiwari J. B. Dadachanji and Co. for the appellant.
R. K. Garg and section C. Agarwal, for the respondents.
The Judgment of the Court was delivered by Mathew, J.
The appellant filed a writ petition before the High Court of Allahabad, Lucknow Bench, challenging the validity of a resolution passed on 12 11 1967 by the Managing Committee of the Jai Narain College, Lucknow, formerly known as Kanyakubja Degree College, an associated college of the Lucknow University, terminating his services, and praying for issue of an appropriate writ or order quashing the resolution.
A learned single judge of that Court, finding that in terminating the services, the Managing Committee acted in violation of principles of natural justice, quashed the resolution and allowed the writ petition.
The Managing Committee appealed against the order.
A Division Bench of the High Court found that the relationship between the College and the appellant was that of master and servant and that even if the service of the appellant has been terminated in breach of the audi alteram partem rule of natural justice, the remedy of the appellant was to file a suit for damages and not to apply under Article 226 of the Constitution for a writ 322 or order in the nature of certiorari and that in fact no principle of natural justice was violated by terminating the services of the appellant as the appellant was given an opportunity of submitting his explanation to the charges.
The Bench, therefore, set aside the order of the learned single judge and dismissed the writ petition.
It is from this judgment that the appeal has been preferred by special leave.
The appellant joined the service of the college as lecturer in 1946.
He was promoted to the post of Head of the Department of Zoology in 1959.
On the basis of certain complaints against him received by the Manager of the College, charges were framed against him and his explanation was called for.
He submitted an explanation.
The explanation was found not to be satisfactory and the Managing Committee passed a resolution on 12 11 1967 for removal of the appellant from service.
As already stated, this was the resolution challenged by the appellant in the writ petition.
On behalf of the appellant, Mr. M. C. Setalvad, contended that the appellant had a statutory status, that his services were terminated in violation of the provisions of statutes passed under the.
Lucknow University Act, 1920 and, therefore the High Court was wrong in its conclusions that no application for a writ or order in the nature of certiorari would lie.
He further submitted that the appellant was not given a reasonable opportunity of defending himself against the charges.
it is well settled that, when there is a purported termination of a contract of service, a declaration that the contract of service still subsisted would not be made in the absence of special circumstances, because of the principle that Courts do not ordinarily enforce specific performance of contracts of service [see Executive Committee of U.P. State Warehousing Corporation Ltd. vs Chandra Kiran Tyagi(1)] and Indian Airlines Corporation vs Sukhdeo Rai( ').
If the master rightfully ends the contract, ,there can be no complaint.
If the master wrongfully ends the contract, then the servant can pursue a claim for damages.
So even if the master wrongfully dismisses the servant in breach of the contract, the employment is effectively terminated.
In Ridge vs Baldwin(3), Lord Reid said in his speech : "The law regarding master and servant is not in doubt.
There cannot be specific performance of a contract of service, and the master can terminate the contract with his servant at any time and for any reason or for none.
But if he does so in a manner not (1) ; (2) ; (3) (1965) Weekly Law Reports, Vol 1, 79.
323 warranted by the contract he, must pay damages for breach of contract.
So the question in a pure case of master and servant does n ot at all depend on whether the master has heard the servant in his own defence; it depends on whether the facts emerging at the trial prove breach of contract. 'But this kind of case can resemble dismissal from an office where the body employing the man is under some statutory or other restriction as to the kind of contract which it can make with its, ser vants, or the grounds on which it can dismiss them." A teacher appointed by a University constituted under a statute was held not to be holding an office or status in Vidyodaya University vs Silva(1).
In that case the services of the respondent was brought to an end by a resolution of the University Council set up under the statute establishing the University.
The resolution was admittedly passed without hearing the teacher.
Under the statute, the Council was empowered to institute professorships and every appointment was to be by an agreement in writing between the University and the professor and was to be for such period and on such terms as the Council might resolve.
Under section 18(e) of the Act, the Council had the power to dismiss an officer or a teacher on grounds of incapacity or conduct which, in the opinion of not less than two third of the members of the Council, rendered him unfit to be an officer or a teacher of the University.
Such a resolution with the requisite majority was passed.
The Act gave no right to the teacher of being heard by the Council.
The Privy Council held that the mere circumstances that the University was established by the statute and was regulated by statutory enactments contained in the Act did not mean that the contracts of employment made with teachers, though subject to section 18(e), were other than ordinary contracts of master and servant and, therefore, the procedure of being heard invoked by the respondent was not available to him and no writ could be issued against the University.
The decision in this case has been criticised by academic .writers (see Jaffe, English and American Judges as Law Makers, p. 26; S.A. de Smith, Judicial Review of Administrative Action, pp. 214 215; G. Ganz, Public Law Principles applicable to Dismissal from Employment, Modem Law Review, Vol.
30 pp. 288291).
Recently the House of Lords considered the question in Malloch vs Aberdeen Corporation (2) .
That case concerned a teacher in Scotland who was dismissed by the Education Committee for the reason that he was not registered in terms of paragraph 2 of schedule 2 to the Teachers ' (Education, Training and Registration) (Scotland) Regulations, 1967, made under section (1) [1964] 3 All F.R. 865.
(2) 324 2(1) of the Education (Scotland) Act, 1962, and the amending regulation 4(2) of the Schools (Scotland) Code, 1956.
In an action against the education authority, he claimed that the purported dismissal was a nullity in that it was contrary to natural, justice since he had not been given a hearing.
It was held (Lord Morris and Lord Guest dissenting) that the teacher had a right to be heard before he was dismissed as according to the majority he was holding an office.
In the course of his speech, Lord Wilberforce made certain observations "A comparative list of situations in which persons have been held entitled or not entitled to a hearing, or to observation of rules of natural justice, according to the master and servant test, looks illogical and even bizare.
A specialist surgeon is denied protection which is given to hospital doctor; a University professor, as a servant, has been denied the right to be heard, a dock laborer and an undergraduate have been granted it; examples can be multiplied [see Barber vs Manchester Regional Hospital Board , Palmar vs Inverness Hospitals Board of Management, [1963], $.C. 311, Vidyodaya University Council vs Silva , Vine vs National Dock Labour Board , Glynn vs Keele University One may accept that if there are relationships in which all requirements of the observance of rules of natural justice are excluded (and I do not wish to assure that this is inevitably so), these must be confined to what have been called "pure master and servant cases", which I take to Mean cases in which there is no element of public employment or service, no support by statute, nothing in the nature of an office or a status which is capable of protection.
If any of these elements exist, then, in my opinion, whatever the terminology used, and even though in some inter parties aspects the relationship may be called that of master and servant, there may be essential procedural requirements to be observed, and failure to observe them may result in a dismissal being declared to be void.
" and then he said as regards the decision in VidyodaYa University, Council vs Silva(1) : "It would not be necessary or appropriate to disagree with the procedural or even the factual basis on which this decision rests : but I must confess that I (1) 325 could not follow it in this country in so far as it involves a denial of any remedy of administrative law to analogous employments.
Statutory provisions similar to those on which the employment rested would tend to show, to my mind, in England or in Scotland, that it was one of a sufficiently public character, or one partaking sufficiently of the natu re of an office, to attract appropriate remedies of administrative law.
" Whether the decision in Vidyodaya University Council vs Silva(1) is correct or not, in this.
case, we think there was no element of public employment, nothing in the nature of an office or status which is capable of protection.
In section R. Tewari vs District Board, Agra(2), this Court formulated the exceptions to the general rule that when there is a termination of a contract of service, a declaration that the contract of service still subsisted would not be made, by saying : "But this rule is subject to certain well recognised exceptions.
It is open to the Courts, in an appropriate case, to declare that a public servant who is dismissed from service in contravention of Article 311 continues to remain in service, even though by so doing the State is in effect forced to continue to employ the servant whom it does not desire to employ.
Similarly, under the industrial law, jurisdiction of the labour and industrial tribunals to compel the employer to employ a worker, whom he does not desire to employ, is recognised.
The Courts are also invested with the power to declare invalid the act of a statutory body, if by doing the act, the body has acted in breach of a mandatory obligation imposed by the statute, even if by making the declaration the body is compelled to do something which it does not desire to do." Mr. Setalvad contended that since the college in question is affiliated to a statutory body, namely, the University of Lucknow,and is governed by the relevant statutes and ordinances framed under the provisions of Lucknow University Act, 1920, any violation of the statute or the ordinance in the matter of terminating the services of a teacher would attract the jurisdiction of the High Court under Article 226 of the Constitution as statutes and ordinances have the force of law.
In support of this, counsel relied upon the decision of this Court in Prabhakar Ramakrishna Jodh vs A. L. Pande and another(").
The appellant before this Court in that case was a teacher in a college affiliated to the University of Saugar and managed by the Governing Body (1) (2) ; (3) 326 established under the provisions of the relevant ordinance made under the University of Saugar Act.
Certain charges were framed against the appellant by the Principal of the College and he was asked to submit his explanation.
The appellant in his explanation denied all the charges and requested for particulars on which one of the charges was based.
The particulars were not supplied and the Governing Body terminated his services without holding any enquiry.
The appellant moved the High Court under Article 226 of the Constitution for a writ quashing the order of the Governing Body and for his reinstatement.
He contended that the Governing Body had made the order in violation of the provisions of Ordinance 20, otherwise called the 'College Code, framed under section 32 of the University of Saugar Act read with section 6 (6) of that Act.
Clause 8 (vi (a) of the College Code provided that the Governing Body of the college shall not terminate the services of a confirmed teacher without holding an enquiry and without giving him an opportunity of defending himself.
The High Court held that the conditions of service of the appellant were governed not by the 'College Code ' but by the contract made between the Governing Body and the appellant under clause 7 of the College Cod& which stated that all teachers of the college shall be appointed under a written contract in the form prescribed , that the provisions of the 'College Code ' were merely conditions prescribed for affiliation of colleges and that no legal rights were created by the 'College Code ' in favour of the teachers of the affiliated colleges as against the Governing Body.
The High Court, therefore, dismissed the petition.
In appeal to this Court it was held that the 'College Code ' had the force of law and that it not merely regulated the legal relationship between the affiliated colleges and the University but also conferred legal rights on the teachers of affiliated ,colleges.
The Court further said "It is true that Clause 7 of the Ordinance provides that all teachers of affiliated colleges shall be appointed on a written contract in the form prescribed in Sch.
A but that does not mean that teachers have merely a contractual remedy against the Governing Body of the College.
On the other hand, we are of opinion that the provisions of Clause 8 of the Ordinance relating to security of the tenure of teachers are part and parcel of the teachers ' service conditions. . " When once this Court came to the conclusion that the 'College Code ' had the force of law and conferred rights on the teachers of affiliated colleges, the right to challenge the order terminating the services of the appellant, passed in violation of clause 8 (vi) (a) of the 'College Code ' in a proceeding under Article 226 327 followed 'as the night the day ' and the fact that the appellant had entered into a contract was considered as immaterial.
In the case in hand, the position is entirely different.
The relevant statutes governing this case are statutes 151, 152 and 153, framed under the provisions of the Lucknow University Act, 1920.
Statute 151 provides that teachers of an Associated College including the ' principal shall be appointed on written contract and that the contract shall inter alia provide the conditions mentioned therein in addition to such other conditions not inconsistent with the Act and the statutes as an Associated College may include in its own form of agreement.
Then the conditions as regards salary, age of retirement, etc., are enumerated.
The statute then goes on to specify the grounds on which a teacher 's services can be terminated.
Statute 152 states that the form of agreement to be adopted by each college shall be approved by the Executive Council before it is put in force.
Statute 153 provides for a form of agreement which shall serve as a model.
It may be noted that statute 151 does not provide for any particular procedure for dismissal or removal of a teacher for being incorporated in the contract.
Nor does the model form of contract lay down any particular procedure for that purpose.
The appellant had entered into an agreement when he was employed in the college.
Clause 5 of the agreement provided that : "the period of probation shall be one year unless extended by the Managing Committee and the College may at any time during the said period of probation put an end to this engagement, or if service shall continue beyond the said term, at any time thereafter, dispense with the services of the said Lecturer without notice, if the Managing Committee of the said College is satisfied that it is necessary to remove the said Lec turer for misconduct, insubordination or habitual neglect of duty on the part of the said Lecturer 'or in case any of the conditions herein specified have been broken by the said Lecturer provided that an oppor tunity is given to him by the said Managing Committee to give his explanation before a decision is arrived at.
" On a plain reading statute 151, it is clear that it only provides that the terms and conditions mentioned therein must be incorporated in the contract to be entered into between the college and the teacher concerned.
It does not say that the terms and conditions have any legal force, until and unless they are embodied in an agreement.
To put it in other words, the terms and conditions of service mentioned in Statute 151 have proprio 328 vigore no force of law.
They become terms and conditions of service only by virtue of their being incorporated in the contract.
Without the contract, they have no vitality and can confer no legal rights.
Whereas in the case of Prabhakar Ramakrishna Jodh vs A. L. Pande and another(1), the terms and conditions of service embodied in clause 8 (vi) (a) of the 'College Code ' had the force of law apart from the contract and conferred rights on the appellant there, here the terms and conditions mentioned in Statute 151 have no efficacy, unless they are incorporated in a contract.
Therefore, appellant cannot found a cause of action on any breach of the law but only on the breach of the contract.
As already indicated, Statute 151 does not lay down any procedure for removal of a teacher to be incorporated in the contract; So, clause 5 of the contract can, in no event, have even a statutory flavor and for its breach, the appellant 's remedy lay elsewhere.
Besides, in order that the third exception to the general rule that no writ will lie to quash an order terminating a contract of service, albeit illegally, as stated in section R. Tewari vs District Board, Agra(2) might apply, it is necessary that the order must be the order of a statutory body acting in breach of a mandatory obligation imposed by a statute.
The college, or the Managing Committee in question, is not a statutory body and so the argument of Mr. Setalvad that the case in hand will fall under the third exception cannot be accepted.
The contention of counsel that this Court has sub silentio sanctioned the issue of a writ under Article 226 to quash an order terminating services of a teacher passed by a college similarly situate in Prabhakar Ramakrishna Jodh vs A. L. Pande and another(1), and, therefore, the fact that the college or the managing committee was not a statutory body was no hindrance to the High Court issuing the writ prayed for by the appellant has no merit as this Court expressly stated in the judgment that no such contention was raised in the High Court and so it cannot be allowed to be raised in this Court.
In this view of the matter, it is quite unnecessary to go into the question whether the appellant was given sufficient opportunity to meet the charges against him.
We hold that the High Court was right in its view that the writ petition was incompetent.
We, therefore, dismiss the appeal but, in the circumstances, we make no order as to costs.
section N. Appeal dismissed.
| IN-Abs | The appellant joined as a lecturer in a College in U.P.
On the hub ,of certain complaints received by the Manager of the College, charges were framed against him and his explanation, was called for.
He submitted an explanation.
The explanation was found unsatisfactory and the Managing Committee passed a resolution for removal of the appellant from service.
The relevant statutes governing the present case are Statutes 151, 152 and 153 framed under the provisions of the Lucknow University Act, 1920.
The appellant filed a writ petition before the High Court challenging the validity of the resolution and a learned single judge finding that the Managing Committee acted in violation of the principles of natural justice, quashed the resolution and allowed the writ petition.
On appeal, a Division Bench set aside the order of the learned single judge and dismissed the writ petition on the ground that no writ lies in the facts and circumstances of the case.
The remedy of the appellant lay in a suit for damages.
On behalf of the appellant it was contended that the appel lant had a statutory status, that his services were terminated in violation of the provisions of the statutes passed under the Lucknow University Act, 1920 and therefore, the High Court was wrong in its conclusions that no writ of certiorari would lie against the respondent.
It was further submitted that ,the appellant was not given a reasonable opportunity of defending himself against the charges.
Statue 151 provides that a teacher of an associated College shall be appointed on a written contract and the contract shall provide the conditions mentioned there in addition to such other conditions as the associated College may include in the agreement.
Clause 5 of the agreement provides that the Managing Committee may dispense with the services of a lecturer without notice if the Committee is satisfied that it is necessary to remove the said lecturer for misconduct or otherwise, provided, an opportunity is given to him by the Committee to give his explanation before a decision is arrived at.
Dismissing the appeal.
HELD : (1) When there is a purported termination of a contract of service,.
a declaration that a contract of service 'still subsisted would not be made in the absence of special circumstances and courts do not ordinarily enforce specific performance of a contract of service.
The remedy of the victim lies in a claim for damages, not a claim for a declaration that the contract of service still subsisted.
[322 E F] Executive Committee of U.P. State Warehousing Corporation Ltd. vs Chandra Kiran Tyagi, ; ; and Indian Airlines Corporation vs Sukh Dev Rai, ; followed.
(2) On a plain meaning of statute 151, it is clear that it only provides that the terms and conditions mentioned therein must be incorporated in 321 the contract to be entered into between the College and the teacher concerned.
It does not say that the terms and conditions have any legal force, until: and unless they are embodied in an agreement.
The terms and conditions of service mentioned in Statute 151 have proprio vigore, no force of law.
They become terms of service only by virtue of their being incorporated in a contract.
Without the contract, they have no vitality and can confer no legal right.
Therefore, the appellant cannot find a cause of action of any breach of law, but only on the breach of the con tract, for which a writ in the nature of ceritiorari will not lie [327 H] (3) A writ will lie when the order is the order of a statutory body acting in breach of a mandatory obligation imposed by a statute.
The College or the Managing Committee in question, is not a statutory body and so the High Court is right is dismissing the petition.[328 D] Further, since the High Court has no jurisdiction, it is not necessary to go into the question as to whether the appellant was given sufficient opportunity to meet the charges against him.
[328 G] Prabhakar Ramkrishna Jodh vs A. L. Pande & anr.
[1965] 2 S.C.R. 713, and Vidyodaya University vs Silva discussed and distinguished.
|
Appeal No. 527 of 1967.
Appeal from the judgment and decree dated August 2nd/3rd, 1965 of the Mysore High Court in Regular First Appeal No. 147 of 1958.
M. Natesan and K. Jayaram, for the appellant.
section section Shukla, for respondents Nos. 1 to 4.
The Judgment of the Court was delivered by Hedge, J.
This appeal by certificate arises from the deci sion of the Mysore High Court in R.A. No. 147 of 1958 on its file.
The plaintiff is the appellant.
The main question that arises for decision in this appeal is as to the share to which the plaintiff is entitled in the properties held to be partible by the High Court.
One other minor contention had also been urged which will be referred to and dealt With at the appropriate stage.
The facts as found by the High Court and which are no more in dispute may now be stated.
The appellant is the adopted son of one Ranga Rao alias Ramachandra Rao who died in 1912.
He was adopted by the 202 said Ranga Rao 's widow Seethabai on September 18, 1955.
The geneology of the family of Ranga Rao is as follows KRISHNA RAO DESHPANDE (Died 1934) MARRIED RADHABAI (Died 1935) Ranga Rao alias Hanumantha Rao Ramchandra Rao (went out of the (died 1912) family by adoption).
Married Seethabai (Defendant No. 1) Govinda (Adopted on 18 9 1955) Plaintiff Lakshmana Rao (died 6 9 1952) Married Venkubai Ambabai lst wife 2nd wife (died 1904) Napppa Nagamma Ansuyabai (Nagesh) Deft.
7 Deft.
2 Krishnaji Lakshamana Gundappa Deft.3 (Deft. 4) Deft. 5.
Hanumantha Rao went out of the family having been adopted into some other family.
There was a partition between Krishna ' Rao and Lakshmana Rao, the only two existing coparceners at that time, in 1933.
After partition Krishna Rao is said to have bequeathed his properties to some of his relations as per his will dated November 8, 1934.
Subsequently there was a further partition between Lakshmana Rao and defendant No. 2 Nagappa on 203 February 14, 1946.
Lakshmana Rao died in 1952.
Asmentioned earlier, the plaintiff was adopted on September 18, 1955 and the suit from which this appeal arises was instituted in1956 by the plaintiff appellant represented by his natural father ashis ' next friend as he was a minor on the date of the suit.
The trial court granted the plaintiff half share in the properties that were held to be that of the family.
The High Court modified the decree of the trial court in certain respects.
It is not necessary to refer to all the modifications made by the High Court.
We shall refer only to those modifications which are challenged in this appeal.
The High Court reduced the share awarded to the plaintiff from half to 1/3rd of the properties held by it to be partible.
The correctness of this decision is questioned.
The only other question is whether the High Court was justified in setting aside the trial court 's decree awarding a sum of Rs. 15001 to the plaintiff.
Before proceeding to examine the appellant 's contention that he is entitled to a half share in properties held to be partible, it would be convenient to dispose of his contention relating to the money decree.
The trial court came to the conclusion that out of the consideration of Rs. 6500/ received under the sale deed Exh. 177, the second defendant had not accounted for Rs. 3000/ .
Hence the plaintiff is entitled to a half share therein.
The trial court as well as the High Court have found that the sale in question is valid as the same was effected to meet family necessities.
The appellant did not seek an accounting from the 2nd defendant.
No case was made out for requiring the 2nd defendant to account in respect of the amounts received by him as the karta of the family, nor did the plaintiff aver in his plaint that there was any cash in the hands of the 2nd defendant.
Hence the High Court was justified in reversing the decree of the trial court directing the defendant to pay to the plaintiff a sum of Rs. 1500/ .
This leaves us with the question as to the share to which the plaintiff is entitled in the partible properties.
Even before the plaintiff was adopted into the family, there was a partition between Krishna Rao and Lakshmana Rao.
The genuineness of that partition is no more in dispute.
After the partition Krishna Rao became absolutely entitled to his share of the properties and hence he was entitled to deal with that property in the manner he thought best.
As mentioned earlier he had bequeathed his properties to others.
But it was urged on behalf of the appellant that his adoption dates back to the date of the death of his adoptive father, Ranga Rao.
By a fiction of law, he must be deemed to have been in existence, when Krishna Rao and Lakshmana Rao divided the properties amongst themselves.
The said partition having been effected without his joinder, the same has to be 204 ignored.
Hence he is entitled to a half share in the properties.
Alternatively, it was contended that the plaintiff is entitled to get by succession half share in the properties that fell to the share of Krishna Rao.
Before proceeding to examine the decided cases referred to at the time of the arguments, let us proceed to examine the question on first principles.
It is true that by a fiction of law well settled by decided cases that an adopted son is deemed to have been adopted on the date of the death of his adoptive father.
He is the continuator of his adoptive father 's line exactly as an aurasa son and an adoption, so far as the continuity of the line is concerned, has a retrospective effect.
Whenever the adoption may be made there is no hiatus in the continuity of the line.
From that it follows that the appellant must be deemed to have been adopted in 1912.
Consequently he is deemed to have been a coparcener in his adoptive father 's family when Krishna Rao and Lakshmana Rao partitioned the properties.
The partition having been effected without his consent, it is not binding on him.
But from this it does not follow that Krishna Rao and Lakshmana Rao did not separate from the family at the time of the partition.
It was open to Krishna Rao and Lakshmana Rao to separate themselves from the family.
Once they did separate, the appellant and his adoptive mother alone must be deemed to have continued as the members of the family.
It is true that because the plaintiff 's adoptive mother was alive, the family cannot be said to have come to an end on the date of partition.
But that does not mean that Krishna Rao and Lakshmana Rao did not separate from the family.
the partition took place in 1933, the appellant even if he was a coparcener on that day could have only got 1/3rd share.
We, fail to see how.
his position can be said to have improved merely because he was adopted subsequent to the date of partition.
It is true that because he was not a party to the partition, he is entitled to ask for reopening of the partition and have his share worked out without reference to that partition.
But so far as the quantum of his share is concerned, it must be determined after taking into consideration the fact that Krishna Rao and Lakshmana Rao separated from the family in 1933.
The alternative contention of the appellant referred to earlier is also untenable firstly because Krishna Rao disposed of his share of the properties by means of a will and secondly even if he had not disposed of his: share of the property, the same would have devolved on Lakshmana Rao by succession and the property that had once vested by succession cannot be divested as in that property the plaintiffs adoptive father had no right of his own.
The doctrine of relation back is only a legal fiction.
There is no justification to logically extend that fiction .
In fact the plaintiff had nothing to do with his adoptive father 's family when Krishna Rao died.
On that day 205 his adoptive father was not alive.
The devolution of Krishna Rao 's property must be held to have taken place at the very moment Krishna Rao died.
We know of no legal fiction under which it can be said to have been in a suspended animation till the plaintiff was adopted.
This takes us to the decided cases.
A long line of decisions has firmly laid down that an adoption dates back to the date of the death of the adoptive father.
It is not necessary to refer to the catena of decisions on this point.
Suffice it to refer to the decision of this Court in Shrinivas Krishnarao Kango vs Narayan Devji Kango and Ors.(1).
But that fiction by itself does not help the plaintiff.
That fiction merely enables him to establish that he must be deemed to have been in existence on the date of the death of his adoptive father.
Division of status need not be effected by bilateral agreement.
It can be effected by an unilateral declaration by a coparcener if the same is properly communicated.
Therefore it was within the power of Krishna Rao and Lakshmana Rao to separate themselves from the family and in fact they did so in 1933.
We see no basis for the contention of the appellant that he can ignore the events that took place in 1933.
He can no doubt ignore the actual partition by metes and bounds effected by Krishna Rao and Lakshmana Rao and ask for a repartition of the properties but his adoption by itself does not and cannot re unite the divided family.
It is one thing to say that an adopted son can ignore a partition effected prior to his adoption, which affects his rights and it is a different thing to say that his adoption wipes out the division of status that had taken place in his family.
Reliance was placed on the decision of the Bombay High Court in Ramchandra Shrinivas and Ors.
vs Ramkrishna Krishnarao (2 ) in support of the proposition that the plaintiff can enter into the adoptive family on the basis that the family is a joint and undivided Hindu family and his rights in the property of the family must be decided on that basis.
It is true that this decision lends some support to the argument that despite the partition effected in 1933, the plaintiff can work out his rights on the basis that the family remains joint.
The conclusion of the High Court that the adopted son is entitled to enter his adoptive family on the basis that the family continues as a joint and undivided Hindu family and that his rights in the family property must be decided on that basis does not appear to be supported by any Hindu law text or by any decision of this Court or the Judicial Committee.
The decision of the Judicial Committee in Anant Bhikappa Patil, Minor vs Shankar Ramchandra Patil(3), relied on by the High Court did not consider that question.
It is true that some of the observations of Chief Justice Stone in Bajirao and Ors.
vs Rant (1) ; (2) A.I.R. 1952 Bam.463 (3) 70 I.A. 232.
206 krishna(1), does support the view taken by the Bombay High Court.
But the question that arose for decision in that case was whether a person adopted, after a partition in his adoptive father 's family cannot divest the properties that had vested in the other coparceners.
It may be noted that in the course of his judgment, the learned Chief Justice observed : "There can, in our opinion, be no question of a partition whereby the partitioning male members take away all the family property from a joint Hindu family unless the family can be wholly disrupted and finally brought to an end.
We regard it as clear that a Hindu family cannot be finally brought to an end while it is possible in nature or law to add a male member to it.
The family cannot be at an end while there is still a potential, mother if that mother in the way of nature or in the way of law brings in a new male member.
The existing male members can separate off; they can take away their share.
They cannot prejudice by partitioning the rights of the after bom male member whether the birth is natural or legal.
If in point of fact, before his arrival, the existing coparceners have partitioned the new arrival can obtain a re opening of the partition and thereby get his share.
How that share is to be calculated in various circumstances need not be decided here.
" These observations in our opinion lay down the ratio of the decision and that ratio does not support the conclusion reached by the Bombay High Court.
The decision of the Full Bench of the Madras High Court, in K. R. Sankaralingam Pillai and anr.
vs Veluchami Pillai, Minor (2) , relied on by Bombay High Court merely laid down that an adopted son is entitled to reopen partition entered into in the family of his adoptive father, before his adoption.
That position is no more open to question and was not questioned in this appeal.
We are only concerned with the quantum of share to which the plaintiff is entitled.
Our attention has not been invited to any decision which supports the view taken by the Bombay High Court.
We see no justification to accept that view.
Further the interest of the society is not advanced by engrafting one more fiction to the already existing fiction that an adopted son is deemed to have been born on the date of death of his adoptive father.
Acceptance of the new fiction canvassed on behalf of the plaintiff is bound to create various complications.
Hindu widows in the past were proverbially long lived because of 'the child marriage system.
Adoptions might take place and have taken place more than half a century after the death of the adoptive (1) I.L.R. (2) I.L.R. 207 father.
Meanwhile the other coparceners might have dealt with the family property on the basis of the then existing rights.
They might have alienated the property.
We see no justification to create chaos by inventing a new fiction unknown to Hindu law texts nor authorised by stare decisis.
This Court in Shrinivas Krishnarao Kango 's case(1) has laid down that the fiction that an adoption relates back to the date of the death of the adoptive father applies only when the claim of the adoptive son relates to the estate of the adoptive father.
But where the succession to the property of a person other than the adoptive father is involved, the principle applicable is not the rule of relation back but the rule, that inheritance once vested cannot be divested.
It is true that the question that arose for decision in that case was whether an adoptive son can claim to succeed to a collateral 's estate, divesting the property that had already vested in someone else.
But the rule laid down by this Court in that case is much wider than the limited question that arose for decision and the reasons given in support of that rule support our conclusion.
The rights of an adopted son cannot be more than that of his adoptive father.
If the plaintiff 's adoptive father was alive in 1933 when the partition took place, he could not have obtained anything more than 1/3rd share in the family properties.
It passes our comprehension how the plaintiff could acquire a greater right than his adoptive father could have had if he had been alive on the date of partition and that he could have got if he had been adopted prior to that date.
In our judgment the plaintiff 's claim for a half share in the family properties is unsustainable.
In the result ibis appeal fails and the same, is dismissed with costs.
S.C. Appeal dismissed.
(1) [1955] 1.S.C.R. 1.
| IN-Abs | The appellant was adopted in 1955 by R 's widow after R 's death in 1912.
In 1933, there was a partition between K (R 's father) and his third son L, the only two coparceners existing at that time.
Thereafter, K. bequeathed his properties by will to some of his relations.
Later, there was a further partition between L and his son.
L died in 1952.
A suit was filed in 1956 by the appellant, claiming half of the family properties.
The trial court granted the appellant half share in the family properties.
The High Court reduced the share awarded to the appellant from 1/2 to 1/3 of the properties held by it to be partible.
The High Court also set aside the trial court 's decree awarding a sum of Rs. 1500 to the appellant as his share of the consideration received under a sale deed; In appeal to this Court the appellant contended that his adoption related back to the date of death of his adoptive father; by a fiction of law, he must be deemed to have been in existence when K and L divided the properties between them; the partition, having been effected without his joinder, the same had to be ignored; and, therefore, he was entitled to a half share in the properties.
Alternatively, it was urged that the appellant was entitled to get by succession, half share of the properties that fell to the share of K. Dismissing the appeal, HELD.
(i) The appellant must be deemed to have been adopted in 1912 when R died.
Therefore, he must be deemed to have been a coparcener in his adoptive father 's family when K and L partitioned the properties in 1933.
The partition having been effected without his consent, it is not binding on him; but from this it cannot be said that K and L did not separate from the family.
So far as the quantum of his share is concerned it must be determined after taking into consideration the fact that K & L separated from the family in 1933.
The appellant can ignore the actual partition,by meters and bounds effected by K and L and ask for a repartition of the properties but his adoption by itself cannot reunite the divided family.
The rights of an adopted son cannot be more than that of his adoptive father.
The fiction that an adoption relates back to the date of the death of the adoptive father applies only when the claim of the adopted son relates to the estate of the adoptive father.
If the appellant 's adoptive father was alive in 1933, when the partition took place, he could not have obtained anything more than 1/3rd share in the family properties.
Therefore, the appellant 's claim for a half share in the family properties is unsustainable.
T204 G; 207 B] 201 The alternative claim of the appellant is also not tenable because K disposed his share by a will and secondly, even if he had not disposed of his share, the same would have developed on L by succession and the property once vested cannot be divested as in that property the plaintiffs adoptive father had no right of his own.
The doctrine of relation back is only a legal fiction.
When K. died, plaintiff 's adoption father was not alive.
The revolution of K 's property must be held to have taken place as soon as K died.
The property could not have remained in a suspended animation till the appellant was adopted.
[2O4G] Shrinivas Krishnarao Kango vs Narayan Devji Kango and ors.
; , ; Anant Bhikappa Patil, Minor vs Shankar Ramchandra Patil, 70 I.A. 232; Bajirao and Ors.
vs Ramkrishna, I.L.R. and K. R. Sankaralingam Pillai and Anr.
vs Veluchami Pillai, Minor, I.L.R. , referred to.
Ramachandra Srinivas vs Ramakrishna Krishna Rao, A.I.R. 1952 Bom.
453, disapproved.
(ii) Both the courts below found the sale in question valid as the same was effected to meet family necessities.
As the appellant did not seek an accounting from the 2nd defendant, and as no case was made out for requiring the second defendant to account in respect of moneys received by him as Karta and as the plaint did not state that there was any cash in the hands of the 2nd defendant, the High Court was justified in reversing the decree of the trial court directing the payment of Rs. 1500 to the appellant.
[203 E]
|
Appeal No. 279 of 1967.
343 Appeal by special leave from the judgment and decree dated September 15, 1966 of the Allahabad High Court in Second Appeal No. 222 of 1960.
G. N. Dikshit and O. P. Rana, for the appellants.
E. C. Agrawala, for respondents Nos. 1, 2, 4 and 5.
The Judgment of the Court was delivered by Beg, J.
There are two appeals by Special Leave before us, Leave, against the Judgment and decree of a learned Judge of the Allahabad High Court allowing a plaintiff 's second appeal The plaintiff 's case was that the Government of Rampur had given him a house "under the orders of His Highness the Nawab of Ramur, passed on 23rd June, 1945".
It appears that, after the merger of Rampur State in Uttar Pradesh in 1949, when Rampur became a district of Uttar Pradesh, this house was given by the Government of Uttar Pradesh to the Municipal Board of Rampur, Defendant Appellant, which demanded rent from the plaintiff by notice.
On the plaintiff 's refusal to pay, the house was attached on 23rd February, 1955.
The plaintiff deposited a sum of Rs. 100 under protest.
He then filed his suit, on 26 10 56, for a declaration that he is the owner in possession of the house, and, in the alternative, that he is a "licensee" entitled to remain in possession of the house for life without payment of rent The defendants, the State of Uttar Pradesh, the Municipal Board of Rampur, and the Public Work.$ Department at Rampur, denied the alleged gift of either the ownership or of a life interest in the house to the plaintiff.
They also pleaded that there was no relationship of landlord and tenant between the plaintiff and the defendants.
Their case was that, if any permission to reside in the house was given to the plaintiff by the ruler of the State of Rampur before the merger of Rampur with Uttar Pradesh, it was valid and effective only so long as the plaintiff was in the service of the former ruler of Rampur.
They set up a claim to "damages for use and occupation in the form of rent from the plaintiff at Rs. 10/ per month from 1 4 1953 to 30 1 1954".
According to them, the plaintiff 's licence, if any, automatically terminated when the State of Rampur merged with the State of Uttar Pradesh.
The defendants had also pleaded that the alleged gift, which was not governed by Mahomedan law, could not be upheld because no registered deed of gift was executed to transfer a house the value of which was far in excess of Rs. 100/ .
The Trial court as well as the first Appellate Court bad found, after ,in examination of all the evidence, including the alleged 344 order dated 23rd June 1945, of His Highness the Nawab of Rampur (Exhibit 1), a letter dated 30th June 1949 ',Exhibit A 10) from a Minister of Rampur State to "the Secretary (Buildings), fixing rent for the house and the oral evidence that the plaintiff had not proved either of the two alternative claims set.
up by him.
A learned Judge of the Allahabad High Court had, upon the plaintiff 's second appeal, reversed the concurrent findings of fact recorded by the Courts below because the learned Judge thought that "the order of the Nawab of Rampur dated 23rd June 1945", constituting a valid declaration of a gift, by the owner of the house, followed by the plaintiff 's admitted actual possession of the house conferred ownership of the house upon the plaintiff respondent according to Mahomedan law.
The learned Judge also held that nothing beyond this order of the Nawab could be looked into for deciding what was intended by the Nawab and that the use of the words "inteqal" and "atta" in the following extract from the order in Urdu determined the intent of the Nawab conclusively. "Ap ki sakunat ke waste Abdul Karim Sabib wala makan atta farmaya gaya hai.
Ap aj hi us me muntaquil ho jayen.
Ap un se mil kar inteqal niaka.1 ki karrawai kariye".
The questions arising before us for decision are : firstly, whether the alleged gift is governed by Mahomedan Law; secondly, whether the requirements of Mahomedan law for establishing a gift of the house or of its usufruct for life to the plaintiff could be held to have been satisfied in this case; and, thirdly, whether nothing beyond the order of 23 6 1945 could be looked into to determine the Nawab 's intention.
One could legitimately presume that a gift by the Nawab of Ranipur, a Muslim, would be governed by the rules of Mahome dan law if the Nawab was dealing with his own private property.
In the case before us, we find that the plaintiff himself has pleaded that he acquired his right and title to the house in dispute from the Government of Rampur State, although the action of the Government was said to be "under the orders dated June 23, 1945, of His Highness the Nawab of Rampur".
Upon an examination of the alleged order, which has been treated by the learned Judge of the Allahabad High Court as a valid declaration of a gift of the house by its owner, governed by Mahomedan law, we find that it is only a piece of information sent.
to the plaintiff who is described as "Nigran Shikar Mahi" or "Supervisor of Fishing.
" The communication, translated in English in the paper book of this Court, reads as follows : "His Highness has passed orders that you should immediately vacate the house in which you reside and 345 pay up to the landlord all his dues.
Abdul Karim wala house has been given to you for your residential purpose.
You should shift to that house this very day.
The Executive Engineer (Buildings) has been intimatto allot the said house to you immediately.
Please contact him and take steps to va cate the house".
The plaintiff himself had produced Agha Khan, the Assistant Military Secretary of the Nawab of Rampur, who had signed and sent the communication, set out above, to the plaintiff.
His evidence shows that the Nawab of Rampur had probably given some oral order to get the private house in which the plaintiff was living vacated, and "to give" another House to him for residence.
Under cross examination, the witness stated that, by using the word "inteqal" in the writing, he meant to convey that "the plaintiff should leave that house and live in the house in dispute." This witness, who was not owner of the house, could not gift the house in dispute to the plaintiff.
He could only "give" the house to the plaintiff in the sense that he could, under the Nawab 's orders, obtain its allotment for the plaintiff.
He said that its previous occupant, a mechanic, was also occupying it, without payment of any rent, with the Nawab 's permission.
The implication of such a statement could only be that the plaintiff had a similar permission.
He did not depose that the Nawab had asked him to inform the plaintiff that the Nawab was making a gift of the house to the plaintiff.
The witness stated that the house belonged to the Government of Rampur.
All this evidence is consistent with the view that the Nawab meant to do nothing more than to resolve the immediate difficulty of the plaintiff, by giving him some free residential accommodation in a house owned by the Government so that the plaintiff could clear up his dues to his landlord, rather than with the conclusion that the Nawab intended to confer the ownership of the house on the plaintiff.
It is well established that a document must be read as a whole.
In a document meant for a transfer of ownership, the purpose is generally stated clearly to be that the property given will be owned and possessed henceforth by the donee in such a way that he could use it or deal with it as he liked.
The only 'karawai ' or proceeding, to which a reference is made in the document, seemed to be "allotment" of accommodation or transfer of plaintiff 's residence into another house, owned by the State, for which appropriate steps were to be taken by a Government official.
The communication savs, as translated, that the Executive Engineer (Buildings) had been informed that the house in question was to be "allotted" to the plaintiff.
If the plaintiff was to become its owner, that would have been communicated to the 346 Executive Engineer.
A transfer of ownership would, in the ordinary course, be expected to be evidenced by much more clear and unequivocal language.
The appropriate proceeding after a gift is that of mutation in Municipal records.
No evidence was given of any mutation in a Municipal record showing transfer of ownership of the 'corpus ' for which the term 'milkiyat ' is used.
It is true that, as the learned Judge observed, the word 'Inteqal ' is used ill connection with a transfer of property.
This is so when it occurs in juxtaposition with 'Jaidad '.
In (the document before us, the following words indicate that transfer which the Nawab had in mind was that of the plaintiff himself to another residence in the physical sense : "Ap aj hi us me muntaqil ho jayen.
" This meaning is further emphasised by the use of the words "sakunat ke waste" (for residential purpose) which was the only stated object of the "inteqal." Again, the word "atta" is used to denote all kinds of grants.
The grant may be of a license or of ownership of property.
The word "atta" could be used by a courtier, as a matter of form, to indicate anything granted by the Nawab whether it be mere permission to live in a house or something more.
If the intention of the Nawab was to grant ownership, the language used to communicate it would not have left it in doubt.
It is significant that the plaintiff, who stated in his evidence that the gift was meant to have been made "in lieu of old services", had not mentioned this object of the alleged donation in his plaint.
It is also evident that he was not sure of his own rights or position because he took up an alternative case of a gift of the right to live in the, house for life.
We do not find the word 'hibba ' or gift used at all in this document.
Nor is the word "amree" or any other similar word, which could connote a life estate, used in the document.
There being no mention either of rights of ownership or those of a life estate holder, the mere use of the words "inteqal" and "atta" does not determine, as the learned Judge assumed, what was really meant to be granted or transferred.
We think that oral and other evidence, besides the document under consideration, was both necessary and admissible under Proviso (6) to Sec.
92 of the Indian Evidence Act to resolve a latent ambiguity caused by the two vague words used in it and to show how its language was related to the existing facts even if one were to assume that the information contained in it was meant to reduce the terms of a grant to the form of writing.
Upon the view we are taking of the facts of this case, it is not necessary for us to embark on any detailed discussion of essentials 347 of a gift under the, Mahomedan law.
It is enough to point out that even if the rules of Mahomedan law were to be applied to the transaction before us the very first of the three conditions of a valid gift, given in Mulla 's 'Principles of Mahomedan Law" (16th Edn.
p. 141) that of "a declaration of gift by the donor" is lacking here.
Such a declaration must indicate, with reasonable clarity, what is really gifted.
It is also not necessary for us to deal with the distinction between separable gifts of the 'corpus ' and the 'usufruct ', recognised by Mahomedan law, which references to Amjad Khan vs Ashraf Khan( ') and Nawazish Ali Khan vs Ali Raza Khan(2) would disclose.
After an examination of all the admissible evidence, relating to the nature of the transaction set up by the plaintiff, which should have been considered, we are satisfied that the plaintiff failed to, prove either a grant of the 'corpus ' or of the 'usufruct ' of the house to him for his life by its owner.
The transaction before us would amount to nothing more than the grant of a license, revocable at the Grantor 's option to reside in the house so long as the grantor allowed the licensee to do so.
Such a grant is known as "areeat" in Mahomedan law (See: Mulla 's Principles of Mahomedan Law, Sixteenth Edition, page 166).
The terms of the alleged grant, even if they are to be found only in the communication sent to the plaintiff, are not, read in the context in which they occur, capable of raising an inference of a larger grant.
The mere expenditure of small sums of money over necessary repairs, alleged by the plaintiff, could not convert it into an irrevocable license.
Consequently, we allow this appeal and set aside the judg ment and decree of the High Court.
We do not think that this is a fit case in which the appellant should get the costs of this litigation as the plaintiff had some grounds to be misled by the communication received by him.
The parties will, therefore, bear their own costs throughout.
V.P.S. Appeal allowed.
(1) A. I. R. (2) A.I.R. 1948 P.C. p. 134.
| IN-Abs | Pursuant to an order by a Muslim ruler of an erstwhile princely State, the respondent was allotted a house and he was living in it.
After the merger of the princely State with the appellant State, rent was demanded from the respondent and he filed a suit for a declaration that be was the owner in possession of the house; and in the alternative, that he was a licensee entitled to remain in possession for life without payment of any rent.
The High Court, in second appeal, held that the use of the Urdu words 'inteqal ' and 'atta ' showed that the Ruler intended the order to be a valid declaration of gift under Mohammedan Law and that when the respondent took possession of the house, he became its owner.
The High Court also held that no other evidence was admissible for deciding on the Ruler 's intention.
Allowing the appeal to this Court, HELD : (1) There being no mention in the order either of rights of ownership or those of a life estate holder, the mere use of the two words, did not determine what was meant to be granted.
The word 'inteqal ' is used in connection with a transfer of property, but in the context of its use here, it could only indicate that the respondent was to have change or transfer his residence in the physical sense.
The word 'atta ' is used to denote all kinds of grants including a mere permission to live in a house.
Therefore, assuming that the order reduced the terms of a grant to writing, oral and other evidence was both necessary and admissible under section 92, proviso (6), Evidence Act, to resolve the latent ambiguity.
The evidence adduced in the case, however, is more consistent with the view that the Ruler meant to resolve the immediate financial difficulty of the respondent by giving him free residential accommodation than with a conferment of the ownership of or a life interest in the house.
[346 B H] (2) There was no declaration of any gift either of the corpus or the usufruct and the admissible evidence relating to the nature of the transaction, which the High Court should have considered, showed, that the transaction amounted to nothing more than a grant of a licence revocable at the grantor 's option.
From the mere expenditure by the respondent of money over some necessary repairs, an inference of a larger grant cannot be drawn.
[347 C. E]
|
No. 307 of 1971.
Under article 32 of the Constitution of India for a writ in the nature of habeas corpus.
R. K. Jain, for the petitioner G. L. Mukhoty and G. section Chatterjee, for the respondent.
The Judgment of the Court was delivered by Khanna, J.
This is a petition through jail under article 32 of the Constitution of India for the issuance of a writ of habeas corpus by Ram Krishna Paul who has been ordered to be detained under section 3 of the West Bengal (Prevention of Violent Activities) Act, 1970 (President 's Act No. 19 of 1970), hereinafter referred to as the Act.
402 The order of detention was made against the petitioner under sub section (1) read with sub section (3) of section 3 of the Act by the District Magistrate, Murshidabad on January 27, 1971.
According to the order of detention, the District Magistrate was satisfied with respect to the petitioner that with a view to preventing him from acting in any manner prejudicial to the maintenance of public order, it was necessary to make an order directing his detention.
The petitioner in pursuance of the detention order was arrested on January 28, 1971 and was served with the same day with the ground of detention together with vernacular translation thereof.
Report about the making of the detention order was sent by the District Magistrate to the State Government along with the grounds of detention and other particulars on January 27, 1971.
The report and the particulars were considered by the State Government and the order of detention was approved by the said Government on February 5, 1971.
The same day the State Government submitted a report to the Central Government together with the grounds of detention and other particulars.
On February 18, 1971 the State Government in its Home Department received re presentation dated February 15, 1971 sent by the petitioner.
The said representation after consideration was rejected by the State Government 'on March 23, 1971.
In the meanwhile, on February 25, 1971 the State Government placed the case relating to the petitioner before the Advisory Board.
The representation made by the petitioner was sent by the State Government to the Board on March 23, 1971.
The Advisory Board after hearing the petitioner, sent its report to the State Government on April 5, 1971.
Opinion was expressed in its report by the Advisory Board that there was sufficient cause for the detention of the petitioner ' The State Government confirmed the order of detention of the peti tioner on May 31, 1971.
The confirmation order was communi cated to the petitioner as per memorandum dated June 10, 1971.
The petition was resisted by the respondents and the affidavit of Shri Manoranjan Dey, Assistant Secretary, Home (Special) Department, Government of West Bengal was filed in opposition to the petition.
After hearing Mr. R. K. Jain who argued the matter amicus curiae on behalf of the petitioner and Mr. G. L. Mukhoti on behalf of the respondents on January 13, 1972, we directed that, for reasons to be recorded later, the petitioner should be set at liberty.
We now proceed to give reasons in support of our decision.
Although a number of submissions were made on behalf of the petitioner at the hearing, it is, in our opinion, not necessary to deal with all of them as the detention order is liable to be quashed because one of the grounds for the detention of the petitioner was 403 extraneous and did not in law justify the making of the detention order.
The grounds of detention which were supplied to the peti tioner under sub section (1) of section 8 of the Act read as under : " (1) That on 8 12 70 at about 20.00 hours you along with your associates went to Jnanada Pharmacy in Berhampore town posing yourself a purchaser of medicine and demanded money from the owner of the Pharmacy in the name of collection towards party fund.
Out of fear, the owner of the pharmacy delivered Rs. 10/to you.
(2) That on 18 12 70 at about 20.00 hours you along with your associates had been to Punjab Dastralaya Khagra, P. section Berhampor and demanded Rs. 100/from the shopkeeper at the point of dagger on the plea of collecting donation towards the party fund.
Putting the owner of the shop in fear of instant death, you induced him to deliver up an amount of Rs. 100/ then and there, (3) That on 22 10 70 at about 19.30 hours you along with your associates had been to Jnanada Pharmacy, Berhampore town and demanded Rs. 250/ from the owner of the Pharmacy at the point of dagger putting him in fear of instant death.
The owner of the Pharmacy was spared on payment of Rs. 50/ forthwith.
You and your associates went away fixing 26 12 70 for payment of the remaining amount.
(4) That on 26 12 70 a,.
about 20.00 hours you along with your associates came to Jnanada Pharmacy, Berhampore and realised Rs. 20/ from the owner of the Pharmacy at the point of dagger putting him in fear of instant death.
" The various circumstances under which a Person can be ' ordered to be detained have been set out in the different clauses of section 3 of the Act.
Ground No. 1 supplied to the petitioner, in our opinion, does not fall under any of those clauses.
According to Mr. Mukhoti the facts set out in ground No. 1 would show that the petitioner received Rs. 10/ from the owner of Jnanada Pharmacy as a result of extortion.
Extortion has been defined in section 383 of the Indian Penal Co& as under : "Whoever intentionally puts any person in fear of any injury to that person, or to any other, and thereby 404 dishonestly induces the person so put in fear to deliver to any person any property or valuable security or anything signed or sealed which may be converted into a valuable security, commits "extortion.
" It would appear from the above definition that before a person can be guilty of extortion, he should intentionally put any person in fear of injury, to that person or to any other, and thereby induce that person so put in fear to deliver to any person some property, valuable security or anything signed or sealed which may be converted into valuable security.
Intentionally putting a person in fear of injury to himself or any other is, thus, a necessary ingredient of the offence of extortion.
In ground No. 1, however, there is no allegation that the petitioner had put any person in fear of any injury, to that person or to any other.
As such, it cannot besaid that the petitioner was guilty of extortion.
We thus find that ground No. 1 was of an extraneous character and did not justify an order of detention.
There is also nothing to show that the District Magistrate would have passed an order of detention of the petitioner in case he was not influenced by facts given in ground No. 1.
The extraneous nature of even one of the grounds of detention would, in our opinion, vitiate the order of detention.
We, therefore, quash the order of detention of the petitioner.
| IN-Abs | The petitioner was detained under section 6 of the West Bengal Prevention of Violent Activities Act, 1970.
One of the grounds of detention which was supplied to the petitioner under sub section (1) of section 8 was that he alongwith his associates went to a pharmacy posing himself as a purchaser of medicine and demanded money from the owner of the pharmacy in the name of collection towards party fund and out of fear the owner delivered Rs. 10/ to him.
Quashing the order of detention, HELD : (i) The ground does not fall under any of the clauses of section 3 setting out the circumstances under which a person can be ordered to be detained and is therefore extraneous in character.
(ii) There is no allegation in the ground that the petitioner had put any person in fear of any injury to that person or to any other.
As such it cannot be said that the petitioner was guilty of extortion.
Intention ally putting a person in.
fear of injury to himself or any other is a necessary ingredient of the offence of extortion.
[403 B] (iii) There is nothing to show that the District Magistrate would, have passed the order of detention of the petitioner in case he was not influenced by the facts mentioned in the ground.
Therefore, the extraneous nature of even one of the grounds of detention would vitiate the order of detention.
[403 D]
|
iminal Appeals Nos. 89 and 90 of.
Appeals by Special Leave from the Judgment and Order dated the 23rd November 1953 of the High Court of Judicature 'at Bombay in Criminal Appeal No. 1213 of 1953, and from the Judgment and Order dated the 25th August 1953 of the High Court of Judicature at Bombay in Criminal Appeal No. 1121 of 1953 arising out of the judgment and decree dated the 6th August 1953 of the Court of Sessions Case No. 36 of 1952.
section Narayanaiah and Dr. C. V.L. Narayan, for the appellant in Criminal Appeal No. 89 of 1954.
C. Sanjeevarow Nayadu and R. Ganapathy Ayyar, for the appellant in Criminal Appeal No. 90 of 1954.
M.C. Setalvad, Attorney General of India (G. N. Joshi and Porus A. Mehta, with him) for the respondent.
151 1180 1954.
December 22.
The Judgment of the Court was delivered by BOSE, J.
These two appeals arise out of the same trial.
The two appellants, Shreekantiah (the first accused in the trial Court and the appellant in Appeal No. 89 of 1954) and Parasuram (the second accused and the appellant in Appeal No. 90 of 1954) were tried with a third accused Dawson on a number of different charges centering round section 409 of the Indian Penal Code: criminal breach of trust by a public servant.
The trial was by jury and all three were found guilty of an offence under section 409 read with section 34.
They were convicted and sentenced as under: Accused No. 1.
Shreekantiah to one year and a fine of Rs. 500 with four months in default; Accused No. 2.
Parasuram to two years and a fine of Rs. 500 with six months in default; and Accused No. 3.
Dawson to six months and a fine of Rs. 200 with two months in default.
The appeal of the second accused to the High Court was dismissed summarily on 25 8 1953 with the one word "dismissed".
The first and third accused appealed separately.
Their appeal was heard by another Bench and was admitted, and a reasoned judgment followed on 23 11 1953.
This, to.
say the least, was, in the circumstances of this case, anomalous.
The ap.peals arise out of the same trial and are from one judgment and relate to the same charge to the jury, and what is more they raise substantially the same points.
This Court was constrained to express its disapproval of the summary rejections of appeals which raise issues of substance and importance.
We draw attention to the remarks in Mushtak Hussein vs The State of Bombay(1).
Those observations apply with even greater force in the present case.
The three accused are Government servants.
At all material times, the first was the Officer Commanding, the Military Engineering Stores Depot at Dehu Road near Poona.
He was in over all charge.
The (1) ; , 820. 1181 second was under him as the officer in charge of the Receipts and Issue control section.
The third worked directly under the second as the Assistant Stores Officer.
The depot is maintained by the Central Government and covers an area of some 150 acres.
Government stores worth several lacs of rupees are kept there.
On 11 9 1948 iron stores worth about Rs. 4,000 were illegally passed out of the depot and were handed over to one Ibrahim Fida Hussain, an agent of the approver Mohsinbhai (P.W. 1).
The case for the prosecution is that the three accused, who were in charge of these stores and to whom they had been entrusted in various capacities, entered into a conspiracy to defraud Government of these properties and that in pursuance of this conspiracy they arranged to sell them to the approver (P.W. 1) for a sum of Rs. 4,000.
The money is said to have been paid and then the stores were passed out of the depot.
The money is said to have been pocketed by the three accused and not credited to Government.
On these facts a number of charges were framed.
The first set was drawn up on 9 7 1953.
All three accused were jointly charged with an offence punishable under section 5(2) of the Prevention of Corruption Act, 1947 and all three were further jointly charged with having committed criminal breach of trust in furtherance of the common intention of all under section 409 of the Indian Penal Code read with section 34.
Then followed a number of alternative charges in which each was separately charged with having committed criminal breach of trust personally under section 409.
As a further alternative.
, all three were jointly charged under section 409, Indian Penal Code read with section 109 for having abetted each other in the commission of a criminal breach of trust under section 409.
Objection was at once taken to these charges and the one which concerns us now was couched in the following terms; 1182 "It is further submitted that the trial under section 5(2), Corruption Act, 1947 with Indian Penal Code section 409 is likely to embarrass the accused in their defence as it would be difficult to efface the evidence (if any) of the accused persons given on oath from the minds of the Jurors when considering the charge under section 409, Indian Penal Code.
It is therefore prayed that the charges under sec409, Indian Penal Code and section 5(2) of the Corruption Act may not be tried together in one trial".
The Assistant Public Prosecutor said he had no objection to separating the charges and leaving the one under section 5(2) for another trial.
The Court then made the following order on 10 7 1953: "Thus, though a joint trial for offence under section 5(2) of the Prevention of Corruption Act and the offences under the Indian Penal Code is legal and valid,, I think, in view of the circumstances mentioned above, it would be in the interest of justice and also in the interests of the accused themselves if the trial for the offence under section 5(2) of the Prevention of Corruption Act is separated.
I therefore grant the application to this extent and order that the charge should be amended accordingly".
In view of this the charges were re framed on 11 7 1953.
The only difference of substance is that the charge under section 5(2) was dropped.
The others remained.
Now it will be observed that the accused are all public servants and they contend that as, according to the prosecution, they purported to act in the discharge of their official duties, sanction was necessary under section 197 of the Criminal Procedure Code.
There is sanction so far as the first accused is concerned but the second accused contends that there is none in his case to justify the present trial, so his trial,, conviction and sentence are bad.
The position about this is as follows: On 27 10 1949 the Governor General, acting under section 197 of the Code of Criminal Procedure, sanctioned the prosecution of the first accused for offences tinder sections 1183 120 B, 409, 109 and so forth, for having conspired with the other two to commit criminal breach of trust in respect of the properties with which this case is concerned and thus for having abetted the commission of that offence, and also for having committed it.
Similar sanction could easily have been given against the other two accused but it was not.
The sanction for these offences was limited to the first accused.
On the same date sanction was also given for the prosecution of the first accused under section 5(2) of the Prevention of Corruption Act and a similar sanction was given against the second accused.
The question is whether this sanction against the second accused can be extended to cover his prosecution under section 409 of the Indian Penal Code.
In our opinion, it cannot.
At the date of the sanction the unamended Prevention of Corruption Act (II of 1947) was in force.
Criminal breach of trust under section 409 of the Indian Penal Code was included in the definition of "criminal misconduct" under section 5(1)(c) of the Act of 1947.
Therefore, an offence under section 409 could be tried under the Act of 1947 and the question arose whether it would have to be tried under that Act, or whether it could also be tried in the ordinary way by the ordinary Courts.
The Punjab High Court held in The State vs Gurucharan Sinah(1) that it could not.
Because of this the Act of 1947 was amended in 1952 by Act LIX of 1952 and section 4 of the amending Act makes it clear that the trial can be under either law.
But in the same year the Criminal Law Amendment Act, 1952 (Act XLVI of 1952) was passed and because of this Act trials under section 5(2) of the Prevention of Corruption Act must be before a Special Court and a special procedure must be followed.
Therefore, the position which these various Acts created was this.
First, a choice was conferred on some authority to choose whether any given accused should be tried in a special Court with a special procedure and be subject to a lesser punishment under section 5(2) or whether he should be tried in the ordi (1) A.I.R. 1952 Punjab 89, 1184 nary way under section 409 of the Indian Penal Code with the risk of a higher punishment.
The question then is who is to do the choosing.
Under section 197 of the Code of Criminal Procedure the Governor General was at that date the sanctioning authority though the words "exercising his individual judgment" had by that time been deleted.
Under the Prevention of Corruption Act the sanctioning authority was the "Central Government".
Now it may well be that the two mean the same thing because of section 8(a) of the General Clauses Act but that makes no difference at the moment.
The fact remains that either one, or two, Government authorities were given the right, and invested with the duty, of making an election.
They had the right to say whether a certain class of public servant who had committed criminal breach of trust should be tried for that offence under section 409 of the Indian Penal Code in the ordinary courts of the land according to the normal procedure obtaining there and be subject to a maximum penalty of ten years plus an unlimited fine or be tried for the same offence under another name in a special court by a special procedure and be subject to no more than seven years plus a fine which is also unlimited.
At this stage of the arguments we asked the learned counsel for the appellants whether they intended to challenge the vires of this law under article 14 of the Constitution because, if they did, the matter would have to go to a Constitution Bench as we, being only three Judges, would have no power to decide it.
The learned Attorney General at once objected because the point had not been raised at any stage and was not to be found even in the grounds of appeal to this Court.
The learned counsel for the appellants replied that they did not wish to take the point.
Accordingly, we have to proceed in this case on the assumption that the amending Act of 1952 (Act LIX of 1952) is valid.
That results in the position we have outlined above.
There is a choice, not only of forum, but also of procedure and the extent of the maximum penalty.
If two separate authorities are given the right to 1185 choose and neither can encroach upon the preserve of the other, then the Governor General has not sanctioned the present prosecution against the second accused and no other authority has the power to do so.
Therefore, in that event, the sanction given to prosecute under section 5(2) cannot be used to cover the present trial because it is given by another authority not competent to give it.
On the other hand , if the two authorities are really one, then the election has been made clearly and unequivocally.
The sanction is to proceed in the special courts with the special procedure and the second accused is not to be exposed to the risk of the higher penalty.
In that event, the present trial against the second accused is incompetent.
That a defect of this kind is fatal and cannot be cured is well settled.
See the Privy Council in Gokulchand Dwarkadas vs The King(1), the observations of Varadachariar, J. in Hori Ram Singh vs The Crown(1) and the decision of this Court in Madan Mohan vs The State of Uttar Pradesh(1).
But the learned Attorney General argued that no sanction was necessary because, according to him, despite what the second accused says, by no stretch of imagination can he be said to have been acting, or even purporting to act, in the discharge of his official duty.
The argument ran as follows: The act complained of here is the breach of trust and the prior abetment of it: the breach occurred as soon as the goods were loaded on Mohsinbhai 's lorries: it was no part of this accused 's official duties to permit an unauthorised removal of the goods: therefore.
, when he allowed that he neither acted.
nor purported to act, in the discharge of his official duties.
Reference was made to the decision of the Federal Court in Lieutenant Hector Thomas Huntley vs The King Emperor(1) where Zafrullah Khan, J. held that "it must be established that the act complained of was an official act", and to the observations of Varadachariar, J. in Hori Ram Singh vs The Crown(1) (1) A.I.R. 1948 P.C. 82.
(3) A.I.R. 1954 S.C. 637, 641.
(2) , 184.
(4) , 269.
(5) , 186.
1186 where, dealing with section 409 of the Indian Penal Code, he says "Though a reference to the capacity of the accused as a public servant is involved both in the charge under section 409 and in the charge under section 477 A, there is an important difference between the two cases, when one comes to deal with the act complained of.
In the first, the official capacity is material only in connection with the 'entrustment ' and does not necessarily enter into the later act of misappropriation or conversion, which is the act com plained of".
What this argument overlooks is that the stress in the passage quoted is on the word "necessarily" which we have underlined.
A later passage at page 187 explains this: "I would observe at the outset that the question is substantially one of fact, to be determined with reference to the act complained of and the attendant circumstances; it seems neither useful nor desirable to paraphrase the language of the section in attempting to lay down hard and fast tests".
With that we respectfully agree.
There are cases and cases and each must be decided on its own facts.
Now it is obvious that if section 197 of the Code of Criminal Procedure is construed too narrowly it can never be applied, for of course it is no part of an official 's duty to commit an offence and never can be.
But it is not the duty we have to examine so much as the act, because an official act can be performed in the discharge of official duty as well as in dereliction of it.
The section has content and its language must be given meaning.
What it says is " when any public servant. . is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty.
We have therefore first to concentrate on the word "offence".
Now an offence seldom consists of a single act.
It is usually composed of several elements and, as a rule, a whole series of acts must be proved before it can be 1187 established.
In the present case, the elements alleged against the second accused are, first, that there was an "entrustment" and/or "dominion"; second, that the entrustment and/or dominion was "in his capacity as a public servant"; third, that there was a "disposal"; and fourth, that the disposal was "dishonest".
Now it is evident that the entrustment and/ or dominion here were in an official capacity, and it is equally evident that there could in this case be no disposal, lawful or otherwise, save by an act done or purporting to be done in an official capacity.
Therefore, the act complained of, namely the disposal, could not have been done in any other way.
If it was innocent, it was an official act; if dishonest, it was the dishonest doing of an official act, but in either event the act was official because the second accused could not dispose of the goods save by the doing of an official act, namely officially permitting their disposal; and that he did.
He actually permitted their release and purported to do it in an official capacity, and apart from the fact that he did not pretend to act privately, there was no other way in which he could have done it.
Therefore, whatever the intention or motive behind the act may have been, the physical part of it remained unaltered, so if it was official in the one case it was equally official in the other, and the only difference would lie in the intention with which it was done: in the one event, it would be done in the discharge of an official duty and in the other, in the purported discharge of it.
The act of abetment alleged against him stands on the same footing, for his part in the abetment was to permit the disposal of the goods by the doing of an official act and thus "wilfully suffer" another person to use them dishonestly: section 405 of the Indian Penal Code.
In both cases, the 'offence" in his case would be incomplete without proving the official act.
We therefore hold that section 197 of the Code of Criminal Procedure applies and that sanction was necessary, and as there was none the trial is vitiated from the start.
We therefore quash the proceedings 152 1188 against the second accused as also his conviction and sentence.
We now turn to the appeal of the first accused.
He has been convicted under section 409 of the Indian Penal Code read with section 34.
The main point here concerns a vital misdirection in the charge to the jury about section 34.
The learned Additional Sessions Judge misunderstood the scope and content of this section and so misdirected the jury about the law.
The section was expounded at length in paragraphs 15 and 16 of the charge and though some of the illustrations given are on the right lines, there is much there that is wrong and which, if acted on, would cause a miscarriage of justice.
The essence of the misdirection consists in his direction to the jury that even though a person "may not be present when the offence is actually committed" and even if he remains "behind the screen" he can be convicted under section 34 provided it is proved that the offence was committed in furtherance of the common intention.
This is wrong, for it is the essence of the section that the person must be physically present at the actual commission of the crime.
He need not be present in the actual room; he can, for instance, stand guard by a gate outside ready to warn his companions about any approach of danger or wait in a car on a nearby road ready to facilitate their escape, but he must be physically present at the scene of the occurrence and must actually participate in the commission of the offence in some way or other at the time the crime is actually being committed.
The antithesis is between the preliminary stages, the agreement, the preparation, the planning, which is covered by section 109, and the stage of commission when the plans are put into effect and carried out.
Section 34 is concerned with the latter.
It is true there must be some sort of preliminary planning which may or may not be at the scene of the crime and which may have taken place long beforehand, but there must be added to it the element of physical presence at the scene of occurrence coupled with actual participation which, of 1189 course, can be of a passive character such as standing by a door, provided that is done with the intention of assisting in furtherance of the common intention of them all and there is a readiness to play his part in the pre arranged plan when the time comes for him to act.
The emphasis in section 34 is on the word "done": "When a criminal act is done by several persons. .
It is essential that they join in the actual doing of the act and not merely in planning its perpetration.
The section has been elaborately explained by Lord Sumner in Barendra Kumar Ghosh vs The King Emperor(1).
At page 52, he explains that "participation in action" is the leading feature of section 34.
And at page 53 in explaining section 114 of the Indian Penal Code, he says "Because participation de facto (as this case shows) may sometimes be obscure in detail, it is established by the presumption juris et de jure that actual presence plus prior abetment can mean nothing else, but participation.
The presumption raised by section 114 brings the case within the ambit of section 34".
At page 55 he says about section 34 that "participation and joint action in the actual commission of crime are, in substance, matters which stand in antithesis to abetments or attempts".
The misdirection is plain and it goes to the root of the matter because the jury returned a verdict of guilty under section 409 of the Indian Penal Code read with section 34 alone and not under section 409 read with section 109.
It is part of the defence of the first accused that he was not present when the goods were loaded nor was be present when they were allowed to pass out of the gates, that is to say, that he was not present when the offence was committed.
It is true there is evidence to show that he was there when the lorries left but apart from the fact that there is a small discrepancy on the point, there is nothing to indicate that this evidence was believed.
If he was not present he (1) [1924) L.R. 52 I.A. 40.
1190 cannot be convicted with the aid of section 34.
He could have been convicted of the abetment had the jury returned a verdict to that effect because there is evidence of abetment and the charge about abetment is right in law.
But the jury ignored the abetment part of the charge and we have no means of knowing whether they believed this part of the evidence or not.
There is also non direction on an important point which may have caused a miscarriage of justice.
The case for the prosecution is that the accused disposed of the goods to Mohsinbhai for a sum of Rs. 4,000 which was duly paid to the second accused on the 10th.
The learned trial Judge told the jury that "the evidence led by the prosecution about the payment of the Rs. 4,000 is proved to be utterly useless", and in telling them why he gave them a number of reasons.
But he omitted to follow this up by telling them that if they rejected this part of the prosecution case, as he invited them to do, then the strongest part of the case against the accused collapsed because officers.
in the position of the accused do not commit illegal acts like this and expose themselves to a prosecution and possible disgrace unless they are prompted by some strong motive, usually self interest; and though a conviction can be based on evidence which does not disclose a motive if the facts proved justify such a course, yet it would ordinarily be unsafe to convict in a case like the present in the absence of proof indicating an adequate reason for criminal behavior on the part of the accused.
Had the jury been told this, as they should have been, it is possible they would not have returned a verdict of guilty.
In the circumstances, we have no alternative but to quash this conviction also.
We have now to consider whether there should be a retrial.
As the present trial cannot proceed against the second accused, and as all the accused are said to have acted in concert each playing an appointed part in a common plan, we do not think it would be right 1191 to direct a retrial though this is the normal course when a jury trial is set aside on the grounds of misdirection and non direction.
We therefore discharge (not acquit) both the appellants leaving it to Government either to drop the entire matter or to proceed in such manner as it may be advised.
We do this because the accused expressly asked that the charge under the Prevention of Corruption Act should be left over for a separate trial.
The two convictions are therefore quashed and also the sentences.
We are told that the first accused has already served out his sentence.
The fine if paid, will be refunded.
The bail bond of the second accused will be cancelled.
| IN-Abs | The three accused Government servants were jointly charged with an offence punishable under section 5(2) of the Prevention of Corruption Act, 1947 and all three were further jointly charged with having committed breach of trust in furtherance of the common intention of all under section 409 of the Indian Penal Code read with section 34.
Then followed a number of alternative charges in which each was separately charged with having committed criminal breach of trust personally under section 409.
As a further alternative, all three were 1178 jointly charged under section 409 read with section 109 for having abetted each other in the commission of a criminal breach of trust under section 409.
On objection taken to these charges, the trial for the offence under section 5(2) of the Prevention of Corruption Act was separated from the trial under section 409 of the Indian Penal Code.
The charges were reframed.
One under section 5(2) was dropped while others remained.
On 27 10 1949 the Governor General acting under section 197 of the Code of Criminal Procedure sanctioned the prosecution of the first accused (appellant No. 1) for offences under sections 120 B, 409, 109 for having conspired with the other two to commit criminal breach of trust in respect of properties belonging to Government and for having thus abetted the commission of that offence and also for having committed it.
Similar sanction was not given against the other two accused and was limited only to the first accused.
On the same date sanction was given for the prosecution of the first accused under section 5(2) of the Prevention of Corruption Act, 1947 and a similar sanction was given against the second accused.
The question was whether this sanction against the second accused could be extended to cover his prosecution under section 409 and whether his trial was valid.
Held, (answering the question in the negative) that under section 197 of the Code of Criminal Procedure the sanctioning authority was the Governor General.
Under the Prevention of Corruption Act, 1947 the sanctioning authority was the Central Government.
Either one, or two, Government authorities were given the right and invested with the duty of making an election.
If two Government authorities are given the right to choose and neither can encroach upon the preserve of the other, then the Governor General has not sanctioned the present prosecution against the second accused (appellant No. 2) and no other authority has the power to do so.
Therefore the sanction given to prosecute under section 5(2) of Act II of 1947, could not be used to cover the present trial, because it was given by an authority not competent to give it.
If, on the other hand, the two authorities are really one, then the election has been made clearly.
The sanction under section 5(2) of the Prevention of Corruption Act, 1947 as amended by Act LIX of 1952 and Act XLVI of 1952 is to proceed in special courts with a special procedure so the present trial against the second accused was incompetent.
It is well settled that a defect of this nature is fatal and cannot be cured when section 197 applies and, as it did, sanction was necessary so the trial was vitiated from the start.
The proceeding,,; were accordingly quashed.
If section 197 of the Code of Criminal Procedure is construed too narrowly it can never be applied for it is no part of an official 's duty to commit an offence and never can be.
But it is not the duty of an official which has to be examined so much as his act, because an official act can be performed in the discharge of official duty as well as in dereliction of it.
The section has content and its language must be given meaning.
1179 In the case of the first accused there was misdirection in the charge to the Jury under section 34.
The essence of the misdirection consisted in the Sessions Judge 's direction to the jury that even though a person may not be present when the offence is actually committed and even if he remains "behind the screen" he can be convicted under section 34 provided it is proved that the offence was committed in furtherance of the common intention.
This is wrong because the essence of the section is that the person must be physically present at the actual commission of the crime.
The misdirection is plain and goes to the root of the case because the jury returned a verdict of guilty under section 409 read with section 34 alone and not under section 409 read with section 109, I.P.C. Held, that in cases which raise questions of substance and importance the High Courts should not pass summary orders of rejection without giving some indication of their views on the points raised before them.
Mushtak Hussein vs The State of Bombay ([1953] S.C.R. 809), The State vs Gurucharan Singh (A.I.R. [1952] Punjab 89), Gokulchand Dwarkadas vs The King (A.I.R. , Hori Ram Singh vs The Crown ([1939] F.C.R. 159), Madan Mohan vs The State of Uttar Pradesh (A.I.R. , Lieutenant Hector Thomas Huntley vs The King Emperor ([1944] F.C.R. 262), and Barendra Kumar Ghosh vs The King Emperor ([1924] L.R. 52 I A. 40), referred to.
|
No. 274 of 1971.
349 Under Article 32 of the Constitution of India for a writ in the nature of habeas corpus.
N. N. Goswami, for the petitioner.
D. N. Mukherjee and G. section Chatterjee, for the respondent.
The Judgment of the Court was delivered by Shelat,J.
The order of detention,dated April 7, 1971, passed against the petitioner herein and in pursuance of which the petitioner was arrested and detained in jail the next day, recites that it was passed under sec.
3(1) and (3) of the West Bengal (Prevention of Violent Activities) Act, President 's Act 19 of 1970, the ground for which was that the District Magistrate, 24 Parganas, who passed it, was satisfied that it was necessary to detain the petitioner with a view to prevent him from acting in a manner prejudicial to the maintenance of public order.
The grounds of detention served on him at the time of his arrest narrated three incidents in which he was said to have been involved.
The first ground was that on November 13, 1970 he, together with some others, committed theft of copper traction wire from a wagon lying in Naihati South Yard, and that when the railway police and the railway protection force on duty rushed at the spot, the petitioner and his associates threw bombs at them with intent to kill them.
The second ground was that on December 23, 1970, the petitioner and his associates were removing 29 pieces of rail from the same railway yard and when the members of the railway protection force attempted to stop them from doing so, the petitioner and his said associates threw bombs at them with intent to kill them.
The third and the last ground was as follows : "That on 13 1 71 in between 12.00 and 12.20, hours, you along with your associates being armed with bombs, swords, lathis, etc.
entered in a clash with, another group with a view to kill them.
Your violent activities created a serious panic in the station area and disturbed the public order.
" From the Dum Dum Central Jail where the; petitioner was detained he made a representation, dated April 29, 1971, to the State Government.
That representation together with the record of the case was placed before the Advisory Board, who it appears, also heard the petitioner in person.
The representation, dated April 29, 1971 was in general terms in which the petitioner denied the said grounds alleged against him, and maintained that he was a law abiding citizen who never indulged in activities of the kind alleged against him.
The Board, after considering the 350 said representation, the said record of the case and after hearing him, as aforesaid, reported that there was, in its opinion, sufficient cause for his detention.
It seems that thereupon the Government confirmed the said detention order and directed continuation of his detention thereunder.
So far there does not appear to be any difficulty as all the steps following the petitioner 's arrest appear to have been taken by the detaining authority in compliance with the provisions of the Act.
But two questions have been raised before us on behalf of the petitioner.
The first was raised by the petitioner himself in the written arguments submitted by him to this Court from jail and the second was raised by his counsel during the course of ,the hearing of the petition.
The point raised by the petitioner was in regard to ground No. 2 in the grounds of detention in which it was alleged that the petitioner participated in the incident said to have taken place on December 23, 1970.
The petitioner 's allegation was that on January 1, 1971 the Naihati G.R.P. police appeared before, the Magistrate, Sealdah, stating that the petitioner was arrested in a police case referred to as Naihati G.R.P. Case No. 11, dated November 23, 1970 under sees.
148, 379 and 307 of the Penal Code and sec.
6(3) of the Explosive Substances Act, but that the Magistrate, after considering the facts and circumstances of the case, released him on bail.
That case, according to the petitioner was still pending.
The contention was that the authorities, having elected to institute proceedings against him under the Code of Criminal Procedure, could not, while those proceedings were still pending, also take parallel proceedings under the present Act thereby placing, firstly, the petitioner under a double jeopardy, and secondly, conducting investigation in that case without that investigation being under the courts supervision and control.
The argument was that if the petitioner were to be kept under preventive detention under the present Act it would not be necessary as, it would otherwise be, for the police to ask for remand orders and produce the petitioner before the Magistrate whenever such orders were prayed for.
The detention order and the detention thereunder, it was argued, were on the aforesaid two grounds invalid.
The second contention concerned the third ground of the grounds of detention and related to the alleged incident, dated January 13, 1971, when the petitioner and his associates who were armed with bombs, swords, lathis etc.
were said to have clashed with another group.
In the written arguments submitted by the petitioner from jail, the petitioner made a general denial stating that, if such an incident had occurred and he had been involved in it the police were bound to file a case against him but that no such case was ' filed which indicated that he had nothing to do with the alleged incident, and had been falsely involved 351 in it.
Counsel appearing for him raised another point, and that was that ground No. 3 was vague and uncertain and was couched in such indefinite language that it would be impossible for the petitioner to effectively make a representation.
We proceed to consider this contention first because in the view we take concerning it would not be necessary for us to go into the contention regarding ground No. 2 of the grounds of detention.
Ground No. 3, no doubt, specifies the date and the time when the incident alleged therein was said to have taken place.
It also alleges that the petitioner and his associates were armed during the alleged incident with weapons such as bombs, swords, lathis etc., and that they had a clash "with another group", and that incident "created a serious panic in the station area".
The ground does not state what the authority meant by "another group", nor does it state in which "station area" the said alleged incident was said to have taken place resulting in panic.
It will be seen that the first and the second grounds mentioned two incidents of theft said to have been committed in the yard of the Naibati railway station.
The question is, in the absence of any particulars as to the place where the incident alleged in the third ground took place, what would the expression "station area" mean to the petitioner, and whether the petitioner would not get the impression that the District Magistrate meant thereby Naihati railway station or Naihati police station area.
In his representation, the petitioner merely denied all the three grounds and maintained that he had no concern with any of the three incidents alleged in the grounds of detention.
In his written arguments submitted to this Court he, firstly, denied having anything to do with the incident of January 13, 1971 And then proceeded to state that all those allegations were made falsely against him by the Naihati railway _police, and that they were false because if the said alleged incidents had in fact occurred the police were bound to launch proceedings against him.
He further asserted that at any rate, the local police, that is, the Naihati police, were bound to make some record of them in the general diary maintained by the said police station.
It is, thus, clear that the petitioner was under the impression, in the absence, of the place or the locality where the said incident was said to have taken place, according to the District Magistrate, either in Naihati railway Station or the area under the jurisdiction of Naihati police station.
Such an impression, it appears, was likely because when read in ' the context of the first and the second grounds, the reader of the third ground in the absence of any particulars as regards the L887 Sup Cl/72 352 locality where the said alleged incident took place, might well infer the locality there alleged must be Naihati railway station area.
That such was the impression of the petitioner appears from the assertion made by him in Para 6 of his written arguments that the allegations in respect of all the grounds were made against him by Naihati Railway police, and that those were false because neither they nor the Naihati Police made any reference to them in the general diaries maintained by them, nor lodged any complaint against him.
In Para 7 of the affidavit in reply of the State, the averment for the first time made was that the alleged incident of January 13, 1971 took place not in Naihati Railway Station area but at Palta Railway Station which resulted in "panic in the said station area and disturbed public peace and tranquility".
Apart, thus, from ground No. 3 in the grounds of detention being vague by reason of its omission to mention the locality, there was in the context of the other two grounds a likelihood of the petitioner, being under a wrong impression that according to .he District Magistrate the incident there alleged had taken place in Naihati Railway Station area.
That being so, it is obvious that 'the petitioner could not make a correct and proper represen tation which must mean that the omission to mention the locality prevented him from effectively making a representation.
The omission to specify the group with whom the petitioner and his associates came into clash also renders that ground vague and indefinite, resulting once again in disabling the petitioner from effectively making a representation.
Suppose that the petitioner wanted to maintain that on January 13, 1971 he was never at or near Palta Railway Station or that the group with whom he was said to have clashed was his own group or was friendly with him, and therefore, there was no possibility of any such clash.
He could not obviously have been able to do so in the absence of particulars about the locality and the name or description of the said group.
The result of those omissions being to prevent the petitioner from effectively making representation, his detention under the said order must be found to be invalid.
The petition, for the reasons aforesaid.
succeeds and is allowed.
Accordingly we direct that the petitioner be released from jail and set at liberty forthwith.
K.B.N. Petition allowed.
| IN-Abs | The petitioner was detained under section 3(i) and (iii) of the West Bengal (Prevention of Violent Activities) Act, 1970.
The first and the second ground of detention served on him mentioned two incidents of theft and throwing of bombs with intent to kill said to have been committed in the yard of Naibati Railway Station.
The third and the last ground was that on January 13, 1971 between 12 and 12.20 hrs.
the petitioner along with his associates "being armed with bombs, swords, lathis, etc.
entered in a clash with another group with a view to kill them" and that his "violent activities created a serious panic in the Station area and disturbed public order.
" The petitioner contended, inter alia that ground No. 3 was vague and uncertain and was couched in such indefinite language that it would be impossible for the petitioner to effectively make a representation and therefore his detention was invalid.
In his representation the petitioner had merely denied all the three grounds and maintained that he had no concern with any of the three incidents alleged in the grounds of detention.
In his written arguments submitted to this Court the petitioner stated that the allegations in respect of all the grounds were made against him by the Naibati Railway Police and that they were false.
In the reply affidavit of the state the averment for the first time made was that the alleged incident in ground No. 3 took place not in Naibati Railway Station area but at another railway station.
Allowing the petition, HELD : (1) Ground No. 3 is vague by reason of its omission to mention the locality.
It is clear that the petitioner was under the impression, in the absence of the place or the locality where the incident was said to have taken place having been mentioned, that the said incident had taken place either in Naibati Railway Station or the area under the jurisdiction of Naibati police.
Therefore, apart from ground No. 3 being vague by reason of its omission to mention the locality, there was in the context of the other two grounds a likelihood of the petitioner being under a wrong impression that according to the District Magistrate the incident there alleged had taken place in the Naibati Railway Station area.
That being so, the omission to mention the locality prevented the petitioner from effectively making a representation.
[352 D] (2)The omission to specify the group with whom the petitioner and his associates came into clash also renders that ground vague and indefinite, resulting once again in disabling the petitioner from effectively making a representation.
[352 E]
|
Appeals Nos. 660 of 1967 and 58 of 1972.
Appeals by certificate/special leave from the judgment and decree dated August 11 / 12, 1964 of the Bombay High Court in Civil Reference No. 6 of 1959.
section T. Desai, P. C. Bhurtari, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant (in both the appeals).
V. section Desai and B. D. Sharma, for respondent No. 1 (in both the appeals).
The Judgment of the Court was delivered by Hegde, J.
Both these appeals, the former by certificate and the later by special leave arise from the decision of the High Court of Bombay in a reference under section 54 of the Bombay Stamp Act.
When Civil Appeal No. 660 of 1967 came up for hearing on a previous occasion, objection was raised as to the maintainability of the appeal on the ground that the High Court was not competent to grant a certificate in the case under article 133 of the Constitution.
At that stage, the appellant sought an adjournment of the appeal so as to enable it to move this Court for special leave against the impugned decision.
That prayer was allowed by this Court.
Thereafter the appellant sought and obtained special leave of this Court to appeal against the decision in question.
Hence Civil Appeal No. 58 of 1972 came to be filed.
In view of this appeal, we may now proceed on the basis that Civil Appeal No. 660 of 1967 stands withdrawn and the same is disposed of accordingly.
Hereafter we shall only deal with Civil Appeal No. 58 of 1972.
334 The facts leading up to this appeal are as follows On November 18, 1950, plot No. 79 at Palton Road, Bombay, admeasuring about 1,368 square yards was leased by the Government of Bombay for a period of 999 years from June 26, 1942 to one Lily Investment Corporation Ltd. On December 11, 1950, the said Lily Investment Corporation Ltd. gave a sub lease of the said plot of land to Uttamchand Tulsidas for a term of 999 years (less one day), from June 26, 1942.
thereafter Uttamchand constructed a building called "Himalaya House" on that plot consisting of several flats, shops and offices.
Under various agreements, he appears to have assigned the right of occupation in those flats, shops and offices to several persons.
One such agreement was with one Motiram Shewarama Vallicha.
That was in respect of one flat.
That agreement is in the record.
As the High Court has placed considerable reliance on that document, it is necessary to quote the relevant clauses therein viz. 2, 5 and 16.
Those clauses read thus : "2.
That the Party hereto of the Second Part hereby agrees to acquire the block bearing No. 12 on the ground floor of the said building for the total sum of Rs. 10,000 (Rupees ten thousand only).
That the possession of the said block shall be delivered to the party hereto of the Second Part provided all the amounts due under this agreement and particularly indicated in condition No. 3 hereof are paid by the party hereto of the Second Part to the Party hereto of the First Part and upon the delivery of such possession the party hereto of the Second Part shall be entitled to the use and occupation of the said block without hindrance PROVIDED NEVERTHELESS that nothing contained in these presents shall be construed as a demise in law of the said leasehold lands or any part thereof or the buildings thereon, such demise to take place only upon the transfer by a formal conveyance to a Co opera tive Society or Incorporated body to be formed as hereinafter agreed.
That the party hereto of the First Part shall form a co operative society or any other incorporated body recognized in law and the party hereto of the Second Part shall join such co operative society or any other incorporated body.
The party hereto of the First Part agrees to convey transfer or assign to the said society or any other incorporated body as the case may be the aforesaid lands and buildings provided that the costs and expenses in connection with the 335 requisition of such society or incorporated body, as well as the costs of preparing, approving, engrossing and stamping the Assignment, Transfer, or Deed of Conveyance required to be, executed by the party hereto of the First Part shall be borne by such society, or the incorporated body as the case may be." On June 28, 1955, the appellant company was incorporated and registered under the provisions of the Indian Companies Act, 1913.
On December 30, 1955, Uttamchand purported to assign all his rights in the building to the appellant company under a deed.
In the preamble to that Deed after tracing, Uttamchand 's title to the property, it is recited "AND WHEREAS the Assignee Company has been formed for the better administration of the said building and for the protection of the interests of the persons occupying flats, offices and shops therein AND WHEREAS the Assignor has agreed to assign to the Assignee all his interests in the said piece of land and building.
" Clause 1 of that Deed provides as under : 1.
The Assignor (i.e. Respondent No. 2) doth hereby for no consideration assign into the Assignee (i.e. the Appellant Company) ALL THAT the piece of land comprised in the before recited Lease together with the buildings and erections now standing and being thereon together with all rights easements and appurtenances thereto belonging and together with all the right title and interest whatever of ' the Assignor in the building known as Himalaya House EXCEPT AND RESERVED as in the before recited Lease more particularly mentioned TO HOLD the same unto the Assignee or all the residue now unexpired of the term of years granted by the before recited Lease SUBJECT to the rent reserved by and to the Agreements covenants and conditions contained in the before recited Lease henceforth on the part of the Assignee to be paid observed and performed.
" The said document bore a stamp of annas 12 only.
When the same was presented for registration, the Sub Registrar of Bombay impounded the same and sent it to the Assistant Superintendent of Stamps, Bombay.
That officer by his letter dated June 26, 1956 informed the appellant company that "as it was formed of and for the persons who had purchased the flats in the building.
the real consideration for the Assignment was made up partly of what was paid by the flat holders and the status of the appellant company was that of the nominee of the flat holders so far as the Assignment was concerned." He further stated that in the absence of any mention of consideration in the document, the then value 887 SUP@CT/72 336 of the premises was an index of the consideration.
He purporting to act under section 40 of the Indian Stamp Act, determined the stamp duty at Rs. 95,997 after valuing the building at Rs. 16,00,000.
Further he imposed a penalty of Rs. 20,000.
He called upon the appellant company to pay the stamp duty as well as the penalty.
On receipt of that communication, the appellant company applied to the Chief Controlling Revenue Authority to revise the order of the Assistant Superintendent of Stamps or in the alternative refer the matter to the High Court for its opinion.
Thereafter the Chief Controlling Revenue Authority made the reference referred to earlier to the High Court.
He submitted two questions for the opinion of the High Court, viz : "(1) Whether Himalaya House Co. Ltd. the Assignee in the Assignment dated 30th December 1955 is the nominee of the several flat holders who have purchased the flats in the Himalaya House and whether the Assignment in question is a Conveyance or a sale for a price which has passed from the hand of the flat holders long before the date of assignment.
(2) Whether it was competent to the Assistant Superintendent of Stamps, under section 40 of the Indian Stamp Act, 1899 (now section 39 of the Bombay Stamp Act, 1958) to go beyond the terms of the document when it is mentioned in the document that no consideration is passed and assess the stamp duty in the manner men tioned by him in his order dated the 26th June 1956.
" The matter came up for hearing before a bench of three Judges of the Bombay High Court presided over by the learned Chief Justice.
At the hearing, the learned Judges opined that the questions submitted by the Chief Controlling Revenue Authority were not appropriate and, therefore, they recast those questions as follows : "1.
Under which article in Schedule 1 to the Stamp Act should the Assignment Deed in question be stamped ? 2.
If Article 23 applies in this case, what is the consideration for the Assignment Deed ?" All the Judges unanimously held that the Article applicable to the case is Article 23 in the First Schedule to the Indian Stamp Act, which will be hereinafter referred to as "the Stamp Ace '.
But while answering the second question, the learned Chief Justice and Naik.
J. opined that "the consideration for the Assignment Deed is 337 the total amount which was payable to the Assignor Tulsidas under the agreements between him and the persons to whom he had, under those agreements, given the right to occupy the Rats, offices and shops in the building." But Mody J. differed from his colleagues and came to the conclusion that "the consideration is ,as mentioned in the Deed of Assignment itself i.e. no consideration All the Judges unanimously came to the conclusion that the consideration mentioned in the document is nil.
This conclusion is obvious because Clause I of the Assignment Deed says that the Assignor assigns his rights 'for no consideration '.
All of them were also unanimous in their conclusion that for finding out the consideration, the concerned authorities (who will be hereinafter referred to as 'Revenue ') cannot travel outside the document; it should be 'as set forth therein '.
But the majority took the view that the Revenue was not bound to accept the quantum of consideration mentioned in the document; it could determine the same by taking into consideration the facts available from the impounded document.
They further held that the impounded document incorporates into itself the various agreements entered into between Uttamchand and the various persons to whom he had assigned certain rights in respect of flats, offices and shops referred to earlier.
In their view, the consideration paid by those persons to Uttamchand formed part of the consideration for the Assignment Deed in.
question.
Naik J. went a little further and held that alternatively the Deed in question can be considered as a "gift" under article 33 of Schedule 1 to the Stamp Act Mody J. opined that there is no basis to hold that the agreements entered into between Uttamchand and the various persons to whom the flats, offices and shops had been assigned were similar to the agreement entered into between him and Motiram Shewarama Vallicha.
He held that on the basis of the material before the Court, it was not possible to come to the conclusion that they had entered into agreements with Uttamchand similar to the agreement entered into between Uttamchand and Motiram Shewarania Vallicha.
He further held that on a plain reading of the Assignment Deed, it is not possible to come to the conclusion that the terms and conditions in the agreements entered into by Uttamchand with those to whom he had assigned flats, offices and shops, were incorporated into the Assignment Deed.
None of the Judges upheld the conclusion of the Assistant Superintendent of Stamps that the appellant company is a nominee of the persons to whom the flats, offices and shops had been assigned; nor did they agree with his conclusion that if in a document, the value of the rights assigned is not mentioned, it is permissible, for the Revenue to assess their value independently.
338 The contention that the appellant company is a nominee of the various persons to whom flats, offices and shops had been assigned was not pressed before us; nor was it urged before us that the Revenue is competent to make an independent assessment of the value of the rights assigned.
Though at one stage, it was feebly suggested that the Deed of Assignment may be considered as a gift but that contention was not elaborated; nor do we see any merit in that contention because in the first place, it does not purport to be a gift; secondly, the valuation of "gift" under Article 33 of the First Schedule has to be made on the same basis as the valuation of a "conveyance" under Article 23 of that Schedule.
Article 33 specifically says that the duty payable on a gift deed will be "same as a conveyance for a consideration equal to the value of the property as set forth in such instrument.
" For the purpose of this case, we shall proceed on the assumption, without deciding, that the charging words in Article 23 of the Stamp Act "where the amount or value of the consideration for such conveyance as set forth therein" do not mean that the Revenue must have regard only to what the parties to the instruments have elected to state the consideration to be, but the duty must be assessed upon the amount or value of the consideration for the transfer as disclosed upon an examination of the terms of the instrument as a whole.
We are of the opinion, that the learned Chief Justice and Naik J. were not justified in holding that the Deed of Assignment incorporates into itself the various agreements entered into between Uttamchand and the persons to whom he assigned flats, offices and shops.
The only reference to those persons in the Deed of Assignment is in the preamble wherein it is stated "AND WHEREAS the Assignor having erected a building known is Himalaya House on the said piece of land had granted to certain persons the right to occupy flats, offices and shops in the said building AND WHEREAS the Assignee Company has been formed for the better administration of the said building and for the protection of the interests of the persons occupying the flats, offices and shops therein.
" These clauses merely refer to the earlier transactions.
They do not incorporate into the Assignment Deed the earlier agreements with the persons referred to therein.
Mere reference to some earlier transactions in a document does not amount to an incorporation in that document, of the terms and conditions relating thereto.
From the language used in the Assignment Deed it is not possible to come to the conclusion that the terms and conditions of the earlier transactions have been made a part of that Deed.
Further barring one particular agreement, other agreements were not before the Court.
Therefore, it is not possible to know what the terms and conditions of those agreements were.
Before the terms and conditions of at, 339 agreement can be said to have been incorporated into another document, the same must clearly show that the parties thereto intended ,to incorporate them.
No such intention in available in this case.
It was urged that in view of section 27 of the Stamp Act, it was permissible for the Revenue to look into the terms and conditions of the agreements entered into by Uttamchand with the various persons to whom he had assigned flats, offices and shops, particularly in view of the fact that the impounded document makes reference to those agreements.
We are not able to accept that contention.
Section 27 prescribes that "The consideration (if any) and all other facts and circumstances affecting the charge ability of any instrument with duty, or the amount of the duty with which it is chargeable shall be fully and truly set forth therein.
" It is true that in view of this provision, the parties to a document are required to set forth in the document fully and truly the consideration (if any) and all other facts and circumstances affecting the chargeability of that document with the duty or the amount of the duty with which it is chargeable.
But a failure to comply with the requirements of that section is merely punishable under section 64 of the Stamp Act.
No provision in the Stamp Act empowers the Revenue to make an independent inquiry of the value of the property conveyed for determining the duty chargeable.
Article 23 is the Article that governs the charging of Stamp duty on "conveyance".
That Article to the extent relevant for our present purpose reads : "23.
Conveyance (as defined by section 2(10) not being a transfer charge or exempted under section 52Where the amount or value of the consideration for such conveyance as set forth therein. . " This Article has come up for consideration before various High Courts on a number of occasions.
In Ramen Chetty vs Mohamed Ghouse(1) the Calcutta High Court held that in determining whether a document is sufficiently stamped for the purpose of deciding upon its admissibility in evidence, the document itself as it stands, and not any collateral circumstances which may be shown in evidence must be looked at.
In Sakharam Shankar and Others vs Ramchandra Babu ohire,(2) it was held that in determining the question whether a particular document is sufficiently stamped, the Court should look at the instrument as it stands.
A Full Bench of the Allahabad High Court in the matter of Muhammad Muzaffar Ali(3) held that if in a deed of gift the value of the property dealt with is not set forth, the deed does not require any stamp, and it is not within the competence of the Collector to have the said property valued in order to assess the duty (1) (ILR 2 (ILR (3) (ILR 44 All. 339).
340 payable.
If, however, the value of the property is intentionally omitted with a view to defraud the Revenue, a prosecution will lie under section 64 of the Stamp Act.
A Division Bench of the Patna High Court in Sri Sitaram Ramalia and Another vs State of Bihar(1) held that the Collector had no power under section 40 of the Stamp Act to embark upon an inquiry with regard to the market value of the properties covered by the document and require the payment of further stamp duty in accordance with his finding as to valuation and, therefore, that the impugned orders of the Collector, Commissioner and the Board were ultra vires and were liable to be set aside under Article 227 of the Constitution.
Therein the Court was considering the scope of section 58 of the Stamp Act which requires that an instrument of settlement should be stamped with the same duty as a bond "for a sum equal to the amount or value of the property settled as set forth in such settlement.
" The Court observed that the words 'as set forth in the settlement" in the section refer back to the word "value" and not to the words "property settled".
Recently the same view was taken by the Andhra Pradesh High Court in Bharpet Mohammad Hussain Sahib and Another vs District Registrar, Kurnool(2).
No decision taking a contrary view was brought to our notice.
The question arising for decision in this case is settled by stare decision.
We are entirely in agreement with the view expressed in those decisions.
Even if we had been inclined to place a different interpretation on Article 23, we would have hesitated to do so in view of the long line of decisions to some of which we have already made reference.
The Legislature may have had.
good reasons for not empowering the Revenue to make an independent inquiry as regards the valuation of the right sought to be assigned.
Under any circumstance, there was no basis to hold that the consideration for the impounded Deed is the total amount received by Uttamchand under the agreements entered into between him and the persons to whom he had assigned certain rights in the flats, offices and shops in the building.
Those persons had an independent right of their own.
Their rights did not flow from the impounded Assignment Deed.
Whether the title obtained by them was perfect or not, there is no denying of the fact that they had acquired valuable rights even before the impounded Deed was executed.
For the reasons mentioned above, we allow this appeal and in place of the answers given by the High Court, we answer the question formulated by that Court thus "1.
The Article applicable in this case is Article 23 in the First Schedule to the Stamp Act, and (1) (ILR 39 Pat.
(2) TLR.
341 2.
the consideration is as mentioned in the Deed of Assignment itself i.e. no consideration.
" The first respondent shall pay the costs of the appellant in Civil Appeal No. 58 of 1972.
There will be no order as to costs in Civil Appeal No. 660 of 1967.
| IN-Abs | The lessee of a plot of land from Government sub leased it and the sub lessee built a building on it consisting of Rats, shops and offices.
The sub lessee assigned the rights of occupation of those flats etc.
under various .agreements.
Thereafter, the appellant company was incorporated and the sub lessee purported to assign all his rights in the building to the appellant company.
In the preamble to the deed it was recited that the company had been formed for the better administration of the building and for the protection of the interests of the persons occupying the flats etc., and that ;the sub lessee had agreed to assign to the appellant company all his interests in the, land and the building.
The consideration, mentioned in the document was nil and the document bore a stamp% of 12 annas.
When it was presented for registration, the authority impounded the deed, held that the appellant company was formed of and for the persons who had purchased the flats etc., that the real consideration for the assignment was .made up partly of what was paid by the occupiers of the flats etc., and determined the stamp duty and penalty under section 40 of the Stamp Act, 1899.
On a reference to the High Court it was held, that the article in the ,Schedule to the St amp Act applicable is article 23.
On the question of consideration, 'however, while one Judge held that the consideration was ,nil ' as mentioned in the deed, the majority held that the Revenue was not bound to accept the quantum of consideration mentioned in the deed, that the deed incorporated into itself the various agreements entered into between the sub lessee and the persons to whom rights were assigned in the flats etc., and that the consideration was the total amount payable to the sub lessee by those assignees.
Allowing the appeal to this Court, HELD: (1) Before the terms and conditions of an agreement can be said to have been incorporated into another document, it must be shown that the parties intended to do so.
In the present case, the mere reference to the earlier transactions in the deed did not amount to an incorporation in it of the terms and conditions of those transactions.
[338 F H] (2) In view of section 27 of the Stamp Act the parties to a document are required to set forth in the document fully and truly, the consideration (if any) and all other facts and circumstances affecting the chargeability of that document with duty.
But a failure to do so is merely punishable under section 64 of the Stamp Act.
There is no provision empowering the Revenue authorities to make an independent inquiry of the value of the property conveyed for determining the duty, even assuming that the charging words in article 23 do not mean that the Revenue must have regard 333 only to what the parties to the instrument have elected to state the consideration to be, but can assess the duty upon the value of the consideration as disclosed upon an examination of the terms of the instrument as a whole.
[339 A D] (3) There is a long line of decisions of the High Courts holding that the Legislature had not empowered the Revenue to make an independent inquiry as regards the valuation of the right sought to be assigned.
That view is correct and the question must also be held to be settled by state decision.
[340 D F] Ramen Chetty vs Mohomed Ghouse, I.L.R. , Sakharam Shankar vs Ramchandra Babu Mohire, I.L.R. , Muhammad Muzaffar Ali, In re.
I.L.R. 44 All.
339, Sri Sitaram Ramalla & Anr.
vs State of Bihar, I.L.R. 39 Pat.
228 and Bharpet Mohammad Hussain Sahib & Anr.
vs District Registrar, Kurnool, I.L.R. , approved.
(4) In any event, there was no basis for holding that the consideration for the deed was the amount received by the sub lessee from the persons to whom he assigned rights in the flats etc.
Those persons acquired an independent right and title whether perfect or not en before the impounded deed was executed, and their rights did not flow from the impounded deed.
[340 F G]
|
No. 136 of 1971.
Appeal by special leave from the judgment and order dated August 6, 1970 of the Madhya Pradesh High Court, Indore Bench in Civil Revision No. 415 of 1969 I. N. Shroff, for the appellant.
section V.Gupte, section K. Mehta and K. L. Mehta,for respondent No.1.
Vaidialingam, J. Civil Miscellaneous Petition No. 5801 of 1971, is by the first respondent, is an application under sections 17 and 29 of the (hereinafter to be referred as the Act) to pass a judgment and decree according to the Award of the arbitrator dated August 24, 1971 and to grant interest from the date of the decree, on the amount found payable by the appellant.
Civil Miscellaneous Petition No. 5802 of 1971, by the State of Madhya Pradesh, the appellant in the Civil Appeal, is an application requesting this Court to decline to take the Award dated August 24, 1971 on its file.
Without prejudice to the above prayer, there is a further request made to this Court to set aside or modify the Award in certain respects.
The relevant facts leading up to the filing of the two applications may be adverted to The erstwhile State of Madhya Bharat and entered into a contract with M/s. Saith & Skelton ( P.) Ltd., the first respondent, for the supply and erection of Pen, stocks for Gandhi Sagar Power Station, Chambal Hydel works.
The acceptance of the contract was by tender No. Project/SE/ 235 2522 F/II/25 dated June 5, 1956.
Under the said contract, the first respondent firm was required to supply material for the five penstocks of P.O.R. Jhalwar Road, Railway Station at Rs. 1,570 per M. Ton within the time stipulated, the total quantity being 463.939 M. Tons.
The material was to be transported from Jhalwar Road Railway Station to the works site by the consignee, ,,he Madhya Bharat Government, and the work of erection was to commence on the receipt at the work site of running length of 96 ft. for any of the penstocks.
Clause 21 of the contract provided for any question or dispute, arising under the conditions of the contract or in connection therewith, to be referred to the arbitrators, one to be nominated by the State and the other by the firm The said clause also provided for the matter being referred to an Umpire to be appointed by the arbitrators in case of disagreement between them.
That clause also referred to certain other matters relating to arbitration proceedings.
Disputes arose between the appellant and the respondent firm with reference to the performance of the contract.
The firm intimated the appellant on December 31, 1959 nominating one Shri T. R. Sharma, as an arbitrator under Cl.
21 of the contract and also called upon the appellant to nominate an arbitrator.
The Directorate General of Supplies and Disposals, who were acting as the agent of the Madhya Bharat Government, nominated one Shri G. section Gaitonde, as an arbitrator on behalf of the appellant.
But the said arbitrator resigned his appointment and in consequence on April 26, 1960 one Shri R. R. Desai, was nominated as an arbitrator on behalf of the appellant.
This nomination was also by the Directorate General of Supplies and Disposals.
On September 6, 1960, the two arbitrators appointed one Sri R. C. Soni, as an Umpire.
The two arbitrators disagreed in their views resulting in the matter being referred to the Umpire on October 20, 1961.
According to the appellant, the appointment of Shri Gaitonde, in the first instance and of Shri R. R. Desai, later, as an arbitrator, by the Directorate General of Supplies and Disposals was without any authority from the appellant.
Later on, the Directorate General of Supplies and Disposals again reappointed Shri R. R. Desai as an arbitrator on behalf of the appellant on January 4, 1961.
According to the appellant the appointment of Shri R. C. Sone, as Umpire on September 6, 1960 was not valid.
Accordingly, the appellant filed in the Court of the Additional District Judge, Mandsaur, Civil Miscellaneous Case No. 16 of 1962 under section 5 of the Act, for setting aside the nominations, as arbitrators of Shri T. R. Sharma and Shri R. R. Desai, as well as the appointment by them of Shri R. C. Soni, as the Umpire.
By order dated October 19, 1963, the Addl.
District Judge, Mandsaur held that the appointments of Shri R. R. Desai, as an arbitrator and Shri 236 R. C. Soni, as Umpire, were both invalid and not binding on the appellant.
The firm filed all appeal before the High Court of Madhya Pradesh against the order of the Addl.
District Judge.
This appeal was later oil treated as a Revision and numbered as Civil Revision No. 415 of 1969.
The High Court, by its order dated August 6, 1970 appointed Shri R. C. Soni as the Sole Arbitrator under section 12(2) of the Act and accordingly modified the order of the Addl.
District Judge, Mandsaur.
The appellant filed Special Leave Petition No. 2370 of 1970 in this Court for grant of Special Leave to Appeal against the order of the High Court dated August 6, 1970.
The firm entered caveat.
On January 29, 1971, this Court ranted Special Leave land, by consent of parties, appointed an arbitrator, whose Award is sought to be made a decree of the Court by the respondent in its application C.M.P. No. 5801 of 1971 and is sought to be set aside by the appellant by C.M.P. No. 5802 of 1971.
As the terms of the order passed by this Court are material, it is reproduced below : Special Leave is granted.
The appeal is allowed The appointment of Shri R. C. Soni as the sole arbitrator is set aside by consent of the parties.
Mr. V. section Desai, Senior Advocate, is appointed Arbitrator by consent of the parties to go into all the questions in this matter and make his awar.
The remuneration for the arbitrator would be Rs. 5,000, which will be shared by both the parties equally.
The arbitrator will make his award within three months from today.
The parties will be at liberty 1 to mention for extension of time, for making the award.
G. K. Mitter J, January 29, 1971.
A. N. Ray J." On February 1, 1971 this Court gave directions in the appeal,, in the presence of the counsel for both parties, that the records of the arbitration be called for forthwith and sent to the sole arbitrator Mr. V. section Desai, appointed as per order dated January 29, 1971.
Again on April 30, 1971, this Court,, in the presence of the counsel for both the parties, extended the time for making the Award by four months and also permitted the arbitrator to hold the arbi tration proceedings at Bombay.
The arbitrator gave his Award on August 24, 1971 and filed the same in this Court, the next day.
He also crave notice to the parties of the Making and signing of 237 the Award.
A signed copy of the Award was also sent to both the parties.
The operative part of the Award is as follows : (1) The opponents, the State of Madhya Pradesh will pay to the claimants a sum of Rs. 1,79,653.18 p. for the balance payable to them in respect of the price of supply and erection of the 5 penstocks.
(2) The State will also pay interest on the said amount at 9% per annum simple interest from 7th June, 1958 to the date of decree.
The State will also refund to t,he claimants a sum of Rs. 15,414,19 p. which they have recovered from the claimants as excess railway freight.
V. section Desai, Sole Arbitrator.
" In C.M.P. No. 5801 of 1971, the firm prays for passing a judgment and decree, according to the Award and also prays for grant of interest from the date of decree at the rate of 9% per annum.
On the other hand, the appellant State, in its application C.M.P. No. 5802 of 1971 prays for an order declining to take the Award on its file or in any event to set aside or modify the award in respect of interest granted prior to August 24, 1971 as well as the direction regarding the refund by the appellant of the sum of Rs. 15,414.19 P.
The Award is also sought to be modified on the ground that the award of interest at 9% is very excessive.
The question of pronouncing judgment according to the Award, as provided under section 17 of the Act and which is the prayer in C.M.P. No. 5801 of 1971 will arise only if the prayer to set aside the Award made in C.M.P. No. 5802 of 1971, by the State, is rejected.
Therefore, we will proceed to consider the contentions raised by Mr. 1.
N. Shroff, learned counsel for the appellant, in support of the application C.M.P. No. 5802 of 1971.
Mr. Shroff has raised the following four contentions: (1) The arbitrator had no power to suo motu file his Award, as he has done in this case, and as such no action can be taken on such an Award; (2) This Court is not the Court as contemplated by section 14(2) read with section 2(c) of the Act.
Hence the filing of the Award in ' this Court is illegal and ineffective in law; (3) The arbitrator had no jurisdiction to award interest from a period anterior to the date of the award or reference; and (4) The Arbitrator has committed a manifest error in directing the refund of Rs. 15,414.19 P. when this amount has already been taken into account in arriving at the figure of Rs. 1,79,653.18 P. 238 We will now proceed to deal with these contentions scriatim.
With regard to the first contention, which relates to the validity of the filing of the Award in this Court suo motu, reliance is placed by Mr. Shroff on section 14(2) of the Act.
It is the contention of the counsel that under this section an arbitrator can cause an award to be filed in court only under two circumstances : (a) when a request to do so is made by any party to the ' arbitration agreement or any person claiming under such party; and (b) when the arbitrator is directed by the Court to file the award.
In this case, it is pointed out,, that no such request was made by any of the parties to the arbitration agreement or any person claiming under such party to the arbitrator to file the Award.
It is pointed out that there was no direction by this Court to the arbitrator to file the Award.
Hence it is urged that the filing of the Award suo motu is illegal, as being contrary to the terms of section 14(2) of the Act.
Mr. section V. Gupte, learned counsel for the respondent firm, referred us to section 38 of the Act and pointed out that the scheme of the Act clearly shows that the Award has to be filed in the Court by the arbitrator either suo motu or on request made by the parties to the arbitration agreement or any person claiming under such party or on being directed by the Court.
The counsel pointed out, there is no prohibition in section 14(2) of the Act, against the arbitrator filing the Award in Court suo motu.
The question specifically arose before the Nagpur High Court in Narayan Bhawu vs Dewajibhawu(1).
The High Court held that there is nothing in section 14(2) of the Act, which precludes the arbitrator from filing the Award suo motu and it is not correct to say that the Award should be filed only if the parties make a request to the arbitrator to file the award or make an application to the Court for that purpose.
We are in agreement with this view of the law, especially when there is no prohibition in the Act, particularly in section 14(2) against the arbitrator filing suo motu his Award in Court.
Mr. Shroff referred us to the decision in Parasramka Com mercial Company vs Union of India(2).
From the facts stated in the said decision, it is seen that the arbitrator made his Award and signed the same on April, 26, 1950.
The arbitrator without sending any notice of the making and signing of the Award, sent a copy of the signed Award to the parties.
The appellant therein acknowledged receipt of the said signed copy of the Award by his letters dated 5th and 16th May, 1950; but he filed an application on March 30, 1951 in the Subordinate Judge 's Court for passing a decree in terms of the Award.
An objection was raised by the (1) A I R (2) ; 239 opponent that the application was out of time under article 178 of the Indian Limitation Act, 1908, as not having been filed within 90 days of the date of service of the notice of the making of the Award.
It is also seen that the arbitrator on July 3, 1951 filed the original Award before the Court suo motu.
The Subordinate Judge rejected the application filed on March 30, 1951 as barred by time.
That order was confirmed by the High Court.
This Court, after a consideration of section 14(1) of the Act held that the serving, by the arbitrator on the appellant before this Court of a signed copy of the Award amounted to giving him notice in writing of the making of the Award.
This Court further upheld, as correct, the view of the Subordinate Judge and the High Court that the application filed by the appellant, beyond the period prescribed under article 178 of the Indian Limitation Act, 1908, was barred.
This Court did not express any view regarding the action taken by the arbitrator in filing suo motu the Award and left open the question as follows : ". .
But we make it clear that the other part of the case, namely what is to happen to the award sent by the Arbitrator himself to the court has yet to be determined and what we say here will not affect the determination.
of that question.
Obviously enough that matter arises under the second sub section of section 14 and will have to be considered quite apart from the application made by the company to have the award made into rule of Court.
" Again the question whether a plea of limitation can be raised with respect to the suo matu filing of the award by the arbitrator was left open as.
follows : ".
As to whether, similar objections can be raised in answer to the award filed at the instance of the arbitrator is a question which we cannot go into the present appeal and no expression of opinion must be attributed to us on that point." Therefore, it is clear from what is stated above that in the said decision this Court had no occasion to consider whether an award can be filed suo motu by an arbitrator nor the further question whether such filing should be within the period of limitation provided under the relevant provisions of the Limitation Act.
In the case before us the period of limitation is dealt with under Entry 119 of the Schedule to the .
As the arbitrator in this case made his Award on August 24, 1971 and filed the same the next day, the question of limitation, if any, does not at all arise.
We do not express any opinion whether the period of limitation will apply when the arbitrator files his award Suo 887Sup.
CI/72 240 motu.
As the filing of the Award by the Arbitrator suo motu is legal, the first contention of Mr. Shroff has to be rejected.
The second contention of Mr. Shroff is that this Court is not "Court" as &fined under section 2(c) of the Act, where the Award could be filed.
Section 2 (c) of the Act is as follows : "2.
In this Act, unless there is anything repugnant in the subject or context, (c) "Court" means a Civil Court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21, include a Small Cause Court." According to Mr. Shroff the Award should have been filed, not in this Court, but in the Court of the Addl.
District Judge, Mandsaur, as that is the Court which will have jurisdiction to entertain the suit regarding the subject matter of the reference.
We are not inclined to accept this contention of Mr. Shroff.
It should be noted that the opening words of section 2 are "In this Act, unless there is anything repugnant in the subject or context.
Therefore the expression "Court ' will have to be understood as defined in section 2(c) of the Act, only if there is nothing repugnant in the subject or context.
It is in that light that the expression "Court" occurrmg in section, 14(2) of the Act will have to be understood and interpreted.
It was this Court that appointed Shri V. section Desai on January 29, 1971, by consent of parties, on an arbitrator and to make his Award.
It will be seen that no further directions were given in the said order which will indicate that this Court had not divested itself of its jurisdiction to deal with the Award or matters arising out of the Award.
In fact the indications are to the contrary.
The direction in the order dated January 29, 1971 is that the arbitrator is "to make his Award".
Surely the law contemplates further steps to be taken after the Award has been made, and quite naturally the forum for taking the further action is only this Court.
There was also direction to the effect that the parties are at liberty to apply for extension of time for making the Award.
, In the absence of anv other court having been invested with such jurisdiction by the order, the only concluonsion that is possible is that such a request must be made only to the court which passed that order, namely, this Court.
That this Court retained complete control over the arbitration proceedings is made clear by its orders dated February 1, 1971 and April 30, 1971.
On the former date, after hearing counsel for both the parties, this Court gave direction that the record of 241 the arbitration proceedings be called for and delivered to the Sole Arbitrator Mr. V. section Desai.
On the latter date, again, after hearing the counsel, this Court extended the time for making the Award by four months and further permitted the arbitrator to hold the arbitration proceedings at Bombay.
The nature of the order passed on January 29, 1971 and the subsequent proceedings, referred to above, clearly show that this Court retained full control over the arbitration proceedings.
Mr. Shroff referred us to the fact that in the order dated January 29, 1971, it is clearly stated "The appeal is allowed".
According to him, when the appeal has come to an end finally, this Court had lost all jurisdiction regarding the arbitration proceedings and therefore the filing of the Award should be only in the Court as defined in section 2(c) of the Act.
Here again, we are not inclined to accept the contention of Mr. Shroff.
That the appeal was allowed, is no doubt correct.
But the appeal was allowed by setting aside the order of the High Court and this Court in turn appointed Mr. V. section Desai as the Sole Arbitrator.
All other directions contained in the order dated January 29, 1971 and the further proceedings, as pointed out earlier, indicate the retention of full control by this Court over the arbitration proceedings.
In Ct. A. Ct.
Nachiappa Chettiar and others vs Cf.
A. Cf.
Subramaniam Chettiar(1), the question arose whether the trial eourt had jurisdiction to refer the subject matter of a suit to an arbitrator when the decree passed in the suit was pending appeal before the High Court.
Based upon section 21, it was urged before this Court that the reference made by the trial court, when the appeal was pending, and the award made in consequence of such reference, were both invalid as the trial court was mot competent to make the order of reference.
This Court rejected the said contention and after a reference to sections 2(c) and 21 of the Act held that the expression "Court" occurring in section 21 includes also the Appellate Court, proceedings before which are a continuance of the suit.
It was further held that the word "suit" in section 21 includes also appellate proceedings.
In our opinion, applying the analogy of the above decision, the expression "Court" occurring in section 14 (2) of the Act will have to be understood,in the context in which it occurs.
So understood, it follows that this Court is the Court under section 14(2) where the arbitration Award could be validly field.
The decision in Union of India vs Surjeet Singh Atwal(2) relied on by Mr. Shroff, dealt with a different aspect and therefore, it is not necessary for us to refer to the same.
The above reasoning leads us to the conclusion that the filing of the Award in this Court by the arbitrator was valid and legal.
The second contention of Mr. Shroff will stand rejected.
(1) ; (2) 242 The third contention of Mr. Shroff is that the arbitrator had no jurisdiction to award interest from a period anterior to the date of award or reference.
Before we deal with this contention, it is necessary to refer to the findings of the arbit rator in his Award.
Issues Nos. 6, 7 and 19 frame by the arbitrator and which are relevant on this aspect are as follows: "6 (a) Was the claimant entitled to the payment for supply as well as for erection on the total weight of 463.939 M. tons inclusive of electrodes ? 6 (b) If not, what are the weights on which the price of supply and the erection charges are to be calculated.
What is due to the claimant from the respondent in respect of the supply and erection of the penstocks ? 19.
Are any of the parties entitled to interest and/ or any other relief.
" On issue No. 6(a) the arbitrator found that the firm was entitled to the same weight both for the calculation of price as well as for the price for erection and the said weight was 463.939 M. Tons inclusive of electrodes.
In view of the above finding on issue No. 6(a), the arbitrator held that issue No. 6(b) does not survive.
On issue No. 7 he found that for the price of supply and erection of 463.939 M. Tons at the rate specified in contract, the total price due to the firm comes to Rs. 12,15,520.18P.
It was admitted before the arbitrator that the firm had been paid by the State of sum of Rs. 10,35,867/.
In view of this admission the arbitrator found that the balance payable to the firm towards the price for supply and erection is, Rs. 1,79,653.18 P. On issue No. 19, the arbitrator found that the firm is entitled to interest at 9% per annum on the balance of Rs. 1,79,653.18 P. from June 7, 1958, the date on which the final inspection of the, penstock took place.
The interest was to be paid till the date of the decree.
It is on the basis of the above findings that the arbitrator made the Award, the operative part of which has already been extracted in the earlier part of the judgment.
The direction regarding the payment of Rs. 1,79,653.18 P. is not challenged by the State.
It is only the direction regarding the period from which interest is payable, that is under challenge.
The arbitrator has made the interest payable from June 7, 243 1958, on the ground that it was the date on which final inspection took place and when the amount become payable to the. respondent.
Mr. Shroff referred us to a decision of the Judicial Com mittee and to certain decisions of this Court to the effect that section 34 of the Code of Civil Procedure will not apply to the proceedings before an arbitrator, as he is not a Court and that interest cannot be awarded by way of damages.
He further referred to those decisions in support of his contention that in the absence of any usage or contract, express or implied, or of any provision of law to justify the award of interest on an amount for a period before the institution of the suit, interest anterior to the date of the suit cannot be allowed.
The decisions referred to by Mr. Shroff are Bengal Nagpur Raliway Company Limited vs Ruttanji Ramji and others(1),, Seth Thawardas Pherumal vs The Union of India(2), Mahabir Prashad Rungta vs Durga Datt(3), Union of India vs A. L. Rallia Ram(4), Vithal Das vs Rupchand and others(5) and Union of India vs Bungo Steel ' Furniture Pvt.
Ltd. (6).
It is no doubt true that for awarding interest under the Interest Act, 1939, or under section 34 of the.
Code of Civil Procedure, certain circumstances must exist.
But one of the principles laid down is that interest prior to the institution of a suit can be awarded if there is any provision of a suit can be awarded if there is any provision of law to justify the award of such interest.
In the cases, referred to above, it is seen that there was neither any agreement pleaded for payment of interest; nor was any provision of law entitling the party to recover interest prior to the period of the suit or arbitration proceedings, referred to or relied upon.
Under such circumstances it was held that the arbitrator or a court had no power to award interest prior to the date of the Award.
In Union of India vs Bungo Steel Furniture Pvt.
Ltd. 17)this Court recognised the power of an arbitrator to award interest on the amount of the award from the date of the award till the date of the decree.
According to Mr. Shroff, the power of the arbitrator to award interest is only from the date of the award and not for any period anterior to that date.
In Firm Madanlal Roshanlal Mahajan vs Hukamchand Mills Ltd. Indore(7), the power of the arbitrator, to whom the subject matter of a suit had been referred for arbitration, to award pendente life interest was considered by this Court.
It was held in (1) L.R. 65 I.A. 66.
(2) (3) ; (4) ; (5) [1966] Supp.
S.C.R. 164.
(6) ; (7) ; 244 the said decision that all the disputes in the suit were referred to the arbitrator for his decision.
One of the disputes, so referred, was whether the respondent therein was entitled to pendente lite interest.
h was held that though in terms, section 34 C.P.C. does not apply to the arbitration, it was an implied term of the reference in the suit that the arbitrator was to decide the dispute, according to law, to grant such relief with regard to pendente lite interest as the Court itself could give, if it decided the dispute.
It was further held that such a power of the arbitrator was not fettered either by arbitration agreement or by the Act.
The decision in Seth Thawardas Pherumal vs The Union of India(1) distinguished on the ground that the said decision is silent on the question whether an arbitrator can award interest during the pendency of the arbitration proceedings if all the disputes in the suit including the claim for interest were referred for arbition.
From the decision in Firm Madanlal Roshanlal Mahajan vs Hukamchand Mills Ltd. Indore(2), it is clear that if all the disputes are referred for arbitration, the arbitrator has power to award interest pendente lite, i.e. during the, pendency of the arbitration proceedings.
In the case before there is no controvery that all the disputes including a claim for payment of the amount with interest was referred to the arbitrator.
The arbitrator, as pointed out earlier, found that the firm was entitled to the Payment as price in the sum of Rs. 1,79,653.18 P.
The arbitrator has further found that this amount became payable as balance price for the goods supplied by the firm on June 7, 1958, on which date the final inspection took place.
If that is so, section 61 of the Sat , of Goods Act, 1930 squarely applies and it saves the right of the seller (in this case the firm) to recover interest, where by law interest is recoverable.
Sub section (2) of section 61, which is material is as follows : "61 (2) In the absence of a contract to the contrary the Court may award interest at such rate as it thinks fit on the amount of the 'Price , (a) to the seller in a suit by him for the amount of the price from the date of the tender of the or from the date on which the price was payable.
(b) to the buyer in a suit by him for the refund of the price in a case of a breach of the contract on the part of the seller from the date on which the payment was made." (1) (2) ; 245 in the case before us, admittedly the contract does not pro vide that no interest is payable on the amount that may be found due to any one of them.
if so, it follows that the seller, namely, the firm is entitled to claim interest from the date on which the price became due and payable.
The finding of the arbitrator in this case is that the price became payable on June 7, 1958.
As held by this Court in Union of India vs A. L. Rallia Ram(1), which related to an arbitration proceeding, under sub section (2) of section 61, in the absence of a contract to the contrary, the seller is eligible to be awarded interest on the amount of the price for the goods sold.
On this principle it follows that the award of interest from June 7, 1958 is justified.
If the contention of Mr. Shroff that under no circumstances anarbitrator can award interest prior to the date of the Award, or prior to the date of reference, is accepted, then the position will be very anomalous.
As an illustration, we may point out that there may be cases where the only question that is referred to the arbitrator is whether any of the parties is entitled to claim interest on the amount due to him from a date which may be long anterior to the date of reference.
When such a question is referred to the arbitrator, naturally he has to decide whether the claim for award of interest from the date referred to by the parties is acceptable or not.
If the arbitrator accepts that claim, he will be awarding interest from the date which will be long prior even to the date of reference.
Therefore, the question ultimately will be whether the dispute referred to the arbitrator included the claim for interest from any particular period or whether the party is entitled by contract or usage or by a provision of law for interest from a particular date.
Mr. Shroff further contended that the award of interest at 9% per annum is exorbitant.
The short answer for negativing this contention is that it is seen from the claim statement filed by both the appellant and the respondent firm that each of them claimed for payment of the amount, due to them with interest at 12% per annum under section 61 of the .
Therefore, it follows that the rate of interest awarded is not excessive.
As we have already held that the arbitrator has got power in this case to award interest from June 7, 1958 at the rate specified by him, the third contention of Mr. Shroff will have to be rejected.
The last contention of Mr. Shroff relates to the direction regarding the refund of Rs. 15,414.19 P. The contention is that this amount has already been taken into account by the arbitrator when he directed the payment of Rs. 1,79,653.18 P. Mr. Shroff (1) ; 246 was not able to satisfy us that the amount, directed to be paid as refund, has been already taken into account in the amount fixed as the balance price payable by the State.
Therefore, this contention also will have to be rejected .
Now that we have rejected all the contentions of Mr. Shroff raised in C.M.P. No. 5802 of 1971, it follows that the prayer asked for,therein cannot be granted.
Now coming to C.M.P. No. 5801 of 1971, filed by the firm, that application is accepted and a judgment and decree are passed on the basis of the Award as against the State is favour of the respondent firm.
The appellant State will pay to the respondent firm a sum of Rs. 1,79,653.18 P. with 9% per annum simple interest from June 7, 1958, till the date of the decree and thereafter at 6% till the date of payment.
The appellant State will also refund to the respondent firm a sum of Rs. 15,414.19 P. which they have recovered from them as excess railway freight.
In the result, C.M.P. No. 5802 of 1971 will stand dismissed with costs.
C.M.P. No. 5801 of 1971 is allowed with costs.
A. decree as stated above will issue.
| IN-Abs | Disputes having arisen between the appellant and the respondent with reference to the performance of a contract which provided for arbitration, steps were taken to appoint arbitrators and an umpire.
The appellant filed a petition in the District Judge 's Court, having jurisdiction over the matter, for setting aside the nominations.
When the matter came up to this Court in appeal, this Court appointed a sole arbitrator with consent of the parties.
Thereafter in the presence ' of counsel for both parties this Court gave directions in the appeal that the arbitration records be sent to the sole arbitrator, and later extended the time for making the award, and gave directions regarding the venue.
The arbitrator gave his award, directing the payment of a certain sum by the appellant to the respondent with simple interest at 9% from a date anterior to the reference, and filed the award ip.
this Court 'the next day.
The respondent filed a petition for passing a decree in terms of the award but the appellant opposed the petition.
On the questions : (1) Whether the arbitrator had no power suo motu to file his award; Whether the award should not have been filed in this Court as it is not the Court contemplated by sections Z((4) and 14(2) of the ; and (3) Whether the arbitrator had no jurisdiction to.
award the interest from a date anterior to the date of award or reference, HELD : (1) There is nothing in section 14(2) of the Act which precludes the arbitrator from filing the award suo motu and it is not correct to say that the award should be filed only if the parties make a request to the arbitrator to file it, or make an application to the Court for that purpose.
The arbitrator having filed the award the next day after making it, no question of limitation arises.
[239 G B] Narayan Bhawu vs Dewajibhawu, A.I.R. 1945 Nag. 117, approved.
(2) The expresion 'Court ' occurring in section 14(2) of the Act will have to be understood in the context in which it occurs, because, the definition of the word in section 2(c) applies only when there is nothing repugnant in the subject or context.
The word 'Court ' would include 'an appellate court ' and the word 'suit ' would include 'appellate proceedings '.
Merely because the order of this Court appointing the sole arbitrator stated 'the ,appeal is allowed ' it is not as if this Court had lost all jurisdiction regarding the arbitration proceedings.
The various directions given by this Court indicate that this Court retained full control over the arbitration proceedings.
Therefore this Court is the Court under section 14(2) where the arbitration award should be validly filed.
[240 E. H; 241 B D] 234 Ct. A. Ct.
Nachiappa.
Chettiar & Ors.
V. Ct.
A. Ct.
Subramaniam Chettiar; , , referred to.
(3) In the present case, all the disputes including the claim for the payment of interest had been referred to the arbitrator.
The contract does not provide that no interest was payable on the amount that may be found due.
Therefore the respondent was entitled, under section 61 (2) of the , to claim interest from the date on which the price became due and payable.
The arbitrator had found that the price had become payable from a date anterior to the date of the award.
There fore, the award of interest from the anterior date was justified.
The award of interest at 9% 'is also not exorbitant because the parties themselves claimed interest at 12%, [245 A G] Union of India vs A. L. Rallia Ram, ; and Firm Madanlal Roshanlal Mahajan vs Hukumchand Mills Ltd. Indore; , , followed,
|
Appeal No. 2172 of 1968.
Appeal from the judgment and order dated August 10, 1967 of the Delhi High Court in Letters Patent Appeal No. 97 D of 1965.
Frank Anthony, K. B. Rohatgi and P. Parameswara Rao, for the appellant.
Jagadish Swarup, Solicitor General of India and section P. Nayar.
for the respondent.
451 The Judgment of the Court was delivered by Beg, J.
This is an appeal by grant of a Certificate of the Delhi High Court under Article 132 read with Article 133(1)(b) and (c) of the Constitution.
The Appellant had filed a petition under Article 226 of the Constitution for quashing an order dated 10 3 1960 and had prayed for a consequential order also in the nature of a mandamus.
Information of the impugned order (Annexure 'C ' to the petition), given to the petitioner, reads as follows "The Union Public Service Commission have in pursuance of Rule 5 of the Central Information Service Rules, 1959, recommended Shri P. B. Roy, at present officiating as Editor in the Publications Division, for appointment, in a substantive capacity, to Grade III of the service at its initial constitution.
Shri Roy is informed that the President has been pleased to post him as an Assistant Editor in the Publications Division with immediate effect".
Those relevant facts, preceding and following the impugned order, which are admitted by both sides may now be mentioned.
In 1955, the post of Editor, Publications Division, in the Department of Information and Broadcasting of the Government of India (hereinafter referred to as ',the Department '), was advertised.
The appellant, who had applied for the post, was selected by the Union Public Service Commission, and, on its recommendation, was offered a temporary post of Editor in the Publications Division of the Department on an initial salary of Rs. 720 per month in the scale of Rs. 720 40 1000 together with the usual allowances.
The material terms and conditions of this employment were: (i) The post is to be gazetted Class I; (ii) The temporary post was sanctioned upto 28 2 1957 but was likely to continue; (iii) Shri Roy (the Appellant) will be governed by the Central Civil Services (Temporary Service Rules) and other Rules applicable to temporary Govt.
servants of his category; (iv) He was to be on probation for 6 months which may be extended at the discretion of the appointing authority.
The Appellant had reported for duty on 1st August, 1956, as directed. 'On 27 3 1957, the Appellant,s probation was extended 452 by three months.
Immediately thereafter, on 28 3 57, the Appellant 's services were terminated under Rule 5 of the Central Civil Services (Temporary Service) Rules 1949, (Annexure 'D ' to the Rejoinder Affidavit of 20th February, 1964).
On 5 3 1957, the Appellant made a representation against this termination of his service (Annexure 'B ' to the Rejoinder Affidavit).
On 27 4 1957 in response to this representation, the above mentioned termination to the Appellants service was rescinded(Annexure 'F ' to the Re joinder Affidavit).
On 28 4 1958, the President was pleased to terminate the probationary period of the.
Appellant and permitted him to continue in his, post in a temporary capacity (Annexure 'B ' to the Affidavit supporting the Petition), On 16 2 1959, the President of India, in exercise of powers conferred by the Proviso to Article 309 of the Constitution of India, promulgated the Central Information Service Rules, 1959 (hereinafter referred to as the Rules), which came into force on 21 2 1959.
These rules were meant for the creation of a Central Information Service with prescribed grades and their strengths.
Entry into this service was open to "departmental candidates" by a procedure laid down in Rule5 for the initial constitution of the service.
In accordance with this procedure, the Appellant was required to appear before a Selection Committee on a given date, and, after selection, he was posted by the impugned order as indicated above.
On 11 31960, the Appellant assumed charge of the post thus assigned to him on the recommendation of the Union Public Service Commission.
The Appellant then made a representation, dated 11 3 1960 (Annexure 'E ' to the Rejoinder Affidavit), against his appointment in Class II grade III post.
He made other similar representations after that.
His last representation was made on 25 8 1962.
the Appellant received a communication dated 10 12 1962 forward ing extract of an order dated 26 11 1962 which said : "The representation from Shri P. B. Roy has been carefully considered in the Ministry.
All relevant facts were fully taken into account, by the Departmental Promotion Committee, before drawing up the recent panel of Grade III officers considered suitable for promotion to Grade II.
Shri Roy may be informed accordingly".
The Appellant, treating this as the rejection of his last representation, filed his petition on 11 1 1963 which was allowed by a learned Judge of the Punjab High Court, sitting on the Circuit Bench at Delhi.
A Letters ' Patent Appeal against this decision had been allowed by a Division Bench of the Delhi High Court which then granted a certificate on 12 8 1968 for leave to Appeal primarily because it held that the required test relating to valuation of the subject matter had been satisfied.
453 The learned Judge who had initially heard the petition had pointed out that the representation of the Appellant was first rejected on 29 7 1960 and that it did not matter that the petitioner had continued making subsequent representations.
The learned Judge had noticed the explanation that the petitioner could not approach the Court as he was admitted to a Tuberculosis Clinic in June,. 1961.
The learned Judge, having found that this was not sufficient to explain the delay between 29 7 1960 and June 1961 was disposed to reject the petition on the ground of laches.
But, in view of the decision of the majority of the Full Bench of the Punjab High Court in section Gurmej Singh vs Election Tribunal, Gurdaspur(1), the delay in filing the petition was overlooked on the ground that, after the admission of a Writ Petition and hearing of arguments, the rule that delay may defeat the rights of a party is relaxed and need not be applied if his case is "positively good".
The learned Single Judge had come to the conclusion, on the facts stated above, that the petitioner 's case would be governed by the decision of this Court in Moti Ram Deka & Ors.
vs General Manager, North East Frontier Railway (2 ) , as the petitioner 's prospects and emoluments were adversely affected by the impugned order.
The learned Judge thought that the mere fact that the Department was reorganized and that the petitioner was to be fitted into an appropriate category by the procedure laid down in Rule 5 did not take away the effect, that is to say, the loss of his emoluments, of the procedure to which the petitioner had been subjected.
This view implied that article 311 of the Constitution was attracted by the case despite the above mentioned creation of the Central Information Service by the rules.
The Division Bench which heard the Appeal of the Union of India was not inclined to interfere with the discretion of the learned Single Judge in rejecting the objection to the petition on the ground of delay.
We too will not enter into this question which was not argued before us.
The Division Bench, after reviewing facts ' leading to the absorption of the Appellant into a newly constituted Central Information Service, in accordance with the procedure laid down in Rule 5 mentioned above, held that the "News and Information Cadre" of the Department, in which the Appellant was initially appointed, had been superseded by the cadres and grades constituted by the rules of the new service.
It overruled the contention of the Petitioner that the effect of the rules was merely to transfer employees in existing posts to corresponding posts with new designations.
It held that the Rules did create an altogether new service.
It pointed out that the process of entry into the new service was of (1) [1964] P.L.R. p. 589.
(2) A.T.R. 1964 S.C. P. 600.
454 selection of each individual candidate after an examination of his individual record and qualifications by a Selection Committee be, fore which he appeared so that there could be no automatic fitting into some corresponding appropriate post of a predetermined class and grade.
The rules and process for the constitution of the new service did not guarantee the class or grade or emoluments enjoyed by any candidate in a cadre in which he served prior to the setting up of the new service.
It, therefore, held that no question of demotion or reduction in rank, without observing the procedure laid down in article 3 1 1 of the Constitution, arose at all in the instant case.
Mr Anthony, appearing on behalf of the Appellant, has assailed the correctness of the decision of the Division Bench of the Delhi High Court on five grounds.
We will take up and consider each of these seriatim.
Firstly, it is contended that the Division Bench had erred in allowing an affidavit to be filed on 26 6 1967 before it, without affording an opportunity to the Appellant to repel its contents by filing a counter affidavit.
It was urged that the result was that an altogether new case, neither argued before nor referred to by the learned Single Judge, had been allowed to be raised.
This ground is no doubt mentioned among the grounds on which a certificate of the fitness for an appeal to this Court was sought.
The Judgment of the Division Bench mentions that, in the course of arguments, the question arose whether the post of Editor in the Publications Division was abolished or had ceased to exist.
It appears that an affidavit was then allowed to be filed before the Division.
Bench on behalf of the Union.
of India in which it was stated that two posts of Editors in the scale of Rs. 720 40 1000 in the Publications Division had ceased to exist as a consequence of the inclusion of two posts in the revised grade of Rs. 700 40 1100 50/2 1250 with effect from 1 7 1959 in the Central Information Service constituted from 1 3 1960.
There is nothing in the Judgment or anywhere else to show that the petitioner had asked for any opportunity to controvert any statement made in the affidavit dated 26 7 1967 and had been denied that.
The case and the contention on behalf of the Appellant have been that the new posts in the services are really old posts in a new garb.
This raised what was primarily a question of law, depending for decision upon an interpretation of the relevant rules of which the Court takes judicial notice.
The rules certainly did not provide for the continuance of any ex. cadre posts outside the new service introduced by the rules.
Facts stated in the Affidavit of 26 7 1967 could have some bearing on the question whether there were two posts in the revised scale which could be considered as corresponding posts.
They could, if they had 455 any effect on the respective stands, perhaps help the Appellant 's case that there was nothing more than a re designation of posts with same duties and corresponding scales.
And, this seems to explain why there is nothing to show that the Petitioner Appellant asked for an opportunity to meet any allegation made in the affidavit of 26 7 1967 filed on behalf of the Union.
Moreover, what the fresh affidavit contained about the dis appearance of the temporary post given to the Petitioner in 1956 before the Rules came into force flowed logically from the order of Petitioner 's initial appointment in a temporary post which was to continue only upto 28 2 1957, unless its life was shown to have been extended for some definite or indefinite period.
The Petitioner had not averred anywhere that the post was continued beyond 28 2 1957 for any period by any order or rule.
Indeed, the very argument advanced on behalf of the Appellant, that his initial post merged in another corresponding post, implied that the post to which he was initially appointed at least lost its identity or could not be deemed to continue without a transmutation.
The question whether the constitution of the Central Information Service did or did not involve fresh appointments to new posts but was simply an automatic process of transmutation by the pooling together of existing incumbents of certain posts to form a new service, as the appellants alleged, was already the subject matter of assertion made in the Rejoinder Affidavit of the Petitioner and counter assertions in a reply filed to the Rejoinder on 2 4 1964.
The affidavit of 24 6 1967 did not introduce anything new but only clarified the position still more.
We find no force in the first objection.
Secondly , it is contended that the impugned order constitutes.
on the face of it, a reduction in rank of the petitioner Looking at the communication dated 10 3 1960, set out above, we find nothing ,there to indicate that the petitioner had been demoted as a measure of punishment.
To hold, as it was suggested that we should, that the procedure laid down by Rule 5 was adopted as a cloak to cover up an intended reduction in rank and emoluments of an officiating Editor, by appointing him in a permanent substantive capacity of a grade, carrying lesser emoluments in the new service, would necessitate going behind the order 'of 10 3 1960.
At any rate, on the face of it, the order discloses no such devious action against the Appellant.
Thirdly, it was contended that the impugned order violates article 14 and 16 of the Constitution inasmuch as it places an employee who was serving as an Editor in a post of lower grade with less emoluments whereas no such result had followed in the case of any other employee in the Information and Broadcasting 456 Department.
We are unable to see how an order which has the effect of terminating an officiating appointment, in which the petitioner had no right to continue, and which gives him a fresh appointment, with a different designation but permanent tenure and prospects, constitutes a violation of either article 14 or 16 of the Constitution simply because the process which resulted in such an order did not have a similar effect upon the position or rights of any other servant in the Department.
Indeed, the Selection Committee had, apparently after taking into account the special features of the petitioners individual case, recommended the maximum pay, in the class and grade of the post given to him, and the petitioner got this exceptional pay.
Even his prospects improved to the extent that from the precarious position of a temporary servant he had moved into a permanent service.
It could not be definitely stated that his position had worsened on the whole.
He was at least no longer subject to the hazards of temporary employment which could be terminated by a month 's notice at any time.
The results of applying Rule 5 to the facts of individual cases could not be expected to be identically similar in all cases.
All candidates were subjected to the same process or pro cedure contemplated by Rule 5.
It is not the Appellant 's case that the Selection Committee did not function honestly or that its proceedings.
were vitiated by any defect in its constitution or of any bias on its part or any unifairness or inequality of the test applied in judging the merits of the Appellant as against other candidates.
The alleged defect with the material said to have been used by the Committee is another matter which we will consider last.
Fourthly, it was urged that Rule 5 mentioned above is itself void for conflict with the provisions of Article 311 and 14 and 16 of the Constitution.
It was urged that Rule 5 permits violation of article 311 of the Constitution inasmuch as it enables that to be done indirectly which could not be, done directly.
The Rule reads as follows : 5.
INITIAL CONSTITUTION OF THE SERVICE: (1) The Commission shall constitute a Selection Committee with the Chairman or a Member of the Commission as President and not more than three representatives of the Ministry of Information and Broadcasting as members, to determine the suitability of departmental candidates for appointment to the different grades and to prepare an order of preference for the initial constitution of the service: 457 (2) On receipt of the Committee 's report the Commission shall forward its recommendations to the Government and such recommendations may include a recommendation that a person considered suitable for appointment to a grade may, if a sufficient number of vacancies are not available in that grade, be appointed to a lower grade; (3) Vacancies in any grade which remain unfilled after the appointment of departmental candidates selected under sub rules (1) and (2) above shall be filled by direct recruitment through the Commission.
Rule 3 indicates that appointments to the newly created ' service could take place either by selection under Rule 5 or by direct recruitment with which we are not concerned here.
The grades and the fixation of an authorized strength of each grade are provided for by Rule 4.
Only posts in the first 3 grades are classified as Class I (Gazetted) posts.
| IN-Abs | The appellant was holding a temporary post of Editor in the Publications Division of the Department of Information and Broadcasting.
The temporary post was sanctioned upto 28 2 1957.
On 16 2 1959, the President of India, in exercise of the powers conferred by the proviso to article 309 of the Constitution, promulgated the Central Information Service Rules, 1959.
These Rules were meant for the creation of a Central Information Service with prescribed grades and strengths, and entry into the service was open to departmental candidates according to r. 5 for the initial constitution of the service.
The appellant was chosen by the Selection Committee and was posted as an Assistant Editor.
He challenged the order.
A single Judge of the High Court allowed the petition.
On appeal, in the course of arguments, the question arose whether the post of Editor was abolished or had ceased to exist and the respondent was allowed to file an affidavit stating that the post of Editor had ceased to exist.
The Division Bench then held that there was no question of demotion or reduction in rank and hence that article 31 1 was not applicable.
In appeal to this Court, it was held (1) The additional affidavit filed by the respondent did not introduce anything new but only clarified the position.
[455 E] (a) There was nothing to show that the temporary post of Editor in which the appellant was initially appointed had been continued beyond 28 2 1957 for any period.
[455 C] (b) The question whether the constitution of the Central Information Service involved fresh appointments to new posts or its effect was merely to transfer existing employees to corresponding posts with new designations was already before the court.
[455 D E] (c) The appellant himself never asked for any opportunity to meet any allegation in the additional affidavit.
[454 F G] (2) There is nothing to indicate that on the face of the impugned order, that the appellant had been demoted as a measure of punishment.
[455 F G] (3) it could not be held that the order, which had the effect of terminating an officiating appointment in which the appellant had no right to continue and which gave him a fresh appointment with a different designation, 'out permanent tenure and prospects, constituted a 450 violation of either article 14 or 16, simply because the process which resulted in such an order did not have a similar effect upon the position or rights of any other person in the Department; especially when, after taking into account the appellant 's individual case, the Selection Com mittee recommended the maximum pay in the class and grade of the post given to him.
[456 A C] (4) (a) The new rules had the effect of constituting a new service with a fair and reasonable procedure for entry into it.
, Such a procedure could not be characterized as a device to defeat the provisions of article 311 or a fraud upon the Constitution simply because the result of subjection to the process of appraisement of the merits of each candidate may not meet the expectations of some candidates.
[457 F G] (b) Article 311 afford , a reasonable opportunity to defend against threatened punishment to those already in Government service.
Rule 5 of the Central Information Service Rules provides a method of recruitment or entry into a new service of persons who, even though they may have been serving the Government had no right to enter the newly constituted service before going through the procedure prescribed by the rule.
The fields of operation of article 311 and r. 5 are quite different and distinct.
[457 G H; 458 A B] (c) The definition of 'departmental candidates ' in r. 2(b) was meant only as an aid in interpreting r. 5 and was not intended to operate as a fetter on the functions and powers of the Selection Committee.
It does not require that all persons falling within the definition of 'departmental candidate ' should be placed in a single class, Under r. 5 the Selection Committee could assign different grades to the departmental candidates.
The post actually held by the appellant before his selection for appointment to the newly constituted service did not automatically or wholly determine the position of a departmental candidate who offered himself to the process of appraisement of his merits by the Selection Committee to be made on the totality of relevant facts.
That Committee was presided over by the Chairman or a Member of the Union Public Service Cornmission and had officials of the Department on it who were in a position to correctly evaluate the appellant 's merit 's and the weight to be attached to his confidential records.
[459 B H] (5) The appellant 's allegations of mala fides and that he was the victim of the prejudice and machinations of an (unnamed) officer in the Transport Ministry, could not properly be tried in writ proceedings and without impleading that official.
[460 F G]
|
o. 1067 of 1971.
Appeal by special leave from the judgment and order dated October 30, 1970 of the: Delhi High Court in F.A.0.
(O.S.) No. 40 of 1970.
N. A. Palkhivala, D. Mukherjee, R. H. Dhebar and A. J. Rane, for the appellants.
V. M. Tarkunde, G. L. Sanghi, B. R. Agarwala and Janendra Lal, for respondent No. 1.
A. K. Sen, G. L. Sanghi and B. R. Agarwala, for respondent No. 2.
The Judgment of the Court was delivered by P. Jagammohan Reddy, J.
This appeal is by special leave.
The question for consideration is whether there is a binding, valid and concluded contract between the appellants and the respondents.
On an application filed by the respondents under section 20 of the Arbitration Act a single Judge of the Delhi High Court directed the appellants to file the arbitration agreement to refer the disputes between the parties arising under the contract to arbitrators.
An appeal against that order to a Division Bench was dismissed.
In order to understand the scope of the controversy, a few facts may be stated.
On the 21st March 1968, a notice of Global Tender No. 1 of 1968 was issued by the President of India, therein referred to as the Government of India, Ministry of Railways (Railway Board) proposing to sell 80,000 tones of surplus released serviceable and scrap rails, as per details given in the schedule thereto, to established buyers abroad or their accredited agents.
It invited offers in respect thereof to be addressed to the President of India and sent to Shri R. No. Mubayi, Director, Railway Stores, Railway Board.
With this notice were enclosed the general conditions of tender, special conditions of tender, instructions to tenderers, including proforma for performance guarantee and deed bonds as in clauses 4A and 4B, shipping terms and schedule of stocks available as on 1st March 1968.
In the general conditions the seller was defined to mean the President of India acting through the Director, Railway Stores, Railway Board, unless the context otherwise provided.
The delivery F.O.B. (Free an Board /F.A.S. (Free Alongside Ship) invoices and freight were dealt with in clause 9.
The default clause in clause 11 provided that where a buyer fails to execute the contract the seller was to have power under the hand of the Director, Railway Stores, Railway Board, to declare the contract at an end 439 at the risk and cost of the buyer.
The special conditions of tender dealt with prices, quotations, payments, terms of shipment, weighment, basis of sales and handling at ports, force majeure, arbitration, legal jurisdiction, acceptance of offers and title and risk.
In the instructions to tenderers, the tenderers were requested to quote their highest offer indicating the price per metric tonne inclusive of export incentive of 5% of F.O.B. value currently applicable as guarantee by the Government of India which will always be to, the sellers benefit for handing over of the rails F.O.B. docks/F.A.S./F.O.B. Indian Port or C.I.F. destination port.
The tenderer was required to offer comments clause by clause on the 'general conditions of tender ' and the 'special conditions of tender ' either confirming acceptance of the clauses or indicating deviation therefrom, if any.
It was further provided that the contract will come into force from the date the buyers ' letter of credit is accepted by the sellers ' nominee.
In 4A of these instructions the proforma deed bond was given which was to be signed by the tenderer and the acceptance was to be signed for and on behalf of the President of India by the person designated for that purpose.
Similarly, para 4B. gave the proforma performance guarantee bond to be addressed to the President of India executed by the tenderer and accepted for and on behalf of the President of India by the ,person so designated.
The terms and conditions also set out the shipping terms in detail, though a few of them were also mentioned in the special conditions under the headings Shipment, Terms of Shipping and Receiving Notice.
It appears that the terms and conditions enclosed with the tender notice annexed to the petition filed in court were not full and complete.
Consequently the appellant has annexed a true copy of the enclosures with the special leave petition and prayed that this may be admitted in evidence.
As there was no dispute in respect of the contents thereof, we have allowed this prayer because without them it is not possible to arrive at a just conclusion.
Pursuant to this tender notice, the respondents, by their letter, exhibit 'B ', dated 21 5 1968, offered to buy 80,000 tonnes of rails at $45.1 per tonne F.O.B. Indian Ports on the term and conditions set out therein.
In reply thereto, by a letter dated 25 5 1968, the Dy. Director, Railway Stores, Railway Board, P.C. Oak in para 1 (6) categorically.
stated by reference to para 14 of the conditions of the letter of the respondents that as shipping terms have finan cial implications they were requested to indicate with reference to the tender which particular clauses they desire to re negotiate and settle.
In para 2 it was stated that the offer of the respondents was not addressed to the President of India as required under clause 1(3) of the Instructions to the Tenderers and, therefore, the Respondents were required to confirm that their offer was deemed to 'nave been addressed to the President of India and ' is 440 open for acceptance on behalf of the President, it was further stated in para 4 that they should send the reply addressed to the President of India through the Director of Railway Stores, Railway Board covering all the points indicated therein, to reach them not later than 28 5 1968.
No reply was, however, received by the time indicated in the letter of the appellants and while so stating another letter was addressed to the Respondents on 3 6 68 by C. Parasuraman for Secretary, Railway Board, seeking further clarification in respect of items Nos. 26 and 27 of the offer contained in the aforesaid letter of the Respondents dated 21 5 1968.
There were also two other clarifications in respect of the weight of the tonne for which $45.1 was quoted and the option to transfer the contract in the name of the foreign principles which it was stated, could not be agreed to straightaway unless and until they knew the names of the foreign principles and their willingness to enter into a legal binding guarantee of all the terms and conditions of the contract.
The Respondents wrote subsequently to the Director, Railway Stores on the 15th June, 29th June, 8th July and the three letters on 10th July and one on the 15th July 1968, some of which were written after a discussion with the Director of Railway Stores in the presence of the Director of Finance, Mr. Datta.
On the same day as the letter of 15th July was sent by the Respondents, P. C. Oak signing for the Secretary of the Railway Board, addressed the following letter of acceptance, No. 68/RS(G)/709/10 to the Respondents "Subject: Tender No. 1 of 1968 for Export sale of used re rollable and repayable steel rails.
Reference: Your letter Nos.
Nil dated 21 5 68, 15 6 68, 29 6 68, 8 7 68, 10 7 68 and 15 7 68.
Kindly be advised that your offer (at $39 per long ton F.O.B. Indian Port for export and Rs. 458/ per long ton for indigenous consumption) with terms and conditions referred to in your above letters is hereby accepted.
Formal contract will be issued shortly.
Kindly acknowledge receipt.
Yours faithfully, Sd./ P. C. Oak.
for Secretary, Railway Board".
Thereafter, it is alleged that several draft agreements were.
exchanged regarding which there is a dispute but ultimately be, fore us it is not contested that a draft agreement, which the appellants say is the 5th draft, but according to the Respondents is 441 the final draft, was handed over to the Respondents by P. C. Oak on 27 8 68 but this, however, was not signed.
Clause 2 of this draft agreement states.
that the contract has been concluded by the issue of seller 's letter No. 68/RS(G)/709/10 dated 15 7 68 to the buyers; that the term of the contract shall be three years from 1 11 1968 to 31 10 1971; that the buyers reserve the right to act upon the contract any time before 1 1 1 68 and start inspection and take delivery of the goods but this will not in any manner effect the terms of the contract.
Even thereafter there was further correspondence between the parties.
By letter dated 18 9 68 the Respondents wrote to the Director, Railway Stores, agreeing to several other matters to be included in the final draft and requested him to issue the 'final.
contract ' without delay.
On the 21st September 1968 the Respondents again wrote to the Director, Railway Stores, complaining that the information provided by the various Railways was not complete and requested him to contact the various Railways and obtain the required information as soon a , possible.
After the receipt of this letter the Joint Director, Railway Stores (G), wrote to the general Manager (S), All Indian Railways with a copy to the respondents calling for the required information.
In that letter the Joint Director stated thus : ". the Board have finalized an export cum internal sale contract with M/s. N. K. (p) Ltd., New Delhi for a period of 3 years, entitling them to export stock of such surplus rails available with the Railways.
The de tailed terms and conditions of the contract will be apprised to you when finalized".
On the 23rd October 1968, C. Parasuraman, for Secretary.
, Railway Board, replied to the letter of the Respondents of the 21st September 1968, stating that it was not correct that their officehas assured them that it would arrange to get the missing details from the concerned C.O.Ss.
After this letter two other letters were written by the Respondents to the Director, Railway Stores, dated 7th and 23rd November 1968.
In the first letter it was stated thus "In pursuance of your invitation we submitted our tender for purchase of used relayable and re rollable steel rails on 21 5 68.
After some negotiations the terms of the contract were finalized and the Secretary, Railway Board by his letter No. 68/RS(G)70910 dated 15 7 68,.
accepted our offer and concluded the contract.
We were informed that the formal contract will be issued shortly.
A draft of the formal contract was handed over to us on 27 8 68.
In our letter of 18 9 68, some agreed terms were set out which had to be incorporated in the formal contract.
Since the acceptance of our 442 offer we have made all arrangement for the sale of the material We beg to inform you that out of the total quantity of 88,936 tonnes of Rails already offered to us for our approval we approve and shall take delivery of 53,807 Tonnes as per list enclosed herewith.
The above quantity may kindly be reserved for us and arrangement be made for their delivery in terms of the contract.
" In the second letter, the respondents complained that though the contract for sale of used rerollable and relayable steel rails was concluded on 15 7 68 they regretted that they had not received the formal contract so far and requested that it should be sent without any further delay.
In the last paragraph of that letter, the Respondents complained that they came to know that some of the Railways who were.
holding storks are selling the steel rails which they have no right to do and requested them to stop such sales.
To this, P. C. Oak for Secretary, Railway Board, replied "Kindly refer to correspondence resting with your letters dated July 26, 1968, 18th September 1968 and No. RB/Rails/68/1/114, dated 2nd December 1968.
Your contention contained in your letter No. RB/Rails/ 68/1 dated 23 11 68 that the Railway Board is not authorized to sell rails ' to other parties because of their having concluded a contract with you is factually incorrect.
No doubt, letter No. 68/RS(G)/709/10 dated 15 7 68 indicated an intention to enter into a con tract with you, but subsequent to this, discussions had been held with you over a number of sittings on 20 7 68, 12 8 68, 26 8 68, 27 8 67 culminating in your letter dated 18 9 68.
This would amply indicate that no agreement had been reached on vital terms and conditions, and the question of the existence of a concluded contract does not arise '.
. " The Respondents replied to this letter by their letter dated 25 1 1969 expressing surprise and contesting the stand taken by the Railway Board.
In the petition of the Respondents filed in Court after setting out the relevant correspondence leading upto the letter of acceptance of P. C. Oak dated 15th July 1968, 'it was stated that that letter was a definite acceptance of the offer and constitutes a binding and valid contract between the parties.
With respect to the draft agreement of the 27th August 1968 handed over to the Respondents embodying the agreement between the parties, the averment was that the then Acting Director of Railway Stores desired certain additional terms to be embodied in the terms that were agreed to.
The additional terms were agreed to by the plaintiffs (Respondents) by their letter to the 443 Director, Railway Stores, dated 18 9 1968.
In para 16 it was further alleged that after the letter of acceptance by the appellants the then Acting Director of Railway Stores and the Director of Finance proposed to the plaintiffs that the price offered by them should be increased or in the alternative certain alterations be made in the agreed terms, but the plaintiffs having justly refused to do so, the 2nd defendant (C. Parasuraman) falsely wrote to the plaintiffs on 15 1 1969 that no concluded contract had taken place and that the Railway Board was, therefore, not precluded from selling rails to other parties.
The appellants in their written statement, raised a prelimi nary objection, namely, that the petition was misconceived as there was no arbitration agreement between the parties and so the question of enforcing the arbitration clause in the alleged contract did not arise.
It also reiterated its stand earlier taken that the letter dated 15 7 68 written by Oak on behalf of the Secretary, Railway Board, was not a letter of acceptance of the offer of the Respondents so as to amount to a concluded contract binding on the Union of India nor could it be construed as such in view of the mandatory provisions of Article 299 of the Constitution of India.
The contention was that unless and until a formal instrument of contract was executed in the manner required by Article 299 of the Constitution and by the relevant notifications, there would not be a contract binding on the Union of India and at any rate no such agreement was entered into as it was.
alleged that though interviews had taken place at various times between the plaintiffs and the several officers of the Railway Board, no agreement had been reached on vital terms and conditions.
Two submissions were urged on behalf of the appellants, namely : (1) that apart from the contention relating to article 299 of the Constitution, there was no concluded contract between the parties, because (a) the essential terms were not agreed to between them on the date when the acceptance letter was issued by P. C. Oak on 15 7 68, and (b) even it there was an acceptance as alleged, that acceptance was conditional upon a formal contract being executed by the appellants; (2) that the three mandatory requirements of article 299 of the Constitution for a valid and binding contract made in exercise of the executive power of the Union have not been complied with namely, (a) that the contract was not expressed to be in the name of the President, nor (b) was 444 it executed on behalf of the President, or (c) by a person authorized to execute it on his behalf.
The crucial question which arises for determination is whether there was a concluded contract, and if there was one, whether the mandatory requirements of Article 299 of the Constitution for entering into a valid and binding contract have been satisfied? It is now settled by this Court that though the words 'expressed ' and 'executed ' in Article 299(1) might suggest that it should be by a deed or by a formal written contract, a binding contract by tender and acceptance can also come into existence if the accept ance is by a person duly authorized on this behalf by the President of India.
A contract whether by a formal deed or otherwise by persons not authorized by the President cannot be binding and is absolutely void.
We do not for the present consider it necessary to go into the question whether and to what extent the requirements of article 299 have been complied with in this case.
What we have to first ascertain is whether apart from the contention relating to Article 299, a concluded contract has come into existence as alleged by the Respondents.
Before us detailed arguments were addressed on behalf of the appellants to show that notwithstanding the letter of acceptance of 15th July 1968, no concluded contract had in fact come into existence and though that letter accepted certain terms, there were other essential terms of the contract which had to be agreed to and were the subject matter of further negotiations between the parties; that it was the intention of the parties that all those terms were to be embodied in a formal contract to be executed which contract alone was to be binding between the parties; and that in any case the letter of acceptance and the subsequent letters were not by the Director of Railway Stores but by the Secretary to the Railway Board who was not a person authorized to enter into the agreement between the President of India represented by the Ministry of Railways and the Respondents.
On the other hand, the stand taken by the Respondents was that all the essential terms of the contract were agreed to and the contract was concluded on 15th July 1968, though at the ins tance of the Director, Railway Stores further terms with respect to the execution of the contract were the subject matter of negotiations between the parties and in any case these did not pertain to the essential terms and could not on that account detract from the binding nature of a concluded contract.
It was also contended that the letter of acceptance by P. C. Oak though signed on behalf of the Secretary, Railway Board was in fact on behalf of the said Board which was authorized to enter into such a contract.
It is in our view unnecessary to consider the several contentions as to whether all the essential terms of the contract had been agreed to or that the contract was concluded by the acceptance 445 letter of 15th July 1968 or whether the parties intended it to be a term of the contract that a formal contract should be entered into between them in order to bind the parties.
In this case, we are of the view that the Secretary to the Railway Board, on whose behalf the offer of the Respondents was accepted, was not the person authorized to enter into a contract on behalf of the President of India.
As can be seen from the various documents already extracted that the tender notice invited offers to be addressed to the President of India through the Director of Railway Stores, Railway Board.
Under the general conditions the seller was defined to mean the President of India acting through the Director, Railway Stores and in the default clause it was provided that where the buyer fails to execute the contract, the seller shall have power under the hand of the Director, Railway Stores, Railway Board, to declare the contract at an end.
In the letter written by Oak on 25 5 68, as earlier noticed, it was pointed out to the Respondents that their offer was not addressed to the President of India as required under clause 1(3) of the Instructions to the Tenderers and, therefore, the Respondents were required to confirm that their offer can be deemed to have been addressed to the President and is open for acceptance on behalf of the President and their reply should be addressed to the President of India, through the Director of Railway Stores, Railway Board.
Even the draft contract dated 27 8 68 in terms of which the Respondents were insisting on a final contract to be issued to them by the appellants was to be executed by the Respondents as buyers on ,the one part and the President of India acting through the Director, Railway Stores, Ministry of Railways (Railway Board) as the sellers, on the other.
There is little doubt that the only person authorized to enter into the contract on behalf of the President is the Director, Railway Stores.
It is true that the notification of the Ministry of Law issued in exercise of the powers under clause 1 of Article 299 of the Constitution shows that the President directed the 'authorities named therein to execute on his behalf the contracts and assurances of property specified therein.
But notwithstanding this, the President is fully empowered to direct the execution of any specified contract or class of contracts on ad hoc basis by authorities other than those specified in the said notification.
This Court had in Seth Bikhraj Jaipuria vs Union of India, (1) earlier held that the authority to execute contracts may be conferred on a person not only by rules expressly framed and by formal notifications issued in this behalf but may also be specifically conferred.
In this case the letter of ac ceptance dated 15 7 1968 was on behalf of the Secretary, Railway Board, who is not authorized to enter into a contract on behalf of the President.
(1) ; 446 It is contended that clause 43 of part XVIII and Part XII empower the Secretary, Railway Board to enter into such con tracts.
Clause 43 of Part XVIII provides that all deeds and instruments other than those specified in that part may be executed by the Secretary or the Joint Secretary or the Deputy Secretary or the Under, Secretary in the Railway Board or a Director, Joint Director, Deputy Director or Assistant Director in the Railway Board.
It is submitted that as nothing has been specified in Part XVIII relating to the contract of the type we are considering, the Secretary, Railway Board is authorized to enter into a contract on behalf of the President.
This submission is untenable because clause 9 specifically provides for the contracts connected with the sale of scrap, ashes, coal, dust, empty containers and stores.
The tender, it will be observed, is for rails which are scrap as well as rerollable and relayable but it is urged that relayable rails are not stores nor can they be considered as scrap and as these are not covered by clause 9, the Secretary, Railway Board is fully empowered by the President to enter into a contract on his behalf.
We cannot accept this argument because in our view relayable rails are part of the stores.
It may be that some of these rails which are part of the stores may be considered to be in a condition which the authorities concerned think should be disposed of.
The contracts relating to the goods of the nature specified in the tender notice are, therefore, dealt with by clause 9, as such clause 43 will have no application.
Part XLI empowers the Secretaries to the Central Government in the appropriate Ministries or Departments to execute any contract or assurances of property relating to any matter whatsoever and is in these terms : "Notwithstanding anything hereinbefore contained any contract or assurance of property relating to any matter whatsoever may be executed by the Secretary or the Special Secretary or the Additional Secretary or a Joint Secretary or a Director or where there is no Additional Secretary or a Joint Secretary or a Director, a Deputy Secretary to the Central Government in the appropriate Ministry or Department and in the case of.
" The contention on behalf of the Respondents is that since Railway Board is a Department of the Government, the Secretary to the Department is authorized to enter into a contract under the above provision.
This submission in our view, is equally misconceived because reading the above requirement carefully it will appear that the persons there mentioned should be Secretary.
Special Secretary etc., to the Central Government in the appropriate Ministry or Department and not that the Secretary to any Department or office of the Government of India is empowered thereunder.
It is however contended that the Secretary to the 447 Railway Board is a Joint Secretary to the Government of India and as such under the above Provision the acceptance letter should be considered to have been executed on behalf of the president Even this submission lacks validity because as pointed out on behalf of the appellant, at the relevant time the Secretary to the Railway Board did not have any status as Secretary to the Central Government.
The status of a Joint Secretary was only conferred on him by a notification by the Government of India in the Ministry of Railways for the first time on 15 9 1969 with effect from that date.
An affidavit of the Deputy Secretary to the Railway Board (Ministry of Railways) has been filed before us setting out the above fact and enclosing the said notification.
Then again it was urged that the members of the Railway Board were Secretaries to the Central Government and hence the Board on whose behalf the Secretary communicated the acceptance could enter into a binding contract.
This submission also is without force because there is no material before us to conclude that the Board was so authorized.
In these circumstances, even if the correspondence shows that the formalities necessary for a concluded contract have been satisfied and the parties were ad item by the time the letter of acceptance of the 15th July 1968 was written, about which we do not wish to express any opinion, there is no valid or binding contact because the letter of acceptance, on the evidence before us, is not by a person authorized to execute the contracts for and on behalf of the President of India.
On the evening before the day the judgment in the case was due to be delivered, an application dated 7 2 72 was filed enclosing an affidavit of R. N. Mubayi who was Director, Railway Stores, between 18 12 1965 to 30 9 1969 as also an affidavit of R. B. Lal, Managing Director of the Respondent No. 1 to take them in evidence and consider the facts stated therein before judgment is delivered, and if necessary, to call for the file and give a re hearing.
The affidavit of Mubayi states that only after he recorded on the relevant file and issued instructions to his Deputy Director, Shri P. C. Oak to convey the acceptance of the offer of M/s. N. K. Private Limited, that the acceptance was conveyed by Shri P. C. Oak to the said company.
The affidavit of R. B. Lal says that though the affidavit filed by P. Lal, Deputy Secretary, Railway Board stating that the Secretary, Railway Board, did not have the status of Secretary, Special Secretary, Additional Secretary, Joint Secretary or Deputy Secretary to the Government of India in the Ministry of Railway, he has not denied that the Secretary did not have the status of a Director.
It is further submitted in that affidavit that the Secretary of the Board had the status of a Director at the relevant time and as mentioned in Part XLI of the Notification of the Ministry of Law, 'a Director ' is authorized to accept offers.
448 Apart from the question whether we should admit additional evidence at this stage in this case and though we had rejected an earlier submission to call for the files, having regard to the facts stated by R. N. Mubayi, Director of Railway Stores during the relevant period that it was he who had asked P.C. Oak to accept the offer and had so endorsed it on the file, as also the affidavit of R. B. Lal that the Secretary to the Board was the Director of Railway Stores, we withheld the judgment and called for the file to satisfy ourselves.
The file has been submitted to us by the appellants along with an affidavit of R. Srinivasan, Joint Director, Railway Board in which it is categorically averred that at the relevant time, namely, 15 7 68, the Secretary Railway Board did not have the status of the Director under Para XLI of the Notification of the Ministry of Law or at all.
A perusal of the relevant file relating to the letter of acceptance would show that on 15 7 68, Shri Oak made the following endorsement: "Reference to Board 's orders at page 38/N, draft letter accepting M/s. N.K. (P) Ltd., offer is being issued today.
D.R.S. may kindly see before issue", and this endorsement was merely signed by R.N. Mubayi.
We are not here referring to the other proceedings on the file as to whether the execution of a formal contract was a condition precedent and as one of the terms of the contract but even the above endorsement does not show that the letter of acceptance of 15 7 68 was issued on the orders and directions of Mubayi as alleged by him in the affidavit.
What it in fact shows is that it is the Board that issued the orders of acceptance and that the acceptance letter was only to be seen by him.
Even the draft letter issued does not contain his initials or his signature in token of his having seen or approved it.
The letter of acceptance not having been issued on the orders of the Director, Railway Stores, there was no concluded contract as on that date, by a person authorized to enter into a contract.
There is also nothing to show that the Secretary to the Board was the Director, Railway Board as further alleged in the affidavit of R. B. Lal.
In this view the appeal is allowed and the application under section 20 of the Arbitration Act is dismissed but there will be no order as to costs of the appellants.
On the other hand, we direct the appellants to pay the costs of the Respondents because special leave was granted on condition that the petitioner will pay the costs of the Respondents in this appeal in any event.
S.C. Appeal allowed.
| IN-Abs | A global tender to sell surplus serviceable and scrap rails was issued to established buyers by the Government of India and pursuant to this tender notice, the respondents by their letter dated 21 5 68 offered to buy the rails at a particular price and Shri P. C. Oak, Deputy Director, Railway Stores, Railway Board, on behalf of the Secretary, Railway Board,, accepted the respondents ' offer with the terms and conditions mentioned in the letters sent by the respondent on 15 7 68.
Negotiations for the final contract, however, took place between the parties and on 15 7 68, the respondents complained that some of the Railways who were holding stocks are selling the steel rails which they have no right to sell in view of the concluded contract; but Shri P. C. Oak for Secretary, Railway Board, replied that subsequent to 15 7 68, there were negotiations for the vital terms and conditions of the contract and so the question of the existence of a concluded contract did not arise.
At this, the respondents filed a petition in Court under section 20 of the Arbitration Act, after setting out the relevant correspondence leading upto the letter of acceptance of 15th July 1968 and it was stated that, the letter was a definite acceptance of the offer and constitute a valid and binding contract between the parties.
In the written statement, the appellants raised a preliminary objection that the petition was misconceived as there was no arbitration agreement between the parties and so the question of enforcing the arbitration clause in the alleged contract did not arise.
Further, it was contended by the appellants that the letter of acceptance and the subsequent letters were not by the Director of Railway Stores, but by the Secretary to the Railway Board, who was not a person authorized to enter into the agreement between the President of India represented by the Ministry of Rail ways and the respondents as required under article 299 of the Constitution.
Allowing the appeal.
BELD : The Secretary to the Railway Board, on whose behalf the offer of the respondents was accepted, was not the person authorized to enter into a contract on behalf of the President of India, as required under article 299, and therefore, the contract, if any, was not binding on the appellants.
Further, it was not correct to say that Clause 43 of Part XVIII and Part XLI empowered the Secretary, Railway Board to enter into such contracts; because Clause 9 specifically provided for the contracts connected with the sale of scrap; ashes coal, dust, empty containers and stores; and repayable rails, being part of the stores, it was covered by Clause 9 and the Secretary, Railway Board, was not empowered by the President to enter into a contract on his behalf.
[445 B] Seth Bikhraj Jaipuria vs Union of India, [1962] 2 S.C.R. 880, referred to. 438
|
minal Appeal No. 185 of 1971.
Appeal by special leave from the judgment and order dated June 19, 1971 of the Madras High Court in Application Nos. 1171 and 1172 of 1971.
section N. Prasad, for the appellant.
A. V. Rangam, for the respondent.
The Judgment of the Court was delivered by Shelat, J.
This appeal, by special leave, is directed against the order of the High Court of Madras, directing a sum of Rs. 500, deposited in the High Court as security for the appellant 's appearance before it in certain contempt of court proceedings, to be adjusted against the fine imposed upon him in those proceedings.
It appears that the contempt of court proceedings, being No. 3 of 1962, were taken against the appellant in the High Court in respect of a letter written and addressed by the appellant to the then Chief Justice of the High Court and which contained certain remarks in regard to the dismissal of the appellant 's revision application by a single Judge of the High Court.
Thus, the contempt with which the plaintiff was charged in those proceedings was contempt of the High Court, and not the City Civil Court, Madras, in which the appellant had filed the suit from out of which the said revision application arose.
In those proceedings, the High Court, by its judgment and order, dated February 25, 1964, held the appellant guilty of contempt of court and sentenced him to six months ' single imprisonment and fine.
The appellant served out the sentence of imprisonment, but failed to pay the fine.
419 It appears that the said amount of Rs. 500, deposited, as aforesaid, in the said contempt proceedings, remained unattached till 1971.
In 1971, two applications were filed in the High Court, one by the appellant for refund of the said amount and the other on behalf of the State for adjustment of the said amount towards the fine remaining unpaid.
By an order, dated June 29, 1971, the High Court dismissed the appellant 's application for refund and allowed the State 's application for payment of the said sum towards satisfaction of the said unpaid fine.
As against the said order, counsel for the appellant relied on sec.
70 of the Penal Code and urged that six years having elapsed since the passing of the order imposing fine upon the appellant, the State 's application was time barred and the High Court could not pass the impugned order, the effect of which was to collect the said fine from out of the said deposit.
If sec.
70 were to apply to the said contempt of court proceedings, there is no doubt that the State 's application would be time barred as that section in terms provides that such fine can be levied within six years after the passing of the order of conviction and sentence.
But sec.
5 of the Penal Code provides, inter alia, that its provisions are not to affect the provisions of any special or local law.
Under sec.
41 of the Penal Code, a special law is one applicable to a particular subject.
Therefore, if the law as to contempt of court, as administered by the High Court of Madras, a chartered High Court, were to be regarded as special law, sec.
70 of the Penal Code, obviously, cannot apply,, and since such a special law does not prescribe any period of limitation for collecting and satisfying a fine imposed thereunder, no question of limitation would arise.
Counsel, however, relied on sec.
25 of the which provides that secs.
63 to 70 of the Penal Code and the provisions of the Code of Criminal Procedure in relation to the issue and execution of warrants for the levy of fines shall apply to all fines imposed under "any Act, Regulation, rule or bye law" unless such Act, Regulation, rule or bye law contains an express provision to the contrary.
The argument was that the order of sentence which imposed upon the appellant the fine was and must be regarded as an order passed under the Contempt of Courts Act, XXXII of 1952, and consequently, sec.
70 of the Penal Code was applicable.
The question is, does the power of the High Court of Madras to punish contempt of itself arise under the , so that under see.
25 of the , secs.
63 to 70 of the Penal Code and the relevant provisions of the Code of Criminal Procedure would apply? The answer to such a question is furnished by article 215 of the Constitution and the provisions of the 420 themselves.
article 215 declares that every High Court shall be a court of record and shall have all powers of such a court including the power to punish for contempt of itself.
Whether article 215 declares the power of the High Court already existing in it by reason of its being a court of record, or whether the Article confers the power as inherent in a court of record, the jurisdiction is a special one, not arising or derived from the , and therefore, not within the purview of either the Penal Code or the Code of Criminal Procedure.
Such a position is also clear from the provisions of the .
3 of that Act provides that every High Court shall have and exercise the same jurisdiction, powers and authority in accordance with the same procedure and practice in respect of contempt of courts subordinate to it as it has and exercises in respect of contempts of itself.
The only limitation to the power is, as provided by sub sec.
(2), that it shall not take cognizance of a contempt committed in respect of a court subordinate to it where such contempt is an offence punishable under the Penal Code.
As explained in Sukhdev Singh Sodhi vs The Chief Justice and Judges of the Pepsu High Court,(1) sec.
3 of the Act is similar to sec.
2 of the 1926 Act, and "far from conferring a new jurisdiction, assumes, as did the Old Act, the existence of a right to punish for contempt in every High Court and further assumes the existence of a special practice and procedure, for it says that every High Court shall exercise the same jurisdiction, powers and authority "in accordance with the same procedure and practice.
" In any case, so far as contempt of the High Court itself is concerned, as distinguished from that of a court subordinate to it, the Constitution vests these rights in every High Court, and so no Act of a legislature could take away that jurisdiction and confer it afresh by virtue of its own authority.
No doubt, sec.
5 of the Act states that a High Court shall have jurisdiction to inquire into and try a contempt of itself or of a court subordinate to it whether the alleged contempt is committed within or outside the local limits of its jurisdiction and whether the contemnor is within or outside such limits.
The effect of sec.
5 is only to widen the scope of the existing jurisdiction of a special kind and not conferring a new jurisdiction.
It is true that under sec.
4 of the Act the maximum sentence and fine which can be imposed is respectively simple imprisonment for six months and a fine of Rs. 2,000, or both.
But that again is a restriction on an existing jurisdiction and not conferment of a new jurisdiction.
That being the position, sec.
25 in the cannot apply.
The result is that sec.
70 of the Penal Code is no impediment by way of limitation in the way of the recovery of the fine.
(1) ; , at 463.
421 It is true that the deposit was made for a particular purpose, that is, to secure the presence of the appellant at the time of the hearing of the said contempt proceedings.
But the High Court, as a court of record, being clothed with a special jurisdiction, has also all incidental and necessary powers to effectuate that jurisdiction.
Consequently, it had the power to order satisfaction of fine imposed by it from out of an available fund deposited by or on behalf of or for the benefit of the appellant.
In our view, the contentions raised on behalf of the appellant cannot, for the reasons aforesaid, be sustained.
The appeal fails and is dismissed.
There will be no order as to costs.
S.C. Appeal dismissed.
| IN-Abs | The appeal is directed against the order of the High Court of Madras directing a sum of Rs. 500/ deposited in the High Court as security for the appellants appearance before it in certain contempt of Court proceedings, to be adjusted against the fine imposed upon him in those proceedings.
The contempt of Court proceedings (No. 3 of 1962) were taken against the appellant in the High Court in respect of a letter written and addressed by the appellant to the then Chief Justice of the High Court and which contained certain remarks in regard to the dismissal of the appellant 's revision application by a single judge of the High Court.
The contempt with which the plaintiff was charged in those proceedings was contempt of the High Court and not the City Civil Court, in which the appellant had filed the suit 'from which, the said revision application arose.
In those proceedings, the High Court by its judgment, held the appellant guilty of contempt of Court and sentenced him to 6 months simple imprisonment and fine.
The appellant served out the sentence of imprisonment but failed to pay the fine.
The said amount of Rs. 500, deposited in the said contempt proceedings remained unattached till 1971.
when two applications were filed in the High Court one by the appellant for refund and the other by the State for adjustment of the said amount towards the fine remaining unpaid and the High Court allowed the State 's application for payment of the said sum towards satisfaction of the said unpaid fine.
Counsel for the appellant relied on section 70 of the Penal Code and urged that six years having elapsed since the passing of the order imposing fine upon the appellant, the State application was time barred and the High Court could not pass the impugned order.
Further, counsel relied on section 25 of the which provides that Sections 63 to 70 of the Penal Code and the provisions of the Criminal Procedure Code in relation to the issue and execution of warrants for the levy of fines shall apply to all fines imposed under any Act, Regulation etc., and since a fine which was imposed upon the appellant, was an order passed under the Contempt of Court Act 1952, Section 70 of the Penal Code was applicable.
Dismissing the appeal, HELD : (i) See.
5 of the Penal Code provides, inter alia, that its provisions are not to affect the provisions of any special or local law and under article 215 of the Constitution, every High Court being a Court of Record, have all the powers of such a Court including the power to punish fore contempt of itself.
The jurisdiction a special one.
not arising or derived from the , and therefore, not within the purview of either the Penal Code or the Code of Criminal Procedure.
The law as to contempt of Court, as administered by the 418 Madras High Court, in the present case, is a special law and therefore, section 70 of the Penal Code does not apply to the facts and circumstances of the case.
Further since such a special law does not prescribe any period of limitation for collecting and satisfying a fine imposed thereunder no question of limitation would arise.
[420 A] (ii) The power of the High Court to punish for contempt of itself arises not under any Act, such as Contempt of Courts" Act, but the Constitution itself vests these rights on every High Court, and no Act of a Legislature could take away that jurisdiction and confer it afresh by virtue of its own authority and since the sentence of fine and imprisonment passed against the appellant was not imposed under any act or statute,Section 25 of the has no application in the present case.
[420 E F] Sukhdev SinghSondhi v The Chief Justice and Judges of the Pepsu High Court [1954]S.C.R. 454 referred to.
|
iminal Appeal No. 93 of 1971.
L. M. Singhvi, P. N. Tewari, O. C. Mathur, J. B. Dadacharji and Ravinder Narain, for the appellant.
Niren De, Attorney General for India, Jagadish Swarup, Solicitor General of India, R. N. Sachthey and R. L. Mehta, for respondents Nos. 1 & 2.
Advocate General for the State of Jammu and Kashmir and R. N. Sachthey, for respondent No. 3.
The Judgment of the Court was delivered by Sikri, C.J.
This appeal, by special leave, is directed ,against the judgment of the Jammu & Kashmir High Court holding that the , (25 of 1946) was validly extended to the State of Jammu and Kashmir by the Jammu and Kashmir (Extension of Laws) Act, 1956 'here in after referred to as the Extension Act.
The High Court decided this question on a reference made by the Special Magistrate, under section 432 of the Code of Criminal Procedure, before whom the challan had been filed under the Ranbir Penal Code on November 29, 1967.
The only question involved in this appeal before us is as to the validity of the aforesaid extension.
In order to appreciate the contentions of the learned counsel in this respect, it is necessary to give an account of the constitutional provisions applicable to the State of Jammu and Kashmir.
On January 26, 1950 the Constitution of India came into force.
In exercise of the powers conferred by cl.(1) of article 370 of the Constitution of India, the President, in consultation with the Government of the State of Jammu & Kashmir, made the Constitution (Application to Jammu and Kashmir) Order, 1950.
This order was superseded by another order in 1954.
By that order, ,one of the entries on which Parliament could make laws was entry 413 80 of List I of the Seventh Schedule of the Constitution.
This entry reads as follows : "Extension of the powers and jurisdiction of members of a police force belonging to any State to any area outside that State, but not so as to enable the police of one State to exercise powers and jurisdiction in any area outside that State without the consent of the Government of the State in which such area is situated; extension of the powers and jurisdiction of members of a police force belonging to any State to railway areas out side the State.
" By the Extension Act, which received the assent of the President on September 25, 1956, the , was extended to the State of Jammu and Kashmir in the following manner.
Section 1(2) of the Extension Act provided that "it shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
" Section 2 provided as follows : "(1) The Acts and Ordinance mentioned in the Schedule and all rules, orders and regulations made thereunder are hereby extended to and shall be in force in, the State of Jammu and Kashmir.
(2) With effect from the commencement of this Act, the Acts and Ordinance mentioned in the Schedule shall be amended as specified therein.
" The Schedule which contained the Delhi Special Police Esta blishment Act, 1946, amended it by omitting the words "except the State of Jammu and Kashmir" from section 1.
A notification was issued appointing November 1, 1956, as the date for the coming into force of the Extension Act in the State of Jammu and Kashmir.
The effect of the notification and Sec.
2 mentioned above was that the , came into force in the State of Jammu and Kashmir from November 1, 1956.
The Constitution (Seventh Amendment) Act, 1956 also came into force on November 1, 1956.
The State of Delhi, which was a part 'C ' State immediately before the Seventh Amendment became a Union Territory.
A new article, article 372A, was also inserted in the Constitution enabling the President to adapt laws in force immediately before the commencement of the Constitution (Seventh Amendment) Act, 1956.
This article has no application to the State of Jammu and Kashmir and, therefore, any adaptations made by the President 414 in exercise of the powers under article 372A can have no application to the State of Jammu and Kashmir.
In view of these constitutional changes, it is contended on behalf of the appellant, that under entry 80 Parliament could only extend the powers and jurisdiction of members of the Police Force belonging to any State, and as Delhi became a Union Territory and ceased to be a State on November 1, 1956, Parliament had no jurisdiction to extend the to the State of Jammu and Kashmir.
It seems to us that the impugned Act was validly extended and our reasons for coming to this conclusion are as follows.
When the Extension Act was passed, Parliament had the competence to extend the impugned Act to the State of Jammu and Kashmir because the Delhi Special Police Establishment was a police force belonging to a Part 'C ' State.
The contention of the learned counsel that because Parliament could not extend the powers and jurisdiction of members of the Delhi Special Police Force after November 1, 1956, assuming it to be correct, does not invalidate the powers exercised earlier.
When the Extension Act was passed there is no doubt that the Parliament had the power.
The fact that the Parliament ceased to have power, as from Nov ember 1, 1956, does not make any difference. ' This Court had occasion to deal with a similar question in State of Assam vs Ka Brhyien Kurkalang.(1) In that case, para 19(b) of Schedule 6, Constitution of India, authorized the Governor to make regulations for the peace and good government of a district.
This power was vested in the Governor tin the setting up of a District Council for an autonomous district.
It was contended that because a District Council had been set up, the Governor could not exercise the power under the Regulation and apply laws.
The High Court had accepted the contention but this Court reversed the judgment of the High Court, and after referring to J. K. Gas Plant Manufacturing Co. Ltd. vs King Emperor; (2) Ram Kirpal vs State of Bihar;(3) and Cajee vs U. Jormanik Siem,(4) held that although the power of the Governor to legislate ended when the District Council was constituted, the power conferred under the regulation on the Governor to bring into force the laws set out in the Schedule continued and would continue so long as the regulation remained on the statute book.
The same principle applies here.
The Central Government could validly issue a notification under sub section
(2) of Sec. 1 appointing the date from which the Act would come into force, and as soon as this notification was made, by virtue of section 2, the (1) (2) (3) ; (4) ; 415 impugned Act came into force in the State.
The Constitution (Seventh Amendment) Act did not destroy the efficacy of sub section (2) of section 1.
The learned counsel contended that this principle conflicts with the general principle that executive power corresponds to legislative power and it could not have been intended that the extended law should operate when there was no corresponding legislative power.
In this connection he referred to article 73.
The general principle is subject to exceptions.
Article 73 itself opens with the words "subject to the provisions of this Constitution.
" This is one of the exceptions envisaged by the Constitution.
Other such exceptions are in article 277 and article 372.
Although legislative power may not exist to legislate on the subject of existing laws executive power would be exercised under the laws saved by article 277 and article 372.
No authority has been cited in support of the contention that executive power to execute a valid law ceases to exist if power to make that law has been transferred to another authority or ceases to exist.
It was next contended that the impugned Act was repugnant to and inconsistent with the Jammu and Kashmir Code of Criminal Procedure and Jammu and Kashmir Police Act, which were already in existence before the Delhi Special Police Act, 1946 came into force.
But in so far as the impugned legislation is a law with respect to entry 80, even if there is repugnancy it must override any laws repugnant thereto in Jammu and.
Kashmir.
article 246, as applicable to Jammu and Kashmir, reads thus "246(1) Notwithstanding anything in clause (2), Parliament has the exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the "Union List"); (2) Parliament, and, subject to clause (1), the Legislative of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the "Concurrent List") When the impugned Act was extended Parliament had no power to make laws with respect to any items in the Concurrent List, but the impugned law is fully covered by entry 80 and there is no need to rely on the Concurrent list.
Therefore, article 254 can have no application to the present case.
It was also contended that the impugned Act could not have been: validly extended by a notification dated October 10, 1956, 416 issued under the Extension Act which itself came into force only from November 1, 1956.
There is nothing in sub s.(2) of section 1 which makes it obligatory that the notification should issue simultaneously with the date of the coming into force of the Act.
On the contrary, notification must ordinarily issue earlier than the date of the coming into force of the law.
It seems to us clear that the notification could have been issued any time after the President had given his assent, and as soon as the notification was issued section 2 came into effect and all the Acts and Ordinance mentioned in the Schedule, stood automatically extended and came into force.
The learned counsel did not press the point regarding article 14 of the Constitution.
In the result the appeal fails and is dismissed.
V.P.S. Appeal dismissed.
| IN-Abs | By the Constitution (Application to Jammu & Kashmir) Order, 1954, one of the entries on which Parliament could make laws was Entry 80 of List I of the Seventh Schedule, dealing With 'Extension of the powers and jurisdiction of members of a police force belonging to any State to any area outside that State '.
The , (Extension Act) received the President 's assent on September 25, 1956.
Section 1(2) provides that it shall come into force on such date as the Central Government may, by notification 'in the Official Gazette appoint.
By a notification dated October 10, 1956, November 1, 1956 was appointed as the date for the coming into force of the Extension Act in the State of Jammu and Kashmir.
The effect of the notification and section 2 of the Act was that the , (the impugned Act) which was one of the Acts mentioned in the Schedule to the Extension Act, came into force in the State from November 1, 1956.
On the same day the Constitution (Seventh Amendment) Act, 1956, came into force and Delhi ceased to be a part C State and became Union Territory.
On the question whether the impugned Act was not validly extended to the State of Jammu and Kashmir, because, Delhi ceased to be a Part C State on November 1, 1956, HELD : (1) When the Extension Act was passed, Parliament had the competence to extend the impugned Art to the State of Jammu and Kashmir, because, the Delhi Special Police establishment was a police force belonging to a Part C State.
Assuming Parliament ceased to have the power as from November 1, 1956, the Central Government could validly issue the notification under section 1(2) appointing the date from which the Extension Act would come into force, and as soon as this was done, by virtue of section 2, the impugned Act came into force in the State.
[414 B E] State of Assam vs Brhvian Kurkalang, A.I.R. 1972 S.C. 223, followed.
(2) The general principle that the executive power corresponds to the legislative power, in article 73, of the Constitution is subject to exceptions.
The executive power to execute a valid law does not crease if power to make that law has ceased to exist.
[415 B D] (3) In so far as the impugned legislation is a law with respect to Entry 80, even if there was repugnancy it must override any laws repugnant thereto in Jammu and Kashmir.
[415 D E] 412 (4) There is nothing in section 1(2) of the Extension Act which makes it obligatory that the notification should issue simultaneously with the ,date of the coming into force of the Act.
On the contrary, the notification must ordinarily issue earlier than the date of the coming into force of the law.
The notification could have been issued any time after the President had given his assent to the Act, and as soon as the notification was issued, section 2 came into effect and all the Acts and Ordinances mentioned in the Schedule stood automatically extended and came into force in the State [416 A C]
|
minal Appeal No. 105 of 1969.
Appeal by special leave from the judgment and order dated March 27, 1969 of the Bombay High Court in Criminal Appeals Nos. 53 and 45 of 1968.
V.S. Kotwal, A. G. Ratnaparkhi and Rajiv Shah, for the appellant.
R. M. Mehta and B. D. Sharma, for the respondent.
The Judgment of the Court was delivered by Khanna, J.
This is an appeal by special leave by Khandu Sonu Dhobi and Bhikanrao Rambhau Khairnar against the judgment of the Bombay High Court affirming on appeal the conviction of the appellants under section 218 read with section 34, section 477A read with section 34 and section 409 read with section 34 of Indian Penal Code as well as under section 5 (2) read with section 5 ( 1 ) (d) of the Prevention of Corruption Act.
Sentence of rigorous imprisonment for a period of one year and a fine of Rs. 200 or in default further rigorous imprisonment for a period of two months has been awarded on each count to, the appellants.
The substantive sentences have ben ordered to run concurrently.
Dhobi appellant No. 1 was an agricultural assistant and was working under Khairnar appellant No. 2 who was agricultural 512 supervisor in the soil conservation section of the Government of Maharashtra.
Dhobi was incharge of the work relating to a Bundh in block No. 13 of village Asane in Taluka Mandurbar.
The above block comprises agricultural lands bearing survey Nos. 8, 17, 18, 19 and 32 measuring 90 acres.
The Bundhs were being constructed since the year 1962.
Rectification work in respect of those Bundhs at a cost of Rs. 369.07 had to be got done by Dhobi appellant under the supervision of Khaimar appellant.
The Government sanctioned an amount of Rs. 4779 in connection with the construction of the Bundhs.
An advance amount of Rs. 5000 was received by Khaimar accused on March 2, 1966 in that connection.
Work of the value, of Rs. 4400 was done but that relating to rectification work was not done.
According to the rules of the soil conservation section, the Government spent the money in the first instance and after the report of the completion of work was received, the expenses were recovered from the landowners for whose benefit the work was done.
On March 11, 1966 Khaimar made entries in measurement book exhibit 27 showing that he had checked 28 payments and certified the, same.
Khaimar accused also stated in the entry that he had passed the measurements and paid Rs. 369.07.
Paysheets exhibit 64 were prepared by Dhobi accused and he obtained the thumb impressions and signatures of the laborers on the paysheets.
Khaimar made his initials below the thumb impressions in the paysheets.
On the last page of the paysheets, Khaimar signed a certificate according to which he had paid Rs. 369.07 to PW 10 Jagan Trinibak who used to do the labour work.
Final bill exhibit 28 was also prepared on that day by the accused and the signature of Jagan Trimbak was obtained on the same.
The bill was got signed from PW 7 Ziparu Tukaram and another person as attesting witnesses.
The bill was signed thereafter by Khaimar.
Debit entry exhibit 32 of Rs. 369.07 was made by Khaimar accused in the cash book.
He also prepared work abstract exhibit 29 on April 16, 1966 and sent it to the sub divisional soil conservation officer Nandurbar showing an expenditure of Rs. 369 07.
The case of the prosecution was that the measurement book exhibit 27, paysheets exhibit 64, final bill exhibit 28 and cash book entry exhibit 32 were false documents and were fabricated by the accused without doing any reification work on the Bundh.
The accused thus committed criminal breach of trust in respect of the amount of Rs. 369.07 in furtherance of their common intention to misappropriate government property.
According further to the prosecution case, the landowners in block No. 13 came to know of the, above, acts of the accused and they complained about it to Sarpanch Tanku Bhagwan (PW 12).
Tanku sent a telegram on April 12, 1966 to the superintending agricultural officer, Bombay division, Nasik in this connection.
A copy of the telegram was 513 thereafter sent by the superintending agricultural officer to divisional soil conservation officer D.S.D. Ghate (PW 1) for necessary action as well as for enquiry and report.
Chate PW went to village Asane on May 2, 1966 and inspected block No. 13.
He found that entries had been made about the payment of Rs. 369.07 in the measurement book and cash book even though no rectification work had been done.
Chate submitted his report on May 6, 1966 for proceeding departmentally against the accused.
On receipt of the above report, the superintending agricultural officer directed P. R. Inamdar (PW 1 1 ), deputy director of agricultural engineering, to go to Asane village and submit his report after personally verifying the facts.
Inamdar went with Ghate to block No. 13 in Asane village on May 11, 1966.
Both Inamdar and Ghate found that no rectification work had been done.
They did not find even a single pit in the lands in that block although, according to measurement book, 83 pits had been recently dug.
Inamdar and Ghate also met the Sarpanch and other landowners of Asane village.
Report dated May 18, 1966 was thereafter submitted by Inamdar affirming those facts.
Sarpanch Tanku sent complaint exhibit 84, in the meanwhile, on April 30, 1966 to the director of anti corruption branch Maharashtra State stating that the accused had prepared false bill for Rs. 369.07 without doing any work and that they had misappropriated that amount.
It was also stated that attempts were being made to shield the accused.
The director of anti corruption sent a copy of that application to Sub Inspector K. G. Patil (PW 13) who was then attached to Dhulia officse of the anticorruption branch.
Sub Inspector Patil made local enquiry and took into possession the measurement book, paysheets and cash book.
The director of anti corruption branch directed Patil to register a case and investigate into the, matter.
Patil went to Nasik and recorded statement exhibit 79 of Inamdar PW on November 7, 1966.
The statement was then sent to Nandurbar Taluka police station.
A case was registered on the basis of that statement at the police station on November 8, 1966.
On November 12, 1966 sub Inspector Patil applied for permission under section 5A of the Prevention of Corruption Act of judicial magistrate 1st class to investigate the offence.
The permission was granted by the judicial magistrate 1st class Nandurbar on the same day.
Patil thereafter recorded statements of a number of persons.
Patil was subsequently transferred and the case was investigated by his successors Mahamuni and Kulkarni who also obtained the requisite permission.
Sanction exhibit 97 for the prosecution of the two accused was granted under section 6 of the Prevention of Corruption Act by the superintending agricultural officer Bombay division, Nasik on May 18, 1967.
514 The two accused in their statements admitted that the work of the value of Rs. 369.07 wasnot done till March 11, 1966 although it was so stated in the various documents by them.
The accused also admitted that no amounts were paid to any of the labourers mentioned in the paysheets although signatures and thumb impressions of the labourers had been obtained on the paysheets on March 11, 1966.
According to the accused, they had prepared the various documents in accordance with the instructions of Ghate PW who was insisting in March 1966, and even earlier, that a completion report relating to block No. 13 be sent as the entire amount spent on that block since 1962 could not be recovered for want of a. completion report.
Khaimar accused added that rectification work had been done between May 13, 1966 and May 16, 1966 and the amount of Rs. 369.07 was thereafter disbursed on May 16, 1966.
The learned special judge held that the amount of Rs. 369.07 had not been paid by the two accused to the labourers.
No work, it was found, had been done and the different documents prepared by the accused in this connection were false even on their own admissions.
The explanation furnished by the accused that they prepared false documents at the instance of Ghate and got work done thereafter was not accepted.
Objection was raised on behalf of the accused that the investigation of the case was illegal and that prosecution was barred by time under the pro visions of section 23 of the Land Improvement Schemes Act, 1942.
These objections were repelled.
The accused were accordingly convicted and sentenced as above.
On appeal the High Court affirmed the, findings of the learned special judge.
We have heard Mr. Kotwal on behalf of the, appellants and are of the opinion that there is no merit in the appeal.
It has not been disrupted before us that the accused made various entries and prepared documents on March 11, 1966 about their having got the rectification work done as well as about the payment of Rs. 369.07 on that account.
It has also not been disputed before us that the amount of Rs. 369 07 was not paid to any one by the accused in March or April 1966.
According to Ghate (PW 1) and Inamdar (PW 11), no work relating to the rectification of the Bundh was found to have been done till May 11, 1966 when they visited the site in question.
Inamdar 's evidence also shows that according to the measurement book prepared by the accused, 83 pits had been recently dug although the witness could not find a single pit on the spot.
In view of the above, we find no cogent ground to disagree with the trial court and the High Court that the accused had prepared false documents and had also committed criminal breach of trust in respect 515 of the amount of Rs. 369.07.
We also agree with the trial court and the High Court that the accused were in the discharge of their duties guilty of criminal misconduct as defined in section 5 of the Prevention of Corruption Act.
Mr. Kotwal has argued that the accused completed the recti fication work after May 11, 1966,.
There is, however, no direct evidence as may show that the, rectification work was completed ' after May 11, 1966.
Even if it may be assumed that the accused completed the rectification work in May 1966, that fact, in our opinion, would not absolve the accused of their criminal liability.
The charge, against the accused relates to preparation of false documents because even though no work had been done till March 11, 1966 and no amount had been disbursed, they prepared docu ments showing the doing of that work and the payment of that amount.
It is no answer to, that charge that after the matter had been reported to the higher authorities, the accused in the month of May 1966 got the rectification work done.
It is also no answer to a charge of criminal misappropriation that the money was subsequently, after the matter had been reported to the high authorities, disbursed for the purpose for which it had been entrusted.
According to explanation 1 to section 403 Indian Penal Code, a dishonest misappropriation for a time only is " misappropriation " within the meaning of that section.
Mr. Kotwal has also submitted that the accused expressed willingness to complete the work after the matter had been reported to the higher authorities.
This submission, 'even if accepted, would not exonerate the accused because the willingness after the matter had been reported to the higher authorities could not efface or undo the offence earlier committed by the accused.
Argument has then been advanced on behalf of the appellants that Sub Inspector Patil did not make investigation in the case in accordance with law.
It is urged that permission to make investigation was granted to Sub Inspector Patil on November 12, 1966 and, as such, he was not authorized to make before that date the enquiry which led to the registration of the case as that enquiry partook of the character of investigation.
Nothing has been brought to our notice as to how an enquiry before the registration of a case can be held to be investigation.
The matter, however, need not be dilated upon and it is not necessary to express any final opinion in the matter because we find that there is no material on the record as may show that the accused were prejudiced because of the alleged non compliance with the provisions of section 5A of the Prevention of Corruption Act.
It is well established that where cxognizance of a case has, in fact, been taken by the court on a police report following investigation 516 conducted in breach of provisions of section 5A of the Prevention of Corruption Act, the result of the trial cannot be set aside unless the illegality in the investigation can be shown to have brought about a miscarriage of justice.
The underlying reason for the above dictum is that an illegality committed in the course of investigation does not affect the competence and jurisdiction of the court to try the accused.
Where, therefore, the trial of the case has proceeded to termination, the invalidity of the proceeding investigation would not vitiate the conviction of the accused as a result of the trial unless the illegality in the investigation has caused prejudice to the accused (see H. N. Rishbud and Inder Singh vs The State of DelHi(1)].
Since there has been no miscarriage of justice in the present case because of the alleged non compliance with section 5A, the conviction of the accused appellants cannot be set aside on that score.
For the same reason, we are unable to accede to the contention of Mr. Kotwal that the conviction of the accused should be set aside because permission under section 5A of the Prevention of Corruption Act to SI Patil for investigation of the offence was granted in a ,casual manner and without the existence of sufficient reasons.
Lastly, it has been argued by Mr. Kotwal that the prosecution of the accused was barred by time under section 23 of the Bombay Land Improvement Schemes, Act, 1942.
The section reads as under "(1) No suit, prosecution or other legal proceeding shall be instituted against any public servant or person duly authorized under this Act in respect of anything in good faith done or intended to be done under this Act or the rules made thereunder.
(2)No suit or prosecution shall be instituted against any public servant or person duly authorized under this Act in respect of anything done or intended to be done, under this Act, unless the, suit or prosecution has been instituted within six months from the date of the act complained of.
" Sub section (1) of the section has plainly no application as it relates to anything done in good faith.
According to Bombay General Clauses Act, a thing shall be deemed to be done in good faith where it is in fact done honestly, whether it is done negligently or not.
The appellants admittedly were not acting honestly when they prepared the false documents in question and showed disbursement of Rs. 369.07 on March 11, 1966.
Mr. Kotwal, however, relies on sub section (2) of section 23 and (1) ; 517 submits that the prosecution could be instituted against the appellants only within six months from March 11, 1966.
As the charge sheet was submitted long after the expire of six months, the case against the accused appellants, according to the counsel, was barred by time.
This contention, in our opinion, is devoid of force.
Sub section (2) refers to suit or prosecution against a public servant or person duly authorized under the Act in respect of anything done or intended to be done under the Bombay Land Improvement Schemes Act.
It cannot be said that the acts of the accused appellants in preparing false documents and in committing criminal breach of trust in respect of the amount of Rs. 369 07 as also their act of criminal misconduct were done under the Bombay Land Improvement Schemes Act.
Sub section (2) of section 23 deals with anything done or intended to be done under the above mentioned Act by a public servant or a person duly authorized under the Act.
It has no application where something is done not under the Act even though it has been done by a public servant who has been entrusted with duties of carrying out improvement schemes under the above mentioned Act.
The impugned acts of the appellants in the present case were not in discharge of their duties under the above mentioned Act but in obvious breach and flagrant disregard of their duties.
Not only they did no rectification work for the Bundh which was a part of the improvement scheme, they also misappropriated the amount which had been entrusted to them for the purpose of rectification.
Prayer has also been made for the reduction of the sentence, but we see no cogent ground to interfere with the same.
The appeal consequently fails and is dismissed.
K.B.N. Appeal dismissed.
| IN-Abs | The appellants entrusted with the duties of carrying out improvement schemes under the Bombay Land Improvement Scheme Act, 1942, were charged with the offence of preparing false documents and committing criminal breach of trust in respect of certain amount.
It was alleged that even though no work had been done and no amount had been disbursed they prepared documents 'showing the doing of the work and payment of the amount, They were convicted under section 218 read with section 34, section 477A read with section 34 and section 409 read.
with section 34 of the Indian Penal Code as well as section 5(2).
read with section 5(1)(d) of the Prevention, of Corruption Act.
The High Court affirmed the conviction.
in the appeal to this Court it was contended that after the matter had been reported to the, higher authorities the rectification work was done and the money was disbursed for the purpose for which it had been entrusted; that the conviction was bad because of non compliance with section 5A of the Prevention of Corruption Act; and that the prosecution was barred by time under section 23 of the Bombay Land Improvement Schemes Act, 1942.
Dismissing the appeal, HELD : (i) There is no cogent ground to disagree with the trial court and the High Court that the accused had prepared false documents, bad also committed criminal breach of trust and were in the discharge, of their duties guilty of criminal misconduct as defined in section 5 of the Prevention of Corruption Act.
(ii)It is no answer to a charge of criminal misappropriation that after the matter bad been reported to the higher authorities the accused got the rectification work done or the money was subsequently disbursed for the purpose for which it had been entrusted.
According to explanation 1 to section 403 Indian Penal Code a dishonest misappropriation for a time only is "misappropriation" within the meaning of that section.
[515 D] (iii)It is well established that cognizance of a case, has, in fact, been taken by the court on a police report following investigation conducted in breach of provisions of section 5A of the Prevention of Corruption Act, the result of the trial cannot be set aside unless the illegality in the 511 investigation can be shown to have brought about a miscarriage of justice.
The reason for the above dictum is that an illegality committed during the course of investigation does not effect the competence and jurisdiction of the Court to, try the accused.
Where, therefore, the trial of the case has proceeded to termination, the invalidity of the preceding investigation would not vitiate the conviction of the accused as a result of the trial unless the illegality in the investigation has caused prejudice to the accused.
Since there has been no miscarriage of justice in the present case because of the alleged non compliance with section 5A the conviction of the appellants cannot be set aside on that score.
[515 H] H.N. Rishbud and Inder Singh vs The State of Delhi, ; , referred to.
(iv)Sub section (i) of the Bombay Land Improvement Schemes Act 1942 has plainly no application as it relates to anyth ing done in the good faith.
It cannot also be said that the acts of the appellants in preparing false documents and committing criminal breach of trust as also the act of criminal misconduct were done "under" the Bombay Land Improvement Schemes ' Act within the meaning of sub section (2).
The subsection has no application where something is done not under the Act even though it has been done by a public servant who has been entrusted with the duties of carrying improvement schemes under this Act.
The impugned acts of the appellants was not in discharge of their duties under the Act but in obvious breach and flagrant disregard of their duties.
[516 G 517 D]
|
Appeal No. 909 of 1971.
Appeal under section 116 A of the Representation of the People Act, 1951 from the judgment and order dated May 21, 1971 of the Patna High Court in Election Petition No. 2 of 1970.
363 Frank Anthony, A. T. M. Sampath and E. C. A Agrawala, for.
the appellant.
L. M. Singhvi, Basudeva Prasad, Ravinder Narain and P. C. Bhartari, for the respondent.
The judgment of the Court was delivered by Grover, J.
This is an appeal from a judgment of the Patna High Court holding that the nomination papers of the respondent Smt.
Jahan Ara Jaipal Singh had been illegally rejected by the Returning Officer.
For that reason the election of the returned candidate Shri N. E. Horo from the 51 Khunti Parliamentary (Scheduled Tribe) Constituency in the State of Bihar was set aside.
On May 1, 1970 the Election Commission of India issued a notification calling upon the above named Parliamentary Constituency to elect a Member to the Lok Sabha in the vacancy caused by the death of late Shri Jaipal Singh.
The last date for filing the nomination papers was May 8, 1970.
The date for scrutiny was May 9, 1970.
Several persons filed nomination papers including Theodore Bodra and others.
Two nomination, papers were filed on behalf of the respondent who was a Congress (Ruling) candidate for the aforesaid by election.
According to the respondent she was the widow of late Shri Jaipal Singh and was a member of the Munda Scheduled Tribe in the State of, Bihar.
She filed certain certificates to that effect.
Bodra filed an objection petition to the nomination papers of the respondent.
The Returning Officer, after hearing arguments, passed an order rejecting the nomination papers of the respondent.
The nomination papers of all the other candidates were accepted.
After the polling took place, the result of the election was announced on June 3, 1970 and the appellant Shri Horo was declared elected to the Lok Sabha.
On July 8, 1970 the respondent filed an, election petition.
In the election petition it was stated inter alia that the petitioner (who is now respondent before us) was the widow of Late Shri Jaipal Singh and belonged to the Munda Scheduled Tribe although she was a Christian by religion.
It was averred in paragraph 3 of the petition that according to the Munda Customary Law when a Munda male married outside the Munda Tribe if his marriage is accepted by the Tribe he continues to be a member of that Tribe and his wife also acquires its membership.
It was pleaded that the wife being a member of her husband 's family had the right of succession to her husband 's property as well.
In para 4 of the petition it was stated that the petitioner was a Tamil by birth.
She married late Shri Jaipal Singh in the year 1954 364 according to the rights and rituals of Mundas in the presence of Parha Raja, Parha Munda, Parha Pahan, relatives of the deceased and the members of the Tribe at Morabadi a Mohalla of Ranchi.
In paragraph 5 the ceremonies which were performed according 'to Munda custom were mentioned.
These ceremonies inter alia were the washing of the wife 's feet by the elder sister of the husband and the holding of the feast of the male goat meat and drinks of Handia etc.
A new name was given by her mother in law to the petitioner, that name being Lankashri.
All these functions were witnessed by Parha Raja, Parha Munda, Parha Pahan and other members of the Tribe.
In paragraph 6 more details were given of the various other ceremonies also which were performed in connection with the marriage.
After referring to the relevant provisions of the Representation of People Act 1951, hereinafter called the 'Act ', it was stated that the Returning Officer had illegally allowed irrelevant personal aspersions to be .cast against the petitioner by her opponents.
It was alleged that the Returning Officer had been influenced by Bodra who was the Chairman of the Bihar Legislative Council.
The decision of the Returning Officer that the status of a Munda could be acquired only by birth and not by marriage and that the petitioner did not belong to the Munda Scheduled Tribe was challenged principally on the ground that the Returning Officer had not considered the custom by which if a Munda male marries a women not belonging to Munda Tribe and that is accepted by the Tribe the wife acquires the membership thereof.
In his written statement the returned candidate Shri Horo maintained that even though the election petitioner might be iving as wife of late Shri Jaipal Singh she was never married in accordance with the custom of the Munda Tribe prevalent in Chhota Nagpur.
It was denied that she was ever accepted as a member of the Munda community as no such custom is prevalent in that community.
It was denied that the ceremonies and rituals mentioned in the election petition had been performed in respect of the marriage of the election petitioner with the late Shri Jaipal Singh.
In paragraph 25 of the written statement it was asserted that a non Munda merely by virtue of the marriage with a Munda could not ipso facto become a Munda.
If a person was not born of a father belonging to a Scheduled Tribe he or she could not legally claim to be a member of the said Tribe.
It was asserted that since the election petitioner was not the daughter of a member of the Munda Tribe she could not claim to be a member of that Scheduled Tribe.
The allegations of mala fides made against the Returning Officer were described as baseless and extraneous.
During the pendency of the election petition the Lok Sabha was dissolved on December 27, 1970.
A petition was filed 365 before the High Court on behalf of Shri Horo that the election petition should be dismissed as having become infructuous.
The court made an order on January 14, 1971 holding that the election petition could not be dismissed on that ground.
On the pleadings of the parties seven issues were framed.
Issues 1, 2 and 3 which are material need be mentioned.
(1) Is the election petition maintainable ? (2) Whether the petitioner was the legally married wife of late Shri Jaipal Singh according to the custom of Munda Tribe prevalent in Chhota Nagpur ? (3) Whether the petitioner could legally acquire the status of a Munda by virtue of her marriage to late Shri Jaipal Singh and whether she had been accepted as a member of the Munda Tribe by the said Tribe ? It may be mentioned that so far as issue No. 1 was concerned the objection taken was that the election petition was defective on account of the non joinder of necessary parties.
When the election petition was filed only Shri Horo the returned candidate was impleaded but subsequently a petition was filed on behalf of the election petitioner making a prayer that the other contesting candidates were also necessary parties and should be impleaded.
The court directed that they be added as parties.
Shri Bodra who was one of the contesting parties was consequently impleaded as a party.
Later on it was prayed on behalf of the petitioner that on a further consideration it was found that the persons who had been subsequently added were not necessary parties and their names might be deleted.
Bodra 's name was therefore deleted.
The argument raised before the High Court was that Bodra being a necessary party to the petition under cl.
(b) of section 82 of the Act the petition became defective as soon as his name was struck off at the instance of the election petitioner.
The High Court was of the view that although in paragraph 21 of the election petition an allegation had been made that Bodra had influenced the Returning Officer, no evidence was led on that point and the case of the election petitioner was based solely on the ground that the nomination paper had been illegally and improperly rejected.
No relief had been sought on the ground that undue influence had been exercised on the Returning Officer by Bodra.
The High Court was also of the view that the allegation made in the election petition that Bodra had exercised his influence in getting the nomination paper of the election petitioner rejected did not fall within the ambit and scope of sub section
(7) of section 123 of the Act.
The contention that the petition was not maintainable was consequently rejected.
On the main issues, namely (2) and (3) it was expressly stated in the judgment that the factum of the marriage of the elec 366 tion petitioner with the late Shri Jaipal Singh had not been disputed.
The real controversy between the parties in the High Court centered round the point whether the marriage was in such form that the wife acquired the membership of the Tribe.
According to the arguments on behalf of Shri Horo as the election petitioner was not a Munda she could not belong to the Munda Tribe and that by marriage such a status could never be acquired.
The High Court examined the evidence relating to the question whether the marriage of the election petitioner with late Shri jaipal Singh had been performed in accordance with the Munda custom and was in such form that she was accepted and treated as a member of the Munda Tribe.
The court also considered the various authoritative books and other works relating to the Mundas and came to the conclusion that on a survey of the entire, evidence and the circumstances there was no reason to discredit the evidence which had been led on behalf of the petitioner that she was married according to the Munda custom and that it was with the approval and sanction of the Tribe that she had been accepted as a member of the Munda tribe.
The first contention raised by Mr. Frank Anthony on behalf of the appellant relates to issue No. 1.
It has been maintained by him that Bodra was a necessary party.
Apart from the fact that he was the only person who had filed a written objection to the nomination of the respondent the election petition filed by the respondent contained serious allegations of corrupt practice against Bodra.
As he had been given up as a party although impleaded at one stage the petition became defective and was not maintainable.
According to clause (b) of section 82 of the Act the petitioner must join as a respondent any candidate against whom allegations of any corrupt practices are made in the petition.
Section 86(1) provides that the High Court shall dismiss any election petition which does not comply inter alia with the provisions of section 81.
There can be little doubt that if the allegations made in the election petition against Bodra amounted to the commission of a corrupt practice by him it was obligatory on the part of the election petitioner to join him as a respondent to the petition.
It is equally clear that in that event the petition would have become liable to dismissal.
For finding out what a corrupt practice is we have to turn to section 123 of the Act.
According to Mr. Anthony the allegations made against Bodra fell within sub section
(7) of section 123 which is in the following terms : section 123 "The following shall be deemed to be corrupt, practices for the purposes of this Act: 367 .lm15 (7) The obtaining or procuring or abetting or attempting to obtain or procure by a candidate or his agent or, by any other person with the consent of a candidate or his election agent, any assistance other than the giving of vote for the furtherance of the prospects of that candidate 's election, from any person in the service of the Government and belonging to any of the following classes, namely : (a) gazetted officers; (b) stipendary judges and magistrates; (c) members of the armed forces of the Union: (d) members of the police forces; (e) excise officers; (f) revenue officers other than village revenue officers known as lambardars, malguzars, patels, deshmykhs or by any other name, whose duty is to collect land revenue and who are remunerated by a share of, or commission on, the amount of land revenue collected by them but who do not discharge any police functions; and (g) such other class of persons in the service of the Government as may be prescribed.
Explanation(1) In this section the expression "agent" includes an election agent, a polling agent and any person who is held to have acted as an agent in connection with the election with the consent of the candidate.
(2) For the purposes of clause (7) a person shall be deemed to assist in the furtherance of the prospects of a candidates 's election if he acts as an election agent of that candidate".
The allegations against Bodra are contained in para 21 of the election petition which may be set out : "That the Returning Officer, while hearing the objections illegally allowed irrelevant personal aspersions to be cast against the petitioner by her opponents and the aforesaid Shree Theodore Bodra even after protests made by and on behalf of the petitioner, Shrimati Jahanara Jaipal Singh, against the same '.
plain reading of the above paragraph shows that no such alletion was made that Bodra had influenced the Returning Officer I L887 Sup CI/72 368 for the purpose mentioned in section 123(7) of the Act.
The essential ingredient of that provision is to obtain, procure etc.
by a candidate of any assistance (other than the giving of a vote) for the furtherance of the prospects of that candidate 's election from any person in service of the Government and belonging to the classes mentioned in the sub section.
There is absolutely no allegation or suggestion in para 21 that the Returning Officer was influenced by Bodra for the purpose of rendering assistance for the furtherance of the prospects of the election of any candidate.
All that has been stated in that paragraph is that while hearing the objection the Returning Officer allowed irrelevant personal aspersions to be cast against the election petitioner by her opponents and Bodra.
It was further stated that on inquiry the election petitioner came to learn that the Returning Officer had been influenced by Bodra.
This influence apparently can have reference only to the conduct or act of the Returning Officer in allowing personal aspersions to be cast against the election petitioner.
Even by stretching the language it is not possible to discover any of the ingredients which would constitute a corrupt practice under section 123(7) of the Act.
Faced with this situation Mr. Anthony sought to rely on sub section (2) of section 123 the relevant part of which is as follows : "(2) Undue influence, that is to say, any direct or indirect interference or attempt to interfere on the part of the candidate or his agent, or of any other person with the consent of the candidate or his election agent with the free exercise of any electoral right: Provided that ". . " It is not possible to comprehend how the allegation contained in para 21 can be understood to amount to a suggestion of direct or indirect interference, or attempt to interfere on the part of the candidate etc.
with the free exercise of any electoral right.
We are accordingly satisfied that no allegation of any corrupt practice had been made in the election petition against Bodra and therefore he was not a necessary party within section 82 of the Act.
In this view of the matter it is not necessary to examine the criticism of Mr. Anthony of that part of the judgment of the High Court according to which one of the reasons given for deciding issue No. 1 in favour of the present respondent was that no relief had been sought on the ground that undue influence had 'been exercised on the Returning Officer by Bodra and that no evidence was led on that point.
On issues 2 and 3 Mr. Anthony has raised three main points The first was that the respondent who was a Christian by birth, was a divorcee and according to her own statement the decree 369 nisi in the divorcee proceedings had been made absolute on May 6, 1954.
According to her she got married to late Shri Jaipal Singh on May 7, 1954.
This marriage was a nullity as under section 57 of the she could not enter into a second marriage until after the expiry of six months from the date the decree had been made absolute.
Secondly the High Court had palpably erred in holding that the respondent had become a member of the Munda tribe by marrying Shri Jaipal Singh and set aside the order of the Returning Officer who had held that she was a Christian by birth and Munda tribe being an ethnic group its membership could not be acquired by marriage but could be acquired only by birth.
Thirdly it has been strongly urged that the respondent failed to prove the custom that a non Munda could be initiated into tribe as its full fledged member either by performance of certain rituals and ceremonies or by the acceptance as such by the tribe or its panchayat.
As regards the first point it was never canvassed or argued before the High Court.
No plea was taken by Shri Horo in the written statement that there could be no valid marriage between the respondent and late Shri Jaipal Singh owing to the provisions contained in section 57 of the until after the lapse of.
a period of six months from the date the decree of divorce was made absolute.
None of the issues which was framed by the High Court involve the question now sought to be agitated based on the provisions of section 57 of the .
It appears that advantage is sought to be taken from the statement of the respondent about the various dates when the decree absolute was granted and the date when the marriage took place between the respondent and the late Shri Jaipal Singh.
In the absence of any pleadings or issues no material has been placed on the record to show that in view of the provisions of section 57 of the aforesaid Act there could not be a valid marriage according to the Munda customary law.
It must be remembered that the respondent contracted a marriage with late Shri Jaipal Singh according to Munda rites and ceremonies and not as one Christian marrying another Christian.
Nor was the matter pursued in cross examination of the respondent and she was not asked as to how she could get over the bar of section 57 in theway of remarriage before the expiry of the prescribed period.
In these circumstances we do not consider that such a pointcan be allowed to be agitated for the first time before this Court.
On the second and the third points, a great deal of reliance has been placed on the following statement in the well known book of section C. Roy "Mundas and their country", 1912 Edn.
"The Munda tribe is divided into a large number of exogamous groups called kilis.
According to 370 Munda tradition, all the members of the same Kili are descended from one common ancestor.
But such a tradition may not be quite correct with regard to the original kilis.
Though exogamous as regards the kilis, the Mundas are endogamous so far as other tribes are concerned.
Thus, there can now be no valid marriage, according to Munda custom, between a Munda and the member of any other 'kolarian ' tribe, such as the Santals, the Kharias the Asurs, or the Bir hors".
According to Roy the family came to be evolved from tribes and sub tribes.
Communal marriage was superseded by the individual marriage and Matriarchal Age was superseded by Patriarchal.
Kinship came to be traced not as before, through a common female ancestor but through a male ancestor.
D. N. Mazumdar in his work on the Ho tribe entitled "Affairs of a Tribe", 1950 Edn.
points out that the rule of endogamy has its base in superstitious belief.
According to him villages which are closely allied by ties of marriage are those which share the same God and Spirits and the same Deonwa.
The influence of Deonwas, in other words, the knowledge of the Bongas of an area, determines the limit of exogamy, for there is a risk in marrying in villages the Bongas of which are unknown; (pp. 237 238).
From the account given by section C. Roy himself it appears that according to the Munda custom the rule of endogamy is not absolute; for instance, in the case of Munda female married or unmarried found to have gone astray with a man of a different caste or tribe, it is said, that the latter is summoned before a Panchayat and a heavy fine is imposed on the lover and the fine, if realised, is paid as compensation to the parents of the seduced maiden or the husband of the married female and the seducer is compelled to take the girl or woman as a wife or a mistress and in case of refusal (which is rare) to submit to the orders of the Panchayat.
The family of the seduced female remains outcaste until a purificatory ceremony is performed and thus restored to caste.
The members of the family then cook rice.
and pulse and themselves distribute the food to the assembled relatives; (see pp.
544 545.) The question that has to be enquired into is whether the strict rule of endogamy of the Munda tribe has been deviated from and whether custom has sanctioned such deviation.
D. W. Mazumdar in his work "Races and Cultures of India" deals with tribal organisations in Chapter 17.
According to him the definition that is found in the current literature on the subject is given in the Imperial Gazetteer which is, "A tribe is a collection of families bearing a common name, speaking a common dialect occupying or professing to occupy a common territory and is 371 not usually endogamous though originally it might have been so".
Endogamy is an essential feature of the tribe though intertribal marriages are breaking the limits of endogamy.
It is further stated by him that "the importance of the blood bond or the kinship group is forced to the background, the communal economy of the clan is superseded by individual desire for gain and property, money assumes an importance it seldom had before, and the ties of reciprocity and mutuality of obligation are reoriented to suit new conditions.
Tribal custom and practices which established social life lose their value and the choice of 'leader and of mate is guided by different considerations".
The Munda tribe cannot be said to be immune from the above process of change in their social Organisation.
Changes in their belief, customs, traditions and practices have taken place under the in fluence of Hinduism, Christianity, and on account of the impact of western education, urbanisation, industrialisation and improved means of communication.
The sense of individualism and lack of love for, the traditional code of conduct and social taboos ,ire stated to be apparent among the emerging urban industrial oriented adivasi communities.
D. N. Mazumdar has made an intensive study of the rule of endogamy among the Ho tribe which is an off shoot of the Munda tribe.
A reference to, the Ho practice may, therefore, help us in understanding the practice among the Mundas.
According to D. N. Mazumdar "A Ho does not marry outside the tribe as a rule but there is today no legal or social prohibition against his doing so.
Though tribal code has relaxed considerably those who work in the mining and industrial centers in and outside Kolhan contract such alliances and when they come back to their villages they are not outcasted by the society;" (pp. 124125, "Races and Cultures of India").
At another place he records : "The endogamy of the tribe is not sacred today, with the result that many marriages have taken place between the Hos and other tribes.
Liaison between Diku men and Ho girls is increasing, and cases that have occurred in Chaibassa during the last ten years or so would fill a volume.
Thus, there being no longer ,my deterrent to mating with strangers, social authority vested in the Killi punch has to exercise its prerogative to ensure a compliance with social traditions.
Killi exogamy has not led to an indiscriminate alliance between the different killis and as far as our knowledge goes, taboo on marriage outside a particular local area can be traced to a dread of unfamiliar Bongas, who were conceived as hostile,.
and therefore dangerous".
(p. 236).
372 L. P. Vidyarthi in his work mentioned before based on his study of the social life of the Oraon and Munda tribes living in the city of Ranchi points out that a good number of cases of marriage between tribals and non tribals have occurred and that in his investigation he came across 53 cases of non tribal males marrying tribal girls.
He points out that greater percentage of love marriages and marriages by 'Kept ' have been socially disapproved while 83.3% and 100 % of arranged and legal (civil) marriages have been approved.
(See pages 102 103).
We may how deal with the evidence produced by the parties on the above points.
P.W. I who was working as District Wel fare Officer in May 1970 at Ranchi and who belongs to the Munda tribe stated that if a Munda male married a non Munda girl and such marriage was accepted by the society it would be a valid and proper marriage.
The wife would, therefore, be accepted as a member of the tribe.
He had himself married an Oraon girl and his wife though a non Munda has been accepted as a member of the Munda tribe.
He further deposed that if the Munda married a non Munda a feast is given and if the elders of the society accept the marriage and participate in the feast that by itself would show that the tribal society has accepted the marriage and the wife has become a member of the tribe.
P.W. 2 who is a nephew of the late Shri Jaipal Singh gave details of the ceremonies which were performed when the marriage between his uncle and the respondent took place.
After the performance of those ceremonies the members of the tribe and the family declared that the respondent had been accepted as a member of the tribe.
He himself is married to a non Munda girl though he was married according to Munda marriage rights as well as according to Hindu law.
P.W. 3 who was at the material time working as Assistant Director in Sociology, Bihar Tribal Welfare Institute, stated that he had been doing research on the subject of Bihar Tribal Marriage and Family Transformation with special reference to Family law.
One of his major duties was to ascertain from the members of different tribes facts relating to the subject of his research.
According to his evidence a Munda male can marry a non Munda girl.
After adopting a special procedure in some cases a non Munda wife is accepted as a member of the tribe.
A certain procedure or formality has to be gone through.
The council of elders of the tribal people has to be consulted and the special reason for the marriage is to be stated.
Then various rituals are gone through and the marriage is allowed by the elders.
He gave instances where, a Munda male had married a non Munda girl and their marriage had been accepted by the tribal people.
One of these instances given by him related to persons belonging to the Santhals and Ho tribes.
He maintained that the customs prevalent among these tribes were broad 373 ly the same as among the Mundas.
In cross examination he stated that he had met the members of the Munda elder council and he had remained in touch with that council since 1952.
He had made special research of Jojo Hatu which was a Munda village.
He claimed to have submitted a report to the government in which he had collected hundreds of cases where a girl of a particular tribe had married outside her tribe.
P.W. 4 was the Superintendent of the Anthropological Survey of India, Ministry of Education.
As an Anthropologist he had to undertake full study in different parts of India mostly among the tribal community.
He had studied Munda tribal custom which assignment had been given to him in 1965 66.
In course of the research he found that a Munda could marry a non Munda girl even before 1954.
He gave three kinds of unusual marriages one of which was where a Munda male married a non Munda female.
The social consequences of that marriage was called Jati Bora.
That meant that the Munda male had committed an offence against the whole community.
Normally he would be ostracised along with his family but there was a process by which he and his wife could be admitted into the community.
This process was known 'Niyar ' which means "to bring in or take in".
The offending party invites the members of the Parha gives them a feast at which a white goat is sacrificed and the blood is smeared on the body of the boy and the girl along with Tarmolik and then they are allowed to sit along with the members of the community in the same Pankti.
After that they are formally considered as members of the community.
He was specifically asked a question with regard to the manner in which a Munda boy marrying a non Munda girl would be accepted by the community and his reply was that in his opinion the Parha was the ultimate authority in the matter of acceptance of a non Munda girl in the community.
If a Parha accepted her that was final.
in cross examination he stated that if a marriage of the nature under discussion is not approved by Parha he did not think it would be accepted by the members of the society.
It may be mentioned that the evidence of this witness has been subjected to a good deal criticism by Mr. Anthony for the reason that he was only expressing an opinion on the last matter and was not making a def inite statement of fact.
P.W. 5, who was attached to the office of the Deputy Commissioner, Palamau, gave an ac count of the ceremonies which were performed of the marriage between the respondent and late Shri Jaipal Singh.
According to him the elders of the community unanimously decided that since permission had been given by the elders they would be taken as members of the tribe.
He denied the suggestion that it was on account of the influence of late Shri Jaipal Singh that Pahans had given sanction to the marriage.
According to him there had been other cases also where such sanction had been given.
374 P.W. 8 who claimed to be a Parha Raja of three Parhas, viz., Takara Parha, Sada Parha and Sagha Parha comprising 36 vil lages also gave evidence about the ceremonies which were performed at the marriage of late Shri Jaipal Singh with the respondent.
After the performance of the ceremonies the Samaj of the Munda tribe accepted the marriage, according to him.
He deposed to other instances where Munda had married non Mundals.
He had attended a marriage of a Munda who had married a Ho girl.
Sanction was given by the elders to that marriage.
It is unnecessary to refer to the evidence of P.W. 10 who is also a Pahan and who claimed to have been present at the time of the marriage in question.
He made a statement which has been subjected to justifiable criticism by Mr. Anthony about the document Exht 3.
His evidence, therefore, does not deserve consideration.
Out of the witnesses examined on behalf of the respondent mention may be made of the statement of Shri Horo himself who appeared as R.W. 6.
After stating that the late Shri Jaipal Singh who was a leader of the Jharkhand Party and was an Adivasi and a Munda professing the Christian religion, he affirmed that the respondent did not have the right and status of a Munda on the basis of established custom.
He admitted that there was a custom that a Munda who had been excommunicated from the tribe could be taken back but according to him that person must be a Munda and no non Munda could be accepted as a member of the tribe.
The Munda could of course marry a non Munda but in the manner in which the Munda usually married a Munda.
The custom among the Mundas is changing and it is dynamic and not static.
The other witnesses produced by Shri Horo are not impressive and do not afford much assistance in deciding the points under discussion.
According to the observations of the High Court Shri Horo did not examine any witness on his behalf who could say that he had made a special study and research of the marriage custom of the Munda tribe and that such a marriage was not acceptable in the present times in spite of all the changes which have taken place in the life and social structure of the community owing to the impact of the various factors which have been mentioned in the authoritative studies of eminent Anthropologists mentioned before.
Our attention ha,, been drawn by Mr. Anthony to certain decisions for the proposition that in a tribe which is endoganotus birth alone can confer the status of membership of the tribal community.
In V. V. Giri vs D. Suri Dora & Others(1) one of the, questions raised, was whether respondent No. 1 in that case had ceased to be a member of the Schedule Tribe at the material time because be had become a Kshtriya.
This court observed that it (1) 375 was essential to bear in mind the broad and recognised features of the hierarchical social stricture prevalent amongst the Hindus.
It was considered enough to state that whatever might have been the origin of the Hindu castes and tribes in ancient times, gradually status came to be based on birth alone.
It was pointed out that a person who belonged by birth to a depressed caste or tribe would find it very difficult, if not impossible, to attain the status of a higher caste amongst the Hindus by virtue of his volition, education, culture and status.
We are unable to see how this case can be of any assistance in deciding the matter before us, namely, whether a non Munda can by marriage be recognised as a member of the Munda tribe in certain circumstances.
The High Court, after discussing the evidence and referring to other authoritative books like "Tribes and Castes of Bengal" by H. H. Risley and "Encyclopedia Mundarica" by Rev. John Hoffman as also the statement in Encyclopedia Britannica, Vol. 15, and the Encylopaedia of Religion and Ethics by James Hastin ings, Vol.
IX, apart from the work of J. Reid, I.C.S., on Chhota Nagpur Tenancy Act, observed that although originally very severe restrictions were imposed amongst the Mundas as far as marriage in their own Kili or seat was concerned, the process of Munda assimilation to the larger Indian society facilitated by im proved communications and the introduction of formal system of education was being accelerated under the independent Government of India.
In Encyclopedia Britannica, Vol. 15 in the Chapter relating to Mundas it is also mentioned.
"The Munda speaking people, with the other Indian tribal groups, are being encouraged to adopt new customs and to become fully participating members of Indian society".
(page 991).
Similarly in the Encyclopedia of Religion and Ethics by James Hastings, Vol.
IX, it has been stated as to how Munda customs are being changed with the impact of the influence of Christianity.
Referring to the Chapter in Reid 's book it has been noticed by the High Court that according to the Munda conception a wife becomes a member of the Kili of her husband by legal fiction.
The High Court further relied on the decision in Wilson Reads vs C. section Booth(1) in which it was held that the question whether a person can be regarded as a member of the Khasi tribe was a question of fact depending upon the evidence produced in the case.
It was said that the whole object of reserving a seat for a particular tribe was to afford the community, ;is a whole, a right of representation and therefore the question of the membership of a particular individual of that community could not be considered divorced from the very object of legislation.
Thus the conduct of the community which had been given the right of special representation.
the manner and how the (1) A. T. R 376 community regarded a particular individual and whether the community as a whole intended to take the individual within its fold were all matters which would be relevant for consideration of the question whether a particular person could be regarded as a member of the Scheduled Tribe.
The High Court was alive to the fact and this point of distinction has been greatly emphasised by Mr. Anthony that in that case the appellant claimed to be a Khasi, his father being a European and his mother a member of the Khasi tribe.
Even though the facts were different, the approach in such matters which commended itself to the Assam High Court can hardly be regarded as unsound.
It appears to us, on a full consideration of the entire material.
that the following matters stand established in the present case : (1) The Mundas are endogamous and inter marriage with non Mundas is normally prohibited.
(2) That a Munda male along with his family on marrying a non Munda girl is often ex communicated or outcasted.
(3) That the rule of endogamy is not so rigid that a Munda cannot marry a non Munda after performing special ceremonies.
(4) That such marriages have been and are being sanctioned by the Parha Panchayat.
(5) That where a Munda male and his family are ' outcasted for marrying a non Munda they are admitted to the tribe after certain special ceremonies are performed.
Even in the account given by S.C. Roy as well as by P.W. 4 a Munda male is excommunicated for marrying a non Munda girl but such excommunication is not automatic.
It is left to the discretion of the panchayat.
If the panchayat approved of a particular marriage with a non Munda then no question of excommunication arises.
Thus several inroads appears to have been made on the rigid system of endogamy which might have existed at one time but over the course of years several matters are left to be decided by the panchayat or elders of the tribe itself.
There is no evidence whatsoever that the late Shri Jaipal Singh was excommunicated or outcasted because he had married a non Munda.
On the contrary there is abundant evidence that his marriage was accepted as valid and was approved by the Parha Panchayat or the elders of the tribe.
Reverting to the argument that a non Munda women cannot become a member of the Munda tribe by marriage even if the 377 marriage be valid because the Mundas are a patriarchical society and constitute an ethnic group, we have already referred to the evidence of the witnesses produced by the respondent who had made, special research in the matter and even if we exclude the opinion of P.W. 4 who was Superintendent of Anthropological Survey of India that the Parha was the final authority in the matter of acceptance of an non Munda girl in the community but the rest of his evidence cannot be brushed aside.
From all this evidence it is proved that once the marriage of a Munda male with a non Munda female is approved or sanctioned by the Parha panchayat they become members of the community.
They contention of Mr. Anthony that a person can be Munda by birth alone can be sustained only if the custom of endogamy is established without any exception.
We have already held that the rule of endogamy has not been proved to exist in the rigid or strict form canvassed by Mr. Anthony.
That rule has not been strictly followed and the marriage of a Munda male with a non Munda woman has been and is being approved and sanctioned by the Parha panchayat.
If a non Munda woman 's marriage with a Munda male is valid it is difficult to say that she will not become a member of the Munda tribe.
The, concept of a tribe is bound to undergo changes, when numerous social, economic, educational and other like factors in a progressive country start having their impact.
It is noteworthy that a Hinduised Munda and a Munda converted to Christianity can inter marry and conversion to Christianity has not become an obstacle in the way of such marriage among the Mundas.
Mr. Horo himself in all fairness affirmed that custom among the Mundas was not static but was dynamic and was changing.
We do not find cogent or weighty reasons for disagreeing with the view of the High Court on the points under discussion.
We may also refer to Article 330 of the Constitution accord ing to which the seats reserved for the Scheduled Tribes are to be reserved in the House of the People, inter alia, for members of these Tribes.
Under section 33 (2) of the Act a candidate for a reserved seat has to file a declaration specifying a particular caste or tribe of which he is a member.
Article 342(1) empowers the President to specify 'the tribes or tribal communities or parts of or groups within tribes or tribal communities which shall, for the purposes of the Constitution, be deemed to be Scheduled Tribes in relation to the State or Union territory as the case may be.
In Parts 1 to 12 of the Schedule to the Constitution (Scheduled Tribes) Order 1952 are specified the tribes or tribal communities or parts of or groups within the tribes or tribal communities who are to be deemed to be Scheduled tribes.
Munda is one of such specified tribes or tribal communities.
It can well be said that the term "tribal community" has a wider connotation than the expression "tribe".
A person who, according to the strict custom of a tribe '.
378 cannot be regarded as a member of that tribe may well be regarded as a member of that tribal community.
Where a non Munda woman is married to a Munda male and the marriage is approved and sanctioned by the Parha Panchayat of that tribe and the marriage is valid she may not, on the assumption that the rule of endogamy prevails, become a member of the Munda tribe in the strict sense as not having been born in the tribe.
She cannot, however, be_ excluded from the larger group, namely, the tribal community.
The High Court has taken the view that the use oil the term "tribal communities" in addition to the term "tribes" in Article 342 shows that a wide import and meaning should be given to these words and even if the respondent is not a member of the Munda tribe by virtue of birth she having been married to a Munda after due observance of all formalities and after obtaining the approval of the elders of the tribes would belong to the tribal community to which her husband belongs on the anology of the wife taking the husband 's domicile.
Even without invoking the doctrine of domicile the respondent 's marriage with late Shri Jaipal Singh who was a Munda having been approved and sanctioned by the Parha Panchayat of the Munda tribe it can be said that she became a me mber of the Munda tribal community.
We have not been shown any infirmity in the reasoning of the High Court on this point.
When a person, in the course of time, has been assimilated in the community it is somewhat difficult to comprehend how that person can be denied the rights and privileges which may be conferred on that community even though tribal by constitutional provisions.
In the result this appeal fails and it is dismissed but in view of the nature of the points involved we leave the parties to bear their own costs in this Court.
V.P.S. Appeal dismissed.
| IN-Abs | The respondent, who was a Tamil by birth and Christian by religion, had married a member of the Munda Schedule Tribe in the State of Bihar.
On the death of her husband, who was a member of the Lok Sabha, she stood for election from a Parliamentary (Schedule Tribe) Constituency in the State.
Another candidate B filed objections to her nomination that she was not a Munda and her nomination was rejected by the Returning, Officer, and the appellant was elected.
She filed an Election Petition for setting aside the election of the appellant.
She alleged that according to, the Munda Customary Law when a Munda male married outside the tribe, if his marriage was accepted by the tribe, he continued to be a member of the tribe and his wife also acquired its membership, and so, she became a Munda.
In the petition it was also stated that while hearing B 's objections the Returning Officer allowed irrelevant personal aspersions to be cast against her and that the Returning Officer had been influenced by B. The High Court allowed the petition.
Dismissing the appeal to this Court, on the questions : (1) Whether B. was a necessary party to the Election Petition; (2) Whether the marriage of the respondent, who was a divorcee, was a nullity under section 57 of the , in that she married her Munda husband within.
six months from the date of the decree being made absolute; and (3) Whether the petitioner became member of the Munda Tribe, HELD : (1) According to section 82(b) of the Representation of the People Act, 1951, a petitioner must join as a respondent any candidate against whom allegations of any corrupt practices are made in the election petition.
Section 123 deals with corrupt practices.
The essential ingredient of section 123(7) on which reliance was placed, is to obtain, procure etc.
by a candidates of any assistance (other than the giving of a vote)for the furtherance of the prospects of that candidate 's election from any person in the service of the Government and belonging to the classes.
mentioned in the sub section.
In the present case, there was absolutely no allegation or suggestion that the Returning officer was influenced by B for the purpose of rendering assistance for the furtherance of the prospects of a candidate 's election.
The influence, mentioned in the election petition, had reference only to the conduct of the Returning Officer is allowing personal aspersions to be cast against the respondent.
The allegations do not also amount to any suggestion of direct or indirect interference or attempt to interfere on the part of a candidate with the free exercise of any electoral right, and hence, do not amount to undue influence under section 123(2).
Therefore, since there was no allegation of any corrupt practice against B be was not a necessary party.
[366 D H;368 A G] 362 2 The respondent had contracted a marriage with a Member of the Munda Tribe according to Munda rites and ceremonies and not as one ,Christian marrying another Christian.
In the absence of any pleadings .Or issues or material on record to show that in view of the provision, of Is.
57 of the there could not be a valid marriage ,a ccording to Munda customary law, such a contention could not be allowed to be agitated for the first time in this Court.
[369 D G] 3(i) The information contained in authoritative books dealing with Munda Customary Law and the evidence of witnesses who had made special research in the matter, show that : (a) The Mundas are endogamous and intermarriage with non Mundas is normally prohibited; (b) A Munda male along with his family, on marrying a non Munda girl, is often excommunicated or outcasted; (c) the rule of endogamy is, however, not so rigid that a Munda cannot marry a non Munda even after performing special ceremonies; (d) Such marriages have been and are being sanctioned by Parha Panchayat, and (e) Where a Munda male and his family are outcasted for marrying a non Munda they are readmitted .to the tribe after certain special ceremonies are performed.
[376 C F] In the present case, there is no evidence that the deceased husband of the respondent was ex communicated or outcasted because he had married a non Munda; on the contrary, the evidence is that the rule of endogamy has not been observed in a rigid or strict form, and that the marriage was accepted as valid and was approved by the Parha Panchayat and the elders of the Tribe.
Once the marriage of a Munda male with a non Munda female is approved or sanctioned by Parha Panchayat they become members ,of the community.
The contention that a person can be a Munda by birth alone can be sustained only if the custom of endogamy is established with,out any exception.
[377 A D] (ii) Munda is one of the specified tribes or tribal communities in the 'Schedule to the Constitution (Schedule Tribes) Order 1952.
The term 'tribal community ' is of wider connotation than the expression 'tribe '.
A "person who, according to the strict custom of a tribe, cannot be regarded ,as a member of that tribe may be regarded as a member of that tribal community.
Where a non Munda woman is married to a Munda male and the marriage is approved and sanctioned by the Pahra Panchayat of that tribe, and the marriage is valid, she may not, on the assumption that 'the rule of endogamy prevails, become a member of the Munda tribe in the stick sense as not having been born in the tribe.
But a marriage between a Hinduised Munda and a Munda converted to Christianity is permitted.
That being so, the wife cannot be excluded from the large r group, namely, the tribal community.
In the present case the respondent 's manage with a Munda male having been approved and sanctioned by the Pahra panchayat of the Munda tribe, it can be said that she became a member of the Munda tribal community.
When a person, in course ,of time, has been assimilat ed into the community that person cannot be denied the rights and privileges which may be conferred on that community, even though tribal, by Constitutional provisions.
[377 E, H; .378
|
minal Appeal No. 101 of 1969.
Appeal by special leave from the judgment and order dated April 16, 1969 of the Rajasthan High Court in section B. Criminal Appeal No. 558 of 1966.
A. section R. Chari and section B. Wad, for the appellant.
K. B. Mehta, for the respondent.
The Judgment of the Court was delivered by Jaganmohan Reddy, J.
This is an appeal by special leave against the judgment of the Rajasthan High Court.
The accused was initially charged on three counts, firstly, under section 5(2) read with section 5(1)(c) of the Prevention of Corruption Act 1947 (hereinafter referred 'to as 'the Act '), secondly, under section 409, I.P.C., and thirdly, under section 477A, I.P.C. Thereafter on 15 1 1964 another Special Judge charged him on two counts, namely, under section 5 (2) read with section 5 ( 1) (c) and section 5 (2) read with section 5 (1) (w) of the Act.
After the trial, the appellant was, however, convicted under section 409, I.P.C. and section 5(2) read with section 5(1)(c) and (d) of the Act and sentenced to rigorous imprisonment of 18 months and a fine of Rs. 250/ under section 409, I.P.C. and 18 months ' rigorous imprisonment, and a fine of Rs. 250/ under section 5(2) read with sections 5(1)(c) and 5(1)(d) of the Act.
The sentences on both these counts were, directed to run concurrently.
The High Court, however, thought that the Special Judge had not recorded any conviction under section 5(1)(d) of the Act and in that view confirmed the conviction and sentence of the appellant of 18 months" rigorous imprisonment on each of the counts, namely, under 499 section 409, I.P.C. and section 5(2) read with section 5(1)(c) of the Act, but reduced the fine for each of the offences from Rs. 250/ to Rs. 150/ .
The appellant was employed as a Traffic Assistant in the Indain Airlines Corporation 's office at Jaipur and his duty was to make reservations of the passengers intending to go by air and issue tickets.
As it happens, when the quota of seats allotted to Jaipur is full, intending travellers who request for accommodation would be required to pay trunk telephone charges for enabling the Airlines Corporation to obtain release of seats from quotas allotted to other centers.
The practice of the Airlines was to collect the approximate charges and issue a receipt therefore and if a seat was available, the reservation would be confirmed and accommodation given to the passengers if seats could be released from other centers for Jaipur.
The appellant who was incharge of these arrangements between 16 2 62 and 30 8 62, collected Rs. 184.90 towards trunk telephone charges but actually deposited with the Airlines Corporation a sum of Rs. 44.91 and misappropriated the balance of Rs. 139.99.
The modus operendi followed by him, it is alleged, was that he would demand a higher amount for Trunk Call charges than were likely to be incurred and he would issue a correct receipt for those amounts on behalf of the Airlines Corporation but after making the trunk call, he would alter the counter foil with the actual amount of trunk call charges.
On the same day he would make a daily return showing the actual amounts and deposit them with the Cashier.
A typical sample of the receipts given by him on behalf of the Airlines Corporation is Exhibit 40 which is as follows INDIAN AIRLINES CORPORATION NEW DELHI.
No. 354577 Station Jaipur.
Date : 30 8 62.
Received with thanks from M/s. M/Travels, Jaipur sum of Rupees Twenty three and forty nP, being the amount T/Call charges to Udaipur and AMD for re lease of seat.
for INDIAN AIRLINES CORPORATION.
Sd/ Cashier".
Rs. 23.40 On 31 8 62, one M.D. Singh of_the Mercury Travel Agency, Jaipur complained to B.S. Gupta, Incharge of the Office of the Indian Airlines Corporation at Jaipur that the appellant had 500 collected Rs. 23.40 for proposed trunk call charges from the Agency but made no call and no seat was allotted to the passenger of the Mercury Travel Agency even though one was available and that seat was given by B. section Gupta to someone else.
B. section Gupta questioned the appellant who then made; a confession of his having collected the amount but not having made a call.
After making this confession he immediately resigned his job.
A preliminary inquiry was conducted by the Area Manager who thereafter lodged the First Information Report.
The accused denied having collected the amounts or of having issued the receipts and further stated that whatever amounts were; collected by him were paid in the office of the Airlines everyday.
Both the Courts found on the evidence that the appellant used to make trunk calls whenever he was on duty from the Indian Airlines Corporation office at Jaipur for the release of seats and that he would call for and receive trunk call charges from intending passengers.
It was further held proved that the appellant gave receipts Exhibited in the case which were in his own hand writing and signed by him; and that it was he who realised the total sum of Rs. 185/ which was entrusted to him and over which he, had a dominion in his capacity as a public servant.
We have already pointed out that the High Court did not confirm the conviction of the appellant under section 5(2) read with section 5(1)(d) on the assumption that the said Special Judge had not convicted the accused for that offence, and since there is no appeal by the State against this part of the judgment, the contention on behalf of the State that he was convicted under section 5(1)(d) has no merits and cannot be sustained.
On behalf of the appellant it was urged before the High Court that as the appellant had to fare a trial extending over more than 3 years incurring enormous expenses for coming to and from Chandigarh where he was practicing law and was also in Jail for some time, the benefit of the Probation of Offenders Act should be given to him] This contention was rejected because the provisions of that Art were inapplicable in view of his conviction under section 409, I.P.C.
As the offence of criminal breach of trust under section 409, I.P.C. is punishable with imprisonment for life, the High Court, in our view, was right because the provisions of section 4 are only applicable to a case of a person found guilty of having committed an offence not punishable with death or imprisonment for life.
Apart from this reasoning, section 18 of the Probation of Offenders Act makes, the provisions of that Act inapplicable to are offence under sub section (2) of section 5 of the Prevention of Corruption Act.
On behalf of the appellant it is submitted by the learned Advocate that the prosecution case as disclosed by the evidence was that the appellant had collected excess charges from the passengers 501 representing them to be the actual charges for trunk calls and not that any excess over the actual charges would be returned to them.
In view of this evidence, the appellant could not be convicted either under section 5(2) read with section 5(1)(c) of the Act or under section 409, I.P.C. because the important ingredient which is entrustment of the amounts is absent.
In order that any amount can be said to be entrusted it should be lawfully made over, but in this case the appellant obtained the amount by cheating and by the commission of an offence.
If there was no entrustment of the moneys to the appellant, he could not be convicted either under section 409 or under section 5(2) read with 5(1)(c) of the Act and is accordingly entitled to an acquittal on both these charges.
In support of this contention reliance has been placed on Surendra Pal Singh vs The State(1), where a Bench of the Allahabad High Court held that the amounts collected from cultivators by the Canal Amin in excess of the amount actually due from them and misappropriated by him, did not amount to an entrustment as he could not be a trustee of that money on behalf of the cultivators, from whom he realised it because when they banded over the money to the accused, they purported to surrender all their rights in that money, nor could it be said that this money had become the property of the Government at any stage for him to be considered a trustee on its behalf.
This decision was, however, disapproved in The State vs Dahyalal Dalpatram(2), by a Bench of the Bombay High Court, a view with which the High Court agreed.
In that case the accused who was employed as a Talati in the Revenue Department, was invested with the authority to collect land revenue and fines.
He was ordered to recover from the land holders who had defaulted in paying the moneys but having collected them, be did not pay them into the Government Treasury as required by the rules made under the Land Revenue Code.
The accused was convicted under section 409, I.P.C.
On the question that when the accused collected the amount as tax alleged to be due by the land holder though the liability whereof could not be enforced according to law.
could it be said that he was then entrusted with the money, the High Court after noticing that the Allahabad High Court appears to have taken the view that a public servant collecting the money claiming that it was, due to the State but which in fact was not due to the State, could not be regarded as entrusted with the money collected by him, held that that was not a necessary ingredient of section 405.
The learned Advocate sought to distinguish this case on the ground that in the Bombay case there was a definite direction to collect a specific amount and when that amount was collected there was entrustment of that money which was lawfully collected, as such the accused was rightly convicted.
It was further contended that if looked at from the point of view of the passengers from whom (1) A.I.R. 1957 All. 122.
(2) A.I.R. 1960 Bom.
502 trunk call charges were collected, they had not entrusted money to the accused because they had parted with the proprietary rights thereon and if viewed from the point of view of the Airlines Corporation, the money collected did not be come the property of the Corporation and consequently there was no entrustment of it.
There can be no doubt 'that before a public servant can be convicted of an offence under section 5(1)(c) or under section 409, I.P.C. the property which is said to, have been misappropriated must be entrusted to him.
Section 405 merely provides, whoever being in any manner entrusted with property or with any dominion over the property, as the first ingredient of the criminal breach of trust.
The words 'in any manner ' in the context are significant.
The section does not provide that the entrustment of property should be by someone or the amount recieved must be the property of the person on whose behalf it is received.
As long as the accused is given possession of property for a specific purpose or to, deal with it in a particular manner, the ownership being in some person other than the accused, he can be said to be entrusted with that property to be applied in accordance with the terms of entrustment and for the benefit of the owner.
The expression 'entrusted ' in section 409 is used in a wide sense and includes all cases in which property is voluntarily handed over for a specific purpose and is dishonestly disposed of contrary to the terms on which possession has been handed over.
It may be that a person to whom the property is handed over may be an agent of the person to whom it is entrusted or to whom it may belong in which case if the agent who comes into possession of it on behalf of his principal, fraudulently misappropriates the property, he is nonetheless guilty of criminal breach of trust because as an agent he is entrusted with it.
A person authorized to collect moneys on behalf of another is entrusted with the money when the amounts are paid to him, and though the person paying may no longer have any proprietary interest nonetheless the person on whose behalf it was collected becomes the owner as soon as the amount is handed over to the person so authorized to collect of different High Courts in this country for nearly a century, a few of which alone need be examined.
In the matter of Ram Sounder Poddar & Ors.(1), a Deputy Magistrate convicted the accused under section 406, I.P.C., an offence over which he had jurisdiction, instead of under section 409, i.p.c.
which was cognizance only by the Court of Session.
on revision the High Court held that the proceedings were contrary to law and the Deputy Magistrate was directed to commit the accused for trial by the Court of Session.
It appears that the accused who were charged were Treasury employees.
One of the accused (1) 1878 (2) al.
L.R. 515.
503 was allowed to, write the Treasury Cash Book which was the duty of the Treasurer.
Taking advantage of it, he misappropriated Rs. 16/ by scoring off the entry in the account book.
In this misappropriation he was assisted by the other accused who was employed to do stamp work.
While holding the trial to be without jurisdiction, it was observed that section 409 does not as supposed by the Deputy Magistrate, require the property in respect of which criminal breach of trust is committed, to be the property of Government, but only requires that it should be entrusted to a public servant in his, capacity as such public servant.
In re : Ramappa(1), the accused who was the Superintendent of some Coffee Curing Works was convicted of criminal breach of trust by misappropriating a large sum of money made up of amounts which he had received from the Manager on the false pretense that they were required for paying coolies who garbled coffee.
One of the arguments urged against the conviction was that the receipt of the money by false representation amounted to an offence of cheating and that the subsequent appropriation of it by the accused to his own use was not a criminal breach of trust as the criminal intent was present at the time of the receipt of the moneys from the Manager.
Benson and Sundara Aiyar, J., while rejecting that argument, observed: "When the accused received the money he did so as a servant of the Company for the express purpose of using it for his master 's benefit in a particular way.
He was, therefore, entrusted with the money and his appropriating it to himself clearly amounts to criminal breach of trust".
In Venkata Raghunatha Sastri(2), Spencer, J., held that where a person who had pledged promissory notes with another as seenrity for a loan dishonestly induced the latter to hand over the same to him by pretending that he required the same for collecting money from his creditors with the aid of which he would pay cash to the complainant, his act constituted an offence of cheating punishable under section 420, I.P.C. and that when he dishonestly disposed of the notes in violation of his contract with the pledgee to use the money collected in paying off his debt, there was both entrustment and dishonest misappropriation and that the conviction for the offence of criminal breach of trust under section 406, I.P.C. was legal.
Both these cases were referred to in The Crown Prosecutor vs J. McIver and K. section Narasimhachari(3).
The facts in this case also were somewhat similar to those in Venkataraghunatha Sastri 's case (4 ) Madhavan Nair, J (as he then was) examined the meaning of the word 'entrusted ' in section 406 and rejected a similar contention as was urged in this case on behalf of the appellant that when the accused by deceiving the complainant fraudulently and (1) (3) (2) (4) 504 dishonestly induced him to part with the property in question, the offence of cheating was complete and that there is no room for further holding that the accused have committed criminal breach of trust also by their subsequent misappropriation of the property.
In the case before us, the practice which was being followed by the Jaipur office of the Indian Airlines Corporation is spoken to by M. U. Menon, P.W. 6, who was a Personal Assistant to the General Manager of the National Engineering Industries Ltd., Jaipur.
He says that on 16 2 1962 his General Manager had directed him to issue instructions to the accounts branch for arranging for flight tickets by air for Delhi.
He first rang up the Indian Airlines Corporation about the air passage for eight persons and received, a reply from that office that 8 tickets were not available at Jaipur and they would try from Udaipur and Ahmedabad by trunk calls.
After some time the Indian Airlines Corporation people rang up telling him that tickets can be arranged and he should end the money amounting to Rs. 410.50 which included trunk call charges of Rs. 26.50.
He thereupon sent a slip, Exhibit P 6 to the accounts department for further necessary action.
There was no cross examination on behalf of the accused.
Similarly Ganesh Singh, P.W. 3 who is working for the National Engineering Indus ' his people contacted Indian Airlines tries Ltd., Jaipur said that when Corporation on telephone and enquired about the fare etc.
they would ask for trunk call charges along with the amount for tickets.
This would be paid and in fact he pointed out to the accused and said that he might be one of the persons whom he met at the office and after he paid the amounts for the tickets and trunk call charges, he would obtain a receipt and give it to the company.
This evidence read with other evidence which has been accepted by both the Courts would show that whatever may have been the criminal in tention of the accused, the amounts for trunk call charges were demanded on behalf of the Indian Airlines Corporation and were paid to the corporation.
The receipts in respect of the sums were given on behalf of the Corporation and it would be the Corporation that would be liable directly to the person who had paid this amount, if no trunk calls were made, or any excess over the actual amount of the trunk call charges was charged by it.
The amount was not paid by passengers to the accused as such but to the Indian Airline.
,, Corporation and as soon as the receipt for the amount actually received from the passengers was given by the accused on behalf of the Corporation, he was entrusted with that amount.
His subsequent conduct in falsifying the counter foils and fraudulently misappropriating the amounts would make him guilty of criminal breach of trust punishable under section 409, I.P.C. as also under section 5(2) read with section 5(1)(c) of the Act.
There is, therefore, no merit in this appeal and it is accordingly dismissed.
Appeal dismissed.
| IN-Abs | The appellant who was an employee of the Indian Airlines Corporation was convicted under section 409, Penal Code, and section 5(2) read with section 5 (1) (c) of the Prevention of Corruption Act, 1947.
The appellant 's duty was to make reservations for the passengers.
The practice was that whenever the quota was full intending travellers were re quired to pay trunk telephone charges for enabling the Corporation to obtain release of seats from quotas allotted to other centers.
The appellant who was incharge of this arrangement, it was alleged, collected Rs. 184.90 towards trunk telephones charges but actually deposited with the corporation only a sum of Rs. 44.90 and misappropriated the balance.
The modus operandi, it was alleged, was that he would demand a higher, amount for Trunk Call charges than was likely to be incurred and he would issue a correct receipt for this amount on behalf of the corporation but after making the trunk call, he would alter the counterfoil with the actual amount of trunk call charges.
In the appeal to this Court it was urged that since the prosecution case as disclosed by the evidence was that the appellant had collected excess charges representing them to be actual charges for trunk calls and not that any excess over the actual charges would be returned to the appellant he could not be convicted either under section 5(2) read with 5(1)(c) of the Prevention of Corruption Act or under section 409 penal code, because, the important ingredient, viz., entrustment of the amount was absent.
Dismissing the appeal, HELD : (i) The expression, 'entrusted in section 409 is used in a wide sense and includes all cases in which property is voluntarily handed over for a specific purpose and is dishonestly disposed of contrary to the terms on which possession has been handed over.
As long as the accused is given possession of property for a specific purpose or to deal with it in a particular manner, the ownership being in some person other than the accused, he can be said to be entrusted with that property to be applied in accordance with the terms of entrustment and for the benefit of the owner.
It may be that a person to whom the property is handed over may 'cc an agent of the person to whom it is entrusted or to whom it may belong in which case, if the agent who comes into possession of it on behalf of his principal, fraudulently misappropriates the property, he is nonetheless guilty of criminal breach of trust, because, as an agent he is entrusted with it.
A person authorized to collect moneys on behalf of another is entrusted with the money when the amounts are paid to him, and though the person paying may no longer have any proprietary interest, nonetheless, the person on whose behalf it was collected become the owner as soon as the amount is handed over to the person so authorized to collect on his behalf.
[502 D] 498 The State vs Dahyalal Dalpatram, A.I.R. 1960 Bom.
53; In re: Ram Soonder Poddar & Ors.
1878 (2) Cal.
L.R. 515; In re : Ramappa, ; in re : Venkata Raghunatha Sastri, (1923)45 M.L.J. 133 and the, Crown Prosecutor vs J. Mclyer and K. section Narasimhachari, , referred to.
(ii)In the present case the amounts for trunk call charges were demanded on behalf of the Corporation and were paid to the Corporation.
The receipts in respect of the sums, were given on behalf of the Corporation and it would be the Corporation that would be liable directly to ,the person who had paid this amount, if no trunk calls were made, or any excess over the actual amount of the trunk call charges was charged by it.
The amount was not paid by passengers to the accused as such but to the corporation and as soon as the receipt for the amount actually received from the passengers was given by the accused on behalf of the corporation, he was entrusted with that amount.
His subsequent con.duct in falsifying the counterfoils and fraudulently misappropriating the amount would make him guilty of criminal breach of trust under section 409 I.P.C., as also under section 5(2) read with section 5(1)(c) of the Act.
[604 E H]
|
Appeals Nos.
109 to 115 of 1952.
Appeals from the Judgment and Decree dated the 9th day of March 1950 of the High Court of Judicature at Calcutta in Appeal from Appellate Decree Nos.
1841 1847 of 1945 arising out of the Decrees dated the 16th day of September 1944 of Munsiff 3rd Court, Burdwan.
P. K. Chatterjee, for the appellant.
section C. Das Gupta, (Sukumar Ghose, with him), for the respondents in Civil Appeals Nos.
109 to 112 of 1952 and respondents 1, 2(a), 3 and 4 in Civil Appeal No. 113 of 1952 and respondents 1 and 3 in Civil Appeals Nos. 114 and 115 of 1952.
December 20.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
The appellant is the Mahant of a religious institution known as Rajgunj Asthal in Burdwan, and the suits out of which the present appeals arise, were instituted by him to recover possession of various plots of land in the occupation of the defendants, or in the alternative, for assessment of fair and equitable rent.
It was alleged in the plaints that the suit lands were comprised in Mouza Nala forming part of the permanently settled estate of Burdwan, and were Mal lands assessed to revenue, and that more than 200 years previously there had been a permanent Mokarrari grant of those lands by the Maharaja of Burdwan to the Rajgunj Asthal; that in the record of rights published during the settlement in 1931 they were erroneously described as rent free, and that on the strength of that entry the defendants were refusing to surrender possession of the lands to the plaintiff.
It was accordingly prayed that a decree might be passed for eject ment of the defendants, or in the alternative, for assessment of a fair and equitable rent.
1170 The defendants contested the suits, and pleaded that the lands were not Mal lands comprised within Mouza Nala, that they did not form part of the zamindari of Burdwan but had been granted as Lakheraj to their predecessors in title long prior to the permanent settlement, that neither the Maharaja of Burdwan nor the plaintiff claiming under him had any title to them, and that the entry in the record of rights in 1931 was correct.
The defendants also pleaded that as they and their predecessors had been in possession of the lands for over 200 years under assertion of an adverse title, the claim of the plaintiff was barred by limitation.
The District Munsif of Burdwan who tried the suits held that the lands were included in Mouza Nala in Thouzi No. 1, which was comprised in the permanently settled estate of Burdwan, that their income was taken into account in fixing the revenue payable by.
the estate., that they had been granted in permanent Mokarrari by the then Maharaja of Burdwan to the Rajgunj Asthal, and that the plea of the defendants that they held them under a Lakheraj grant made prior to the permanent settlement was not true.
He also held that the documents on which the defendants claimed to have dealt with the properties as owners under assertion of an adverse title were not proved to relate to the suit lands, that the relationship subsisting between the parties was one of landlord and tenant, that as there had been no determination of tenancy, no decree in ejectment could be passed but, that the plaintiff was entitled to fair rent, and that the claim was not barred by reason of article 131 of the Limitation Act.
In the result, he granted decrees for rent.
The defendants appealed against this decision to the Court of the District Judge of Burdwan, who agreed with the District Munsif that the suit lands were Mal lands within the zamindari of Burdwan, and that they had been settled on the plaintiff by the Maharaja of Burdwan.
But he held that as the defendants and their predecessors had been in posses sion of the lands for a very long time without 1171 payment of rent, a presumption of a lost grant could be made in their favour.
He accordingly dismissed the suits.
Against this decision, the plaintiff appealed to the High Court, which agreeing with the District Judge on both the points dismissed the appeals, but granted a certificate under article 133(1) (c), as it was of the opinion that the question of lost grant raised an issue of great importance.
The substantial question that arises for our decision is whether on the materials on record the Courts below were right in presuming a lost grant in favour of the defendants.
The grounds on which the District Judge made that presumption are that the defendants, and their predecessors had been in possession of the lands for a long time without payment of rent, that they had been asserting continuously that they were holding under a Lakheraj grant, and that they did so to the knowledge of the plaintiff.
It must be mentioned that in dealing with this question the District Munsif held that the documents put forward by the defendants as containing assertions by them that they held under a Lakheraj grant were not shown to relate to the suit lands.
The District Judge differed from this finding, and observed: ". . . there are some unmistakable names of tanks, etc., by which some of the lands of these documents at least can be connected with the suit lands . .
These documents relating to these holdings cannot, therefore, be discarded as unconnected with the suit lands".
These observations are vague, and do not lead anywhere, and cannot be taken as a finding on the question.
No attempt was made before us on behalf of the respondents to connect any of the documents with the lands held by them.
In the circumstances, the finding of the District Munsif on the point must be accepted.
On the further question whether the plaintiff had knowledge of the assertion of any hostile title by the defendants, the learned District Judge answered it in the affirmative relying on Exhibits A to A 24, 150 1172 which are receipts for realisations of cesses from the defendants.
But the High Court held and its finding has not been attacked before us that there was no proof of the contents of these documents, and that they must therefore be excluded.
The position thus is that there is no proof that the respondents set up any adverse title prior to 1931, much less that the plaintiff bad knowledge of the same.
We are therefore left with a bare finding that the defendants and their predecessors in title had been in possession for a long period without payment of rent; but here again, there is no finding as to the precise length of time during which they held possession.
The question is whether in this situation a presumption of lost grant could be made.
The circumstances and conditions under which a presumption of lost grant could be made are well settled.
When a person was found in possession and enjoyment of land for a considerable period of time under an assertion of title without challenge, Courts in England were inclined to ascribe a legal origin to such possession, and when on the facts a title by prescription could not be sustained, it was held that a presumption could be made that the possession was referable to a grant by the owner entitled to the land, but that such grant had been lost.
It was a presumption made for securing ancient and continued possession, which could not otherwise be reasonably accounted for.
But it was not a presumption juris et de jure, and the Courts were not bound to raise it, if the facts in evidence went against it.
"It cannot be the duty of a Judge to presume a grant of the non existence of which he is convinced" observed Farwell, J. in Attorney General vs Simpson(1).
So also the presumption was not made if there was any legal impediment to the making of it.
Thus, it has been held that it could not be made, if there was no person competent to be the recipient of such a grant, as where the right is claimed by a fluctuating body of persons.
That was held in Raja Braja Sundar Deb vs Moni Behara and others(1).
There will likewise be no scope for this (1) , 698.
(2) ; , 416.
1173 presumption, if there is no person capable of making a grant: (Vide Halsbury 's Laws of England, Vol.
IV, page 574, para 1074); or if the grant would have been illegal and beyond the powers of the grantor.
[Vide Barker vs Richardson(1) and The Rochdale Canal Company vs Radcliffe(1)].
In the light of these principles, it has now to be seen whether on the facts found a lost grant could be presumed in favour of the defendants.
The finding is, as already stated, that they were in possession without payment of rent for a considerable length of time, but it has not been established precisely for how long.
In their written statements they pleaded that they bad been holding under a Lakheraj grant made prior to the permanent settlement, and had been in possession by virtue of that title for over 200 years.
On this plea, the grant to be presumed should have been made 200 years prior to the suit.
There is an obvious difficulty in the way of presuming such a grant on the facts of this case.
There was a permanent settlement of the zamindari of Burdwan in 1793, and it has been found by all the Courts that in that settlement the suit lands were included as part of the Mal or assessed lands of the estate.
Now, the scheme of the settlement of the estates was to fix the revenue payable thereon on the basis of the income which the properties were estimated to yield, and Regulation No. 8 of 1793 contains elaborate provisions as to how the several kinds of property are to be dealt with.
Section 36 of the Regulation provides that "the assessment is also to be fixed exclusive and independent of all existing lakheraje lands, whether exempted from the kheraje (or public revenue) with or without due authority".
Therefore, when it is shown that lands in an estate are assessed, it must follow that they could not have been held on the date of the permanent settlement as Lakberaj.
It would be inconsistent with the scheme of the settlement and section 36 of Regulation No. 8 of 1793 to hold that the assessed or Mal lands in an estate could have been held on an anterior Lakheraj grant.
It was for this (1) (2) [18521 18 Q. B. 287.
1174 reason that the defendants pleaded that the suit lands were not comprised in the Mal lands of the zamindari of Burdwan.
But that plea has been negatived, and it has been found that they are part of the Mal lands within the zamindari assessed to revenue, and in view of that finding there is no scope for the presumption of a lost grant.
Learned counsel for the respondents relied strongly on the record of rights made in 1931 with reference to the suit lands as supporting his contention.
The entry in question describes the lands as "Bhog Dakhal Sutre Niskar", and has been translated as "without rent by virtue of possession and enjoyment".
The plaintiff attacked this entry as made at the instance of the defendants acting in collusion with one of his agents.
The Courts below, however, have held that had not been established, and therefore the entry must be taken as properly made.
The respondents contended that a strong presumption should be made in favour of the correctness of the entry, because it was made in the ordinary course of business, and that it was sufficient to sustain a presumption of lost grant.
Giving the entry its full value, does the word "Niskar" import a rent free grant? Rule 37 of the Technical Rules and Instructions issued by the Settlement Department for observance by the settlement authorities provides that if property is found in the possession of a person who is not actually paying rent for it should be described as "Niskar", and if no sanad or title deed is produced by the occupant showing a rent free title, the words "Bhog Dakhal Sutre" (by virtue of enjoyment and possession) should be added.
In the written statement it was stated that (as the defendants could not produce any 'revenuefree grant ' they (Settlement Officers) recorded Niskar Raiyati right in a general way".
Reading Rule 37 along with the written statement it is clear that the entry in the record of rights in 1931 was made in compliance with that Rule, and that what it imports is not that there was a rent free grant, but that the person in possession was not actually paying rent.
Whatever weight might attach to the word "Niskar" in a 1175 record of rights in other context, where the question is whether a presumption of a lost pre settlement Lakheraj grant could be made, the inference to be drawn from that word cannot outweigh the effect of the non exclusion of the lands from the Mal or the regularly assessed estate.
We are therefore of opinion that a presumption of lost grant cannot be founded on the entry in the record of rights.
There are also other difficulties in the way of presuming a lost grant in favour of the predecessors of the defendants.
The suit properties formed part of Mauza Nala within the zamindari of Burdwan, and if a grant had been made in favour of the predecessors of the defendants, it must have been made by the Maharaja of Burdwan or by the Rajgunj Asthal.
But the defendants have in their written statements denied the title of both the Maharaja and the Asthal, and having failed in that plea, cannot fall back on a presumption of lost grant by the very persons, whose title they have repudiated.
This does not exhaust all the difficulties of the defendants.
According to the District Judge, the suit properties had been settled on the Rajgunj Asthal more than 200 years ago.
Therefore, the grant to be presumed must have been made by the Mahant of Asthal in favour of the predecessors of the defendants.
But before raising such a presumption, it must be established that the grant was one which could have legally been made by him.
It is well settled that it is beyond the powers of a manager of a religious institution to grant perpetual lease binding the institution for all times to a fixed rent, unless there is a compelling necessity or benefit therefor.
Vide Palaniappa Chetty vs Sreenath Devasikamony(1).
And what is pleaded in the present case is not even so much as a permanent lease, because there is neither premium paid nor rent reserved but a Lakheraj grant unsupported by any consideration.
That would clearly be beyond the powers of a Mahant, and no presumption of a lost grant could be made in respect thereto.
In Barker vs Richardson(2) , an easement was claimed (1) [1917] L.R. 44 I.A. 147.
(2) , 1176 both on the ground of prescription and presumption of a lost grant by a rector.
In negativing this claim, Abbot, C. J. observed that a grant could not be presumed, because the rector had no right to bind his successor by it, and it would therefore be invalid.
In The Rochdale Canal Company vs Radcliffe(1) where the Court was asked to presume that a company had made a grant of its surplus waters for use by the Duke of Bridgewater, Lord Campbell, C. J. observed that "if they had made a grant of the water in the terms of this plea, such a grant would have been ultra vires and bad", and on that ground, he refused to raise the presumption.
We are accordingly of opinion that on the facts found, no presumption of a lost grant could be made in favour of the defendants, and that the plaintiff was entitled to assessment of fair and equitable rent on the holdings in their possession.
Learned counsel for the respondents also raised the plea of limitation.
The Courts below have held that the suits were within time under article 131 of the Limitation Act, as the final settlement of records was published on 16 6 1931, and the present suits were filed within 12 years thereof for establishing the right of the institution to assessment of rent.
It was observed by the learned Judges of the High Court who heard the application for leave to appeal to this Court that it was not suggested before them that the decision on the question of limitation was erroneous.
The contention that is now pressed before us is that in the view that there was no rent free grant in favour of the predecessors of the defendants they were all trespassers, and that the title of the Asthal had become extinguished by adverse possession for long over the statutory period.
But the question of adverse possession was not made the subject of an issue, and there is no discussion of it in the judgments of the Courts below.
We have already held that the documents relied on by the defendants as containing assertions that they held under a Lakheraj grant are not shown to relate to the suit lands.
We (1) ; , 1177 have also held that there is no proof that the defendants claimed to hold under a rent free grant to the knowledge of the plaintiff prior to 1931, and that what all has been established by them is non payment of rent for a considerable but unascertained period of time.
That, in itself, is not sufficient to make their possession adverse.
It was only in 1931 that the defendants could be said clearly to have asserted a hostile title, and the suits are within time from that date.
There is no substance in this plea, which is accordingly rejected.
In the result, the appeals are allowed, the decrees ,of the District Court and of the High Court are set aside, and those of the District Munsif restored with costs in this Court and in the two Courts below.
The decrees of the District Munsif will stand as regards costs in that Court.
Appeals allowed.
| IN-Abs | A presumption of a lost grant arises in favour of a person who does not claim adversely to the owner but who on the other hand proves ancient and continued possession in assertion of a title derived from the owner without any challenge and such possession and assertion cannot be accounted for except by referring to a legal origin of the grant claimed.
But the presumption of a lost grant is not an irrebuttable presumption of law and the court cannot presume a grant where it is convinced of its non existence by reason of a legal impediment, as where the presumption of a lost grant is claimed by a fluctuating body of persons.
Similarly a presumption of a lost grant cannot arise when there is no person capable of making such a grant or if the grant pleaded is illegal or beyond the powers of the grantor.
A presumption of a lost grant by way of Niskar cannot be im puted to the Mohunt of an Asthal inasmuch as he is legally incompetent to make any Niskar grant.
When a defendant who denies the title of the plaintiff in respect of any land, fails in that plea, he cannot fall back on the presumption of a lost grant from the very person whose title he has denied.
Findings of fact arrived at by courts should not be vague.
Attorney General vs Simpson ([1901] , Raja Braja Sunder Deb vs Moni Behara and others ( [1951] S.C.R. 431), Barker vs Richardson ( , The Rochdale Canal Com 1169 pany vs Radcliffe ([1852] IS Q.B. 287), and Palaniappa Chetty vs Sreenath Devasikamony ( [1917] L.R. 44 I.A. 147), referred to.
|
Appeals Nos. 1291 and 1292 of 1967.
Appeals by special leave from the award dated June 30 1967 of the Additional Industrial Tribunal, Bangalore in A.I.D. Nos.6 ',and 8 of 1966.
O. P. Malhotra and D. N. Gupta, for the appellant.
I. N. Keshava and K. Rajendra Chowdhary, for respondents Nos.2 and 3.
Vineet Kumar, for respondents Nos. 4 to 10.
On December 8, 1965, the Government of Mysore referred to the Industrial Tribunal for adjudication the following question "Is the Management of the Bangalore Woollen, Cotton and Silk Mills Company Limited, Bangalore, justified in announcing payment of one month 's basic wages as advance against wages for the half year ending June 1965 instead of declaring this payment as an ad vance against payment of bonus as was being, done all these years ? If not, what other relief the workers are entitled to.
This was numbered as Reference No. A.I.D. 6 of 1966.
Civil Appeal No. 1291 of 1967 is directed against that part of the order of the Tribunal regarding this Reference.
On March 5, 1966, the Government of MysorE referred to the same Tribunal for adjudication the following question "Whether the demand of the workers of Bangalore Woollen, Cotton and Silk Mills Co., Ltd., Bangalore, for additional bonus for the year 1962 and 1963 at the rate of 2 months additional bonus and4 months additional bonus on total wages respectively is justified.
If not, to what other relief or reliefs are the workmen entitled ?" This Reference was numbered as A.I.D. 8 of 1966.
Civil Appeal No. 1292 of 1967 is directed against that part of the order of the Tribunal regarding this Reference.
Both the appeals are by the Company.
We will first take up Civil Appeal No. 1291 of 1967.
appellant was making two payments of bonus every year, one for the half year ending 30th June and half year ending 30th December.
The accounting year is the Calendar year.
The half yearly payments were unilaterally declared by the appellant and not on the basis of any agreement between the parties.
The quantum of bonus that was paid for each half year was also not constant.
Half yearly payments were made at the end of the half year when 466 the working result of the said year was known and if there was sufficient profit to pay bonus.
The payment of bonus for the half years also depended upon the approximate estimate that the Directors used to make about their prospective future earnings for next half year.
According to the appellant the bonus amounts were paid out of profits.
As the (hereinafter to be referred as the Act) had come into force on August 28, 1965, the appellant issued a circular to the effect that for the half year ending June 30, 1965, payments will be made as advance of wages equivalent to 1/6th of the basic earnings of the employees.
In this circular there is a reference to the Payment of Bonus Ordinance 1965, promulgated on May 29, 1965 and that under the terms of the Ordinance, bonus is payable only within a period of 8 months from the end of the accounting year.
The circular further states that no bonus is payable for the accounting year 1965 until the accounts for the year are closed.
It was further mentioned that the amounts are paid as advance wages in view of the representations made by the employees.
The circular further mentioned that the amounts paid as advance wages will be set off against the bonus that may be found payable for the ac counting year 1965 and that if no bonus is payable, the amount paid will be adjusted against the wages due for any month after March, 1966.
The issue of the above circular led to the Unions concerned raising a dispute with the Management that the payment of bonus at the end of each half year has become a condition of service of the workmen as the same was being paid for several decades without any relation to profits.
The appellant was charged by the Unions of having changed the conditions of service by offering to make payments as advance against wages instead of payment by way of bonus.
As conciliation proceedings failed, the workmen resorted to a strike in December 1965, which led to the Reference being made by the State Government on December 8, 1965, No. A.I.D. 6 of 1966.
The short stand taken by, the appellant before the Tribunal was that the payments were being made as bonus at the end of each half year on the basis of the profits earned by the Company.
Such payment was a voluntary act of the appellant and related to profit and it had not become a condition of service of the employees.
The further case of the appellant is that as the Act had come into force, bonus is governed by the provisions of the Act and that bonus is to be paid only within eight months after the close of the year of account, i.e., December 31, 1965.
The Unions pleaded that the payment of bonus at the end of each half year, which was being done for a long number of years, 467 has become a condition of service and the amounts paid were not related to the profits earned by the Company.
The Unions further contended that the Act has not in any manner affected the right of the employees getting bonus in the manner paid by the appellant namely , at the end of every half year.
The Tribunal has recorded the following findings : The pay ment of bonus was not a settled condition of service, but is dependent upon the profits earned during the half year.
Payments made by the appellant at the close of the half year cannot be considered as customary or festival bonus and that the appellant has made no change in the conditions of service of the workmen by altering the quantum of bonus.
Though bonus was paid at the close, of each half year, the quantum of such bonus varied depending upon the profits earned by the Company.
The Company has no doubt been paying for a long time profit bonus in two instalments, namely, in the month of August for the half year ending 30th June and in the month of March or April of the succeeding year for the half year ending 31st December.
The coming into force of the Act has, not created any right in the appellant to withhold the payment for each half year as it used to do.
The appellant will be entitled to deduct the amount of bonus paid for the first half year from the amount of bonus payable to its, employees under the Act in respect of the accounting year and the employees will be entitled to receive only the balance for the second half year.
On these findings the Tribunal held that the appellant was not justified in announcing the payment of the amount towards advance wages under the circular dated August 28, 1965.
In the end the Tribunal gave a direction to the effect that the appellant is liable to pay profit bonus in two instalment as advance against the final declaration of bonus to be paid during the last week of August or first week of September and the balance, if any, was to be paid in the month of March or first week of April of the succeeding year.
It further gave a direction that the first payment that is to be paid is to be as advance against payment of bonus and not as against wages.
Mr. Malhotra, learned counsel for the appellant, has chal lenged the above directions given by the Tribunal.
The counsel pointed out that after the coming into force of the Act, the rights and liabilities of the parties, regarding bonus, are governed by its provisions.
Under the Act, the computations of the available and allocable surplus have to be made on the basis of the gross profits ascertained at the end of the relevant accounting year and the payment of bonus has to be made within eight months of the close of the accounting year.
As the Act envisages payment of only one bonus, at the end of the accounting year, after computation of the amount as per the Act, the direction given by the Tribunal 468 regarding payment of half yearly bonus is illegal and contrary to the provisions of the Act.
This direction, the counsel pointed out, given by the Tribunal, will apply not only to the year 1965, but also to all succeeding years.
On the other hand, Mr. H. K. Puri, learned counsel for the respondents Nos. 2 and 3, whose contentions have been accepted by the, counsel for the other respondents, urged that the Act does not prohibit an employer from paying bonus at the end of each half year.
The appellant has been paying bonus in two installments, namely, at the end of each half year.
It is always open to the appellant, both by virtue: of the provisions of the Act and the direction given by the Tribunal to deduct when paying final bonus at the end of the accounting year, any amounts that may have been paid for the first half year.
Therefore, according to Mr. Puri, the directions given by the Tribunal are neither illegal nor contrary to the provisions of the Act.
We are not inclined to accept the contention of Mr. Puri.
We have already referred to the findings of the Tribunal to the effect that the amount that was paid by the appellant as bonus at the end of each half year was on the basis of the profits earned by it The Tribunal has rejected the claim of the Unions that the payment of bonus, in the manner claimed by them, was not a condition of service and that the payment had nothing to do with any custom or festival.
These findings have not been and in fact could not be challenged by the respondents.
There is also no controversy that payment of bonus for the accounting year 1965 is governed by the provisions of the Act.
If so, the question is whether the directions given by the Tribunal and referred to above, can be supported by the provisions of the Act.
The Act has come into force with effect from August ' IS, 1965.
As provided under sub section (4) of section 1, it applies to all accounting years commencing on any day in the year 1964 and in respect of every subsequent accounting year.
Section 2 defines amongst others the expressions, "accounting year", "allocable surplus", "available surplus" and "gross profits" Section 4 deals with the computation of gross profits.
So far as the appellant is concerned; under section 4, cl.
(b) the gross profits are to be calculated in the manner specified in the Second Schedule.
Section 5 provides for computation of available surplus.
It is to be ascertained after deducting from the gross profits the various items, referred to in section 6.
Section 6 deals with the items to be deducted as prior charges from the gross profits.
Section 10 makes it obligatory on an employer to pay minimum bonus to the employees in an accounting year of 4% of his salary or wages or Rs. 40/ whichever is higher.
This payment is irrespective of the 469 fact whether a Company has or has not earned profits in an accounting year.
But this provision is subject to the provisions of sections 8 and 13.
Section 11 provides for payment of bonus subject to a maximum of 20% of the salary or wages, if the conditions mentioned therein are satisfied.
Section 17 enables an employer, who has paid during any accounting year Puja Bonus, or other customary bonus or a part of the bonus payable under the Act before the due date, to deduct the amount so paid from the amount of bonus payable by him to an employee under the Act in respect of that accounting year.
It further provides that under such circumstances the employee will be entitled to receive only the balance.
Section 19 fixed the time limit for payment of bonus.
If there is a dispute regarding payment of bonus pending before any authority, the bonus will have to be paid within a month from the date, on which the Award becomes enforceable or the settlement comes into operation.
In any other case the bonus will have to be paid within a period of eight months from the close of the accounting year.
Under the proviso to section 19, power is given to the appropriate Government to extend the period of eight months in accordance with the provisions contained therein.
Section 34 provides that the Act except as otherwise provided in the section, shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the terms of any Award, agreement, settlement or contract of service made before May 29, 1965.
We have referred to some of the relevant provisions of the Act.
From a perusal of the scheme of the Act, it is clear that the bonus for a particular accounting year will have to be computed in accordance with the provisions of the Act on the basis of the gross profits which are determined at the close of the accounting year.
The Act itself provides as to how the gross profits are to be calculated and the available and allocable surplus arrived at The Act also provides the outer limit, the period within which bonus has to be paid.
It further gives the employer a right to deduct any amount that any have been paid during the accounting year as part of the bonus payable under the Act.
It will be seen from the scheme of the Act that the claim for bonus can be made only after the close of the accounting year and in accordance with the provisions of the Act.
The gross profits can be calculated only at the end of the accounting year and the available and allocable surplus can also be worked out only at the end of the accounting year.
There is no question of an employer computing the gross profits,, available and allocable surplus in the middle of an accounting year or at any time before the close of the relevant accounting year.
The direction given by the Tribunal really amounts to the employer having to make, two 831 Sup CI/72 470 computations at the end of each half year.
No doubt the Tribunal has given a direction to the effect that any amount paid for the first half year can be deducted when the final bonus is paid at the, end of the accounting year.
Even without any such consideration being shown by the Tribunalallowing an employer to so deduct section 17gives such a right to an employer.
We are not impressed with thecontention of Mr. Puri that as there is no prohibition in theAct against an employer making the payment by way of bonus at the end of a half year, the direction given by ' the Tribunal can be sustained.
Mr. Puri referred us particularly to the provisions contained in section 17 of the Act.
He pointed out that though a time limit is fixed by section 19, the Act itself as is evident from section 17, clearly envisages payment of bonus at the end of each half year.
We are not inclined to accept this contention of Mr. Puri.
The direction given by the Tribunal making it obligatory on the Management to make half yearly payment of bonus apart from being opposed to the scheme of the Act, also runs counter to the provisions of section 19.
Whether it is the minimum bonus of, 4% under section 10 or ' the maximum bonus of 20 % under section 11, they have to be paid, as, is made clear by s ' 19, only within the period mentioned therein. ' It may be that an employer voluntarily pays amount during the accounting year by way of part bonus which he is entitled to take into account and adjust when making final payment at the close of the accounting year.
It is one, thing to say that an employer can make voluntary payment, but it is a different thing for the Tribunal to give a direction to that effect.
Section 17 on which reliance, is placed by Mr. Puri is as follows: "Where in any accounting year (a) an employer has paid any paid bonus or other customary bonus to an employee; or (b) an employer has paid a part of the bonus payable under this Act to an employee before the date on which such bonus becomes payable, then, the employer shall be entitled to deduct amount of bonus so paid from the amount of bonus payable by him to the employee under this Act in respect of that accounting year and the employee shall be entitled to receive only the; balance.
Clause (a)has no application as the Tribunal has categori cally held that there is question of any payment by way of puja bonus, or other customary bonus.
Even then if any such bonus 471 has been paid the employer is entitled to deduct the same from the amount of bonus payable under the Act.
Clause (b) is an enabling section in favour of the employer in that it visualizes a situation or contingency where he may have paid during the accounting year a part of bonus payable under the Act "before date on which such bonus becomes payable".
If an employer has paid any amount during an accounting year by way of part of the bonus, he, is entitled lo deduct the same from the final amounts that may be payable under the Act.
That provision does not give a right to an employee to claim payment of bonus even by way of part payment during the currency of the accounting year.
If so, the Tribunal has also no jurisdiction to give a direction to an employer to pay bonus at the end of each half year.
In this case,it is no doubt, seen that the appellant has been paying bonus atthe end of each half year.
But the Tribunal has found that suchpayment has not become a condition of service.
Therefore by the mere fact that the appellant has been making payments on previous occasions every half yearly, does not confer a right on the employee to have such payments by way of bonus in the same manner even after the Act came into force,.
From the above discussion it follows that the directions given, by the Tribunal in A.I.D. No. 6 of 1966 have to be set aside.
Now coming to Civil Appeal No. 1292 of 1967, as mentioned earlier, it is against that part of the Award of the Tribunal in A.I.D. No. 8 of 1966.
The question that was referred to the Tribunal has also been extracted in the earlier part of the judgment.
That relates to a claim for additional bonus for the years, 1962 and 1963, There is no controversy that the appellant has already paid for the year 1962, three months basic wages as bonus.
Similarly for the year 1963 also four months basic wages as bonus has already been paid.
The claim was for, two months total wages as additional bonus for the year 1962 and four months ' total wages as additional bonus for the year 1963.
The findings recorded by the Tribunal in A.I.D. No. 6 of 1966 regarding the nature of bonus paid to the employees have been adopted for this reference also.
The respondents Unions do not challenge those findings.
Therefore, even in respect of the years 1962 and 1963, what is payable is only profit bonus.
There is also no controversy that for these two years the quantum of bonus payable has to be calculated in accordance.
with what is known as the Labour Appellate Tribunal Full Bench Formula, which has been approved by this Court in The Associated Cement Companies Ltd. Dwarka Cement Works, Dwarka vs Its Workmen and Another(1).
Both the parties have filed statements of calculations according to (1) 472 the said Formula.
The statements Exs.
M. 1 and M.2 filed by the Management represent the computation of available surplus for the years ended December 31, 1962 and 1963 respectively.
exhibit M. 1 is as follows : "THE BANGALORE WOOLLEN, COTTON & SILK MILLS CO. LTD.
Statement showing the computation of available surplus for the year ended 31st December, 1962 (Under L.A. T. Formula) Profit as per profit and loss Account6801756 Add: Provision for Bonus 1614000 Depreciation on Fixed Assets 1696481 Donations 107362 Additional Bonus for 1961 146000 3563843 10365599 .Less: Profit on sale of assets 1745426 8620173 Less Normal Depreciation and Shift Allowance1465812 7154361 Less: Tax Liability Profit as above 7154361 Less Development Rebate 586415 6567946 Income tax Liability at 50 Y. on Rs. 65534083276704 Income Tax at 25 % on Rs.145383635 65679463280339 Super Profits Tax on Rs. 6553408409158 3689497 Return on Capital employed Preference Share Capital 78 %.
on Rs. 60000046800 ordinary Share Capital 729000 6% on Rs. 12150000 Reserves employed in the business 4% on Rs. 469379 471787 3325545336244030 Available Surplus.
910331 Subject to claim for rehabilitation.
473 We have prepared the above statement from the audited accounts of the Company and is in accordance therewith.
The return on Capital and Reserves is as claimed by the Company.
Sd/Illegible Chartered Accountants." Similarly exhibit M2 regarding the year 1963 is as follows : "THE BANGALORE WOOLLEN, COTTON & SILK MILLS CO. LTD.
Statement showing the computation of available surplus for the year ended 31st December 1963 (Under L. A. T. Formula) Profit as per Profit and Loss Account 5239220 ADD : Provision for Labour Bonus 2245000 Depreciation on Fixed Assets 1733719 Donations 8804 Provision for Taxation 8110000 12097523 17336743 LESS: Profit on Sale of Assets 83093 Excess Provision of Electricity charges and interest written back 675184 758277 16578466 LESS: Normal depreciation and Shift Allowance 1647555 14930911 LESS Tax Liability Profit as above 14930911 Less Development Rebate 460548 14470363 Income tax Liability at 50% on Rs. 14455825 7227912 25 % on Rs. 145383635 Dividend tax 164025 Companies (Profit) Surtax Liability on Rs. 1445582 51786212 9181784 Return on Capital Employed Preference Share Capital 7 .8 % on Rs. 600000 46800 Ordinary Share Capital 6 Y. on Rs. 12150000 729000 Reserves employed in the business 4 % on Rs. 46937947 .1877518265331811835102
Available surplus 3095809 Subject to claim for rehabilitation.
474 We have prepared the above statement from the audited accounts of the company and certify that it is in accordance therewith.
The return on capital and reserves is, as claimed by the company.
illegible Chartered Accountants.
The Tribunal has accepted as correct the gross profits as given by the appellant in these, two exhibits for the two years in question.
Even though the Unions contested the return on Preference Share Capital at 7.8%, the Tribunal has rejected their objections.
it has held that under the Preference Share Regulations Act, the Company is bound to pay 7.8% on Preference Share Capital.
Ile Workmen did not raise any controversy regarding the return on Ordinary Share Capital at 6%.
The Tribunal, therefore, accepted the figures given in both Exs.
M. 1 and M. 2 and to the return of Ordinary Share Capital.
But the controversy arose about the claim made by the appellant regarding return on Reserves employed during the two years.
It will be noted that neither in exhibit M. 1 nor in exhibit M. 2 the appellant has made any claim for rehabilitation excepting adding a note to the statement that they are subject to a claim for rehabilitation.
The two points in controversy between the parties regarding these two years were (1) The claim for Return on Reserves and (2) Provision for Rehabilitation.
We will first take up the question regarding the claim of the appellant for return on Reserves.
In exhibit M. 1, the appellant has claimed a sum of Rs. 178733.00 as 4% return on Rs. 44468315.00 being the amount employed in business.
Similarly in exhibit M.2, for the year 1963, it had claimed Rs. 1877518.00, being 4% return on Reserves on Rs. 46937947.00, employed in the business.
The Unions contested the claim of the appellant on the ground that they are not entitled to any return on Reserves.
The appellant had filed two statements Exs.
Ml (a) and M.2(a) for the years 1962 and 1963 respectively, showing how the amounts claimed as Reserves employed in business have been arrived at exhibit M. 1 (a).
for the year 1962 is as follows THE BANGALORE WOOLLEN, COTTON & SILK MILLS CO. LTD.
Year ended 31st December 1962.
Reconciliation of Capital employed in the business during the year ended 31st December.
475 "As at 31 12 1961: Fixed Assets and Capital Works 43139570 in Progress Investments 595216 Interest accrued on Investments 17477 Stores and Spare parts 6179042 Raw Materials 6886058 Process Stocks 5053558 Finished Stocks 1381082 Sundry Debtors 2473722 Advances 2768233 Balance with Railway and Excise Authorities 292529 Deposits 18993 68806470 LESS Sundry Creditors 7077709 Due to Directors 63744 Unclaimed Dividends 18257 Provision for Taxation 1057850 Proposed Dividends 1481400 Provision for Gratuity 1860431 Officer 's Retiring Fund 26764 (Fund loss investments) 11588155 57218315 LESS: Share Capital 12750000 Rs. 44468315" Exhibit M.2(a) for the year 1963 is as follows "THE BANGALORE WOOLLEN, COTTON & SUR MILLS CO. LTD.
Year ended 31st December, 1963.
Reconciliation of Capital employed during the year ended 31 12 1963.
As at 31 12 1962 45229453 Investments 548575 Interest accrued on Investments 8703 Stores and Spare Parts 6553343 Raw Materials 4701434 Process Stocks 7285534 Finished Stocks 1688931 Sundry Debtors 3429299 Advances 3165324 Balances with Railway and Excise Authorities 346450 .Deposits 24234 729811280 476 LESS: Sundry Creditors 7686123 Due to Directors 65278 Unclaimed Dividends 22837 Provision for Taxation 2305645 Proposed Dividends 1481400 Provision for Gratuity1 706251 Officers Retiring Fund 25799 (Fund less investments) 13293333 59687947 Less Share Capital 12750000 Rs. 46937947" It will be seen that the last figures shown in both the statements have been claimed by the appellant as Reserves employed in business for each of these two years.
The Tribunal after a reference to the evidence of the Char tered Accountant,, M.W.1, has held that the amounts which should have been used as Working Capital are those mentioned in Exs.
M.1(a) and M.2(a), less the fixed assets and capital works in progress.
The Tribunal has further held that the working capital cannot include fixed assets nor the capital works in progress, as they represent the funds required for day to day work of the Company.
According to the Tribunal these fixed assets have been accumulated over years and they cannot form part of the working capital.
However, the Tribunal accepted the claim of the appellant that the other items in Exs.
M.1(a) and M.2(a), namely, investments, interest accrued on investments, stores and spare parts, raw materials, process stocks, finished stocks, sundry debtors, advances etc.
are the amounts available to be used as working capital.
On this reasoning the Tribunal held that in calculating the return on working capital, the amounts mentioned in exhibit
M.1(a) and M.2(a) less the amount sunk in fixed assets and working capital in progress, have to be deducted.
On this basis it deducted from Rs. 44468315, a sum of Rs. 43139570, and fixed a sum of Rs. 1328745, as Reserves employed in business during the year ended December 31, 1962.
On this amount it allowed a sum of Rs. 53150/ as return on Reserves at 4% for the year 1962.
Similarly, for the year 1963, it deducted from Rs. 46937947 a sum of Rs. 45229423, and fixed a sum of Rs. 1708524/ as Reserves employed in business during that year.
On this amount it allowed Rs. 68340/ as return on Reserves at 4%.
Mr. Malhotra, learned counsel for the appellant, while accepting that the principle adopted by the Tribunal in this regard is 477 correct, contended that it had made a mistake incalculation.
According to the learned counsel, the claim musthave been allowed in the manner calculated by the appellant.
In this connection, the learned counsel pointed out that even in cases where the evidence regarding the utilization of Reserves as Working Capital as claimed by the Company, is not very satisfactory, this Court,, on the basis of the balance sheets, which indicated that some amount must have been used as working capital has allowed such a claim.
In this connection, he relied on Workmen of M/s Hindustan Motors Ltd. vs M/s Hindustan Motors Ltd., and Another(1) and Messrs. Aluminium Corporation of India vs Their Workmen (2).
We may straightaway say that these decisions do not assist the appellant.
In the case before us it is not necessary to do any guess work as the appellants wants us to do.
The appellant has filed statements showing how it has calculated the amount of Reserves utilized as working capital and we have to find out whether the calculations made by it are correct.
In fact, Mr. Malhotra has not been able to point out from the balance sheets, as to what amount, according to the appellant, can be considerd to have been used as working capital.
In the two decisions,, relied on by him, the company concerned was able to refer to the figures in the balance sheets from which this Court was able to draw a conclusion regarding the approximate amount that would have been utilized as working capital.
The position before us is entirely different.
On the other hand, Mr. Puri" learned counsel for the respon dents, referred us to the balance sheets for the years in question regarding the share capital of the company being shown as Rs. 12750000/ .
The counsel further pointed out that the said share capital must have been sunk in acquiring the fixed assets and for capital works in progress and, therefore, the Tribunal was justified in deducting the amount of fixed assets and capital works in progress shown in Exs.
M. 1 (a) and M.2 (a) from the total shown by the appellant in those statements.
The counsel further urged that in considering the claim for return on working capital two questions have to be kept in view: (1) Whether the Reserves were available, and if they were (2) whether they were used as working capital and if so what is that amount.
The Tribunal in our opinion, has correctly kept these two principles in view in arriving at the amount of Reserves used as working capital and on which a return is to be allowed.
We see no error committed by the Tribunal in the calculation made for arriving at the, Reserves which must have been used as working capital, especially as the evidence on the side of the appellant was very unsatisfactory.
Even the appellant has deducted the amount of share capital before (1) ; (2) 478 arriving at the final figures mentioned in Exs.
M.1(a) and M.2 (a).
But the appellant was claiming the whole of the final amount shown in these two statements as Reserves used as working capital, which it was not certainly entitled to in law.
We have already pointed out that the Tribunal has held that the working capital cannot include fixed assets nor the capital works in progress as it represents 'the funds required for day to day running of the Company.
The, Tribunal has further held that the appellant is entitled to deduct investments, interest accrued on ,investments etc.
which have been shown in Exs.
M 1 (a) and M.2(a) on the ground that they must be considered to be the amounts available to be used as working capital.
These findings have not been challenged by the learned counsel for the appellant.
The appellant has also filed details of Reserves employed in the business during the years ended 31st December, 1962 and 1963 as shown in Exs.
M. 1 (b) and M.2(b) respectively.
Even ,there the appellant has deducted the share capital before giving final figures.
Therefore, the contention of Mr. Malhotra that the Tribunal 'has committed a mistake in calculating the amount of Reserves used as working capital for these two years, cannot be accepted.
If so, it follows that the amount fixed by the Tribunal as return 'at 4% on Reserves used as working capital for these two years, is correct.
The second question that arises for consideration is the claim made by the appellant for provision for rehabilitation for the two years and which claim has been rejected by the Tribunal.
The claim made by the appellant for provision for rehabilitation for the year 1962 was Rs. 18030871.00 and for the year 1963 Rs. 18062336.00.
Thus the appellant was claiming for each year provision being made of more than a crore of rupees for rehabilitation.
The appellant has filed a chart exhibit M.8 giving the calculations for the year 1962, its claim for rehabilitation for Rs. 18030871.00.
If the claim for rehabilitation is accepted, then the result will be that there will be no profits at all from and out of which any bonus can be paid for the years in question.
The claim of the appellant has been opposed by Mr. I. N. Keshava, learned counsel for the first respondent and his contentions have been adopted by the counsel appearing for the other respondents Unions.
The claim of the appellant is opposed mainly on two grounds, namely, (1) that the appellant has no scheme for rehabilitation for the relevant years and (2) in any event there were huge Reserves available from which the, claim for rehabilitation can be easily met.
The Tribunal has rejected the claim for rehabilitation both on the grounds that the appellant 479 has no scheme for rehabilitation and that the rehabilitation claim can be adequately met with from the huge Reserves of nearly four crores of rupees that the appellant had.
It must be noted that Rehabilitation Reserve is a substantial item which goes to reduce the available surplus and as a result affects the right of the employees to receive the bonus.
Hence the employer will have to place all relevant materials and the Tribunal will have to scrutinize them carefully and to be satisfied that the claim is justified.
It is no doubt true that it is but proper in the larger interest of the industry as well as the employees that proper rehabilitation Reserve should be built up taking into consideration the increase in price in plant and machinery which has to be replaced at a future date and by determination of multiplier and its deviser.
It is also clear from the decisions of this Court that if a Company has no scheme for rehabilitation, then of course, its claim on that head must be rejected.
[vide Azam Jahi Mills, Ltd. vs Their Workmen(1)].
Further, since it is the employer who seeks replacement costs, it is for him to satisfy the Tribunal as to what will be the overall cost of replacement and in doing so, it is he who has to discharge, this burden by adducing proper evidence and giving other party an opportunity to test the correctness of that evidence by cross examination.
[vide National Engineering Industries Ltd. vs Its Workmen(2)].
It is also now well settled that in determining the claim of the employer for rehabilitation, two factors are essential to be ascertained, namely, (1) the, multiplier, and that has to be done by reference to the purchase price of the machinery and the price which has to be paid for rehabilitation or replacement; and (2) the determination of the deviser and that has to be done by deciding the probable life of the machinery.
[vide The Honorary Secretary, South India Millowners ' Association and others v The Secretary Coimbatore District Textile Workers ' Union(3) and M/s Gannon Dunkerley and Co. Ltd. and another vs Their Workmen(4)].
Mr. Malhotra, learned counsel for the appellant, very strongly relied on the statement exhibit M.S. as well as the evidence of M.W. 2, the Mill Manager and M.W. 3, the Assistant Officer, Efficiency Section of the Mill, in support of his contention that the appellant has a scheme for rehabilitation and that the claim made by the appellant for making provision for rehabilitation is proper.
The counsel also pointed out that the evidence of these two witnesses clearly establishes that most of the items of machinery have long out lived, their normal age of 25 years and (1) (2) [1968]1 S.C.R. 779.
(3) [1962] Supp.
2 S.C.R (4) A.I.R. 1971 S.C. 2567.
480 therefore they require replacement in order to ensure proper production.
The counsel further pointed out that the rejection by the Tribunal of the claim made by the appellant, on the basis that the life of the textile machinery is only 25 years, is not correct and that the view of the Tribunal that the normal age is more than 25 years is opposed to the decisions of this Court.
So far as the age of the machinery is concerned, it is no doubt true that in The Honorary Secretary, South India Millowners ' Association and others vs The Secretary Coimbatore District Textile Workers ' Union(1), this Court, after a reference to the evidence adduced confirmed the findings of the Tribunal that the estimated life of the textile machinery in question should be taken to be 25 years, but in the said decision itself it is observed ,is follows "We are not prepared to accept either argument because, in our opinion, the life of the machinery in every case has to be determined in the light of evidence adduced by the parties.
" But it is unnecessary for us to pursue this aspect further as we are disallowing the entire claim for rehabilitation.
Mr. Malhotra, also criticized the view of the Tribunal that in this case the evidence of the witnesses on the side of the appellant clearly shows that the machines are working very efficiently though they have been running for over 50 years.
On the other hand, the counsel urged that the principle to be borne in mind, when considering the claim far rehabilitation, is that the life of the machinery is the period during which it is estimated to work with reasonable efficiency and not the period during which it has actually been operated, that is, till it becomes too deteriorated for use.
No doubt the last proposition enunciated by the counsel in the abstract is correct; but the question is whether the appellant has discharged its burden of satisfying the Tribunal that it had a scheme for rehabilitation and whether it had placed the necessary mate rials for the purpose of working out the multiplier and the deviser.
Mr. Keshava, learned counsel for the first respondent, referred us to the written statement filed by one of the Unions, Benny Mills Labour Association, wherein it has specifically stated that the plant and machinery owned by the Mills are amongst the most modem, machineries and that no provision for rehabilitation is necessary.
The appellant, it is pointed out, in its reply statement did not controvert these averments.
EN en in the statements Exs.
M. 1 and M. 2, filed by the appellant, no claim for rehabilitation has been made.
He also referred to the evidence or (1) [1962] Supp. 2.
S.C. R. 926.
481 M.Ws. 2 and 3 and pointed out that their evidence does not show that the Company had any scheme for rehabilitation.
On these grounds, the counsel pointed out that the appellant has not placed sufficient materials before the Tribunal to sustain its claim for rehabilitation.
It must be emphasized that in dealing with the claim of an employer for rehabilitation, as pointed out earlier, the onus of proof is on the employer.
He has to prove the price of the plant and the machinery, its age, the period during which it requires replacement, the cost of replacement, the amount standing in the Debentures and Reserve Funds and to what extent the funds at its disposal would meet the cost of replacement.
If the, employer fails lo lead satisfactory evidence on these points, the result will be that the claim for rehabilitation will have to be totally rejected.
It is no doubt true that a chart exhibit
M. 8 has been filed by the appellant and M.W. 3, the Assistant Officer, Efficiency Section, has spoken regarding the same.
But he has admitted that the original quotations received from the dealers regarding the price of new machinery for the purpose of replacement have not been produced before the Tribunal.
He has further admitted that the appellant has not produced the letters written by it calling for quotations regarding the price of the machinery.
He has further admitted that no charts have been produced to show the value of the machineries in 1962.
The multipliers, according to this witness, have been adopted as advised by the appellant 's Legal Adviser.
It is clear from the above answers of the witness that there is no material placed before the Tribunal by the appellant from which the multiplier and deviser can be properly worked out for the purpose of considering the claim for rehabilitation.
In fact the Mill Manager, M.W. 2 has stated that the company has floated a debenture for 1 1/2 crore for buying new machinery.
This clearly shows that the appellant had no scheme for rehabilitation and that explains the reason why it had not made any provision for rehabilitation.
Mr. Malhotra, then urged that at any rate the Tribunal itself has proceeded on the basis that some amount for rehabilitation is necessary to be provided for each year.
Based on this observation of The Tribunal, the counsel pointed out that the appellant should be allowed at least the amount that it has actually spent for replacement of machineries in the years 1962 and 1963.
According to him a sum of Rs. 2619608 and Rs. 2124102 have been spent in the years 1962 and 1963 respectively for machinery and plant installed in those years.
In this connection he referred us to the balance sheet and profit and loss accounts for these two years and stressed that the Tribunal has committed an error in not 482 allowing at least these amounts by way of provision for rehabilitation.
it is no doubt true that these amounts are shown in the schedules to the balance sheets for the years concerned.
Admittedly, there is, no such claim made in the written statement filed by the appellant before the Tribunal.
When the Unions were contesting the claim of the appellant on the ground that it has no, scheme for rehabilitation and that it has not spent any amount by way of replacement of old machinery, it was the duty of the appellant to have made a proper claim and it should have adduced evidence regarding that aspect before the Tribunal.
Mere production of balance sheet and profit and loss accounts by themselves will riot entitle the appellant to sustain its claim for rehabilitation.
For all the reasons given above, it is clear that the Tribunal was justified in holding that the appellant has not been able to make out its claim for making provision for rehabilitation.
In this view the Tribunal was justified in rejecting this claim of the appellant.
We may also state that the Tribunal is also of the view 'that the appellant has large Reserves with which it can meet rehabilitation expenses of the machinery.
In this connection the Tribunal has also referred to the evidence on the side of the appellant, that even according to the appellant rehabilitation will have to be completed only within eight years from 1962 and that only a sum of rupees eighty lakhs will be required for each year.
On 'this reasoning the tribunal has held that this amount of rupees eighty lakhs can be easily met with from the large Reserves available with the appellant.
It is not necessary for us to consider this aspect further because we have already agreed with the findings of the Tribunal that the appellant has no scheme for rehabilitation and that it has not placed any satisfactory evidence before the Tribunal in support of its claim.
The last point that arises for consideration is regarding the available surplus for the years 1962 and 1963 as calculated by the Tribunal and the award by it of 1/3rd of the amount as additional bonus for the two years after deducting the bonus already paid by the appellant.
The Tribunal, after rejecting the appellant 's claim for rehabilitation and also allowing return on Reserves used as working capital in the manner, already referred to, had arrived at the available, surplus for the year 1962 in the sum of Rs. 2635914 and for the year 1963 at Rs. 4904987.
The appellant filed a statement exhibit M. 4 showing the Amount of bonus already paid for the years 1962 and 1963 to all employees drawing a total of Rs. 500/ and less per mensem.
From that statement it is seen that for the year 1962 it had paid a sum of Rs. 1441455 and for the year 1963 a sum of Rs. 1960795.
On the basis of the available surplus worked out for the years 1962 and 1963, the balance 483 available surplus after deducting bonus already paid will be as follows: 1962 Rs. Available surplus as worked out by the Tribunal2635914 Amount already paid as bonus by the appellant1441455 Balance . .
1194459 1963 Available surplus as worked out by the Tribunal4904987 Amount already paid as bonus by the appellant1960795 Balance .
. 2944192 What the Tribunal has done is to distribute 1/3rd of the, amount shown as balance above, for each of the years as additional bonus.
That results in the workmen getting Rs. 398153 representing 25 days basic wages as additional bonus for the year1962.
Similarly, the workmen get Rs. 981397 representing two months basic wages as additional bonus for the year 1963.
Therefore, it will be seen that the total bonus thatthe workmen will get for each of the years will be as follows 1962 Rs. 1.
Amount already paid by the appellant 1441455 2.
Additional amount awarded by the Tribunal 398153 TOTAL . .
1839608 From the available surplus of Rs. 2635914 in 1962, the work men will get a total sum of Rs. 1839608 as bonus for that year which works out to more than 60% of the available surplus.
Similarly for the year 1963 the figures are as follows 1963 Rs. 1.
Amount already paid by the appellant 1960795 2.
Additional amount awarded by the Tribunal981397 TOTAL .
2942192 From the available surplus of Rs. 4904987 in1963, the workmen will get a sum of Rs. 2942192 for that year which works out more or less about 60% of the available surplus, falling short by a sum of Rs. 800/ .
484 Mr. Malhotra, learned counsel for the appellant attacked the method of calculation adopted by the Tribunal.
According to him the Tribunal should not have fixed more than 60% of the available surplus as bonus payable for a year.
On the other hand, the amounts of bonus now awarded by the Tribunal and already paid by the appellant exceed 60%.
In our opinion, there is considerable force in the contention of the learned counsel.
The available surplus, as found by the Tribunal for the year 1962 is Rs. 2635914.
Working out roughly 60% of this surplus to be distributed as bonus to the workmen, the amount of bonus will be about Rs. 1581600.
The appellant has admittedly paid a sum of Rs. 1441455.
The balance that the workmen will be entitled to will be Rs. 140145.00, whereas the Tribunal has directed the appellant to pay for this year by its Award a sum of Rs. 398153.
The award of this amount is not .justified.
So far as 1963 is concerned, the available surplus as found by the Tribunal is Rs. 4904987.
60% of this available surplus, to which the workmen will be entitled to will be Rs. 2942992.
On the other hand, the total amount that the workmen will get as per the award including the amount already paid by the appellant as bonus is Rs. 2942192.
The appellant will have to pay only an additional sum of Rs. 800/ to make up 60%.
There is no appeal by the Unions and therefore, the bonus awarded for the year 1963 does not require any interference.
In allocating the available surplus between the company and the workmen, it has been held by this Court that it will be equitable if roughly 60% of the surplus is distributed as bonus to the workmen and the Company is left with the remaining 40%.
The Company will get in addition to this 40%, the benefit of the Income tax rebate on the 60% bonus payable to the workmen.
[vide M/s. Gannon Dunkerley and Co. Ltd. and another vs Their workmen(1)].
We have 'adopted the same principle in the case on hand.
To conclude the Award of the Industrial Tribunal in A.I.D. No. 6 of 1966 is set aside and Civil Appeal No. 1291 of 1967 is allowed.
There will be no order as to costs.
The Award of the Industrial Tribunal in A.I.D. No. 8 of 1966 is modified to the following extent: For the year 1962 the appellant will be liable to pay as additional bonus only a sum of Rs. 140145 instead of a sum of Rs. 398153 as directed by the Tribunal in the Award.
To this extent Civil Appeal No. 1292 of 1967 is allowed in part.
In other respects, it is dismissed.
There will be no order as to costs.
| IN-Abs | The appellant company was making two payments of bonus every year one for the half year ending 30th June and the other for the half year ending 31st December.
The payment was on the basis of profits earned by it and the payment was not a condition of service and had nothing to do with any custom or festival.
When the came into force, the appellant issued a circular that as bonus was payable under law only within a period of 8 months from the end of the, accounting year (the appellant 's accounting year was the calendar year), no bonus was payable for the accounting year 1965 until the accounts for the year are closed, and the announced payment of one month 's basic wages as advance against wages for the half year ending 30th June 1965.
The questions, (1) whether the appellant was justified in announcing the payment as advance against wages instead of as advance bonus, and (2) whether the respondents were justified in claiming bonus for the years 1962 and 1963, in addition to what had already been paid by the appellant were referred to the Industrial Tribunal.
On the first question the Tribunal held.
that the appellant was not justified in announcing the payment towards advance wages and directed the appellant to pay profit bonus in two installments one as advance against the final declaration of bonus, and the balance, if any, as the second instalment.
On the second question the Tribunal held that the question of bonus payable was to be calculated in accordance with the Labour Appellate Tribunal Full Bench Formula approved in Associated Cement Companies Ltd. vs Workmen, r 19591 S.C.R.25; that in calculating the return on Reserves the claim of the appellant to include in the working capital the amounts sunk in (a) fixed assets and (b) capital work in progress should be disallowed; and that the claim of the appellant for a provision for rehabilitation should be rejected.
In appeal to this Court.
HELD : (1) (a) Under the Act, bonus for a particular accounting year will have to be computed in accordance with the provisions of the Act on the basis of the gross profits determined at the close of the accounting year.
The Act makes provision as to how the gross profits, available and allocable surplus are to be calculated, and section 19 prescribes 8 months from the close of the accounting year as the period within which the bonus was to be normally paid.
The scheme of the Act shows that a claim for bonus can be made only after the close of the accounting year, because., gross profits and the available and allocable surplus can be worked out only at the end of the accounting year and not earlier, whereas the direction given by the Tribunal requires the employer to make two computations at the end of each half year.
[469 E H; 470 A B] 463 (b) The direction given by the Tribunal making it obligatory on the management to make half yearly payments of bonus apart from being opposed to the scheme of the Act, runs counter to section 19.
Under the section, whether it is the minimum bonus of 4% under section 10 or the maximum bonus of 20% under section 11, they have to be paid only within a period of 8 months from the closing of the accounting year.
[470 C E] (c) Section 17(b) is an enabling section in favour of the employer in that it visualizes a situation when he may have paid during the accounting year a part of the bonus payable under the Act, before the date on which such bonus becomes payable.
If the payment was by way of profit bonus, he is entitled to deduct it from the final amount that may be payable under the Act.
But that provision does not give a right to an employee to claim payment of bonus by way of part payment during the currency of the accounting year.
Therefore, the mere fact that the appellant has been making payments on previous occasions half yearly, does not confer a right on the employee to have such payments by way of bonus in the same manner after the Act has come into force.
Hence, the Tribunal had no jurisdiction to give a direction to the appellant to, pay bonus at the end of each half year.
[471 A C] (2) (a) In considering the claim for return on working capital two questions have to be kept in view : (i) whether Reserves were available, and (ii) whether they were used as working capital, and if so, what was, the amount used.
1477 GI In the present case, the Tribunal has correctly kept the two principles in view in arriving at the amount of Reserves used as working capital and on which a return is to, be allowed.
The balance sheets of the appellant do not have any figures from which the Tribunal would be able to, draw a conclusion.
The Tribunal, therefore, while accepting the statements.
of account filed by the appellant for the two years, for showing how it had calculated the amount of Reserves utilized as working capital, held, that the two items should be deducted; because, working capital represents the funds required for day to day Work of the company and cannot include,, fixed assets, and the capital works in progress.
[477 G H; 478 A C] Workmen of M/s. Hindustan Motors Ltd. vs M/s. Hindustan Motors Ltd. & Anr. ; and M/s. Aluminium Corpn.
of India vs Workmen, , referred to.
Therefore, the contention that the Tribunal had committed a mistake in calculating the amount of Reserves used as working capital cannot be accepted.
[478 D E] (b) A company should build up rehabilitation reserve taking into consideration the increase in price in plant and machinery which has to be replaced at a future date.
But since it is a substantial item which goes to reduce the available surplus and as a result, affects the right of the employees to bonus, the employer will have to place all relevant material, before the Tribunal for its scrutiny.
The burden of proof is on the employer to prove the price of the plant and machinery, its age, the period during which it requires replacements, the cost of replacement, the amount standing in the Debenture and Reserve Funds and to what extent the funds at its disposal would meet the cost of replacement.
If the employer fails to lead satisfactory evidence on these points his claim for rehabilitation will be rejected.
Also, if a company has no scheme for rehabilitation then its claim on that bead must be rejected.
[479 A E; 481 B C] 464 Azam Jahi Mills Ltd. vs Workmen, and National Engineering Industries Ltd. vs Workmen, ; , referred to.
in the present case, the averment in the written statement of the respondents, that the appellant 's machinery was among the most modern and no provision for rehabilitation was necessary, was not controverted by the appellant.
The balance sheets for the two years showed that some amounts were spent on machinery.
But when the respondents were contesting the claim of the appellant on the ground that it had no scheme of rehabilitation and that it had not spent any amount by way of replacement, it was the duty of the appellant to have made a proper claim and to adduce evidence regarding that aspect.
Mere production of balance sheets and profit and loss accounts and adding a note in the statements, of account filed that the figure is 'subject to claim for rehabilitation ' will not entitle the appellant to sustain its claim for rehabilitation.
Moreover, the appellant had large Reserves to meet rehabilitation expenses.
It had also 'Boated a debenture for buying new machinery.
[481 G H; 482AC, D] Further, in determining the claim of an employer far rehabilitation, two, factors are essential to be ascertained, namely, (i) the multiplier, which has to be done by reference to the purchase price of the machinery and the price which has to be paid for replacement; and (ii) the divisor, which has to be done by deciding the probable life of the machinery.
[479 E F] Honorary Secretary, South India Millowners ' Assn.
vs Secretary Coimbatore District Textile Workers ' Union, [1962] Supp. 2 S.C.R. 926 and M/s. Gannon Dunkerley & Co. vs Their Workmen, A.I.R. 1971 S.C. 2567, referred to.
In the present case no material was placed before the Tribunal by the appellant from which the multiplier and divisor can be properly worked out.
[481 E F] Therefore, the Tribunal was justified in holding that the appellant had not made out its claim for making provision for rehabilitation.
[482 C D] (c) The equitable method of allocating the available surplus between the company and its workmen is to distribute 60% as bonus to the workmen leaving the remaining 40% to the company.
In the present case, the method of calculation adopted for 1962, by the Tribunal, shows that the amount of bonus awarded by the Tribunal together with the amount already paid by the appellant exceeded 60% and the award of the excess was not justified.
[484 A C] M/s. Gannon Dunkerley & Co. vs Their Workmen, A.I.R. 1971 S.C. 2567.
referred to.
|
Appeal No. 11 of 1971.
Appeal by Special Leave from the judgment and order dated March 26, 1970 of the Kerala High Court in Writ Appeal No. 197 of 1968.
Appellant appeared in person.
Gobind Dass and section P. Nayar, for the Respondent.
The Judgment of the Court was delivered by Hedge, J.
, This is an appeal by special leave.
The appellant was a Preventive Officer, Grade, 11, Customs Office, Cochin from June 16, 1962 to January 31, 1963.
In April 1962, he applied to the Assistant Collector of Customs, seeking permission to allow his wife to run a taxi service.
He was informed that no permission was necessary for his wife to operate a taxi service but he should not canvass any business for his wife.
Thereafter, it is said that the appellant acting on behalf of his wife purchased some cars which were used as taxis.
It appears that there were several ,complaints against the appellant to the effect that he was canvassing business for his wife.
Those complaints were enquired into.
Thereafter on March 25, 1963 the appellant was served with ' a memorandum stating that while functioning as Preventive Officer, Grade II, Cochin Customs House, during the period June 1962 to January 31, 1963 he had contravened the provisions of rule 12(1) of the Central Civil Services (Conduct) Rules, 1955.
The factual allegation made against the appellant was that he canvassed business for his wife.
He was told that an enquiry will be held against him on the basis of that charge.
Sri H. T. Soares, Assistant Collector, Customs House, Cochin was appointed as the Enquiry Officer.
During the pendency of the enquiry an additional ground in support of the charge was 487 served on the appellant to the effect that he himself was running the taxi service.
After enquiry the Enquiry Officer came to the, conclusion that the allegations made against the appellant were established and consequently he was guilty of contravening rule 12(1) of the Central Civil Service (Conduct) Rules, 1955.
The Enquiry Officer recommended appellant 's removal from service.
On the basis of that recommendation the Disciplinary Authority served on the appellant a notice to show cause why he should not be removed from service.
The appellant submitted his explana tion.
But the same was not accepted by the Disciplinary Authority.
In the result the appellant was ordered to be removed from service.
The appellant challenged that order by means of a petition under article 226 of the Constitution before the High Court of Kerala.
His writ petition was first heard by a single judge who dismissed the same and the order of the single _judge was affirmed by a Division Bench of that High Court.
Hence this appeal.
The appellant personally argued his appeal.
He challenged the validity of the order removing him from service on various grounds.
As we are of the opinion that the appellant had not been afforded reasonable opportunity to present his case and consequently the impugned order has to be struck down, we do not think it necessary to examine other contentions advanced by the appellant.
The appellant who was a member of the civil service of the Union of India was holding his office during the pleasure of the President; but in view of article 311 of the Constitution, he could not have been removed from service except after enquiry in which he had been given a reasonable opportunity of being heard in respect of the charge levelled against him.
This procedural guarantee is undoubtedly a valuable one.
Breach of that guarantee vitiates the enquiry.
Removal from service is a major penalty.
Procedure for imposing major penalties is prescribed in rule 15 of the Central Civil Services (Classification, Control and Appeal) Rules, 1957, a rule framed under article 309 of the Constitution.
Sub rule (5) of that rule provides "The Disciplinary Authority may nominate any, person to present the case in support of the charges before the authority inquiring into the charges (herein ' after referred to as the Inquiring Authority).
The Government servant may present his case with the assistance of any Government servant approved by the Disciplinary Authority, but may not engage a legal practitioner for the purpose unless the person nominated by 488 the Disciplinary Authority as aforesaid is a legal practitioner or unless the Disciplinary Authority, having regard to the circumstances of the case , so permits.
" This rule bears upon the reasonable opportunity contemplated by article 311.
The validity of; this rule was not challenged.
Hence all that we have to see is whether the rule had been complied with.
For deciding this question it is necessary to refer to the relevant facts.
In September 1963, one A. M. Shivaraman was appointed as the officer to present the case before the Enquiry Officer in support of the allegations made against the appellant.
The said Shivaraman was a trained police prosecutor.
After he was appointed to present the case in support of the allegations made against the appellant, the appellant wrote to the Collector of Customs, Cochin, the Disciplinary Authority on October 4, 1963 as follows : "From : C. L. Subramanlam, Preventive Officer, Customs House, Cochin 3.
TO The Collector of Customs, Customs House, Cochin 3.
Sir, Sub : Sec.
1/63 Estt Cus dated 30th September 1963.
In the above memorandum it is stated in paragraph 4, that Shri A. M. Sivaraman as the officer to present the case in support of the allegations against me before the Enquiry Officer.
I understand that Shri A. M. Sivaraman is legally trained to conduct such prosecutions.
Under such circumstances I will be prejudiced in my defence unless I am permitted to engage a counsel to appear and defend me during the enquiry.
Hence I request that permission be accorded to engage a lawyer of my choice to represent and defend the charges before the Enquiry Officer.
Cochin 3, 4 10 1963 Yours faithfully, Sd/ C. L. Subramaniam".
He again reiterated his request for permission to engage a counsel to defend him in his letter to the Assistant Collector on 489 October 9, 1963.
Thereafter he again wrote to the Collector of Customs on October 14, 1963 as follows It may help me very much too, if you can grant the permission I have sought for engaging a Counsel of my choice at an early date so (that I could get the Counsel 's assistance for the inspection of documents too.
" On October 17, 1963, Sri Scares, Assistant Collector of Customs wrote to the appellant thus "Secret 1/1/63 Est.
Cus Custom House, Cochin 3 17th September 1963 From The Assistant Collector of Customs, Appraising Department, Customs House, Cochin 3 TO Shri C.L. Subramaniam, Preventive Officer, Custom House, Cochin 3.
Sub : Establishment Inquiry into the work and conduct of Shri C. L. Subramaniam, Preventive Officer, Custom House, Cochin.
With reference to your letter Sc.
1/63/Estt.
Cus dated 14th October 1963, requesting permission for engaging a counsel to appear and defend you, during the enquiry, I am directed by the Collector to inform you that although Shri A. M. Sivaraman is illegally trained, he is not a legal practitioner and hence there is no necessity for engaging a lawyer to defend you at the enquiry.
Sd/ H. T. Soares, Assistant Collector of Customs".
It is clear from that letter that the Disciplinary Authority had overlooked the fact that the appellant sought permission to engage counsel not because Sivaraman wag a legal practitioner but because he was trained prosecutor.
On January 6, 1964, the appellant again wrote to the Collec tor of Customs explaining his difficulties in defending himself.
In Paragraph 4 of that letter, the appellant stated "In the nature of accusations made against me and the nature of their widespread source the importance 490 of the informants and their intentions, the varying types of witnesses supporting the charge, the complicated nature of the evidence, the inexperience I have in assessing the impact of such evidence and in sifting the evidence for preparing an effective cross examination and above all the lurking conspiracy of a series of persons whom I have to deal with firmly in discharging my duties as a Preventive Officer, all these when con sidered can lead you to the only conclusion that if I am denied the assistance of an experienced counsel at the enquiry it would be tantamount to denial of an opportunity to defend myself and prove my innocence.
This 'would be particularly so in the conte xt of the present enquiry where evidence have sought to be brought in by different stages and alleged incidents subsequent to the charges are sought to be proved in support of the allegations made before such incidents." Despite these communications, the appellant was not give permission to engage a legal practitioner to defend himself Therefore the question arises whether the appellant was give reasonable opportunity to defend himself in accordance with sub rule (5) of rule 15 of the Central Civil Services (Classification Control and Appeal) Rules, 1957.
The portion of that rule that is relevant for our present purpose is the last clause which say that the Government servant may not engage a legal practitioner for the purpose mentioned in that clause "unless the Disciplinary Authority having regard to the circumstances of the case so permits".
The grievance of the appellant was that he was pitted again a trained prosecutor and not that Sivaraman was a legal practitioner.
The Disciplinary Authority did not consider that grievance.
It brushed aside the request of the appellant on the ground that Sivaraman was not a legal practitioner, a consideration which was not relied on by the appellant.
The grounds urged by the appellant in support of his request for permission to engage a legal practitioner were by no means irrelevant.
The fact that the case against the appellant was being handled by a trained prosecutor was a good ground for allowing the appellant to engage a legal practitioner to defend him lest the scales should be weighted against him.
The Disciplinary Authority completely ignored that circumstance.
Therefore that authority clearly failed to exercise the power conferred on it under the rule.
It is not unlikely that the Disciplinary Authority 's refusal to permit the appellant to engage a legal practitioner in the circumstances mentioned earlier had caused serious prejudice to the appellant and had amounted to a denial of reasonable opportunity to defend him self.
491 The appellant contended that he had a right to engage a legal practitioner to defend him.
He sought to spell out that right on, the basis that what he could himself do, he could get it done by an agent of his and a legal practitioner acting for him would only have been his agent.
In support of his contention he placed reliance on the decision in Pet vs Greyhound Racing Association Ltd.(4).
The facts of that case were as follows Track stewards of a greyhound racing stadium owned by the defendants proposed to hold an inquiry into the withdrawal of a trainer 's dog from a race at a stadium licensed by the National Greyhound Racing Club.
The inquiry involved the question whether drugs had been administered to the dog.
The trainer held a licence from the National Greyhound Racing Club entitling him to race dogs on tracks licensed by the club, and thus the result of the inquiry might involve the trainer 's reputation and livelihood.
The rules of the club, to which the trainer had agreed when he obtained his licence, did not prescribe the procedure to be followed by track stewards at their inquiries, and did not exclude legal representation.
The procedure in fact followed at such an inquiry allowed the trainer to be present, to hear the evi dence and to have an opportunity to question witnesses.
The trainer sought to be represented by counsel and solicitor at the enquiry but the track stewards decided ultimately not to allow legal representation.
On appeal from the grant of an interlocutory injunction restraining the inquiry from being held unless the trainer were allowed to be represented, the Court of Appeal held that prima facie the trainer was entitled to an oral hearing and, the inquiry being one of serious importance to him, to be represented as it by counsel and solicitor, for he was entitled not only to appear himself but also to appoint an agent on his behalf, and so was entitled to appoint lawyers to represent him.
Lord Denning, M. R. who delivered the main judgment of the court in the course of his judgment dealing with the decision of stewards that they will not hear lawyers observed "I cannot accept this contention.
The plaintiff is here facing a serious charge.
He is charged either with giving the dog drugs or with not exercising proper control over the dog so that someone else drugged it.
If he is found guilty, he may be suspended or his licence may not be renewed.
, The charge concerns his reputation and his livelihood.
On such an inquiry I think that he is entitled not only to appear by himself but also to appoint an agent to act for him.
Even a prisoner can have his friend.
" (1) 492 Proceeding further the Master of Rolls observed "I should have thought, therefore, that when a man 's reputation or livelihood is at stake, he not only has a right to speak by his own mouth.
He has also a right to speak by counsel or solicitor.
" This decision, in our opinion, does not bear on the point under consideration.
Herein we, are dealing with a statutory rule, which prohibits the appointment of a legal practitioner excepting under certain circumstances.
Hence the agency theory has no relevance nor are we required to consider the principles of natural justice as those principles are only relevant when the concerned procedure is not regulated by any statute or statutory rule.
The rule laid down in Pet 's case(1) has not commended itself to this Court.
In Kalindi and ors.
vs Tata Locomotive and Engineering Co. Ltd.(2), a question arose whether in an enquiry by management into misconduct of a workman, the workman was entitled to be represented by a representative of the Union.
Answering this question this Court observed that a workman against whom an enquiry is being held by the management has no right to be represented at such an enquiry by a representative of the Union though the employer in his discretion can and may allow him to be so represented.
In such enquiries fairly simple questions of fact as to whether certain acts of misconduct were committed by a workman or not fall to be considered and the workman is best suited to conduct the case.
Ordinarily, in enquiries before domestic tribunals a person accused of any misconduct conducts his own case and so it cannot be said that in any enquiry against a workman natural justice demands that he should be represented by a representative of his Union.
The same view was taken by this Court in Brooke Bond India (Private) Ltd. vs Subba Raman (S) and anr.(3).
That view was reiterated again in Dunlop Rubber Co. vs Workmen (4 ).
The learned counsel for the State relied on the decisions mentioned above in support of his contention that the appellant was not entitled to have the assistance of a legal practitioner.
This contention is without force.
In those cases this Court considered, whether a person proceeded against in an enquiry before a domestic tribunal had a right to be represented by someone else on the basis of the principles of natural justice.
Therein this Court was not called upon to consider either the limits of the reasonable opportunity to defend oneself, guaranteed under article 311 or the scope of a statutory rule.
The question that falls for decision in this case did not arise for decision in those cases.
(1) (3) (2) ; (4) ; 493 The appellant supported his complaint of breach of rule 15 (5) on yet another ground.
After the appellant 's request for engaging a counsel was rejected, he requested the Disciplinary Authority to let him have the assistance of Abraham Kurian, clerk, Cochin Head Post Office, Cochin 1.
This request he appears to have made long before the date of enquiry i.e. December 5, 1963.
He had also requested the Disciplinary Authority to move the superiors of Abraham Kurian to grant permission to Abraham Kurian to assist him .
But it appears the Disciplinary Authority wrote to the Superintendent of Post Offices who is stationed at Trichur only on the 28th of November, 1963 requesting him to permit Abraham Kurian to assist the appellant.
That communication was not received by the Superintendent of Post Offices in time.
Hence Abraham Kurian did not get the permission sought before the date of enquiry.
After learning that fact from Abraham Kurian, the appellant wrote the following letter to the Collector of Customs on December 4, 1963.
"Sec. 1/1/63/Estt Cus.
No. 16 Customs Quarters Willingdon island, P.O. Cochin 3.
4th December 1963.
From C. L., Subramaniam, Preventive Officer Gr.
II, Customs House, Cochin 3.
To The Collector of Customs & Central Excise, Custom House, Cochin 3.
Sir, Sub Enquiry into the work and conduct of Shri C. L. Subramaniam, Preventive Officer, Custom House, Cochin 3.
With reference to your letter dated 3rd December, 1963 wish to submit as follows Shri Abraham Kurian, Clerk, Cochin Head Post Office who is to assist me in the enquiry from 5 12 1963 in connection with certain allegations pending against me has urgently applied to his superior yesterday itself and is awaiting permission.
494 As I cannot appear for the enquiry without assistance I re quest you Sir, to adjourn the hearing by 10 days.
Thanking you, I remain Sir, Yours faithfully, Sd/ C. L. Subramaniam.
" On the date of the enquiry, the Enquiry Officer adjourned the case sine die after obtaining an undertaking from the appellant that on the next date of the enquiry he would go on with the case even if he was unable to get the assistance of Abraham Kurian on that date.
On December 9, 1963, the appellant wrote to the Enquiry Officer as follows "Sec.
No. 1/1/63 Estt.
9th December 1963 From C. L. Subramaniam, Preventive Officer, Custom House, Cochin 3.
To : The Asstt.
Collector of Customs (Apprg.), Enquiry Officer, Custom House, Cochin 3.
Sir, Sub : Enquiry into the work and conduct of Shri C. L. Subramaniam, Preventive Officer, Custom House Cochin.
I understand from a communication from the Senior Super intendent of Post Offices, Trichur addressed to the Assistant Collector of Customs (Apprg.), Custom House, Cochin with copy endorsed to Shri Abraham Kurian, that your communication informing that the enquiry was to have been held from 5 12 1963 was received by the Senior Superintendent of Post Offices only on 5th December, 1963, and therefore the relief arrangement could not be made by him.
Now that the enquiry is adjourned it is requested that you may be good enough to inform the Senior Superintendent of Post Offices, Trichur (Superior Officer of the Government who assists 495 me) sufficiently early 'as to the date of the enquiry, so that he may relieve the Government servant in time.
It is humbly pointed out that unless your goodself take necessary action in time in this regard it may not be possible to get me the assistance I have requested for.
Yours faithfully, Sd/ 9 12 63 (C. L. Subramaniam)" Even after getting this letter, the Enquiry Officer did not fix the date of the enquiry.
It appears that on December 30, 1963 the Enquiry Officer fixed January 8, 1964 as the date of enquiry.
It is only thereafter he wrote to the Superintendent of Post Offices requesting him to permit Abraham Kurian to assist the appellant.
It is not known when that letter was received by the Superintendent of Post Offices but Abraham Kurian did not get the permission sought, before the date of enquiry.
Therefore he was unable to assist the appellant in the enquiry.
Hence the enquiry went on without the appellant having anybody 's assistance.
From the facts set out above, it is clear that the Enquiry Officer did not afford the appellant necessary facility to have the assistance of another Government servant in defending him which assistance he was entitled to under the rule.
He was deprived of that assistance solely because of the indifferent attitude adopted by the Enquiry Officer.
Therefore we have no hesitation in coming to the conclusion that the Enquiry Officer had clearly breached rule 15(5).
It is needless to say that rule 15 is a mandatory rule.
That rule regulates the guarantee given to Government servants under article 311.
Government servants by and large have no legal training.
At any rate, it is nobody 's case that the appellant had legal training.
Moreover when a man is charged with the breach of a rule entailing serious consequences, he is not likely to be in a position to present his case as best as it should be.
The accusation against the appellant threatened his very livelihood.
Any adverse verdict against him was bound to be disastrous to him, as it has proved to be.
In such a situation he cannot be expected to act calmly and with deliberation.
That is why rule 15(5) has provided for representation of a Government servant charged with dereliction of duty or with contravention of the rule by another government servant or in appropriate, cases by a legal practitioner.
For the reasons mentioned above, we think that there had ' been a contravention of rule 15(5).
We are also of the opinion 496 that the 'appellant had not been afforded a reasonable opportunity to defend himself.
Hence the impugned order is liable to be struck down and it is hereby struck down.
The facts of this case are not such as to justify any fresh enquiry against the appellant.
Hence we direct that no fresh enquiry shall be held against the appellant and he be restored to the position to which he would have been entitled to but for the impugned order.
The appeal is accordingly allowed.
The appellant is entitled to his costs from the respondents both in this Court as well as in the High Court.
S.C. Appeal allowed.
| IN-Abs | The appellant, a preventive officer, applied for permission to allow his wife to run a taxi service.
He was informed that no permission was necessary.
Thereafter, appellant acting on behalf of his wife, purchased a few cars which were used as taxis.
Later several complaints were made against him to the effect that he was canvassing business for his wife.
Enquiry was made and the appellant was served with a memorandum stating that while functioning as Preventive Officer he had contravened the provisions of Rule 12(1) of the Central Civil Services (Conduct) Rules 1955.
The factual allegation made against him was that he canvassed business for his wife.
An Enquiry Officer was appointed.
On enquiry the appellant was found guilty of contravening rule 12(1) of the Central Civil Service (Conduct) Rules 1955, and his removal from service was recommended.
On the basis of that recommendation, the Disciplinary Authority served on the appellant a notice to show cause why he should not be removed from service.
The appellant submitted his explanation; but the Disciplinary was not satisfied and consequently, the appellant.
was removed from service.
The appellant challenged the order by a writ petition which was dismissed both by a single judge as well as by a Division Bench of the High Court.
On appeal to this Court, it was contended by the appellant that he was not given a reasonable opportunity of being heard in respect of the charge levelled against him and there was a violation of rule 15 of ,the Central Civil Services (Classification, Control & Appeal) Rules 1957 and article 311 of the Constitution.
Hence the order of removal was bad in law One trained police prosecutor, was appointed as the officer to present the case before the Enquiry Officer in support of the allegations made against the appellant.
Therefore, the appellant wrote to the Disciplinary Authority for permission to engage a counsel to defend his case, but even after a number of written requests, he was not given the permission to engage a legal practitioner to defend himself.
Further, the appellant was denied the assistance of a government servant.
Allowing the appeal, HELD:(i) In the facts and circumstances of the case, it was clear that the appellant had not been afforded a reasonable opportunity to defend himself.
The grievance of the appellant that he was pitted against a trained prosecutor was not considered by the Disciplinary authority.
The fact that the case against the appellant was being hand led by a trained prosecutor was a good ground for allowing the appellant to engage a legal practitioner to defend him lest the scales should be weighted against 3 L1031SupCI/72 486 him.
The disciplinary authority completely ignored that circumstance.
Therefore, that authority clearly failed to exercise the power conferred on it under the rule.
[490 G] (ii)There had been a clear violation of rule 15(5) of the Central Civil Service (Classification, Control & Appeal).
Rules 1957 which provides for the engagement of a legal practitioner in certain circumstances.
The present case required that the appellant be given a chance to defend himself by a legal practitioner.
Since he was denied such an opportunity, the order was bad and therefore, it should be struct down.
1495 HI Pet.
vs Greyhound Racing Assn.
Ltd., ; Kalindi Ors.
vs Tata Locomotive & Engineering Co. Ltd, ; ; Brooke Bond India Private Ltd. vs Subba Ramman (S) & another, , discussed and distinguished.
|
iminal Appeal No.51 of 1968.
Appeal by special leave from the judgment and order dated February 2, 1968 of the Bombay High Court in Criminal Application No. 393 of 1967.
Appellant appeared in person.
M.C. Bhandare, section B. Wad and, B. D. Sharma, for the respondent.
The Judgement of the Court was delivered by Grover, J.
This is an appeal by special leave from a judg ment of the Bombay High Court finding the appellant who is an Advocate, guilty of contempt of court and sentencing him to simple imprisonment for a term of four weeks and a fine of 538 Rs. 1,000/ .
It was directed that in default of payment of the fine he would have to undergo simple imprisonment for a further period of four weeks.
He was also ordered to pay the costs of the Assistant Government Pleader in the High Court and the Government Pleader before the Sessions Judge.
The material facts may be stated: In March 1966 a suit was filed against the appellant by D. N. Santani who is also an Advocate for recovery of Rs. 640/ in the court of the Civil Judge, Junior Division, kalyan.
The plaintiff in that suit had engaged H. I. Jagiasi as his Advocate.
In the written statement filed by the appellant he made certain allegations against Jagiasi and alleged inter alia that the latter was responsible for the suit.
Jagiasi filed a criminal complaint for defamation in August 1966 against the appellant in the court of Shri P. D. Sayyid, Judicial Magistrate at Kalyan.
The appellant has set out a number of incidents and matters in his petition for special leave to appeal which it is not necessary for our purpose to mention.
It would suffice to say that on October 15, 1966 the appellant filed an application before the Judicial Magistrate saying that he intended to apply for transfer of the case to some other court.
On October 28, 1966 he presented a transfer application in the court of the Sessions Judge.
Thana.
The transfer application was ultimately dismissed by the Assistant, Judge and Additional Sessions Judge on March 8, 1967 before whom it came up for disposal.
Meanwhile it appears that the appellant applied for transfer of the civil suit which had been filed by D. R. Santani to the court of the District Judge.
The suit was stayed and we have been informed that ultimately it was transferred sometime in the year 1967 from the court of Shri M. B. `Baadkar from whose court transfer was sought.
It has further been stated at the Bar and that statement has not been challenged that the civil suit was ultimately dismissed in August 1969.
While dismissing the transfer application of the appellant in the criminal complaint filed by Jagiasi in the, court of Shri P. D. Sayyid the Additional Sessions Judge recorded an order that a report be submitted to the High Court for "considering the conduct of the appellant and the course adopted by him in making the transfer application and in making amputations or aspersions against the Judicial Officers and to take action for contempt of court under section 3 (2) of the , hereinafter called the 'Act '.
This was done after reproducing three paragraphs from the transfer application and expressing an opinion that the appellant had attempted to attack the integrity and honesty of the courts of the Judicial Magistrate and the Civil Judge and to scandalize and to malign the same.
The High Court made an 539 order on December 1, 1967.
The following part of that order may be reproduced "He made an application to the Sessions Judge for transfer of the proceedings to another Court and the ground objected to by the learned Sessions Judge is as follows : "The Magistrate below is on friendly relations with the complainant the respondent No. 1 in the present petition and he even enjoys the hospitality of the respondent No. 1 some times alone and some times in company of the, Civil Judge J. D. Kalyan (Shri M. B. Baadkar) whois also on friendly relations with the respondent No.1 and who also enjoys the hospitality of the respondent No. 1 The learned Sessions Judge had called for report from the Magistrate Mr. P. D. Sawed and was apparently satisfied after consideration of all the affidavits produced before him that the allegations was baseless.
He, there , fore,, referred the matter to this court for suitable action being taken against the respondent Advocate for his making such allegations and interfering with the course of justice and scandalizing or maligning the Courts below '.
It was further stated in that order that the appellant had asked for an opportunity to establish the truth of the allegation made above which had been made, both "because of his personal knowledge and also because of information obtained from others".
A list of witnesses was furnished by the appellant whom he proposed to examine.
The High Court directed the District Judge to regard the evidence and to submit his report along with the evidence and the reports of the two judges.
It was expressly stated that the inquiry was to be confined to the allegations which had been quoted above.
The show cause notice which was issued to the appellant by the High Court (omitting unnecessary portions) was as follows : "Whereas" upon reading letter No. 2434, dated 5th April, 1967 forwarded by the 2nd Addl.
Sessions Judge, Thana along with the Record and proceedings of Cri.
Transfer Application No. 108/66 on his file and the Record and Proceedings in Cri.
Case No. 2949 of 1966 of the Court of the Judicial Magistrate, F. C. Kalyan, requesting to take action under the against the Advocate Mr. G. L. Bhatia, who has made serious allegations against the Judicial 540 Officers Shri Baadkar and Shri Sayyad in Transfer Cri.
Application No. ' 108/66 in para one in the Court of the 2nd Addl.
Sessions Judge, Thana, etc., And whereas this Court has on 15th June 1967, passed the following order : "Notice to Mr. Bhatia Advocate to show cause why action for contempt of Court should not be taken against him.
Notice to G. P. also.
A copy of D. J. 's letter to, be sent to Mr. Bhatia along with the notice.
" The District Judge in accordance with the orders of the High Court submitted a report giving his own findings on the evidence recorded by him and.
also after taking into consideration the reports of Sarvshri Baadkar and Sayvid which had been called for from them apparently after the witnesses produced by the appellant had given their evidence and copies of their depositions had been sent to the two Judges.
The appellant raised two preliminary objections before the High Court.
The first was that the District Judge could only submit a record of evidence and could not give his findings and, secondly, he could not take into consideration the reports of the two judges which had not been shown to the appellant.
Another objection raised was that the reports of the Judicial Officers could not have been relied upon because the appellant had no opportunity to cross examine them.
The High Court repelled all these objections.
From the statement of preliminary facts it is clear that the High Court relied only on the allegations contained in para 1 of the application of transfer which have already been set out before and contents of which were that Shri Sayyid was on friendly relations with Jagiasi and that he had even enjoyed his hospitality sometimes alone and sometimes in the company of Shri Baadkar.
We have laid a certain amount of stress on the aforesaid allegation made in para 1 of the transfer application because that application consisted in substance of three paragraphs.
It will be desirable, owing to the nature of this case, to set out all the allegations made in the transfer application 1."The Magistrate below is on friendly relations with the complainant the Respondent No. 1 in the present petition and he even enjoys the hospitality of the Respondent No. 1 some times alone and some times in company of the Civil Judge J. D. Kalyan (Shri M. B. Baadkar) who is also on friendly relations with the Respondent No. 1 and who also enjoys the hospitality of the Respondent No. 1.
541 2.
The Magistrate below is prejudiced against the present application.
3.The Magistrate below has not taken and does not appear to take impartial disinterested view of the case in question.
(a) Evidently the complainant was not actuated by mere or bonafide professional interest.
He was the author of false litigation for a false and fabricated claim.
That matter Suit No. 213 of 1966 was still pending hearing and adjudication.
The com plaint in question could not as such be filed in all fairness and it ought not to have been entertained at least without the preliminary enquiries or at any rate it ought to have been stayed.
(b) That was not done and the process was ordained to be urgently issued and served and the socalled summons was served on the applicant a day or two 'before the date of hearing to harass and handicap him in his professional commitments.
(c) Even the said summons was not accompanied by copy of the complaint as mandatorily required by section 204(b) of the Code of Criminal Procedure, and the applicant was left guessing as to what the said summons related to.
(d) On 15th October 1966 when the case in question was Sr.
No. 10 12 on the Board and it was preceded by even part heard cases the trial Magistrate did not permit this application even leave for a while to enable him to go to Civil Court at a distance of furlong or so to obtain leave of the Court from his professional engagements and the trial Magistrate observed that he would "take up the case there and then and just now" and in the next moment the complainant was in the Box ready for "finishing" the case as though by previous understanding.
4.The applicant respectfully refrains from entering into further details in this regard and he would do the same if called upon.
For the present suffice to say that in view of what is stated above there is well founded apprehension in the mind of the applicant he would not get justice unless the case is transferred to some other Court of the competent jurisdiction".
542 The question which immediately arises is whether an allegation of the nature made in para (1) in the circumstances of the present case in a 'transfer application would amount to contempt of the two judges Sarvshri Sayyid and Baadkar.
The High Court made a detailed examination of the evidence adduced before the District Judge and also relied on the reports of Sarvshri Sayyid and Baadkar.
It came to the conclusion that the allegations made by the appellant had not been proved.
It was observed that these allegations "in the above quoted paragraph" which means paragraph 1 were quite serious.
The High Court was also influenced by the fact that the appellant had "pitched the case higher and tried to prove that the two judges concerned were continuously receiving from Mr. Jagiasi presents of large value in the shape of sarees and other articles and thus receiving bribes so as to indiscreetly favour Mr. Jagiasi and the litigants whom he represented in their Court".
The appellant was not even willing to tender an apology and his position as an Advocate was naturally regarded as making the contempt all the more serious.
The appellant, who has argued the case himself, has raised the following main contentions : 1.The Act is unconstitutional and invalid.
It violates Articles 20 and 21 of the Constitution.
2.No procedure has been provided in the Act and therefore if is bad.
3.Even the normal procedure which should be followed in such cases has not been followed.
4.The High Court was not entitled to call for a report from the District Judge or to delegate its functions ,including the examination of witnesses to the District Judge.
5.The show cause notice issued by the High Court containing the charge of contempt was confined only to paragraph 1 of the transfer application.
The statements made in that paragraph could not by themselves constitute contempt.
In our opinion it is wholly unnecessary to decide points 1 to 4 because the appellant must succeed on the 5th point.
This court has, after a review of all the relevant decisions, laid down in Perspective Publications (P) Ltd. & Anr.
vs State of Maha rashtra(1), inter alia, the following principles : 1.It will not be right to say that the committals for contempt for scandalizing the, court have become obsolete.
(1) ; 543 2.The summary jurisdiction by way of contempt must be exercised with great care caution and only when its exercise is necessary for the proper administration of law and justice.
3.It is open to any one to express fair, reasonable and legitimate criticism of any act or conduct of a judge in his judicial capacity or even to make a proper and fair comment on any decision given by him.
4.A distinction must be made between a mere libel or defamation of a judge and what amounts to a contempt of the court.
The test in each case would be whether the impugned publication is a mere defamatory attack on the judge or whether it is calculat ed to interfere with the due course of justice or the proper administration of law by his, court.
It is only in the latter case that it will be punishable as contempt.
5."Alternatively the test will be whether the wrong is, done to the judge personally or it is done to the public.
To borrow from the language of Mukherjea J., (as he then was,) Brahma Prakash Sharma 's case the publication of a disparaging statement will be an injury to the public if it tends to create an apprehension in the minds of the people regarding the integrity, ability or fairness of the judge or to deter actual and prospective litigants from placing complete reliance upon the court 's administration of justice or if it is likely to cause embarrassment in the mind of the judge himself in the discharge of his judicial duties".
In that case it was held that the imputation in an article of impropriety, lack of integrity and oblique motives to a judge of the High Court in the matter of deciding a suit constituted contempt of court.
The question whether an action can be taken under section 3 of the Act if in a transfer application allegations are made against a judge which are of such nature as to constitute contempt of his court does not appear to be res Integra.
In State of Madhya Pradesh vs Revashankar(1) aspersions of a serious nature had been made against a Magistrate in a transfer petition.
, One of such aspersions was that the Magistrate in whose court the proceedings were pending was a party to a conspiracy with certain others the object of which was to implicate, the complainant in a false case of theft and that a lawyer appearing for the accused persons in whose favour the Magistrate, was inclined, had declared (1) 544 that he had paid a sum of Rs. 500/ to the Magistrate.
It was also asserted that the applicant was sure that he would not get impartial and legal justice from the Magistrate.
It was held that the aspersions taken at their face value amounted to what is called ' scandalizing the court ' itself and the attack on the Magistrate tended to create distrust in the popular mind and impair the confidence of the people in the courts.
This decisions is quite apposite for the purposes of the present case.
It decides that allegations made even in a transfer application casting aspersions on a judicial officer can constitute contempt of his court within section 3 of the Act.
It is difficult to comprehend that the mere statement that a Magistrate is friendly with a party who happens to be an advocate and enjoys his hospitality or has friendly relations with him will constitute contempt unless there is an imputation of some improper motives as would amount to scandalizing the court itself and as would have a tendency to create distrust in the popular mind and impair the confidence of the people in the courts.
The allegations contained in para 1 of the transfer application may or may not amount to defamation of the two judges, namely, Sarvashri Sayyid and Baadkar but to constitute contempt the other tests which have been discussed above must be fulfilled.
As noticed before the High Court confined the action, which was to be taken, only to the matter stated in paragraph 1 and did not choose or decide to include or consider paragraphs 2 or 3 either in the show cause notice or in the judgment the following part of which may be reproduced: .
"We have considered the whole of the evidence on record that can be relied upon on behalf of the condemner on the one side and by the State in support of the case for action against the condemner.
We have with some anxiety considered the arguments advanced by the contemner in support of his case that the evidence is sufficient to prove the allegations made by the contemner in the above quoted paragraph.
We find it impossible to hold in his favour that he has proved that Mr. Sayyid had friendly relations with Mr. Jagiasi and was enjoying the hospitality of Mr. Jagiasi either alone or in company with Mr. Baadkar.
He has failed to prove that Mr. Baadkar had friendly relations with Mr. Jagiasi and enjoyed the hospitality of Mr. Jagiasi".
It is true that a party cannot make such allegations even in a transfer application which may fall within the rule laid down in Revashankar 's(1) case or in the Perspective Publication 's case(2) and which may amount to scandalizing the court in the sense pointed out in these decisions.
In the State vs The Editors & (1) (2) [1969] 2 S.C.R.779.
545 Publishers of Eastern Times and Prajatantra(1), Jagannadhadas C.J. (as he then was) delivering the judgement of the Division Bench, after an exhaustive examination of the decided cases where the jurisdiction of the court for this, class of contempt had in fact been exercised, observed "A review of the cases in which a contempt committed by way of scandalising the court has been taken notice of, for punishment, shows clearly that the exercise of the punitive jurisdiction is confined to cases of very grave and scurrilous attack on the court or on the Judges in their judicial capacity, the ignoring of which would only result in encouraging a repetition of the same with a sense of impunity and which would thereby result in lowering the prestige and authority of the court".
There are not many decisions in which punishment has been inflicted for committing contempt of court by making scurrilous allegations in an application for transfer of a case from one court to another.
Mention may, however, be made of one of such cases: Swarnamayi Panigrahi vs B. Nayak & Ors.
(2) There, during the pendency of certain rent suits filed before the Rent Suit Collector by the landlord, who was the wife of the Chief Justice of the Orissa High Court, the tenant filed certain transfer applications before the Additional District Collector making statements like these : "1.
The lower court openly identified himself with 'the plaintiff Shrimati Swammayi Panigrahi and is so partial to her that no justice or impartial decision can be expected from him; 2.He has gone out of the course prescribed by law and has taken over the function of witness and court in himself in such a way that there is no parallel to it in the history of litigation in India; and 3.That opposite party wields extraordinary in fluence in the State as she is the wife of Shri Lingarai Panigrahi Chief Justice of Orissa High Court.
It is being openly talked about that the conclusions are foregone".
It was observed that though some latitude has to 'be given in a transfer application but the question was whether or not the applicant in that case had exceeded the limits permissible under the law.
As a rule applications for transfer were not made merely (1) (2) A.I.R 1959 Orissa 89.
546 because the trying judge was alleged to be incompetent but there may be circumstances beyond the judge 's control such as the acquaintance with one of the parties or personal interest in the subject matter of the proceedings which in law would be considered as preventing him from giving an unbiased decision.
It was held that the, applicant had exceeded the limits and had gone out of his way not only to malign the personal integrity and judicial honesty of the lower court but had also directly attacked the whole administration of justice headed by the Chief Justice of the State.
It is noteworthy that on an allegation made in a transfer application the judge against whom the allegation is made is often afforded an opportunity of giving explanation by the higher court and he can dispel any cloud that might have been cast on his fairness and integrity.
The higher court takes action for transfer after full consideration of all the circumstances of the case including the report of the judge against whom the allegations are made.
In this way it can well be said that cases in which applications for transfer are made stand on a slightly different footing from those where a party makes an allegation, either inside or outside the court of a scandalizing nature imputing improper motives to the judge trying the case.
The Allahabad High Court in Emperor vs Murli Dhar & Another(1) was of the view that where an accused person in an application for transfer of a case made an assertion that the persons who had caused the Proceedings to be instituted were on terms of intimacy with the officer trying the case and, therefore, he did not expect a fair and impartial trial was not guilty of offence under section 228, Indian penal Code, there being no intention on the part of the applicant to insult the court, his object being merely to procure a transfer of his case.
It is true that.
in the garb of a transfer application a person cannot be allowed to commit contempt of court by making allegations of a serious and scurrilous nature scandalizing the court and imputing improper motives to the judge trying the case.
But then the nature of the allegations will have to be closely examined and so long as they do not satisfy the requirements of what May be regarded as contempt of court no punishment can possibly be inflicted.
The appellant, in the present case, is an advocate and it is most unfortunate that though at the stage of the transfer application be made certain allegations in para 1 about the social intimacy between Jagiasi and Sarvashri Sayyid and Baadkar, the two judicial officers, with the apparent object of securing a transfer of the case he proceeded to take the highly ill advised step of attempting to substantiate, the allegation so made.
We are, however, not concerned with any charge relating to the matters subsequent to the notice which was issued by the High Court with regard.to the allegations for which punishment has been (1) I.L.R. 8 All, 284.
547 imposed on the appellant.
That notice on the face of it discloses no such allegation which could be regarded as falling within the rule laid down by this Court and by a series of decisions of the Privy Council in which this head of contempt i.e. scandalizing court has come up for examination.
Most of those decisions have been referred to in the case of Perspective Publications (P) Ltd.(1).
In addition we may mention Debi Prasad Sharma & Others vs Emperor(2) in which in a newspaper report the Chief Justice of a High Court was untruly alleged to have committed an ill advised act in writing to his.
subordinate judges asking them to collect subscriptions for the War Fund.
According to their lordships there was no criticism of any judicial act of the Chief Justice nor any imputation was made for anything done or omitted to be done by him in the administration of justice nor was there any criticism of him in his administrative capacity.
In the opinion of their lordships the proceedings in contempt were misconceived.
In our judgment the allegations contained in para 1 of the transfer application were not such as would amount to contempt of court.
We cannot help observing that the appellant did not show the sense of responsibility in making the allegations in question which is expected from an advocate and in further attempting to substantiate them which he failed to do.
The appeal is allowed and the order passed by the High Court is hereby set aside.
Parties will bear their own costs in this Court.
S.C. Appeal allowed.
(1) ; (2) A.I.R. (1943) P.C. 202.
| IN-Abs | An advocate, in a transfer application in respect of a criminal complaint, filed before the Sessions Judge made certain allegations against two judicial officers before whom the criminal complaint and a civil suit, were pending.
While dismissing the transfer application, the Additional Sessions Judge, who heard ' the application, recorded an order that a report be submitted to the High Court for considering the conduct of the applicant as to the course adopted by him in making imputations or aspersions in the transfer petition against the judicial officers and to take action for contempt of court under section 3(3) of the .
Paragraph 1 of the transfer application stated that "the Magistrate below is on friendly relations with the complainants the respondent No. 1 in the present petition and he even enjoys the hospitality of the Respondent No. 1 sometimes alone and sometimes in company of the Civil Judge J. D. Kalyan (Shri M. B. Boadkar) who is also on friendly relations with the respondent No. 1 and who also enjoys the hospitality of the respondent No. 1".
There were other allegations in the transfer petition.
The show cause notice issued by the High Court containing the charge of contempt was confined only to paragraph 1 of the transfer appli cation.
The High Court held that the appellant was guilty of contempt of court and he was sentenced accordingly.
Allowing the appeal.
HELD : (1) The show cause notice on the face of it disclosed no such allegation which could be regarded as falling within the rule laid down by this Court in which the head of contempt, i.e. scandalizing the Court, had come up for examination.
In Perspective Publications (P) Ltd. vs State of Maharashtra, ; this Court has laid down certain principles as to the law of contempt.
They are : (i) It will not be right to say that Committals for contempt for scandalizing the Court have become obsolete.
(ii)The summary jurisdiction by way of contempt should be exercised with great care and caution and only when its exercise is necessary for the proper administration of law and justice.
(iii)Any one may express fair, reasonable and legitimate criticism of any act or conduct of a judge in his judicial capacity or make a proper or fair comment on any decision given by him.
(iv)A distinction must be made between a mere libel or defamation of a judge and what amounts to contempt of court.
The test in each 537 case would be whether the impugned publication is a mere defamatory attack on the judge or whether it is calculated to interfere with due course of justice or the proper administration of law by the court it is only in the latter case that it will be punishable as contempt.
[542 H] (v)Alternatively, the test will be whether the wrong is done to the judge personally or it is done to the public.
The publication of a disparaging statement will be an injury to the public if it tends to create an apprehension in the minds of the people regarding the integrity, ability of fairness of the judges or to deter actual and prospective litigants from lacing complete reliance upon the courts administration of justice or if it is likely to cause embarrassment in the mind of the judge himself in the discharge of his judicial duties".
[543 E] (2)Allegations made even in a transfer application casting aspersions on a judicial officer can constitute contempt of his court within section 3 of the Act.
However, cases in which applications for transfer are made/ stand on a slightly different footing from those where a party makes an allegation, either inside or outside the court of a scandalizing nature imputing improper motives of the judge trying the case; but even in the case of a transfer application, a person cannot be allowed to commit contempt of court by making allegations of a serious nature scandalizing the court and imputing improper motives to the judge trying the case.
[544 B, 546 D] In the present case, the mere statement that a Magistrate is friendly with a party who happens to be an advocate and enjoys his hospitality or has friendly relations with him will not constitute contempt unless there is an imputation of some improper motives as would amount to scandalizing the court itself and as would have a tendency to create distrust in the popular mind and impair the confidence of the people in the courts.
[544 C] State of Madhay Pradesh vs Revashankar, , State vs
The Editors and Publishers of Eastern Times and Prajatantra, and Swaranamavi Panigrahi vs B. Nayak & Ors., A.I.R. 1959 Orissa 89, referred to and discussed.
|
Appeal No. 1807 of 1971.
Appeal by special leave from the judgment and order dated May 6, 1971 of the, Patna High Court in C.W.J.C. No. 41 of 197 1.
L. M. Singhvi, section C. Dingra and U. P. Singh, for the appellant.
section V. Gupte and B. P. Singh, for respondents Nos.
1 to 5.
section N. Prasad and D. N. Mishra, for respondent No. 6.
The Judgment of the Court was delivered by Mathew, J.
The appellant filed a writ petition before the High Court of Patna_praying for quashing an order passed by the Minister of Forest, Government of Bihar, on December 13, 1970, and for issue of a writ in the nature of mandamus directing the respondents 1 to 5 to give effect to the previous order of the Minister of Forest dated November 27, 1970.
The writ petition was heard by a Division Bench of the Court and the petition was dismissed.
This appeal, by special leave, is from that judgment.
There is a bamboo coup know as "Bantha Bamboo coup in Chatra North Division of Hazaribagh district.
On July 22, 1970, the Forest Department of the Government of Bihar advertised for settlement of the right to exploit the COUP by Public auction ' The auction was held in the Office, of the Divisional Forest Officer on August 7, 1970.
Five persons including the appellant participated in the auction.
Though the reserve price fixed in the tender notice was Rs. 95,000/ , the appellant 's bid of Rs. 92,001/ , being the highest, was accepted by the Divisional Forest Officer.
The petitioner thereafter deposited the security amount of Rs. 23,800/ and executed an agreement.
The Divisional Forest officer reported about the auction We servator of Forests, Hazaribagh Circle, by his letter dated August 25, 1970.
As the price for which the coup was provisionally, 632 settled exceeded Rs. 50,0001 , the Conservator of Forests forwarded the papers regarding the auction sale to the Deputy Secretary to Government of Bihar, Forest Department, for coation of the acceptance by the Government.
Since the provisional settlement was made for an amount less than the reserve price, the matter was also referred to the Finance Department.
The Finance Department invited comments from the Divisional Forest Officer as to why the settlement was made for a lesser amount.
The Divisional Forest Officer, by his letter dated October 30, 1 970.
submitted his explanation for the provisional settlement at an amount below the reserve price.
When the matter was pending before the Government, the appellant expressed his willingness to take the settlement at the reserve price of Rs. 95,000 by his communication dated October 26, 1970.
The appellant thereafter filed an application on November 3, 1970, praying for settlement of the coup on the basis of the highest bid.
The Minister of Forest, by his proceedings dated November 27, 1970, directed that the coup may be settled with the highest bidder.
namely the appellant, at the reserve.
price.
A telegram was sent by the Government to the Conservator of Forests, Hazaribagh Circle on November 28, 1970, with a copy of the same to the Conservator of Forest, Bihar, confirming the auction sale to the appellant at the reserve price of Rs. 95,000/ .
As no intimation was received by the Divisional Forest Officer, he did not cormmunicate the proceedings of the Minister to the appellant.
One Md. Yakub, Respondent No. 6, filed a petition on December 4. 1970, before the Government of Bihar, Respondent No. 1.
offering to take the settlement of the coup in question for Rs. 1,01,125/ .
A telegram was sent by the Government on December 5, 1970, to the Divisional Forest Officer, directing him not to take any action on the basis of the telegram dated November 28, 1970, sent to him in pursuance of the proceedings of the Government dated November 27, 1970.
That telegram was received by the Divisional Forest Officer on December 10, 1970.
and the Divisional Forest Officer, by his letter dated December 10. 1970, informed the Government that the previous telegram dated November 28, 1970, was not received by him and so it content was not communicated to the appellant.
The whole matter was there after placed before the Minister of Forest and the Minister, by his proceedings dated December 13, 1970, cancelled the settlement of the coup with appellant and settled the same with Respondent No. 6 for.
1,01,125/ .
The Government thereafter sent telegrams on December 21, 1970, /to the Conservator of Forests and the Divisional Forest Officer informing them that the coup had been settled with Respondent No. 6.
The Divisional Forest Officer.
by his letter dated December 23, 1970, directed Respondent No. 6 to deposit the security amount and to pay the first instalment.
Respondent No. 6 deposited the same and executed an agreement.
633 The contention of the appellant in the writ petition was that there was a concluded contract when the bid of the appellant was accepted by the Divisional Forest Officer though that was subject to confirmation by the Government and that, when the Government confirmed the acceptance by its proceedings, dated November 27, 1970, it was no longer within the power of Government to make the settlement of the coup upon the 6th Respondent by its proceedings dated December 13, 1970.
It was also contended in the alternative that the settlement of the coup in favour of.
the 6th Respondent was in violation of statutory rules and, therefore, in any event, that settlement was invalid.
As already indicated, the High Court negatived these conten tions and upheld the validity of the settlement in favour of the 6th Respondent.
The special conditions in the tender notice makes it clear that the Divisional Forest Officer has the right to, accept a bid of less than Rs. 5,0001 , that acceptance of a bid of more than Rs. 5,0001 by him is subject to confirmation by the Chief Conservator of Forests and the Forest Department of the Bihar Goverment, that an auction sale for an amount of more than Rs. 5,0001 would not be recognised until it is confirmed by the competent authority, and that a bid made in auction and which has been provisionally accepted by the Divisional Forest Officer shall be binding on the bidder for two months from the date of auction or till the date of rejection by the competent authority, whichever is earlier.
Counsel for the appellant contended that there was a condi tional acceptance of the offer of the appellant by the Divisional Forest Officer, that on confirmation by the Government, that acceptance became unconditional and, therefore, there was a concluded contract when the Government confirmed the acceptance, even though the confirmation was not communicated to the appellant.
In support of this, he relied on The Rajanagaram Village Cooperative Society vs Veerasami Mudaly(1).
There it was held that in the case of a conditional acceptance in the presence of a bidder, the condition being that it is subject to approval or confirmation by some other person, the acceptance, though conditional, has to be communicated and when that is communicated, there is no further need to communicate the approval or confirmation which is the fulfillment of the condition.
It was further held that a conditional acceptance has the effect of binding the highest bidder to the contract if there is subsequent approval or confirmation by the person indicated, that he cannot resile from the contract or withdraw the offer, and if there is approval.
or confirma (1) [1950] 11 M.L.J.486.
634 tion, the contract becomes concluded and enforceable.
This decision was considered in Somasudaram Pillai vs provincial Government of Madras(1) where Chief Justice Leach, speaking for the Court said that, to have an enforceable contract, there must be an offer and an unconditional acceptance and that a person who makes an offer has the right to withdraw it before acceptance, in the absence of a condition to the contrary supported by consideration.
He further said the fact that there has been a provisional or conditional acceptance would not make any difference as a provisional or conditional acceptance cannot in itself make a binding contract.
The question whether by an acceptance which is conditional upon the occurrence of a future 'event a contract will become concluded was considered by Williston and this is what he says : ( ) " A nice distinction may be taken here between (1) a so called acceptance by which the acceptor agrees to become immediately bound on a condition not named in the offer, and (2) an acceptance which adopts unequivocally the terms of the offer but states that it will not be effective until a certain contingency happens or fails to happen.
In the first case there is a counteroffer and rejection of the original offer; in the second case there is no counter officer, since there is no assent to enter into an immediate bargain.
There is, so to speak, an acceptance in escrow, which is not to take effect until the future.
In the meantime, of course, neither party is bound and either may withdraw ' More over, if the time at which the acceptance was to become effectual is unreasonably remote, the offer may lapse before the acceptance becomes effective.
But if neither party withdraws and the, delay is not unreasonable a contract will arise when the contingency happens or sti pulated event occurs" In this case, it is not the want of communication of the confirmation by the Government to the appellant that really stands in the way of there being a concluded contract, but rather the want of confirmation by the Government of the conditional acceptance by the Divisional Forest Officer.
The appellant 's bid was for Rs. 92,001/ .
The, acceptance of the bid by the Divisional Forest Officer was, therefore, subject to confirmation by Goverment.
The proceedings.
of the Minister dated November 27, 1970, would show that he did not confirm the acceptance of the (1) A.I.R. 1947,34 Madras, 366.
(2) Williston On Contracts, Vol.
I, 3rd Ed.
Section 77A, 635 offer by the Divisional Forest Officer.
What the Minister did was not to confirm the acceptance made by the Divisional Forest Officer, but to accept the offer made by the appellant in his communication dated October 26, 1970, that he would take the coup for the reserved price of Rs. 95,000/ .
There was, therefore, no confirmation of the acceptance of the bid to take the coup in settlement for the amount of Rs. 92,001/ .
If the offer that was accepted was the offer contained in the communication of the appellant dated October 26, 1970, we do not think that there was any communication of the acceptance of that offer to the appel lant.
The telegram sent to the Conservator of Forest, Hazaribagh, by the Government on November 28, 1970, cannot be considered as a communication of the acceptance of that offer to the appellant.
The acceptance of the offer was not even put in the course of transmission to the appellant; and so even assuming that an acceptance need not come to the knowledge of the offeror the appellant cannot contend that there was a concluded contract on the basis of his offer contained in his communication dated October 26, 1970, as the acceptance of that offer was not put in the course of transmission.
Quite apart from that, the appellant himself revoked the offer made by him on October 26, 1970, by his letter dated November 3, 1970, in which he stated that the coup may be settled upon him at the highest bid made by him in the auction.
We are, therefore, of the opinion that there was no concluded contract between the appellant and the Government.
This takes us to the question whether the settlement in favour of the 6th Respondent was in violation of any statutory rule.
The appellant 's contention was that the settlement in favour of the 6th Respondent by a private treaty was in violation of the, rules of executive business made under Article 166(3).
Rule 10 of the Rules provides : "10(1) No department shall, without previous consultation with the Finance Department, authorise any orders (other than orders pursuant to any general or special delegation made by the Finance Department) which (a) either immediately or by their repercussion, will affect the finances of the State, or which, in particular, (i) involve any grant of land or assignment of revenue or concession, grant, lease or licence of mineral or forests, rights or a right to water power of any easement or privilege in respect of such concession.
** *** ** *** 636 (2), Where on a proposal under this rule, prior consultation with the Finance Department is required, but on which the Finance Department might not have agreed, no further action shall be taken on any such proposal until the cabinet takes a decision to this effect.
" A copy of the letter from the Deputy Secretary to the Government of the Accountant General, Bihar, dated November 22, 1967 would show that some relaxation of Rule 10(1) of the rules of executive business was made by the Finance Department relating, to lease of forest Coups or forest produce of the value of more than Rs. 50,0001 .
That letter reads as under : "Subject : Revision of procedure in issuing any order involving any grant of lease, sale or licence of minerals of forest rights if such order is issued by the Administrative Department at the, Secretariat level.
"Sir, I am directed to say that in relaxation of rule 10 of the Rules of Executive Business, Government have been pleased to decide that the Forest Department shall authorise orders sanctioning leases of Forest coups or produce of the value of more than Rs. 50,0001 (rupees fifty thousand) each, subject to the following conditions that (1) Reserve price of the coup has been fixed before auction.
(2) Highest bid should be accepted.
(3) Highest bid should not be less than the reserve price.
(4) Any relaxation to the above conditions may not ordinarily be allowed except with the prior concurrence of the Finance Department.
" Before the High Court the contentions of the 6th Respondent were, firstly, that the rule 10(1) is not a statutory rule and, secondly, that it did not concern lease of forest land.
The High Court, without deciding the question whether the rule is a statutory rule, held that the rule has nothing to do with the lease of forest coups and said that there was nothing which prevented the Government from giving the coup on lease by private treaty.
The High Court, therefore, held that there was no bar statutory or otherwise, to the settlement of the coup in favour of Respondent 637 No. 6 by private negotiation and as such the settlement in his favour was valid.
, Counsel for the appellant argued that the High Court went wrong in its conclusion that rule 10(1) as relaxed, did not apply to the grant of the lease of the coup in question and that it really prohibited a lease of forest land except by public auction.
, We are not satisfied that the construction contended for is correct.
Neither rule 10(1) nor the rule as relaxed says that forest land can be leased only by public auction.
Rule 10(1) in so far as it is relevant to the present case only says that no department shall, without prior consultation with the Finance Department, authorise by any order, the lease or licence of mineral or forests.
The relaxation made to rule 10(1) as evidenced by the letter from the Deputy Secretary to the Government is to the effect that in the case of lease of forest land of the value of more than Rs. 50,000/ , if made by public auction, it can only be made subject to the conditions mentioned there.
In other words, rule 10(1) as relaxed does not prohibit the grant of a lease by private treaty.
The rule read in the context of its relaxation as mentioned in the letter of the Deputy Secretary would only show that consultation with the Finance Department is not necessary for a lease, if the lease is of of the value of more than Rs. 50,000/ and is granted in pursuance of a public auction held in conformity with the conditions mentioned in the letter of the Deputy Secretary.
Now the question is whether the coup in question was settled in favour of the, 6th Respondent in accordance with Rule 10(1).
It is clear from the records relating to the proceedings for the grant of the lease in favour of the 6th Respondent that the Finance Department was not consulted before the Minister passed the order on December 13, 1970, to grant the lease.
But counsel for the Government of Bihar and 6th Respondent contended that rule 10(1), in so far as it requires prior consultation with the Finance Department, is only directory in character and therefore, even if there was no prior consultation, the settlement was valid.
So, the question arises whether rule 10(1) which requires prior consultation with the Finance Department is mandatory or not.
Several tests have been propounded in decided cases for determining the question whether a provision in a statute, or a rule is mandatory or directory.
No universal rule, can be laid down on this matter.
In each case one must look to the subject matter and consider the importance of the provision disregarded and the relation of that provision to the general object intended to be secured.
Prohibitive or negative words can rarely be directory and are indicative of the intent that the provision is to be mandatory (see Earl T. Crawford.
The Construction of Statues, pp.
523 4).
638 Where a prescription relates to performance of a public duty and to invalidate acts done in neglect of them would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty, such prescription is generally understood as mere instruction for the guidance of those upon whom the, duty is imposed (see Dattatreya Moreshwar Pangerkar vs The State of Bombay and others(1)].
Where, however, a power or authority is conferred with a direction that certain regulation or formality shall be complied with, it seems neither unjust nor incorrect to exact a rigorous observance of it as essential to acquisition of the right or authority (see Maxwell, Interpretation of Statutes, 6th edition, pp. 649650).
in this case, we think that a power has been given to the Minister in charge of the Forest Department to do an act which concerns the revenue of the State and also the rights of individuals.
The negative or prohibitive language of rule 10(1) is a strong indication of the intent to make the rule mandatory.
Further, rule 10(2) makes it clear that where prior consultation with the Finance Department is required for a proposal, and the department on consultation does not agree to the proposal, the department originating the proposal can take no further action on the proposal.
The cabinet alone would be competent to take a decision.
When we see that the disagreement of the Finance Department with a proposal on consultation, deprives the department originating the proposal of the power to take further action on it, the only conclusion possible is that prior consultation is an essential pre requisite to the exercise of the power.
We, therefore, think that the order passed by the Minister of Forest, Government of Bihar on December 13, 1970, settling the coup in favour of the 6th Respondent was bad and we quash the order.
We allow the appeal to the extent indicated but make no order as to costs.
G.C. Appeal allowed.
(1) ; at p. 624.
| IN-Abs | The right to exploit a bamboo coup in the Hazaribagh district of Bihar was auctioned in August 1970.
The reserve price was Rs. 95,000/but the appellant 's bid of Rs. 92,001/ being the highest was accepted by the Divisional Forest Officer.
The petitioner deposited the security required and executed an agreement.
The Divisional Forest Officer about the auction sale to the Conservator of Forests, Hazaribagh Circle .
As the price for which the coup was provisionally settled exceeded Rs. 50,0001 the Conservator of Forests forwarded the papers regarding the auction sale to the Deputy Secretary to the Government of Bihar, Forest Department for confirmation of the acceptance, by the Go Since provisional settlement was made for an amount less than the reserve price the matter was also referred to the Finance Department.
When the matter was pending the appellant expressed his willingness to take the settlement at the reserve price of Rs., 95,000/ by his communication dated October 26, 1970.
The appellant thereafter filed an application on November 3, 1970 praying for settlement of the coup on the basis of the highest bid.
The Minister of Forest by his proceedings dated November 27, 1970 directed that the coup may be settled with the highest bidder viz. the appellant at the reserve price.
A telegram was sent by the Government to the Conservator of Forests, Hazaribagh Circle on November 28, 1970 with copy of the same to the Conservator of Forest, Bihar co the auction sale at the reserve price of Rs, 95,000/.
As no intimation was received by the Divisional Forest Officer he did not communicate the proceedings of the Minister to the appellant.
On December 24, respondent No. 6 filed a petition to the Government offering to take the settlement of the coup in question for Rs. 101125/ .
The Minister, by his proceedings dated December 13, 1970 cancelled the settlement of the coup with the appellant and settled the same with respondent No. 6 for Rs. 101125/ . 'The appellant filed a writ petition in the high Court contending that there was a concluded contract when the bid of the appellant was accepted by the Divisional Forest Officer though that was subject to the confirmation by the Government and when the Government confirmed acceptance by its proceedings dated number 27, 1970 it was no longer within the Dower of the Government to make the settl ement of the coup upon the 6th respondent.
It was also contended that the settlement of the coup in favour of the 6th respondent was invalid because (a) rule 10(1) of the Rules of Executive Business made under article 166(3) of the Constitution as relaxed by the letter of.
the Deputy Secretary to the Government dated November 27, 1967 pro hibited the grant of lease by private treaty and (b) the requirement of 12 L1031SupCI/72 630 prior consultation in r. 10(1) with the Finance Department was mandatory and had not been complied with.
The High Court rejected the appellant 's contentions.
In appeal to this Court by special leave.
HELD : (1) The acceptance of the appellant 's offer was subject to confirmation by the Government and in the absence of such confirmation them could be no concluded contract.
The appellant 's bid was for Rs;.
92001/ .
The acceptance of the bid by the Divisional Forest Officer was therefore, subject to confirmation by the Government.
The proceeding of the Minister dated November 27, 1970 would show that he did not confirm acceptance of the offer by the Divisional Forest Officer.
What the Minister did was not to confirm the acceptance made by the Division 31 Forest Officer but to accept the offer made by the appellant in his communication dated October 26, 1970 that he would take the coup for the reserved price of Rs. 95,000/.
There was, there for, no confirmation of the acceptance of the bid to take the coup in the settlement for the amount of Rs. 92,001/ .
[634 G 635B] If the offer that was accepted was the offer contained in the communication of the appellant dated October 26, 1970 it could not be said that there was any communication of the acceptance of that offer to the appellant.
The telegram sent to the Conservator of Forest, Hazaribagh by the Government on November 28, 1970 could not be considered as a communication of the acceptance of that offer to the appellant.
The acceptance , of the offer was not even put in course of transmission to the appellant; and so even assuming that acceptance need not come to the knowledge of the offer or, the appellant could not contend that there was a concluded contract on the basis of his offer contained in his communication dated October 26, 1970, as the acceptance of that offer was not put in the course of transmission.
Apart from that the appellant himself revoked the offer made by him on October 26, 1970 by his letter dated November 3, 1970 in which he stated.
that the coup may be settled upon him at the highest bid made by him in, the auction.
There was, thus no concluded contract between the appellant and the government.
[635B D] The Rajanagaram Village Cooperative Society, vs Veeraswami Mudaly, , distinguished.
Somasundaram Pillai vs Provincial Government of Madras, A.I.R. 1947 Madras, 366, applied.
(ii)Rule 10(1) in so far as it was relevant to the present case only says that no department shall without prior consultation with the Finance Department authorise by any order the lease of license of mineral or forests.
The rule read in the context of its relaxation as mentioned in the letter of the Deputy Secretary would only show that consultation with the Finance Department is not necessary for a lease if lease is of land of the value of more than Rs. 50,0001 and 'is granted in pursuance of public auction held in conformity with the conditions mentioned in the letter of the Deputy Secretary.
The rule where before or after relaxation did not prohibit the grant of leave by private treaty.
[637C] (iii)It was clear from records relating to the proceedings for the grant of the lease in favour of the 6th respondent that the Finance Department was not consulted before the Minister passed the order on December 13, 1970.
to grant lease.
It could not be said that rule 10(1) in so far Is it requires prior consultation with the Finance Department is only drirectory and therefore even if there was no, prior consultation the settlement 631 was valid.
The negative or prohibitive language of rule 10(1) is a strong indication of the intent to make the rule mandatory.
Further rule 10(2) makes it clear that where prior consultation with the Finance Department is required for a proposal and the department on consultation, does not agree to the proposal, the department originating the proposal can take no further action on the proposal.
The Cabinet alone would be competent to take a decision.
Prick consultation is, therefore, an essential prerequisite to the exercise of power.
The, order passed by the Minister of Forest, Government of Bihar on December 13, 1970 settling the coup in favour of the 6th respondent was, therefore bad and the order must be quashed.
[637EF; 638D F] Dattatreya Moreshwar Pangerkar vs The State of Bombay and Others.
applied.
|
l Appeals Nos.
1091 to 1093 of 1971.
Appeals by special leave from the award dated April 15, 1971 of the Industrial Tribunal, Maharashtra, Bombay in References (IT) Nos. 20 of 1969, 70 of 1970 and 105 of 1969.
V.M. Tarkunde, R. A. Jahagirdar and I.N. Shroff, for the appellant (in all the appeals).
K.T. Sule.
Janardan Sharma and Indira Jaisingh, for respondent No. 1 (in all the appeals).
Urmila Kapoor and Kamlesh Bansal, for respondent No. 2 (in all the appeals).
The Judgment of the Court was delivered by Vaidialingam, J.
These three appeals, by special leave, arise out of the Award, dated April 15, 1971 of the Industrial Tribunal, Maharashtra, Bombay in Reference (I.T. Nos. 20 and 105 of 1969 and 70 of 1970).
The main questions that arise for consideration in these appeals relate to the award of Dearness Allowance, Classification of Grades and Fixation of Wages and a direction given by the Industrial Tribunal regarding the Incentive Bonus Scheme, as modified by the Company.
There is also a minor point regarding a particular clause in the Gratuity Scheme as framed by the Tribunal in Reference (I.T. No. 20 of 1969).
Though there are certain other matters dealt with in the Award in Reference (I.T. No. 20 of 1969) they are not the subject of controversy in these appeals.
We will now state the circumstances under Which the Refer ences came to be made to the Tribunal.
570 The appellant was started as a proprietary concern in the year 1944 and was later transformed to a public limited Company and registered as such under the Indian Companies Act, 1962.
From its inception, the Company has been dealing in the business of manufacturing and selling pharmaceutical products.
It had its factory in Jogeshwari in Greater Bombay.
At the time of the Reference, the Company was employing about 714 workmen of whom 558 were operatives and 156 were members of the clerical and subordinate staff.
All these employees were covered by the demands comprised in all the References.
The wage scales of the workmen had been determined originally in Reference (I.T.No. 23 of 1959).
The wage scales of the operatives were as follows "Unskilled A Rs. 1 .52 0 .09.2 .23 0 .12 2 .93
Unskilled B 1.25 0.96 1.85 0.09. 2.30 Semi skilled A 2 .00 0 .12 2 .72 0 .18 3 .80
Semi skilled B 1 .76 0 .11 2 .64 0 .15 3 .39
Skilled 2 59 0 .13 2 .85 0 22 3 .95 0 .30 4 .25".
The wage scales of the clerical and subordinate staff were as follows .200 260 "Junior Chemist Rs. 120 10 12 Manufacturing Assistant140 10 220 15 310 Store keepers Store Assistants 180 10 260 15 350 Stenographers Junior Clerk 60 8 90 10 146 E.B. 15 215.
Intermediate Clerks75 8 115 12 175 E.B. 15 250.
Senior Clerks 115 10 255 15 315 E.B. 20 395.
" In addition to the basic wages, referred to above, the employees were getting dearness allowance, which in the case of operatives was equal to 80% of the revised textile scale of dearness allowance and in the case of clerical and subordinate staff 100% of the revised textile scale of dearness allowance.
The nomenclature of the grades of the operatives was changed by a consent award in Reference (I.T. No. 170 of 1961).
The grades and wages as per this award were as follows "Unskilled Rs. 1 25 0 06 1 85 0 09 2 30 Semi skilled A, 1 52 0 02 2 33 0 12 2 93 Semi skilled B ' 1 76 0 11 2 64 0 15 3 39 Skilled 2 00 0 12 2 72 0 18 3 39 Highly Skilled 2 59 0 13 2 85 .O 22 . 3 95. .
O 30 4 25.
" The dearness allowance of the operatives and clerical and subordinate staff underwent a change by the award in Reference (I.T. No. 402.
of 1963).
Under that award the dearness allowance 571 of the operatives was increased to 90% of the revised textile scale of dearness allowance from January 1, 1964 and to 95% of the revised textile scale of dearness allowance from July 1, 1964.
The dearness allowance of the clerical and subordinate staff was supplemented at different slabs with effect from January 1, 1964 as follows : "Basic salary upto Rs. 100 Basic salary of Rs. 101 to 200 Basic salary of Rs. 201 to 300 Basic salary of over Rs. 300 .
Operatives ' dearness allowance plus Rs. 7 .50 Operative , ' dearness allowanceplus Rs. 15.
Operatives dearness allowance plus Rs. 22 50.
Operatives ' dearness allowance plus Rs. 25.
" Though the award prescribed to the clerical and subordinate staff the same rate of dearness allowance of the operatives plus a fixed amount, as referred to above, the Company continued to give them dearness allowance equal to 100% of the revised textile scale of dearness allowance.
This was also supplemented with the fixed amount depending upon the slab of the salary.
There was a settlement on June 24, 1966 between the Company and its employees, in and by which the wages of the opera tives and the clerical and subordinate staff underwent a final revision.
The wages of the operatives were fixed as follows "Unskilled Rs. 1 .25 0 .10 2 .75
Semi skilled B 1 60 0 .12 2 32 0 .15 3 .67
Semiskilled A 1 .80 0 .15 2 85 0 .20 4 . 45 Skilled 2 .,10 0 20.3 .10 0 .25 5 .10
Highly skilled 2 .75 0 20 3 75 0 .25 5 00 0 .30 6 .50.
" Similarly, the wages of the clerical and subordinate staff were as follows : "Junior Clerk Rs. 75 6 105 10 155 15 260 E. B. 17 311.
Intermediate Clerk 90 8 130 12 190 15 295 E. B. 18 349.
Senior Clerk 125 10 195. 15 270 20 390 E. B 25 440.
Steno and Storekeeper180 10 260 15 380 E. B. 20 4 460.
" The above basic scales in respect of all the categories were again supplemented by dearness allowance as provided for in the award passed in Reference (I.T. No. 402 of 1963).
The Company had also an Incentive Bonus Scheme, by virtue of which a large number of operatives were getting, on an average an additional sum of Rs. 28/ per month.
The Company further revised 572 from about November 1, 1969 the wage scales of Drivers and Watchmen as follows : "Drivers Rs. 70 6 100 9 145 12 205 E. B. 15 250.
Watchmen 45 4 65 6 95 E. B. 8. 135".
The above was the pattern of the wage structure and dearness allowance for the operatives and the clerical and subordinate staff.
The Unions concerned made a demand for introducing the following scheme of dearness allowance in respect of all the workmen with immediate effect : Wage slab .
When the working classVariation in the cost of living in dearness allow dex figure is inance for every 10 the group of 401 points rise or 410.
upto 100 100 per cent 5 per cent From Rs. 101 to 200 50 per cent2 1/2 per cent From Rs. 201 and above 25 per centII percent Minimum dearness allowance Rs. 100.
Minimum variation Rs. 5.
" They also demanded that the above scheme of dearness allow ance was to have retrospective effect from August 1, 1967.
In the same demand the Unions required that the workmen should be granted one month 's wages for every year of service as gratuity in case of resignation, dismissal, discharge, death or termination of service for any reason.
By this demand the Unions required modification of the then existing pattern of payment of dearness allowance at 95% of revised textile scale of dearness allowance to operatives and 100% of revised textile scale of dearness allowance plus Rs. 7.50 to Rs. 25/ paid to the clerical and other staff.
The Company did not agree to the demand and in consequence by order dated January 14, 1969 the Government of Maharashtra referred for adjudication to the Industrial Tribunal the demands.
This Reference was registered as Reference (I.T. No. 20 of 1969).
The Unions again made a demand for revision of scales of pay as well as the classification of employees, their grades and their fitment in the revised scales of pay.
As against the then existing six categories of workmen and their wage scales of the operatives the Unions demanded new classification and gradation into eight grades with new wage scales.
Similarly, as against the then existing five grades of the clerical and subordinate staff, the Unions demanded the creation of six categories with enhanced wage scales.
These demands again were not accepted by the Company which led to the State Government making a reference Oil January 9, 1970, which reference was registered as Reference (I.T. No. 70 of 1970).
573 The Company some time in the year 1959 had introduced an Incentive Bonus Scheme.
This was introduced, according to the appellant, because of the fact that the workmen were not giving a substantial production.
The basis of the scheme, introduced by the appellant, was that if the workmen gave only 30% of the 100% production expected of them, their performance would be considered zero.
On the other hand, if they gave production above 30% and upto 100%, they would be eligible for payment of Incentive Bonus which would be from 31 to 100 points.
In other words, for the 70 points above the first 30 points, the workmen would get Rs. 501 as Incentive Bonus which would work out approximately to about Rs. 71.43 per point.
The appellant desired that the then existing floor limit of 30% ought to be raised to 75% without varying the quantum of Rs. 501 that was originally payable on achievement of 100% production.
What was intended was that the 25 points between 75 and 100 points Were to be made eligible for payment of Incentive Bonus of Rs. 2/ for each point.
The 'Company served a notice of change on the workmen under section 9A of the .
As the workmen protested against this change, this led the Government to make a Reference to the Industrial Tribnual for adjudication.
This was numbered as Reference, (I.T. No. 105 of 1969).
The appellant resisted the claims made for revision of dearness allowance and wage scales as well as the modification sought for in the gratuity scheme.
The appellant also wanted the Tribunal to uphold the notice of change given by it under section 9A of the in respect of the Incentive Bonus Scheme.
In particular the appellant contended that it was not a comparable concern with the units referred to by the Unions and that any modification in the scale of dearness allowance and wages would be beyond its financial capacity.
The appellant also relied oil the coming into force of the Drugs (Price Control) Order, 1970 with effect from May 16, 1970.
According to the appellant the wages and dearness allowance paid by it to the workmen were far higher than what were paid by other units in the region.
The Company also referred to the various awards wherein it had been held that it could not be compared with an International Company having branches in Bombay or with foreign concern though incorporated in India.
The wage scales had been fixed by Settlement dated June, 24, 1966 and that nothing has happened since the date of Settlement to justify a revision of wage scales 'and dearness allowance.
The appellant further urged before the Tribunal that the double linking of dearness allowance, as required by the Unions had never been adopted for the Pharmaceutical units in the Bombay region.
According to the appellant, the revision 574 effected regarding the Incentive Bonus Scheme was justified and the amount of 2/ offered per point was much more than the prevailing rate of Rs. 71.43p.
per point.
It also opposed the revision of the then existing gratuity scheme as demanded by the Unions.
According to the appellant the gratuity scheme which was in force had been introduced by a consent award in 1963.
The appellant filed copies of balance sheets and profit and loss accounts from 1962 63 to 1969 70 and various other charts in support of its plea that it will not be able to bear the additional financial burden that would result if the wage scales and dearness allowance are revised as per the demands made by the Unions.
It will be seen from the facts mentioned above that thr main controversy between the parties related to the revision of wage structure and dearness allowance.
As the demands of the workmen related to regrouping, in different grades, the operatives and the clerical and subordinate staff and as this involved a very radical change in the existing pattern of grades, the Tribunal felt that the opinion of an expert should be obtained on the advisibility of the reclassification.
In this regard both the Unions and the against filed a joint application on December 22, 1970 requesting the Tribunal to appoint Sri N. L. Gadkari, retired Chief Inspector of Factories, Maharashtra State as an assessor.
They also prayed that the points mentioned in the application be referred for the opinion of the assessor.
The Assessor submitted his report on February 22, 1971, in which he recommended the continuance of the then existing grades.
The Unions, while demurring to the report of the Assessor, requested the Tribunal, by their application dated March 25, 1971 to fix for the then existing five grades the following wage scales "Unskilled. .
Rs. 85 8 125 10 225 Semi skilled B. 100 10 150 12 210 15 285.
Semi skilled A 120 12 180 15 255 18 345.
Skilled 140 15 215 18 305 20 405.
Highly skilled 225 25 350 30 500 35 675.
" The appellant, when the Reference came up for hearing, raised an objection to the selection of wage scale by the Unions for the existing grades of the operatives on the ground that such a selection was not permissible, being contrary to the provisions of s.10(4) of the .
The Unions, ultimately, made it clear to the Tribunal that their demand for revision of wage scales of the existing five grades of operatives is to be as follows : "Unskilled Rs. 60 5 85 7 155.
Semi skilled B 70 6 100 8 180.
Semi skilled A 85 8 125 10 225.
Skilled 100 10 150 12 210 15 285.
Highly skilled 120 12 180 15 255 18 345.
" 575 It is on the basis of this claim that the question of revision has been dealt with by the Tribunal.
Regarding the financial incapacity pleaded by the appellant, the Tribunal after an analysis of the balance sheets and profit and loss accounts, held that the average net profit of the Company during the years 1965 66 to 1969 70 works out to about Rs. 1384691/ .
It is also of the, view that the apprehensions of the appellant/regarding the possible impact of the Drugs (Price Control) Order, 1970 are not justified.
It is the view of the Tribunal that in spite of the price freeze effected in 1963, the appellant has been doing very good business from 1962 63 to 1969 70.
Ultimately, the Tribunal found that the financial condition of the appellant is quite sound.
Regarding the comparable concerns in the region, the Unions referred to as many as twenty units.
One of the units relied on as comparable with the appellant was M/s. Burroughs Wellcome & Co. (India) Private Ltd., Bombay.
The appellant opposed its being compared with the concerns relied on by the Unions on the ground that those units were either foreign concerns doing business in India or Indian units working, in collaboration with foreign concerns.
The appellant in turn relied on several other concerns as being comparable with it.
The appellant very strongly relied on certain previous awards in support of its contention that it has been held in those awards that the appellant cannot be compared with foreign concerns or with the concerns working in collaboration with foreign concerns.
The Tribunal, after a consideration of the materials placed ' before it, in this regard, ultimately, held that M/s. Burroughs Wellcome & Co. (India) Private Ltd., was a unit which could be considered as a comparable concern with the appellant.
The Tribunal having regard to the grades and scales of pay obtaining in M/s. Burroughs Welcome & Co. (India) Private Ltd., held that the wage scales for the five grades for the operatives of the appellant should be as follows : "Unskilled .
Rs. 42 3 71 4 112 Semi skilled B 47 3 50 82 4 122 Semi skilled A 50 4 90 5 50 134 Skilled 55 5 50 110 6 50 155 50 High skilled 72 7 142 8 182 9 5C 220.
" The Tribunal fixed the following grades and scales of pay for the clerical and subordinate staff "Junior Clerks and Laboratory Assistants Rs. 85 7 50 145 10 195 12 259 17 323 Intermediate Cierks 120 10 200 12 260 15 335 18 353 Senior Clerks 185 15 305 20 365 25 465" 576 The Tribunal did not accept the large demand made by the Unions for a general adjustment in increments of the employees.
Nevertheless, in view of the revision of the scales of wages, it gave certain directions so that the employees may be fitted in the appropriate revised wage scales.
The parties very hotly contested the question of dearness allowance as well as the pattern to be adopted.
As there were different systems of dearness allowance for the operatives and the clerical and subordinate staff, the Unions desired that a common scheme of dearness allowance on a slab system should be adopted.
The Tribunal having regard to the decisions of this Court in Greaves Cotton and Co. and others vs Their Workmen(1) and Bengal Chemical & Pharmaceutical Works Ltd. vs Its Workmen(2) held that there was no justification for having two systems of dearness allowance one for the operatives and the other for the members of the clerical and subordinate staff.
Accordingly, the Tribunal held that all the employees should get the same dearness allowance irrespective of the fact whether they were operatives ,or members of the clerical and subordinate staff.
As the dearness allowance has to be fixed on industry cum region basis, the Tribunal examined the system of dearness allowance followed in the region by the industries belonging to the pharmaceutical units.
The Unions had submitted statements Exs.
DU 1 and MU. 1 containing a list of pharmaceutical units, in support of their contention that such units were adopting a slab system of dearness allowance.
The Company, on the other hand, referred to certain awards of the Industrial Tribunals in support of its stand that slab system of dearness allowance is not considered as an appropriate mode of providing neutralization.
The Unions also relied on certain awards wherein the slab system of dearness allowance had been introduced by the Industrial Tribunals.
Though the Tribunal had held that most of the units referred to in Exs.
DU 1 and MU 1, cannot be, considered for the purpose of being treated as units comparable with the appellant, nevertheless it held that the practice adopted by those units regarding the grant of dearness allowance can be taken into account as providing a guide regarding the system of dearness allowance adopted in the region.
On this basis the Tribunal accepted the statements in Exs.
DU 1 and MU 1 and held that the slab system of dearness allowance was prevalent in a large number of units belonging to pharmaceutical industry.
In this view, the Tribunal further held that slab system of dearness allowance can be adopted, if the financial burden consequent on the adoption of the said system, can be safely borne by the Company.
(1) (2) 577 The Tribunal then proceeded to consider the system obtaining in Burrough Welcome Company regarding the payment of dear ness allowance.
The system in the said Company, which was common for operatives as well as the clerical and subordinate staff, was as follows Basic Salary Dearness allowance per Variationfor month at the Bom points.
bay working class cost of living index 491 500.
Rs. 1 100.
150 percent 5 Per cent Rs. 101 200 1 50 Per cent on the 1st 21 Per cent Rs. 100.
71 Per cent on the balance.
Rs. 201 300 150 per cent on the 1st 11/4 per cent.
Rs. 100.
721 Per cent on the 2nd Rs. 100, and 36 1/4 per cent on the balance.
Minimum Dearness allowance Rs. 4 Rs. 101.
In the said Company the above scale of dearness allowance was however limited only to employees drawing a basic salary upto Rs. 360/ per month.
The appellant accepted before the Tribunal that the scheme of dearness allowance obtaining, in Burroughs wellcome Company would cast a lesser financial burden than the scale of dearness allowance as demanded by the Unions.
In fact, the Company had filed two charts Exs.
C 12 and C 13, showing the burden which it will have to bear if the scheme of dearness allowance as demanded by the Unions was introduced.
, The Company had worked out the demands in different ways and that is why it filed two statements.
According to the appellant the additional financial burden will be about Rs. 878125.00 as per exhibit C 12 and Rs. 1252693.00 as per exhibit C 13.
The Tribunal is of the view that under exhibit C 13, the Company had taken into account a sum of Rs. 186293.00 payable to some members of the staff drawing a salary of over Rs. 200/per month and amongst whom were also included 52 chemists.
According to the Tribunal the 52 chemists are not covered by the Reference and therefore the burden will have to be calculated only in respect of the workmen covered by the Reference and to, whom dearness allowance is being fixed.
On calculation the Tribunal found that about a lakh of rupees payable to 52 chemists and included in exhibit C 13 by the appellant will have to be deducted from Rs. 1252693.00 Accordingly, it held that as per the calculation of the appellant under exhibit C 13, leaving out the 52 chemists, the total burden will only be Rs. 1152693 .00.
Taking 578 into account the tax relief that the Company will get, the Tribunal ultimately held that the additional financial burden that the appellant will have to bear will only be Rs. 555000.00.
As it had already held that the average annual gross profits of the Company are over Rs. 40,00,000.00, the Tribunal held that the Company can easily bear this additional burden.
The Tribunal is further of the view that though the financial impact of the Drugs (Price Control) Order, on the business activities of the Company has had to be seen, the impact will not be such as to make the appel lant 's financial position difficult.
For all these reasons, the Tribunal fixed for the operatives and the clerical and subordinate staff of the appellant dearness allowance on a system prevalent in Burroughs Wellcome Company.
The system of dearness allowance fixed by the Tribunal is as follows : Basic salary Dearness allowance per Variation month at the Bom bay working class cost of living index 521 530.
Rs. 1 100 150 per cent Rs. 101 200 150 per cent on the 1st Rs. 100.
72 1/2 per cent on the balance.
Rs. 201 300 150 Per cent on the 1st 100 Rs.72 1/2 Percenton the 2.
Rs. 100.
36 1/4 per cent.
on the balance.
Minimum dearness allow ance Rs. 101 _ percent _ 1/2 per cent Rs. 4.
The Tribunal has further directed that dearness allowance in accordance with the above scheme will be payable only to em ployees drawing a basic salary upto Rs. 300/ per month.
It will be seen that the Tribunal while adopting the scale of dearness allowance obtaining in Burroughs Wellcome Company, has made a departure in fixing the scale of dearness allowance on the basis of the Bombay Working Class Cost of Living Index 521 to, 530.
The dearness allowance scheme obtaining in Burroughs Wellcome Company was on the Bombay Working Class Cost of Living Index 491 to 500.
The dis rent cost of living index was adopted by the Tribunal in view of the fact that the appellant was Paying incentive wages to its operatives and with a view to lessen the financial burden on the Company.
Another feature of the scheme adopted by the Tribunal is that it puts a ceiling on the employees drawing basic wages upto 579 Rs. 300/ per month alone being eligible for dearness allowance, whereas under the practice originally obtaining in the Company there was no such limit.
The Tribunal held that the revised wage scales and dearness allowance would be effective from October 1, 1969 and directed the Company to pay the arrears within three months from the date of the Award becoming enforceable.
At this stage it may be mentioned that the appellant is not challenging this direction regarding the date from which the wage scales and dearness allowance are to take effect, though it very vehemently attacks the fixation of the scale of revised wage scales and dearness allowance by the Tribunal.
Regarding gratuity, the Company had already a scheme which had been introduced under the Settlement Award in Reference (IT) No. 141 of 1962.
It is not necessary to set out the scheme that was prevalent in the Company because the only.
objection of the appellant to the revised scheme evolved by the Tribunal is in respect of raising the ceiling from 15 months to 17 1/2 months.
The demand in this regard by the Unions was that the ceiling should be raised from 15 months basic wages to 20 months basic wages.
However, the Tribunal did not accept the claim of the Unions in toto.
On the other hand, it adopted the practice obtaining in the Burroughs Wellcome Company and accordingly fixed the ceiling at 17 1/2 months basic wages.
Regarding the notice of change issued to the workmen by the appellant under s.9A of the proposing to alter the existing floor limit of 30% to 75% in the Incentive Bonus Scheme, the Tribunal on the joint application of the parties dated April 10 , 1970 appointed on April 28, 1970 Sri B. Tulpule, as Assessor to examine the question of revising the existing scheme of Incentive Bonus.
The Assessor submitted his report on August 27, 1970 making the following recommendations : "(1) The base performance index for all sections /in the Company 's factory should be revised and raised to 60 per cent.
(2) Consequent upon the revision of the base index as above, an amount of Rs. 100 per day should be added to the basic wages of the workers, this addition being independent of any other revision of the wage structure that the Tribunal may decide upon.
(3) The revised rates of incentive should continue beyond 100 pet cent performance." Though the Unions generally accepted the recommendations, the appellant was opposed, particularly to the second and third 580 recommendations.
The Tribunal, after a consideration of the objection, is, of the view that recommendations Nos. 2 and 3 were beyond the scope of the terms of reference made to him.
Therefore, those two recommendations were negatived.
Regarding the first recommendation, it is stated by the Tribunal that the Unions accepted the same and that the Company also was not opposed to that suggestion made by the Assessor regarding the raising of the base performance index to 60%.
In dealing with this aspect the Assessor in his report had stated as follows "If the base index of any incentive scheme is raised from X to Y, the workers will stop getting the incentive earnings which they used to get for the performance range from X to Y. This is also the main anxiety expressed by both the Unions in the present case.
At the outset I asked the management whether the implication of their proposed change was such a reduction in the workers ' total pay packet, at any given level of performance.
The management categorically assured me that that is not their intention.
Their purpose in proposing the change is stated by them to induce workers to raise their performance above the prevailing level.
" The Tribunal in its Award had stated that the matters men tioned in the above paragraph including the assurance stated to have been given by the appellant were not denied.
Therefore, the Tribunal, in view of the common measure of agreement between both the parties regarding the first recommendation is of the view that if the pay packet of the workman is to be protected at the wage raise base index performance of 60%, some scheme may have to be worked out.
But as the necessary materials for the purpose of evolving a scheme were not available, the Tribunal has thrown out a suggestion that the said question should be dealt with by the appellant in consultation with the Unions and frame a scheme by common consent, if possible.
Accordingly, the Tribunal left the matter to the parties to deal with the matter with the observation that if it is found that no scheme could be framed by consent, the Unions will be free to raise any dispute that may be available to them in that regard.
We have.
exhaustively referred to the questions referred to the Tribunal as well as the decision of the, Tribunal on those points.
In these appeals, as mentioned earlier, the controversy relate to (1) Scale of Dearness Allowance; (2) Fixation of Wage Scales, Classification and Grades; (3) Raising of the ceiling to 17 '2 months basic wages in. the gratuity scheme.
; and (4) the direction given by the Tribunal.
regarding the Incentive Bonus Scheme.
581 As the main points in great controversy between the parties before us relate to the pattern of dearness allowance and the classification and grades of employees and the fixation of the revised wage scales, we will take up for consideration those matters.
The very _first objection of Mr. Tarkunde, learned counsel for the appellant is regarding the manner of ascertaining grosser of its when revising the wage scales and awarding dearness allowance.
We have already pointed out that the Tribunal has proceeded on the basis that the average annual gross profits of the Company are over Rs. 40,00,000.00.
The appellant had submitted balance sheets and profit and loss accounts for the year 1962 63 to 1969 70.
It is enough to refer to the particulars that could be gathered for the five preceding years, namely, 1965 00 to 1969 70.
For those years the figures are as follows Particulars 1965 66 1966 67 1967 68 1968 69 1969 70 Paid up capital 4500000 4 50 000 0 4500000 54 00 00 0 Reserves and Surplus 2152186 2925376442151547856975714988 Sales 21997640 23866647 303593803299445637152031 Depreciation 5449195 55035784 8241111775916719 Development rebate 972426 8266105840110858144511 Provision for taxation 1915000 1590300185050016985001639000 Net Block 4601566 4905509 545821257459977375386 Net Profit 954591 1443489 159709416045011323779 From the above statement it will be seen that the average net profits work out to Rs. 1384691.00 The net profits have been arrived at, by the Company after deducting taxation, depreciation and development rebate.
It is on the basis of the net profits, so arrived at that the appellant appears to have urged before the Tribunal that the wage scales and dearness allowance are to (1),fixed.
The Tribunal rejected this contentions.
On the, other hand, the Tribunal has held that when considering a revision of wage structure what is to be taken into account is not the net profit. ; but gross profits without any deductions having been made for taxa tion, depreciation and development rebate.
It is on that basis.
that the Tribunal held that the average gross profits ' of the Company exceed Rs. 40,00,000.00.
The gross profits without deducting taxation, depreciation and development rebate for the years 1965 66 to 1969 70 will be.
proximately as follows Year Gross profits Rs. "1965 66.
35,11,752 1966 6736 ' 57,000 1961 6843, 37,698 1968 6945, 25,134 1969 7040, 24,009" 9 L1031 Sup.
Cf/72 582 From the above it will be seen that the figure of Rs. 40,00,000.00 arrived at by the Tribunal as average annual grossprofits appears to be prima facie correct.
Mr. Tarkunde, learned counsel for the appellant found con siderable difficulty in challenging the view of the Tribunal that gross profits are to be arrived at without decucting taxation and development rebate.
He rather strenuously urged that there is absolutely no warrant for arriving at gross profits without deducting depreciation.
On the other hand, Mr. K. T. Sule, learned counsel for the respondent No. 1, whose, contentions have been adopted by Mrs. Urmila Kapoor, learned counsel for the second respondent, pointed out that the approach made by the, Tribunal is correct and is also supported by the decisions of this Court.
Mr. Tarkunde referred us to sections 205 and 211 of the , as well as , Schedule VI therein.
We do not think it necessary to% refer to those provisions as, in ouropinion, they have no relevance or bearing when considering a revision of wages and award of dearness allowance under industrial adjudication.
Those provisions are intended for ' a totally different purpose.
We will presently show, by reference to the decisions of this Court that the Tribunal was justified in computing gross profits without deducting taxation, depreciation and development rebate.
In view of the decisions, to which we will immediately refer to, Mr. Tarkunde was prepared to accept the position that, at any rate, taxation and development rebate cannot be deducted, but he still maintained that depreciation has to be deducted.
In Gramophone Company Ltd. vs Its Workmen(1), this Court, in dealing with a gratuity scheme, had to consider the principles applicable for ascertaining the financial capacity of an employer.
In that decision the employer contended that before the real profit for each year can be4 arrived at, the provisions made for taxation and for development reserves should be deducted.
On this basis, it was further contended that if these deductions are made, there will not be any profit left which will enable the Company concerned to frame a gratuity scheme.
This claim for deducting taxation and development rebate reserves was negatived by this Court as follows : "When an industrial tribunal is considering the question of wage structure and gratuity which in our opinion stands more or less on the same footing as wage struc (1)[1964] 583 ture, it has to look at the profits made without considering provision for taxation in the shape of income tax and for reserves.
The provision for income tax and for reserves must in our opinion take second place as compared to provision for wage structure and gratuity, which stands on the same footing as provident fund which is also a retrial benefit.
" It was further observed that if an industry is in a stable condition and the burden of provident fund and gratuity does not result in loss to the employer, that burden will have to be borne by the employer, like the burden of wage structure in the interest of social justice.
It was finally held that the contention on behalf of the Company therein that provision for taxation and provision for reserves should take precedence over provision for gratuity cannot be accented.
From the above decision it is clear that Fixation of wage structure stands more or less on the same footing as framing of a gratuity scheme and the principles applicable for ascertaining the profits are the same : (2) Provision for taxation and provision for reserves cannot take precedence over for gratuity and fixation of wages; and (3) The provision for income tax and for reserves must take second place as compared to provision for wage structure and gratuity.
The above decision categorically rules out any deduction of taxation.
It also excludes from deduction all provision for reserves which will take in depreciation reserve also.
But, Mr. Tarkunde contended that the above decision is an authority for the proposition that the only two items that could be deducted are provision for taxation and provision for development rebate reserve.
If so, the counsel urges that the deduction of depreciation reserve as claimed by the appellant is justified and, that the Tribunal erred in declining that item to be deducted.
We are not inclined to accept this contention of Mr. Tarkunde.
The above decision is, in our opinion, an authority for the proposition that the provision for taxation and provision for reserves, which expression will take in depreciation reserve also, cannot be deducted for the purpose of computing the profits.
At 'any rate the, said decision had no occasion to consider whether depreciation reserve can be deducted or not.
We have already pointed out that the only claim made by the appellant therein was for deducting provision for taxation and for development rebate reserve and that claim was rejected.
Therefore, looked at from any point of view, the above decision is certainly not in favour of the contention of Mr. 584 Tarkunde that depreciation reserve has to be deducted before arriving at profits.
In The Indian Link Chain Manufacturers Ltd. vs Their Work men(1), this Court had occasion to consider the principles applicable to ascertain the financial capacity of a company in fixing wage scales and dearness allowance and framing of a gratuity scheme.
The Principle applicable was stated as follows "It is pertinent to notice that gratuity and wages in industrial adjudication are placed on the same footing and have priority over Income tax and other reserves, as such in considering the financial soundness of an undertaking for the purposes of introduction of a gratuity scheme the profits )that must be taken info account are those computed prior to the deduction of depreciation and other reserves.
" The decision in Gramophone Company vs Its Workmen 2 was quoted with approval in this decision.
The Company in that case had calculated profits after deducting depreciation.
This method was deprecated by this Court as follows : "All these profits it may be mentioned are computed after deducting depreciation and this should betoken into account in considering the desirability of formulating a gratuity scheme for the Appellant.
" In the end the provision made for depreciation and which had been deducted by the Company for calculation of profits was added back.
From the above decision it is clear that profits are to be computed prior to the 'deduction of depreciation and other reserves.
The said decision directly holds that provision for depreciation and other reserves cannot be deducted in computing profits be ascertained for framing a gratuity scheme.
This decision again reiterates the legal position that gratuity and wages in industrial adjudication and placed on the same footing and have priority over Income tax and other reserves.
In fact, as pointed out by us earlier, provision made for depreciation and which had been deducted by the Company for arriving at profits was added back.
by this Court.
Mr. Tarkunde urged that this Court in The Indian Link Chain Manufacturers Ltd. vs Their Workmen(1) has misunderstood and misinterpreted the earlier decision in Gramophone Company Ltd. vs Its Workmen (2 ) .
According to the counsel the error committed by this Court was on proceeding on the basis that the decision in (1) ; (2) [1964]2 L.L.J. 131.
585 Gramophone Company Ltd. vs Its Workmen(1) has laid down that depreciation reserve should not be deducted in computing the profits available for framing a gratuity scheme or when fixing a wage scale, We have no hesitation in rejecting this contention of Mr. Tarkunde.
We have already expressed our views regarding the scope of the decision in Gramophone Company Ltd. vs Its Workmen(1) and no error has been committed by this Court in The Indian Link Chain Manufactures Ltd. vs Their Workmen(2).
On the other hand, the latter decision is directly in point to the effect that provision for depreciation cannot be deducted.
We may also refer to the observation of this Court in Ahme dabad Millowners ' Association Etc.
vs The Textile Labour Association(3) that. . it is the figure of gross profit which is more important, because it is not disputed that wages payable to the employees are a first charge,, and.
all other liabilities take their place after the wages.
" Mr. Tarkunde referred us to, the statements contained in certain leading text books on principles of Accounting, Book Keeping and Accounts and Accountancy regarding the nature of depreciation reserve.
In "Principles of Auditing by F. R. M. De Paula, 8th Edition," it is stated that the main object of providing for depreciation of wasting assets is to keep the original capital intact.
In "Balance Sheets, how to read and understand them, by Philip Tovey,3rd Edition" the distinction between a "Reserve" and "Depreciation" has been stated.
The author says that depreciation should be written of before arriving at the year 's profit and that reserve is built up, by setting aside portions of the profits itself.
The author proceeds to state that depreciation represents the estimated wear and tear which will ultimately reduce the property and plant to scrap value.
In "Book Keeping and Accounts" 'by Cropper, Morr 's and Fison, 19th Edition, when dealing with the Trial Balance, Trading and Profit and Loss Accounts, it is mentioned that depreciation is the term employed by the Accountants to indicate the gradual deterioration both in the value and the usefulness of those assets which, by reason of their nature and uses, steadily decline in value.
Again in "Accountancy" by William Pickles, 3rd Edition the author has defined "Depreciation" as the permanent and continuing diminution in the.
quality, quantity or value of an asset.
it Is further stated that the provision for depreciation does not depend upon what the business can afford, as the debit therefore is an (1) [1964] 2 L.L.J.131, (2) ; (3) ; 586 essential one, constituting not an appropriation of, but a charge against, profits for the period in question.
Based upon the above statements contained in the text books, referred to above, Mr. Tarkunde urged that the principle in Accountancy is that depreciation must be deducted before ascertaining the profits.
In our opinion, the above statements may have considerable bearing in the preparation of profit and loss accounts having due regard to the provisions of the and Mercantile usage; but they have no bearing on the question of fixation of wage structure and dearness allowance in an industrial adjudication.
From what is stated above, it follows that the Tribunal was justified in arriving at gross profits without deducting the provision for Depreciation.
As already mentioned by us, Mr. Tarkunde has accepted that the Tribunal was justified in not deducting the Provision made for taxation and development rebate.
The result is that the average gross profits of the appellant being about Rs. 40,00,000,00, as held by the Tribunal, is correct.
In the fixation of wages and dearness allowance the legal position is well established that it has to be done on an industry cumregion basis having due regard to the financial capacity of the unit under consideration vide Express Newspapers (Private) Ltd., and Another vs The Union of India and others(1), Greaves Cotton and Co. and others vs Their Workmen (2) , and Bengal Chemical & Pharmaceutical Works Ltd. vs Its Workmen(3).
It has been further stated in Greaves Cotton add Co. and others vs Their Workmen (2 ) as follows : "The principle therefore which emerges from these two decisions is that in applying the industry cum region formula for fixing wage scales the Tribunal should lay stress on the industry part of the formula if there are a large number of concerns in the same region carrying on the same industry; in such a case in order that production cost may not be unequal and there may be equal competition, wages should generally be fixed on the basis of the comparable industries, namely, industries of the same kind.
But where the number of industries of the same kind in a particular region is small it is the region part of the industry cum region formula which assumes importance. . (1) (2) ; (3) ; 587 It has been further emphasized in Ahmedabad Millowners ' Association etc.
vs The Textile Labour Association(1) that industrial adjudication should always take into account, when revising the wage structure and granting dearness allowance, the problem of the additional burden to be imposed on the employer and ascertain whether the employer can reasonably be called upon to bear such burden.
The principles to be borne in mind have been stated in the said decision as follows : " It is a long range, plan; and so, in dealing with this problem, the financial position of the employer must be carefully examined.
What has been the progress of the industry in question; what are the prospects of the industry in future; has the industry been making profits; and if yes, what is the extent of profits; what is the nature of demand which the industry expects to secure; what would be the extent of the burden and its gradual increase which the employer may have to face ? These and similar other considerations have to be carefully weighed before a proper wage structure can be reasonably constructed by industrial adjudication. .
As pointed out in Greaves Cotton and Co. and others vs Their Workmen (2) , one of the principles to be adopted in fixing wages and dearness allowance is that the Tribunal should take into account the, wage scale and dearness allowance prevailing in ' comparable concerns carrying on the same industry in the region.
, The factors which have to be taken into account for ascertaining comparable concerns have also been laid down by this Court.
In Workmen of Balmer Lawrie and Co. vs Balmer Lawrie and those principles have been stated as follows "Besides, it is necessary to emphasise that in dealing with the comparable character of industrial undertakings, industrial adjudication does not usually rely on oral evidence alone.
This question is considered in the light of material fact and circumstances which are generally proved by documentary evidence.
What is the total capital invested by the concern, what is the extent of its business, what is the order of the profits made by the concern, what are the, dividends paid, how many employees are employed by the concern, what is its standing in the industry to which it belongs, these and other matters have to be examined by industrial adjudication in determining the question as to whether one concern is com parable with another in the matter of fixing wages.
Now, (1) ; (2) ; (3) ; 588 it is obvious that these questions cannot be decided merely on the interested testimony either of the workmen, or of the employer and his witnesses '" In Workmen of New Egerton Woollen Mills vs New Egerton Woollen Mills and others(1) , the above principles have again been reiterated.
From the decisions, referred to above, it follows that two principal factors which must weigh while fixing or revising wage scales and grades are: (1) How the wages prevailing in the establishment in question compare with those given to the workmen of similar grade and scale by similar establishments in the same industry or in their absence in similar establishments in other industries in the region; and (2) What wage scales the establishment in question can pay without any undue strain on its financial resources.
The same principles substantially apply when fixing or revising the dearness allowance.
The question is whether the Tribunal has adopted the above principles when revising the wage scales and dearness allowance in the case of the appellant.
The Unions had relied on as many as twenty one concerns located in the region of Greater Bombay and belonging to the same pharmaceutical units of industry as, units comparable with the appellant.
The appellant opposed its being compared with those concern,, on the ground that the units relied on by the Unions were companies haying foreign collaborations or connections, and as such possessing several advantages.
The appellant in turn relied on several concerns in the region as comparable units.
Before we refer to the concerns relied on by the Unions and the appellant as comparable concerns, it is necessary to deal with an objection raised by Mr. Tarkunde that no foreign unit doing business in India or no unit in India doing business in collaboration with a foreign concern, can ever be considered for purposes of comparison.
According to the appellant such concerns have distinct advantages of international research facilities, reputation in business which enables such concerns to market their products more easily and thus enable them to pay higher wages to their employees.
In view of the special technical facilities, that may be available to them, their output will be far higher though the number of employees will be much less, and as such they will be able to pay to their lesser number of employees higher wages.
In this connection Mr. Tarkunde relied on certain awards of the Industrial Tribunal (1)[1969] 589 wherein it is held that the comp 'es having foreign collaboration though in the same region and in the same industry, cannot be considered for the purposes of comparison with purely local On the other hand Mr. Sule, has opposed the above position and urged that the question as to who is the employers is absolutely immaterial so long as the tests for the purposes of comparability as laid down 'by this Court, are satisfied and the capacity to bear the financial burden is established.
We will deal with aspects in the first instance.
It must be stated at the outset that the Unions placed reliance on certain information contained in the prospectus of the Company and certain statements contained in the book "Indian, Pharmaceutical Industry" published in 1963 and 1969, to show that the appellant concern is also one which has foreign collaboration and as such it is to be ranked as a concern with foreign attachment.
has recorded a finding in favour of the appellant that it is not a unit having foreign collaboration.
Therefore, this finding is III favour of the appellant.
The question that now arises for consideration is whether in law there is any objection or prohibition in an industrial tribunal, when dealing with comparable units in a region from taking into account concerns having foreign collaboration.
It is no doubt true that some of the concerns relied on by the Unions are concerns working in collaboration with foreign firms.
In Chemical Industries and Pharmaceutical Laboratories Limited (Cipla) Bombay vs Their Workmen(1), it was held by the Industrial Tribunal that the Cipla cannot be compared to Glaxo Laboratories, Raptakos Brett and other pharmaceutical concerns which are either subsidiaries of foreign concerns or are closely linked with them.
It was further held that if any comparis on could be made,in can only be with concerns like Kemp & Company.
Sandu Pharmaceutical, Fair Deal Corporation, Edison Continental Laboratories, Bengal 'Chemicals and such other indigenous concerns.
Again in Alembic Chemical Works Ltd. Baroda vs Its Workmen (2) , the Tribunal held that Alembic cannot be compared to concerns like the Glaxo Laboratories and others who have associations in different degrees and forms with certain foreign concern, of international repute.
On this reasoning the Tribunal relied more on the scales wages prevailing in concerns like the Jhandu Pharmaceutical, Cipla.
Kemp & Co., and such similar concerns although it held that (2) [1958] I.C.R. Bombay, 1305.
(1) [1957] I.C.R Bombay, 1206.
590 Alembic is a much bigger concern, than the said units.
It must be stated that in both these awards concerns with foreign collaboration have been eliminated from consideration on the ground that they cannot be regarded as comparable concerns and to that extent they support Mr. Tarkunde 's contention.
In Reference (IT) No. 223 of 1959, which related to the appellant Company, the workmen placed reliance on Indian units of foreign concerns for being treated as comparable units.
,The appellant, however, pointed out that those units which have international fame and repute in world market were in a position to sell their products more easily and profitably and hence they cannot be treated as comparable units.
The Tribunal, no doubt, accepted the contention of the appellant that the Unions had selected some of the bigger concerns for comparison and held that it would be more appropriate if the appellant is placed somewhere in between the bigger and smaller concerns.
In this view the Tribunal took to the financial capacity of the appellant.
Again in Reference, (IT) No. 402 of 1963, relating to the appellant, wherein the dearness allowance was revised, the appellant had contended that it should not be compared with the units like Ciba, Dumex, Glaxo, Sandoz and the like.
The Tribunal held that the appellant cannot be compared with international pharmaceutical units having branches in Bombay or with foreign concerns like Glaxo, Ciba, Sandoz etc., which though incorporated in India are subsidiaries of foreign companies having all the advantages of connection with respect of home companies in Europe and America.
The Tribunal referred to the award in Reference (IT) No. 223 of 1,959 and held 'that a fair cross section of the industry has to be taken into account for fixing a scale of dearness allowance, which will be within the financial capacity of the appellant.
But, how ever, the Tribunal held that the appellant is a firm of good reputeand standing and that it has very fair prospects.
Though in Reference (IT) No. 223 of 1959, the Tribunal did not specifically eliminate from consideration units having foreign collaboration as such, nevertheless, in Reference (IT) No. 402 of 1963, the Tri bunal has held that the appellant cannot be compared with international pharmaceutical companies having branches in Bombay or with concerns, though, incorporated in India, are subsidiaries of foreign, companies.
From what is stated above, it is no doubt true that in the three awards, one of which specifically relates to the appellant, concerns having foreign collaboration have been eliminated for purposes of comparison.
But no legal principle on the basis of which such a decision has been arrived at has been stated in any of these awards.
591 In our opinion, so long and to the extent that concerns having foreign collaboration are doing business in India and in a particular concerned region, we do not see any reason why they should not be taken into account for purposes of being treated as comparable units, provided the tests for such purposes as laid down by this,, Court are satisfied.
No doubt some of those concerns may be having an advantage in various matters.
But merely because that they possess such advantage in the field of business is not a circum stance for eliminating such concerns for purposes of comparability.
The object of industrial adjudication is, as far as possible, to secure uniformity of service conditions amongst the industrial units in the same region.
If a concern having foreign collaboration properly satisfies the tests of comparability, it would be improper to regard ' such unit as uncomparable merely on the ground that it is a con cern with foreign collaboration or interest and that 'the unit with which it is sought to be compared is entirely of Indian origin and resources.
The object of Industrial.
Law is to improve the service conditions of industrial labour so as to provide for them the ordinary amenities of life with a view to bring about industrial peace which would in 'turn accelerate productivity of the country resulting in its prosperity.
The prosperity of the country, in its turn will help to improve the condition of labour.
The principles regarding fixation of wage scales and dearness allowance have been laid down in several decisions, by this Court and they apply equally to all industries irrespective of the character of the employer.
The worker is interested in his pay packet and given reasonable wages, he can be expected to be a satisfied worker.
There is no justification from the stand point of view of the employees for fixing different wage scales merely because of the fact that some workmen are in the employ of purely local concerns while some others are in the employ of units though in the same region, working in collaboration with, foreign concerns.
As the paramount consideration is the interest of the worker, the character of the employer is irrelevant, provided ' the latter 's financial capacity to bear the burden is established.
In the ultimate analysis the, character of the employer or the destination of profits has no relevance in the fixation of wages and dearness allowance.
We are fortified in the above view by The decision of the Constitution Bench of this Court in Hindustan Antibiotics Ltd. vs The, Workmen and others(1).
In that case on behalf of the appellant it was urged that as it was a government company in the public sector, the principles governing the fixation of wages applicable to companies in the private sector do not have any relevance.
On (1)[1967]1.S.C.R.652. 592 the other hand, on behalf of the workmen it was contended that in fixing the wage structure including dearness allowance the question, who is the employer, is irrelevant and that only the needs of the employee are of paramount importance.
The contention on behalf of the workmen was accepted by this Court and it was held that the same principles that have been laid down by the industrial adjudication and the courts regarding the fixation of wage scales and dearness allowance in respect of companies in the private sector apply with equal force to companies in the public sector also.
It was further held that in the application of the industry cum region principle to be adopted to distinction can be made between one unit and another in the same industry in the fixation of wage scale,; provided the test of financial capacity is satisfied.
It was further held that by and large the acceptance of the principle of industry cum region will be more conducive to industrial relations and that the same principles evolved by the industrial adjudication in regard to private sector undertakings will govern those in the public sector undertakings having a distinct corporate existence.
Though the decision cited above had to deal with a claim for ,differentiation being made on behalf of a company in the public sector and which claim was rejected, in our opinion, the basic principle underlying the said decision will apply even with respect 'to the question whether the units, having collaboration with foreign concerns can be taken into account for purposes of comparison, In our opinion, the above decision warrants the conclusion that such units having foreign collaboration or foreign companies doing 'business in India can be taken into account for purposes of being considered whether they are comparable units.
Of course, the test laid down by this Court for treating one unit as a comparable one, will have to be satisfied, and once that test is fulfilled, there can be no distinction made between such units and purely local units.
Therefore, in our view, the Tribunal, in the case 'before us, was perfectly justified in taking into account for purposes of comparison units having collaboration with foreign concerns and foreign units doing business in India in the same region and being in the same industry.
It follows, therefore, that the principles laid down to the contrary in the awards relied on by Mr. Tarkunde, are erroneous.
Coming to the units relied on by the parties as comparable units.
as mentioned earlier, the Unions relied on as many as 21 concerns as comparable with the appellant.
No doubt some of the units relied on by them were units having collaboration with foreign concerns.
The appellant also, in turn filed statement exhibit C 26.
referring to six companies which could be treated as comparable concerns. 593 The Tribunat rejected most of the units relied on by the Unions on the ground that the information furnished regarding such units.
were not adequate and complete regarding various factors necessary to constitute a comparable unit.
We have also gone through the statements filed by the Unions.
In exhibit DU 2, one of the Unions furnished information regarding the business performance of about nine concerns till the year 1964 65.
Similarly, in exhibit DU 3, another Union had given the average performance of nearly ton units for the years 1962 63 to 1964 65.
As it would be more desirable to consider the financial capacity of the appellant in the light of the trading results disclosed in the balance sheets and profit and loss accounts from the years 1965 66 to 1969 70, it must he considered that the information furnished in Exs.
DU 2 and DU 3 cannot he considered to be upto date and helpful.
The Unions also did not make any further attempt to supplement the informa tion contained in these two exhibits by furnishing information regarding the years subsequent to 1964 65.
No doubt, the Unions have furnished particulars regarding one unit, Burroughs Welcome India) Private Ltd., which will be dealt with later.
Therefore, the rejection by the Tribunal of most of the units relied on by the Unions, was justified.
The appellant Company relied on six units mentioned in exhibit C 26.
Those units are Cipla, Chemo Phama, Zandu, Opil, Sigma and Bengal Chemicals.
But the Company did not furnish information regarding the business performance of these concerns for a period of years in the immediate past.
But it will be noted that the four units referred to in exhibit C 26.
namely, Zandu, Cipla, Opil and Sigma, had been considered by the Industrial Tribunal in its previous award Reference (IT) No. 402 of 1963, when the scale of dearness allowance obtaining in the appellant Company was revised.
On that occasion the Tribunal had held that it was only Cipla which came nearest to the appellant Company and even there the dearness allowance obtaining in Cipla cannot be taken for comparison.
That means that these four units were left out of account and were not treated as units comparable with die appellant.
No fresh materials were placed by the appellant regarding these four units after the decision of the Tribunal in Reference (IT) No. 402 of 1963.
Therefore, the Tribunal in the present case, was justified in rejecting the claim of the appellant that those four units are comparable concerns.
The elimination of the four units.
thus left for consideration only two concerns, namely, Chemo Phama and Bengal Chemicals.
Even here the Unions had furnished statements Exs.
DU 8 and DU 9, regarding these two units in Ex ' DU 8, the business performance of Chemo Phama froth 1965 to 1969 was given and in exhibit DU 9, the business performance of Bengal Chemicals from 1965 to 1970 was given.
The 594 'Unions had also furnished exhibit DU 44 regarding the business performance of the appellant.
A comparison of the statements contained in Exs.
DU 8 and DU 9 with the material relating to the appellant in exhibit DU 44, regarding the paid up capital, reserves and surplus sales, net block, net profits and gross profits, it is quite clear that the business performance of Chemo Phama and Bengal Chemicals do not come anywhere nor that of the appellant.
The appellant in all respects stands on a much higher footing.
The average gross profits of the appellant work out to Rs. 40,11,176.
while the average gross profits of Chemo Phama works out to Rs. 5,31,511 and that of the Bengal Chemicals to Rs. 11,39,553.
Therefore, it is clear that these two units also cannot be treated as concerns comparable with the appellant and hence the wage structure prevailing in those concerns cannot provide any useful guidance.
We have already mentioned that the Tribunal has ultimately held that M/s Burroughs Wellcome (India) Private Limited is a concern comparable with that of the appellant.
It is no doubt a foreign company in the sense that its entire capital is held by foreign company as shown in the statement exhibit C 11, filed by the appellant.
But we have already rejected the contention that such a concern cannot be ruled out of consideration for purpose of comparability.
A very severe attack has been levelled by Mr. Tarkunde in the Tribunal 's treating M/s Burroughs Wellcome Company as a comparable unit.
According to the learned counsel if the various factors relevant for the purpose of comparison are considered, it will be clear that the appellant cannot stand any comparison with this unit.
Mr. Tarkunde further pointed out that instead of taking ,only one unit for purposes of comparison, the Tribunal should have taken fair cross section of the industry in order to find out where exactly the appellant can be fitted in.
It is no doubt true that a fair cross section of the industry should be taken into account.
But in this case when all the other units have been held to be not ,comparable with the appellant, this criticism levelled against the approach made by the Tribunal cannot be accepted.
Regarding Burroughs Wellcome Company, the Unions had sub mitted a statement exhibit DU 2A under a seal of confidential as it was a private limited company.
A comparison of the information ,contained in the said statement exhibit DU 2A regarding the paid up ,capital ', reserves and surplus sales, depreciation, development rebate, provision for taxation, net profits, gross profits, net block and dividend declared for the years 1967 to 1970 with the corresponding items in exhibit DU 4A with respect to the appellant shows that both the units are substantially on a par.
Normally, the 595 statements in exhibit DU 2A could have been extracted in this judgment but for the fact that Burroughs Wellcome Company being a private limited company and the statements having been furnished in a sealed cover, they could not be made public.
The paid up capital.
is identical in both the concerns.
The average sales of Burroughs Wellcome Company and those of the appellant are substantially the same.
The difference between the, net profits of the two is significantly small.
The gross profits of the two units are also close to each other.
No doubt there are some small differences between the two in these items, but they are of no significance.
The various factors which have to be taken into account for he purpose of a unit being treated as a comparable one as laid down by this Court have already been referred to.
If so, all those factors taken into account clearly show that Burroughs Wellcome Company is a unit comparable with the appellant.
No doubt the appellant has relied on the ratio of employees to sales, as well as to debt equity ration and the percentage of profit to sales in respect of the appellant and the Burroughs Wellcome Company.
exhibit C 22 contains the ratio of employees to sales in 1968 69.
Though there are certain other units referred to therein, we will only advert to the particulars regarding the appellant and the Burroughs Wellcome Company, which are as follows Ration of Employee to Sales No. of Per Name of the Company Year SalesEmployees employee sale Rs. Rs. Unichem 68 6932994456 752 43875 Burroughs.
69 25000000 425 58823 A reference to exhibit C 22 will show that the sales of the appellant is higher than that of Burroughs Welcome Co. No doubt the ratio per employee is slightly less in the case of the appellant.
It is also seen that the appellant employs nearly 752 workmen whereas Burroughs Wellcome Co. employs only 425 workmen.
In exhibit C 18, particulars regarding Debt Equity Ratio have been given.
That statement contains particulars regarding the various firms including the appellant.
In 1969 the capital of the appellant was Rs. 101.86 lakhs.
It had borrowed Rs. 95.89 lakhs and the percentage on borrowed funds to capital works out to 94.1 %.
It is no doubt true that there is no borrowed capital in Burroughs Wellcome Co. In exhibit C 18 particulars regarding nine Units have been given and it is seen that except two units, all the other seven units, including the appellant, have borrowed.
In fact it is interesting to note that Glaxo, which has a capital of Rs. 1196.81 lakhs had also borrowed Rs. 26 80 lakhs.
Similarly, 596 Chemo Phama which had a capital of only Rs. 32.05 lakhs had borrowed Rs. 37.08 lakhs and the percentage works out to Rs. 115.7%.
We are referring to these aspects because it was stressed by Mr. Tarkunde that the Debt Equity Ratio in the appellant is very high and that it has to pay a large amount by way of interest on borrowed funds which is not the case with Burroughs Wellcome Company.
But the statements contained in exhibit C 18 themselves clearly show that borrowing for the purpose of business seems to be a usual pattern followed by the companies in the region.
exhibit C 15 is a statement relating to percentage of profit to sales for the years 1965 66 to 1969 70.
No doubt the figures given therein show that the percentage of profits has been fluctuating.
but, in our opinion, the particulars contained in the above exhibits.
relied on by the appellant, do not affect the findings of the Tribunal that Burroughs Wellcome Company is a unit comparable with the appellant.
Another criticism that has been levelled by Mr. Tarkunde is that the Tribunal has not taken into account the prospects of the future business of the appellant.
In this connection the appellant relied on the coming into force with effect from January 1, 1971 of ' the Drugs (Price Control) Order, 1970.
According to Mr. Tarkunde whatever may have been the financial.
position of the appellant in the past, its future business is bound to suffer in view of this price control order.
He referred us to the decision in Williamsons (India) Private, Ltd. vs Its Workinen(1) of this Court wherein it has been held, amongst the various factors which have to be taken into account for the purpose of fixation of wage scales and dearness allowance, the prospect of future business is a very relevant circumstance.
This factor, according to the appellant, has not been taken into account by the Tribunal.
We have earlier referred to the decisions of this Court regarding the principles governing the fixation of wages and dearness allowance.
It is no doubt a long, range plan and the Prospects of future business amongst other factors have also to be taken into account.
The case of the appellant is that in 1963, there has been a price freeze and that has affected its business and therefore the Drugs (Price, Control) Order, 1970 will affect its future business.
We have, already, extracted in the earlier part of the judement the trading results, of the appellant from 1965 66 to 1969 70.
If the price freeze which came into force in 1963 had any affect, then it must have been reflected in the trading results of the appellant.
The (1) 597 trading results of the appellant during the years 1962 63 to 1964 65 are as follows : Particulars1962 63 1963 64 1964 65 Paid up capital 4491000 44992504499500 Reserves and Surplus 476569 1010753 1505353 Sales 10241405 1566588317388705 Net Block 3907400 4371113 4345467 Provision for Taxation 934000 1065000 1515000 Depreciation297243379256390878 Development rebate 33686 100617 22329 Net Profits 442881 703567 877271 A glance of the above statement clearly shows that though the paid up capital remains the same, there has been a steady rise in the reserve and surplus sales and net profits.
Similarly, the net block has also an increase.
There has been no set back in the sales.
On the other hand there has beena steady rise in the sales.
No doubt for the year 1969 70 the profits did go down; but the drop is comparably small and the appellant has not been able to, satisfy.
us that it is due to the price freeze.
Then the question is regarding the impact of the Drugs (Price Control) Order, 1970, which has come into effect from January 1,1971.
In this connection it is necessary to refer to the speech made bythe Chairman of the Board of Directors of the appellant Companyat the Annual General Meeting held on January 9, 1971.
At thisstage it may be mentioned that the Accounting year of the appellant Company is from October 1, to September 30, of the succeeding year.
On January 9, 1971, the Chairman was giving a review of the working of the Company for the year ending September 30, 1970.
He had clearly stated that the impact of the Drugs (Price Control) Order, 1970, which had come into force only recently will be felt by the Company only after the year 1970 71.
The appeal was heard by us from January 3, 1972 and concluded only on January 10, 1972.
As the Company, in the previous years had been having its Annual, General Meetings in early January, of each year, we suggested to the counsel for the appellant that as the approximate trading results for the year commencing from October 1, 1970 to September 30, 1971 would have been available by then, they may be furnished so that it may be possible to find out the impact of the Drugs (Price Control) Order on the trading results of the appellant.
But it was represented that the figures are not available.
It is not necessary for us to cornment except to state that going by the fact that on former occasions the figure had been ready by the first week of January to enable the Annual General Meeting of the Company to be held, it would not have been difficult for the appellant to have furnished at least 1031 Sup.
CI/72 598 the approximate figures, if really the trading results had shown a decline.
The appellant has missed an opportunity 'that was provided to it to establish that the Drugs (Price Control) Order has adversely affected its business.
Under those circumstances, it is not possible for us to disagree with the view of the Tribunal that the impact of the Drugs (Price Control) Order will 'not be such as to affect materially the business prospects of the appellant Company.
We may state that if the Drugs (Price Control) Order, mate rially affects the prosperity of the appellant 's trade, it would be open to it to raise a dispute for the reduction in the wage structure and in case they are able to show that in view of the Drugs (Price Control) Order, their financial position has been weakened to such an extent that they cannot bear the burden of wage structure fixed by the present award, the matter may have to be examined on its merits.
The question of fixation of wage scales need not detain us very long.
We have already extracted the wage scales prevailing in the appellant company as well as the categories of workmen when the reference was made.
We have also referred to the fixation of wage scales by the, Tribunal on a comparison with the wage scale obtaining in Burroughs Wellcome Company.
The wage structure.
as well as the grades that were prevalent in Burroughs Wellcome Co. in pursuance of the settlement dated June 13, 1966 regarding the ,operatives and clerical and subordinate staff have been incorporated ,by the Tribunal in its Award.
We do not think it necessary to reproduce the same.
A comparison of the wage scales in Burrough Wellcome Company and the wage scales fixed by the Tribunal in the Award for the Company will show that the Tribunal has only made some slight variation in view of the fact that it accepted the report of the assessor for the continuance of the existing grades in the Company.
As some of those grades were, not existing in BurToughs Wellcome Company, the Tribunal bad to make some slight changes.
Wherever it was possible the wage structure in Burroughs Wellcome Co. has been retained but the maximum has been raised a little and some slight changes have also been made in the incremental stage.
Once Burrough Wellcome Company is treated as a comparable unit, we are satisfied that the wage scales awarded by the Tribunal cannot be 'considered to be unjustified.
The Tribunal 's finding regarding the financial capacity of the appellant has already been referred to and we accept the same.
it was, however, pointed out by Mr. Tarkunde that in consi dering the comparability of a unit; strength of the labour force has also to be given due importance.
Mr. Tarkunde pointed out that 599 while the appellant employs 752 workmen, there are only 436 in Burroughs Wellcome Co. as is seen from the Statement exhibit C 22.
No doubt to this extent, the two units differ, but when one bears in mind the business performance of both the units,there is not much of a substantial difference.
It may be that because of the fact that Burroughs Wellcome Co. adopts more modem methods of production, it was employing a smaller complement of workers.
Having due regard to all the other tests that have been satisfied, this difference in the strength of labour force alone, in our opinion, cannot be given undue importance.
It is pertinent to note that this Court in Workmen of New Egerton, Woollen Mills vs New Egerton Woollen Mills and others(1) did not disagree with the view of the Industrial Tribunal which had treated the respondent therein and another unit as a comparable unit, notwithstanding the that the respondent was employing at the material time about 3000 workmen whereas the unit which was treated as a comparable unit was having the labour force of only about 1000 men, in view of the fact that all other requirements for comparability Were satisfied.
In fact, in the case before us, the Tribunal has adverted to this difference of labour force of the appellant and Burroughs Wellcome Company, but nevertheless it held that, that by itself is not sufficient to eliminate Burroughs Wellcome Company as a comparable unit.
We agree with this approach made by the Tribunal.
An objection was taken on the basis of section 10(4) of the that the Tribunal has permitted the Unions to revise their demand regarding classification and grades of workmen and that the Tribunal has further committed an error in upholding the grades of Stenographers, Assistants and Store keepers and merging them with that of the Senior Clerks.
We are not inclined to accept this contention advanced on behalf of the appellant.
We have already referred to the fact that as the question of classification and fixing grades were matters cf a technical nature, at the joint request of both the parties, the Tribunal appointed Sri Gadkari, as an assessor.
It was really in view of the stand taken by both the parties before the assessor and the Tribunal, after the report was submitted by the assessor that the Tribunal has accepted the report that the existing grades should continue.
But as the workmen had to be fitted in 'the appropriate grades, the Tribunal was justified in fitting in the categories the workmen and their grades as well as their scales of wages.
The above contention based upon section 10(4) of the , at the most can relate, if at all.
only to the operatives.
The report of Sri Gadkari has already been referred to.
He had suggested the ' retention of the existing categories.
The workmen have necessarily to, be classified for the purpose of being put in particular categories (1)[1969] 2 L.L.J.782.
600 and the wages also have to be suitably fixed depending upon the category in which they are so fitted.
Having due regard to the, nature of the reference, classification though jobwise and the fixing of wages of pay and fitting the workmen in suitable categories were all matters incidental and as such the Tribunal has acted within its jurisdiction in classifying the workmen and fixing the scales of pay after fitting them in particular categories.
In the view above expressed, we do not think it necessary to refer to the decisions referred either by Mr. Tarkunde, learned counsel for the appellant or by Mrs. Urmila Kapoor, on behalf of the respondent No. 2 as to when exactly the matter can be considered to be incidental to the question referred for adjudication.
Before we take up the question of dearness allowance, one other point that requires to be adverted to is the objection taken on behalf of the appellant regarding the raising in the gratuity scheme the ceiling limit from 15 months to 17 21 months ' basic wages.
The Tribunal has adopted the pattern obtaining in Burroughs Wellcome Company.
We do not see any question of principle involved in this matter and therefore we find no merit in the objection raised by the Company.
The pattern of dearness allowance that was in force in the appellant Company at the time of the reference has been indicated already.
We have also referred to the scale of dearness allowance fixed by the Tribunal.
There were different systems of dearness allowance for the operatives and the clerical and subordinate staff.
That such a different system of dearness allowance for the employees working under the same employer is not warranted, is clear from the decisions of this Court in Greaves Cotton & Co. and others vs Their Workmen(1) and Bengal Chemical & Pharmaceutical Works Ltd. vs Its Workmen(2).
Therefore, the Tribunal was justified in devising a uniform scale of dearness allowance applicable to all the employees of the appellant.
The Unions required a common scheme of dearness allowance of slab system to be introduced for all employees.
The appellant resisted the claim on the ground that there was already a scheme of dearness allowance existing in the Company and that there is, no justification for revising the same.
But, nevertheless, the Tribunal has adopted, by and large, the scheme of dearness allowance which was in vogue in 'Burroughs Wellcome Co. Normally, once Burroughs Wellcome Co. is treated as a unit comparable with the appellant, the Tribunal must be considered prima facie to be justified in introducing the pattern obtaining in that unit.
However, it is pointed out on behalf of the appellant that the slab system of dearness allowance does not obtain in any of the pharmaceutical industries in the region.
(1) ; (2) ; 601 The contention that because there was a system of dearness allowance in existence in the Company and therefore there was no justification for revising the same, cannot be accepted.
A similar contention raised in Remington Rand of India vs Its Workmen(1) was rejected by this Court.
In that.
case there was a system of dearness allowance providing for payment of not only a rate of percentage on the basic salary but also a variation in the percentage on the rise or fall of the cost of living index.
The workmen demanded revision of the scale of dearness allowance on the ground that the cost of living index had increased.
The claim was resisted by the Company on the ground that the scheme of dearness allowance then existing in the Company itself provided for an increase in the cost of living index and therefore no revision is required.
This contention was not accepted by this Court.
It was held that a claim made by the Workmen, if otherwise justified, cannot be rejected on the sole ground that a provision is already made in an existing scheme of dearness allowance for adjustment depending upon an increase in the cost of living index.
This Court further held that if it is established that the cost of living shows a tendency to rise very high, the workmen would be entitled to claim and there may be a change in the rate of dearness allowance originally fixed, so, as to provide for more neutralisation.
It was further held that a claim made by the workmen win have to be properly considered and adjudicated upon by the Tribunal.
In fact, in that case, it is seen that there was only a 50 point rise in the cost of living index and nevertheless the revision of the scale of dearness allowance by the Tribunal was upheld.
We may also refer to the decision of this Court in Workmen of Balmer Lawrie and Co. vs Balmer Lawrie and Co.(2) wherein it has been held as follows : "If the paying capacity of the employer increases or the cost of living shows an upward trend, or there are other anomalies, mistakes or errors ', in the award fixing wage structure, or there has been a rise in the wage structure in comparable industries in the region, industrial employees would be justified in making a claim for the reexamination of the wage structure and if such claim is referred for adjudication, the Adjudicator would not normally be justified in rejecting it solely on the ground that enough time has not passed after the making of the award, or that material change in relevant circumstances had not been proved.
It is of course, not possible to lay down any hard and fast rule in the matter.
The question as to revision must be examined, on the merits in each (1) (2) ; 602 individual case that is brought before an adjudicator for his adjudication.
" On the date when the settlement was entered into between the appellant and its workmen on April 20, 1966, the cost of living , index was 630.
From exhibit C 1 it is seen that in August 1969, the cost of living index had gone up to 7 90 and from exhibit DU IO dated December 8, 1970, it is seen that when the second settlement was entered into between Burroughs Welcome, Co. and its workmen, the cost of living index had gone upto 800.1.
It is also seen that at the time of the Award it had gone up further to about 850 points.
Therefore, from the date of the settlement in 1966 the cost of living index had very rapidly gone up by 220 points.
At the time when the demand for revision of wage scales and dearness allowance wag made by the Unions and when the reference order was made by the Government, the cost of living index had gone up very high.
That clearly shows that the workmen had made out a case for revision of wage scales and dearness allowance.
We have earlier referred to the scheme of dearness allowance fixed by the Tribunal in the Award.
The scheme provides for payment of a particular percentage on the basic salary and it also provides for variation on 10 points.
But the dearness allowance has been fixed on the Bombay Working Class Cost of Living Index of 521 530.
Though more or less the same pattern of dearness allowance was obtaining in Burroughs Welcome Co. , the dearness allowance in the latter was fixed at the Bombay Working Class Cost of Living Index of 491 500.
The scale of dearness allowance, as demanded by the Unions, was on the basis of the cost of living index 401 410.
It was accepted by the appellant that the scheme obtaining in Burroughs Welcome Company is more advantageous from the financial point of view than the scheme of dearness allowance demanded by the Unions.
In fact, the Tribunal itself has made a further concession in favour of the appellant by adopting the cost of living index of 521 530 instead of 491 500 as was obtaining in Burroughs Welcome Co. The Tribunal had made this change in the cost of living index in view of the fact that in the appellant Company, there was an Incentive Wages Scheme in and by which operatives 'were getting on an average, about Rs. 28/ per month.
Therefore the financial burden cast on the appellant by the dearness allowance scheme fixed by the Tribunal is such that the appellant can bear the burden.
in order to show that in the Bombay region the pharmaceutical units were adopting the slab system of dearness allowance, the Unions had filed a chart exhibit DU 1.
It is evident from exhibit DU 1, that out of 19 pharmaceutical units, referred to therein, at least 1 1 of them adopt the slab system of dearness allowance which.
has been 603 introduced in the case of the appellant in the Award.
No doubt, it is pointed out by Mr. Tarkunde 'that in the statement filed bay the appellant, exhibit C 25, it will be.
seen that none of the Indian owned units have adopted the slab system.
But whether those units have adopted or not, we have already indicated, that no distinction can be made between a purely local unit and a foreign unit doing business in India or an Indian unit doing business in collaboration with foreign concern.
When once such units can be taken into, account as comparable units, the pattern of dearness allowance, obtaining therein can very well be considered to ascertain the system adopted by the industry as that will show the trend in the region.
As pointed out above, at least 11 units, referred to in exhibit DU 1 have adopted the.
system now introduced in the case of ' the appellant by the Tribunal.
Under those circumstances when such system is prevailing in the industry in the same region, it cannot be held that the Tribunal has committed any error, in introducing a similar pattern in the case of the appellant.
The slab system has been approved by this Court as will be seen by the decisions in Greaves Cotton and Co. and others vs Their Workmen(2) and Bengal Chemical and Pharmaceutical Works Ltd. vs Its Workmen (2) .
Even in Bombay that such a pattern of dearness allowance, as the one introduced in the case of the appellant, is existing is seen by the decisions of this Court in Greaves Cotton and Co. and others vs Their Workmen(2) and Kamani Metals & Alloys Ltd. vs Their Workmen (3).
No doubt the industries therein were not pharmaceutical units.
But that such a system exists in Bombay region is clear from the above decisions.
Mr. Tarkunde referred us to the Award of the Industrial Tri bunal in Reference (IT) No. 411 of 1966 in Voltas Limited, Bombay vs The Workmen Employed under them dated September 30, 1969 wherein the adoption of slab, system has not been approved.
On the other hand, Mrs. Urmila Kapoor, learned counsel for respondent No. 2 has drawn our attention to a number of awards of the Industrial Tribunal rendered during the years 1965 to 1968 wherein the slab system of dearness allowance has been adopted in Bombay region.
It is only necessary to refer to the award in the case of May and Baker Limited, Bombay vs Its Workmen, because that is a pharmaceutical unit.
The award was given in or about June 1967 and it is seen that the dearness allowance on the pattern now given by the Tribunal in respect of the appellant has been adopted.
We have already referred to the fact that in exhibit DU71, it is seen that as many as 11 pharmaceutical unit s in Bombay region have adopted the pattern of granting dearness allowance on the slab (1) ; (3) ; (2) 3.
604 system now incorporated in the present award.
Though most of the units referred to therein could not be treated as units comparable with the appellant because of lack of full information regarding material factors, yet those concerns can be taken into account inasmuch as the system Obtaining in those concerns will show that the slab system is not something new to the pharmaceutical units.
We have already referred to the award in May and Baker Limited, Bombay vs Its Workmen.
These facts clearly show that the scheme of dearness allowance provided in the award before us in respect of the appellant is not anything new.
On the other hand, the Tribunal has only adopted the system prevailing in the region in respect of pharmaceutical units.
So far as the financial burden is concerned we have already referred to the findings recorded by the Tribunal.
Even on the basis that the Tribunal was not justified in proceeding on the assumption that 52 chemists are not covered by the reference, in our opinion, the additional burden that will be cast on the appellant can be easily borne by if.
Therefore, we see no error in the scheme of dearness allowance introduced, in the case of the appellant, by the Tribunal.
The only other point that requires to be considered is in respect of the direction given by the Tribunal regarding the Incentive Bonus scheme in respect of which the appellant had given notice of change under section 9A of the industrial Disputes Act, 1947.
We have already referred to the nature of the scheme that originally existed and the modification sought to be made by the, appellant.
We have also pointed out that the Tribunal has not accepted most of the recommendations made by Sri Tulpule, who was appointed as an a ssessor on the joint application of both the parties.
The Tribunal has stated that it is desirable that a scheme is worked out, if possible, by consent of parties for the purpose of protecting the interest of the workmen at the increased base performance index.
According to Mr. Tarkunde the Tribunal itself should have gone into the matter and evolved a scheme.
No doubt, it would have been desirable if the Tribunal had actually evolved a scheme.
But the Tribunal has stated that the necessary material for that purpose has not been made available and as such it has not been possible to devise a scheme calculated to afford protection to the incentive earning of a workman at the raised base performance index.
In fact, we also suggested to, the counsel that the parties may consider the matter and submit a scheme for that purpose.
But it was represented to us on February 9, 1972 by Mrs. Urmila Kapoor, learned counsel for respondent No. 2, that it has not been possible for the parties to arrive at an agreement in respect of that matter, at present.
Therefore, there is nothing further that could 605 be done by this Court in this regard; and the result is that the observations made by the Tribunal in this regard will have full effect.
In the result, all the conventions of the appellant are rejected and the Award of the Industrial Tribunal in respect of the matters ,in controversy in the appeals are confirmed.
All the appeals are dismissed.
In Civil Appeal No. 1091 of 1971, the appellant will pay the costs of respondents Nos. 1 and 2.
In the other appeals, parties will near their own costs.
The appellant will have three months ' time from today for payment of the amounts due under the award.
| IN-Abs | The appellant carried on the business of manufacturing and selling pharmaceutical products in Greater Bombay.
In disputes arising bet the appellant and the respondents the Industrial Tribunal had to deal with questions relating to dearness allowance, classification of grades and fixation of wages and the incentive bonus scheme as modified 'by the company.
In appeal against the award of the Tribunal, HELD : (i) The decisions of this Court in Gramophone Company Ltd. vs its Workmen and The Indian Link Chain Manufacturers Ltd. vs Their Workmen show that the Tribunal was justified in computing gross profits without deducting taxation, depreciation and development rebate.
The latter decision is directly in point to the effect that provision for depre ciation cannot be deducted.
[582E., 585B C] Gramophone Company Ltd. vs Its Workmen, and The Indian Link Chain Manufacturers Ltd. vs Their Workmen, , applied.
Ahmedabad Millowners ' Association Etc.
vs The Textile Labour Association, ; , referred to.
(ii)So long and to the extent that concerns having foreign collaboration are doing business in India and in a particular concerned region there is no reason why they should not be taken into account for purposes of being teated as comparable units, provided that the tests for such purposes as laid down by this Court are satisfied.
The object of industrial adjudication is to secure as far as possible uniformity of service conditions among industrial units in the same region,.
if a concern having foreign collaboration properly satisfies the tests of comparability it would be improper to regard such unit as uncomparable merely on the ground that it is a concern with foreign collaboration or interest and that the unit with which it is sought to be compared is entirely of Indian origin and resources.
[591A C] Chemical Industries and Pharmaceutical Laboratories Limited (Cipla) Bombay vs Their Workmen, [1957] I.C.R. Bombay 1206 and Alembic Chemical Works Ltd. Baroda vs Its, Workmen ; , Hindustan Antibiotics Ltd. vs The Workmen and Ors., ; , relied on.
(iii)On the materials before it the Tribunal was justified in treating M/S. Burroughk Wellcome & Co. as a unit comparable with the appellant.
568 The fact that Burroughs Wellcome employed a lesser labour force did not deserve much importance because the business performance of the two companies was equal.
Once Burroughs Wellcome Co. was treated as a comparable unit the wage scales awarded by the Tribunal could not be considered to be unjustified.
[598G 599A D] Workmen of New Egerton Woollen Mills vs New Egerton Woollen Mills and Ors., , applied.
(iv)On the facts of the case it was not possible to disagree with the view of the Tribunal that the impact of the Drugs (Price Control ) Order will not be such as to affect materially the business prospects of the appellant company.
If the Order materially affects the prosperity of the appellant 's trade it would be open to it to raise a dispute for the reduction in the wage structure and in case they are able to show that in view of the Drugs (Price Control) Order their financial position has weakened to such an extent that they cannot bear the burden of the wage structure fixed by the present award, the matter may have to be examined on its merits.
[598B C] Williamsons (India) Private, Ltd. vs Its Workmen, , referred to.
(v)The Tribunal had acted within its jurisdiction in classifying the workmen and fixing the scales of pay after fitting them in particular categories.
The objection based on section 10(4) of the must be rejected.
[599E 600B] (vi)When the Tribunal raised in the gratuity scheme the ceiling limit from 15 months to 17 1/2 months according to the pattern obtaining in Buroughs Wellcome Company there was no question of principle involved justifying an objection by the appellant company.
[60OC D] (vii)There were different systems of dearness allowance for the operators and the clerical and subordinate staff in the appellant company.
That such a different system of dearness allowance for employees working under the same employer is not warranted is clear from the decisions of this Court in the cases of Greaves Cotton & Co. and Bengal Chemical & Pharmaceutical Works Ltd. Therefore the Tribunal was justified in devising a uniform scale of dearness allowance applicable to all the employees of the appellant.
[600E F] Greaves Cotton and Co. and Ors.
vs Their Workmen, ; and Bengal Chemical & Pharmaceutical Works Ltd. vs Its Workmen; , , relied on.
(viii)From the date of the settlement in 1966 the cost of living index had very rapidly gone up by 220 points.
At the time when the demand for revision of wages scales and dearness allowance was made by the Unions and when the reference order was made by the Government, the cost of living index had gone up very high.
That clearly showed that the workmen bad made out a case for revision of wage scales and dearness allowance.
The contention of the appellant that because a system of dearness allowance already existed there should be no revision of the same, could not be accepted.
[6O2C; 601A] Co. ; and Remington and of India vs Its Workmen, , followed.
569 (ix)When the slab, system of dearness allowance was prevailing in the industry in the region the Tribunal committed no error in introducing a similar pattern in the case of the appellant.
[603C D] Kamani Metals & Alloys Ltd. vs Their Workmen, ; , referred to.
(x)In regard to the incentive Bonus Scheme the Tribunal had stated that the necessary material for that purpose had not been made available and as such it had not been possible to devise a scheme calculated to afford protection to the incentive earning of a workman at the raised base performance index.
This Court could do nothing further,in this 'regard and the result would be that observations made by the Tribunal will have full, effect.
[604G H]
|
minal Appeal No. 165 of 1971.
Appeal by special leave from the _judgment and order dated November 24, 1970 of the Madras High Court in Criminal Appeal No. 761 of 1970 and Referred Trial No. 50, of 1970.
section Lakshminarasu, for the appellant.
A. V. Rangam, for the respondent.
623 The Judgment of the Court was delivered by Khanna, J.
Thulia Kali (26) was convicted by Sessions Judge Salem under section 302 Indian Penal Code for causing the death of Madhandi Pidariammal (40) and under section 379 Indian Penal Code for committing theft of the ornaments of Madhandi deceased.
The accused was sentenced to death on the former count.
No separate sentence was awarded for the offence under section 379 Indian Penal Code.
The High Court of Madras affirmed the conviction and.
sentence of the accused.
The accused has now come up in appeal to, this Court by special leave.
The prosecution case was that Madhandi deceased purchased land measuring 1 acre 62 cents from Thooliya Thiruman (PW 5), elder brother of the accused for rupees one, thousand.
The land of the accused adjoined the land sold to Madhandi deceased.
The accused wanted Madhandi deceased to sell that land to him but the deceased declined to do so.
Madhandi constructed a fence around the land purchased by her, as a result of which the passage to the land of the accused was obstructed.
About a week before the present occurrence, the accused removed some jack fruits from the land purchased by the deceased.
Complaint about that was made by the deceased to the Panchayatdars.
The Panchayatdars considered the matter, but the accused declined to abide by the decision of the Panchyatdars.
On March 12, 1970 at about 12 noon, it is stated, Madhandi deceased left her house situated in village Sakkarapatti along with her daughter in law Kopia Chinthamani (PW 2), aged 10, for Valaparathi at a distance of about two miles from the village for grazing cattle.
Shortly thereafter, Valanjiaraju (PW 1), stepson of Madhandi deceased, also went to Valaparathi and started cutting plants at a distance of about 250 feet from the place where the deceased was grazing the cattle.
At about 2 p.m. the accused came to the place where Madhandi deceased was present and asked her whether she would give him the right of passage or not.
The deceased replied in the negative.
The accused then took out knife exhibit 1 and gave a number of knife blows, to the deceased in spite of her entreaties to the accused not to stab her and that she would give him what he wanted.
Kopia PW raised alarm and ran from the place of occurrence.
She met Valanjiaraju PW and told him that the accused was giving knife blows to Madhandi.
Accompanied by Kopia, Valanjiaraju then went towards the accused but he threatened them with knife.
Valanjiaraju and Kopia thereupon went to the village and informed the husband of the deceased as well as a number of other villagers including Aneeba (PW 3) and Selvaraj (PW 4).
Valanjiaraju and a large 624 number of other villagers then went to the place of occurrence A and found the dead body of Madhandi deceased lying there with injuries on her throat, face and other parts of the body.
Both her ears were found to have been chopped off.
Her jewels had been removed.
According further to the prosecution, Valanjiaraju went to B the house of village munsif Muthuswami (PW 8) to inform him about the occurrence.
Muthuswami, however, was away from the house to another village in connection with some collection work.
Muthuswami returned at about 10.30 p.m. and was told by Valanjiaraju about the occurrence.
Muthuswami did not record the statement of Valanjiaraju at that time and told him that be would not go to the spot where the dead body was lying on that night as wild animals would be roaming there and that he would go there on the following morning ' Muthuswami went to the spot where the dead body of the deceased was lying at about 8.30 a.m. on the following day, that is, March 13, 1970 and had a look at the dead body of the deceased.
Statement P. I of Valanjiaraju was recorded by Muthuswami at 9.
a.m. at the spot.
The statement was then sent by Muthuswami to police station Valavanthi at a distance of about two miles from the place of occurrence.
Formal first information report P. 15 on the basis of statement P. I was prepared at the police station at 11.45 a.m. Head Constable Rajamanickam after recording first informa tion report, went to the place of occurrence and reached there at 2.30 p.m. Inspector Rajagopal (PW 13), on hearing about the occurrence at the bus stand, also went to the place of occurrence.
Inquest report relating to the dead body of the deceased was then prepared.
Dr. Sajid Pasha (PW 7) was thereafter sent for from Sendamangalam.
Dr. Pasha arrived at the place of occurrence at 12.30 p.m. on March 14, 1970 and performed post mortem examination on the dead body of Madhandi deceased.
Inspector Rajagopal arrested the accused, according to the prosecution, at 5 a.m. on March 15, 1970 in a reserve forest about one mile from Seppangulam.
The accused then stated that he had kept ornaments and knife in the house of Chakravarthi (PW 9) and would get the same recovered.
The Inspector then went with accused to the house of Chakravarthi PW and from there recovered knife exhibit 1 and ornaments Exs.
2 to 8.
The said ornaments belonged to Madhandi deceased.
The knife was taken into possession and put into a, sealed parcel.
The clothes which the accused was wearing were got removed and put into a sealed parcel.
The parcels were sent to Chemical Examiner, whose report showed that neither the knife nor the clothes of the accused were stained with blood.
625 At the trial the plea of the accused was denial simpliciter.
According to the accused, the villagers came to know on the evening of March 12, 1470 that the deceased had been murdered.
The accused along with the villagers went to the spot where the dead body of the deceased was lying and stayed with them there during the night.
On the following day, the accused was suspected by the villagers.
They gave him beating and tied him to; A tree.
Later on that day, that is, March 13, 1970, the accused was taken to the police station and kept there for two days.
The accused denied having committed the murder of the deceased or having got recovered the ornaments and the knife.
No evidence was produced in defence.
The learned Sessions Judge in convicting the accused relied upon the evidence of Kopia (PW 2), who had given eye witness account of the occurrence, as well as the statement of Valanjiaraju (PW 1), who had been threatened by the accused with knife near the place of occurrence.
Reliance was also placed upon the recovery of knife and ornaments in pursuance of the statement of the accused.
The High Court agreed with the Sessions Judge and affirmed the conviction of the accused.
There can be no doubt that Madhandi deceased was the victim of a 'brutal attack.
Dr. Sajid Pasha, who performed post mortem examination on the dead body of Madhandi, found as many as 29 injuries on the body.
Out of them, 24 were incised wounds and five were multiple abrasions.
There were a number of incised wounds on the face, neck, chest and abdomen.
The pinnas of the right and left ears had been completely severed.
Injuries were also found in the eyes and laryngeal region.
Death was the result of different injuries, some of which were individually sufficient to cause death.
The case of the prosecution was that it was the accused appellant who had caused the injuries to,Madhandi deceased.
The accused has, however, denied this allegation and has claimed that he has been falsely involved in this case on suspicion.
The trial court and the High Court have based the conviction of the accused appellant, as stated earlier, primarily upon the testimony of Kopia (PW 2) and Valanjiaraju (PW 1).
This Court does not normally reappraise evidence in an appeal under article 136 of the Constitution, but that fact would not prevent interference with an order of conviction if on consideration of the vital prosecution evidence in the case, this Court finds it to be afflicted with ex facie infirmity.
There are in ' the present case certain broad features of the prosecution story which create considerable doubt regarding the veracity of the aforesaid evidence, and.
in our opinion, it would not be safe to maintain the conviction 626 on the basis of that evidence.
According to Kopia (PW 2), .the accused stabbed the deceased at about 2 p.m.
Kopia raised alarm and immediately informed Valanjiaraju, who was cutting plants at a distance of about 250 feet from the place of occurrence.
Valanjiaraju and Kopia then, came towards the place where the accused had assaulted the deceased, but the accused threatened them with knife.
Valanjiaraju and Kopia thereupon went to the village abadi and informed the other villagers.
Valanjiaraju accompanied by other villagers then went to the place of occurrence and found the dead body of Madhandi lying there with a number of injuries.
According to document P. I Valanjiaraju made statement .about the occurrence to village munsif Muthuswami (PW 8) at about 9 a.m. on March 13, 1970.
Formal first information report on the basis of the above statement was prepared at the police station at 11.45 a.m.
The delay in lodging the report, according to the prosecution, was due to the fact that Muthuswami PW was away to another village in connection with some collection work and he returned to his house at 10.
30 p.m. Muthuswami told Valanjiaraju when the latter met him at night that he would record the satement only after having a look at the dead body on the following morning.
It is in the evidence of Valanjiaraju that the house of Muthuswami is at a distance of three furlongs from the village of Valanjiaraju.
Police station Valavanthi is also at a distance of three furlongs from the house of Muthuswami.
Assuming that Muthuswami PW was not found at his house till 10.30 p.m. on March 12, 1970 by Valanjiaraju, it is, not clear as to why no report was lodged by Valanjiaraju at the police station.
It is, in our opinion, most difficult to believe that even though the accused had been seen at 2 p.m. committing the murder of Madhandi deceased and a large number of villagers had been told about it soon thereafter, no report about the occurrence could be lodged till the following day.
The police station was less than two miles from the village of Valanjiaraju and Kopia and their failure to make a report to the police till the following day would tend to show that none of them had witnessed the occurrence.
It seems likely, as has been stated on behalf of the accused, that the villagers came, to know of the death of Madhandi deceased on the evening of March 12, 1970.
They did not then know about the actual assailant of the deceased, and on the following day, their suspicion fell on the accused and accordingly they involved him in this case.
First information report in a criminal case is an extremely vital and valuable piece of evidence for the purpose of corroborating the oral evidence adduced at the trial.
The importance of the above report can hardly be overestimated from the 627 standpoint of the accused: The object of insisting upon prompt lodging of the report to the police in respect of commission of an offence is to obtain early information regarding the circumstances in which the crime was committed, the names of the actual culprits and the part played by them as well as names of eye witnesses present at the scene of occurrence.
Delay in lodging the first in formation report quite often results in embellishment which is a creature of afterthought.
On account of delay, the report not only gets bereft of the advantage of spontaneity, danger creeps in of the introduction of coloured version, exaggerated account or concocted story As a result of deliberation and consultation.
It is, therefore, essential that the delay in the lodging of the first information report should be satisfactorily explained.
In the present case, Kopia, daughter in law of Madhandi deceased, according to the prosecution case, was present when the accused made murderous assault on the deceased.
Valanjiaraju, stepson of the deceased, is also alleged to have arrived near the scene of occurrence on being told by Kopia.
Neither of them, nor any other villager, who is stated to have been told about the occurrence by Valanjiaraju and Kopia, made any report at the police station for more than 20 hours after the occurrence, even though the police station is only two miles from the place of occurrence.
The said circumstance, in our opinion, would raise considerable doubt regarding the veracity of the evidence of those two witnesses and point to an infirmity in that evidence as would render it unsafe to base the conviction of the accused appellant upon it.
As regards the alleged recovery of knife and ornaments at the instance of the accused, we find that the evidence consists of statements of Inspector Rajagopal (PW 13), Kati Goundar (PW 6) and Chakravarthi (PW 9).
According to Chakravarthi (PW 9), the accused handed over the ornaments in question to the witness when the accused came to the house of the witness on the evening of March 12, 1970 and passed the night at the house.
The witness also found knife in the bed of the accused after he had left on the following day.
According, however, to Kali Goundar (PW 6), the accused, on interrogation by the Inspector of Police, stated that he had entrusted the ornaments to Thangam, wife of Chakravarthi (PW 9).
Apart from the discrepancy on the point as to whom was the person with whom the accused had kept the ornaments, we find that Thangam, with whom the accused, according to Kali Goundar PW had kept the ornaments, has not been examined as a witness.
In view of the above statement of Kali Goundar, it was, in our opinion, essential for the prosecution to examine Thangam as a witness and its failure to do so would make the Court draw an inference against the prosecution.
in his bed in the house of Chakravarthi (PW 9) when he had ample opportunity to throw away the knife in some lonely place before arriving at the house of Chakravarthi.
The knife in question was found by Chemical Examiner to be not stained with blood and according to the prosecution case, the accused had washed it before leaving it in the bed in the house of Chakravarthi.
If the accused realised the importance of doing away with the blood stains on the knife, it does not seem likely that he would bring that knife ' to the house of Chakravarthi and leave it in the bed.
Looking to all the circumstances, we are of the view that it is not possible to sustain the conviction of the accused on the evidence adduced.
We accordingly accept the appeal, set aside the conviction of the accused appellant and acquit him.
K.B.N. Appeal allowed.
| IN-Abs | This Court does not normally reappraise evidence in an appeal under article 136 of the Constitution but that fact would not prevent interference with an order of conviction, if, on consideration of the vital prosecution evidence in the case the Court finds it to be afflicted with ex facie infirmity.
The appellant was sentenced to death under section 302 Indian Penal Code.
The trial Court and the High Court based the conviction of the appellant primarily upon the testimony of two witnesses one of whom according to the prosecution case was present when the accused made murderous assault on the deceased and the other arrived soon after.
Neither of them nor anyone else who was told about the occurrence by the two witnesses made any report at the police station for more than 20 hours after the occurrence even though the police station was only two miles from the place of occurrence.
Setting aside the conviction, HELD : That the delay in lodging the report would raise considerable doubt regarding the varacity of the evidence of two witnesses and point to an infirmity in that evidence and would render it unsafe to base the conviction of the apPellant.
The first information report in a criminal case is an extremely vital and valuable piece of evidence for the purpose of corroborating the oral evidence adduced a ' the trial The object of insisting upon prompt lodging of the report to the police in respect of commission of an offence is to obtain early information regarding the circumstances in which the crime was committed, the names of the actual culprits and the part played by them as well as, the names of eye witnesses present at there scene of occurrence.
Delay in lodging the first information report quite often results in embellishment which is a Creature of after thought.
It is therefore essential that the delay in lodging the report should be satisfactorily explained.
[626 H]
|
Appeal No. 1339 of 1967.
Appeal by special leave from the Award dated April 28, 1967 ' of the Central Government Labour Court, Bombay in Application No. LCB 39 of 1965.
608 section D. Vimdalal, section K. Wadia, D. N. Mishra and O. C. Mathur , for the appellant.
K. P. V. Menon, section R. Iyer and M. section Narasimhan, for respon dent No. 1.
The Judgment of the Court was delivered by Dua, J.
This.
is an appeal by special leave and the appellant, the Air India Corporation, Bombay assails Part I of the Award 'with corrigendum, dated April 28, 1967, given by the Central Government Labour Court, Bombay, on the complaint dated October 16, 1965 made by Shri V. A. Rebellow, respondent No. 1 in this Court (hereinafter referred to as the complainant) under section 33 A of the Industrial Disputes Act, 1947_hereinafter called the Act).
The complaint was originally filed by the complainant before the National Industrial Tribunal, Delhi, (Mr. Justice G. D. Khosla, retired Chief Justice of the Punjab High Court) in the Industrial Dispute Reference No. 1 of 1964 but was later transferred to the Central Government Labour Court and numbered as application No. LCB 39 of 1965.
The impugned award merely dealt with the preliminary points .raised by the appellant that the complainant was not a workman concerned in the aforesaid industrial dispute and that there was no breach of section 33 of the Act with the result that the complaint under section 33 A of the Act was incompetent.
The Labour Court held the complainant to be,, a workman concerned in the aforesaid industrial dispute pending before the National Industrial Tribunal on the date of his dismissal and that the dismissal was not a discharge simpliciter but in breach of the provisions of section 33.
On this finding his complaint was held to be maintainable.
The two questions canvassed in the present appeal are (1) whether the complainant was a workman and was as such concerned in the aforesaid dispute (Industrial Dispute Reference No. 1 of 1964) and (2) whether the termination of his service was a dismissal as alleged by him or was a mere termination of service not amounting to dismissal.
Broad facts necessary for understanding the controversy may now be stated: The order which was challenged as amounting to the com plainant 's dismissal reads CONFIDENTIAL Dated June 19, 1965 (Thru : The Commercial Manager, Cargo) Dear sir, It has been decided to terminate your services, which we hereby do with immediate effect.
You will be paid ,one month 's salary in lieu of notice.
609 2.
Please arrange to return, as early as possible, all items of Corporation 's property in your possession to enable us to settle your accounts.
Your accounts will be settled after checking your commitments.
Yours faithfully, AIR INDIA Sd/ section K. KOOKA Commercial Director" On July, 16, 1965 the complainant acknowledged the above letter terminating his services with immediate effect and requested for reinstatement because according to him there was nothing to warrant such summary termination of his services.
This is what he wrote : ".
In this connection I have to state that I have served the Corporation for a period of over nine years and to the date of terminating my services, there is nothing on record which warrants that my services should be terminated summarily.
Hence it is requested that I be reinstated and thereafter if the Management is of the opinion that I have done something against the interest and the fair name of the Corporation, I be charged accordingly, given an opportunity to explain my conduct and after everything else if I am found guilty, action taken against me as the management deems fit.
With the experience I have with the management 's policy towards, its employees, I am confident that I will never 'be deprived of the opportunity I have asked for and more so in the light of the faithful service I have rendered. . " The following reply was sent to the complainant on September 8.1965 2. 1 have to inform you that your services were terminated on payment of 30 days ' salary in lieu of notice, in accordance with Rule 48 of the Air India Employees 'Service Regulations.
" 610 Regulation 48 of the Air India Employees ' Service Regulations which was described as Rule 48 in the letter of September 8, 1965 leads as under CHAPTER VIII Cessation of service 48.
Termination : The service of an employee may be terminated without assigning any reason, as under : (a) of a permanent employee by giving him 30 days ' notice in writing or pay in lieu of notice; (b) of an employee on probation by giving him 7 days ' notice in writing or any in lieu of notice; (c) of a temporary employee by giving him 24 hours ' notice in writing or pay in lieu of notice.
Explanation : For the purposes of this Regulation, the word "pay" ' shall include all emoluments which would be admissible if he were on privilege leave." In the complaint under section 33 A of the Act it was alleged by the complainant that the order dated June 19, 1965 smacked of vindictiveness or unfair labour practice and that his alleged termination was a cloak for punishing him.
No facts were, however, stated in support of this averment.
According to the averments in this complaint, Regulation 48 postulates the existence of some reason for the termination of service and since the Corporation had not disclosed any reason for the termination of the complainant 's service it was requested that the Corporation be directed to disclose the reason, if any, for the termination of his service.
The real grievance of the complainant, it appears, was founded on the construction of Regulation 48 as is clear from the following averments in para 7 of the complaint: "The complainant submits that on a reasonable construction of the said Rule, the Opposite Party is bound to disclose the reason if any for the said termination in the present proceedings.
The complainant submits that any other construction would be unreasonable and make the said rule itself unreasonable, illegal, void as also in contravention of Articles 14, 16, 19 and 311 of the Consti tution of India and is therefore void and inoperative." In regard to the question of the complainant being a workman concerned in a pending industrial dispute it was averred that the 611 complainant had been employed by the Opposite Party as an Assistant Station Superintendent (Crew Scheduling) in the grade of Rs. 300 25 500 50 650 and was confirmed in that post with effect from 1st December, 1963.
In para 8 of the complaint it was pleaded that : "the proceedings in reference No. NIT No. 1 of 1964 were and are pending before this Hon 'ble Tribunal and the Complainant is a workman concerned in the said dispute.
The Complainant says that under the circumstances aforsaid the Opposite Party ought to have made an application for approval before this Hon 'ble Tribunal under Section 3 3 (2) of the , 1 947 but the Opposite Party has made no such application nor has the Opposite Party intimated that it proposed to make such an application for approval while terminating the services of the Complainant.
The Complainant says.
that the Opposite Party has not obtained the approval of this Hon 'ble Tribunal in writing of the action taken by it against the Complainant.
" On these averments reinstatement was claimed by the complainant with full back wages and allowances from the date of the alleged termination of his services.
It appears that pursuant to directions from the Labour Court the appellant filed a further written statement dated June 30, 1966 and it was submitted : "Without prejudice to the contention of the Opposite Party that this case should be decided on the preliminary points above as raised by the Opposite Party, as the Complainant has repeatedly made a grievance that a written statement on merits has not even been filed and as this Honourable Tribunal also indicated at the preliminary hearing that a written statement on merits should in any event be kept ready and that no further time would be given to the opposite Party for preparing and filing the same , the Opposite Party herewith begs to submit this further written Statement.
" With these; preliminary submissions it was stated as follows in paragraph 7 : "With reference to, paragraphs 6 and 7 of the Complaint, Regulation 48 of the Air India Employees ' Service Regulations provides inter alia, that the services of a permanent employee may be terminated, without assigning any reason, by giving him thirty days ' notice in writing or pay in lieu of notice.
The construction 612 sought to be put upon the said Regulation by the Complainant is not correct.
The opposite Party denies that Regulation 48 is unreasonable, illegal or void or in con travention of Articles 14, 16, 19 and 311 of the Constitution of India.
The said Regulations have been framed with the previous approval of the Central Government under section 45 (2)(b) of the Air Corporation Act, 1953.
The Opposite Party submits that it was and is not bound to give or disclose any reason for terminating the service of the Complainant.
Any contrary view would, it is submitted, render the said Regulation No. 48 completely nugatory.
However, without prejudice to this, the Opposite Party says that the Complainant 's service was terminated because of the total loss of confidence on account of grave, suspicions regarding his private conduct and behaviour with Air Hostesses of the Corporation.
The reports and statements from the Air Hostesses concerned cannot be disclosed as they involve the reputation and future of young and unmarried girls.
Having regard to this, the Opposite Party could not continue the Complainant in its service and it was constrained to terminate his service in accordance with Regulation 48.
" The complainant 's averment that he was a workman concerned in the proceedings in the industrial dispute was denied by the appellant in the first written statement dated March 15, 1966 in para I which reads : "(a) The Complainant was at no relevant time a 'workman ' within the meaning of that term as defined in Section 2(s) of the said Act.
At the time of the termination of his service, the Complainant was an Assistant Station.
Superintendent and was employed in an adminis trative,/Supervisory capacity, drawing a total salary amounting to Rs. 690 per month.
Moreover, it may also be pointed out that in its Staff Notice No. 130 dated 31st March, 1956, the Opposite Party has given a classi fication of its personnel, wherein the category of Assistant Station Superintendents has been classified as an "Officer" category (vide Entry No. 1/28).
A copy of the said Staff Notice is hereto annexed and marked exhibit No. 1.
Further, the said category of A ssistant Superintendents has not been included among the categories of workman in the ' dispute in Ref.
No. NIT/1 of 1964 pending before the, National Industrial Tribunal composed of Shri G. D. Khosla.
Besides, the Class of officers designated as Assistant Station Superintendents has always been, and is, represented by the Air India Officers 613 Association which is not an association representing any workmen ' and which is not a party to the dispute in the above mentioned reference.
Further, the said class of Officers has not at any time presented itself before the National Industrial Tribunal nor has, it been represented at the hearing of the said dispute by any of the Unions representing parties nos.
2 to 7 to the said dispute.
(b) Even assuming, without admitting, that the Complainant is held to be a workman (which is denied) sub sections `1 and 2 of section 33, and consequently section 33A, have, and can have, no application having regard to the circumstances of the present case.
The sub ject matter of the Complaint is not a matter connected with the dispute in the Reference before the National Industrial Tribunal nor is the Complainant concerned in the said dispute.
Further subsection (1) (b) and subsection 2(b) of section 33 have application only in the case of dismissal or discharge for misconduct in the circumstances set out therein, and not to a case of termination of service simpliciter.
In the present case, the Opposite Party has bona fide terminated the service of the Complainant under the provisions of Regulation 48 of Air India Employees ' Service Regulations which are applicable to the Complainant.
There has, therefore, been no breach of the provisions of sub section (1)(b) or sub section 2(b) of section 33 and unless there is such a breach there can be no invocation of Section 33A.
On the contrary, the Opposite 'Party repeats that the said sub sections are inapplicable.
" The complainant and the appellant both filed lists of the complainant 's duties in proof of their respective contentions, exhibit E 1 being the appellant 's list and exhibit W 13, the complainant 'section The Labour Court held in the impugned award that the com plainant as Assistant Station Superintendent was a Junior Officer and as such, as determined in the Khosla Tribunal Award, was a workman concerned in the industrial dispute before that Tribunal and that his discharge was not discharge simpliciter but in breach of section 33 of the Act.
On this view the complaint was directed to be considered on the merits.
In this Court Shri Vimadlal argued that keeping in view the complainant 's duties it is not possible to hold that he is a workman.
According to the submission the complainant was an officer whose duties were primarily supervisory and, therefore, he could not be described as a workman.
The complainant, it was further argued, was at least not a workman concerned in the industrial 11 L1031S sup.
CI/72 614 dispute pending before the Khosla Tribunal.
In any event, the action taken by the appellant, not being for misconduct on the part of the appellant but under Regulation 48 was not hit by section 33 of the Act.
We should like first to deal with the applicability of sections 33 and 33A of the Act on the assumption that the complainant was a workman and also as such interested in a pending industrial dispute.
These sections read : "33.
Conditions of service etc., to remain unchanged under certain circumstances during pendency of proceedings: (1) During the pendency of any conciliation proceeding before a concilation officer or a Board or of any proceeding before an arbitrator or a Labour Court or Tribunal or National Tribunal in respect of an industrial dispute, no employer shall, (a) in regard to any matter connected with the dispute, alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceeding; or (b) for any misconduct connected with the dispute, discharge or punish, whether by dismissal or otherwise, any workmen concerned in such dispute, save with the express permission in writing of the authority before which the proceeding is pending.
(2) During the pendency of any such proceeding in respect of an industrial dispute, the employer may, in accordance with the standing orders applicable to a workman concerned in such dispute, or, where there are no such standing orders, in accordance with the terms of the contract, whether express or implied, between him and the workman, (a) alter, in regard to any matter not connected with the dispute, the conditions of service applicable to that workman immediately before the commencement of such proceeding; or (b) for any misconduct not connected with the dispute, discharge or punish, whether by dismissal or otherwise, that workman Provided that no such workman shall be discharged or dismissed, unless he has 'been paid wages for owner 615 month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer.
(3) Notwithstanding anything contained in sub section (2)no employer shall, during the pendency of any such proceeding in respect of an industrial dispute,take any action against any protected workman concerned in such dispute (a) by altering, to the prejudice of such protected workman, the conditions of service applicable to him immediately before the commencement of such proceedings; or (b) by discharging or punishing, whether by dismissal or otherwise, such protected workman, save with the express permission in writing of the authority before which the proceeding is pending.
Explanation.
For the purposes of this sub section, a 'protected workman ', in relation to an establishment, means a workman who, being an officer of a registered trade union connected with the establishment, is recog nised as such in accordance with rules made in this behalf.
(4) In every establishment, the number of workmen to be recognised as protected Workmen for the purposes of sub section (3) shall be one per cent.
of the total number of workmen employed therein subject to a minimum number of five protected workmen and a maximum number of one hundred protected workmen and for the aforesaid purpose, the appropriate Government may make rules providing for the distribution of such protected workmen among various trade unions, if any, connected with the establishment and the manner in which the workmen may be chosen and recognised as protected workmen.
(5) Where an employer makes an application to a conciliation officer, Board, an arbitrator, a Labour Court, Tribunal or National Tribunal under the proviso to sub section (2) for approval of the action taken by him, the authority concerned shall, without delay, hear such application and pass, as expeditiously as possible such order in relation thereto as it deemed fit.
616 33A Special provision for adjudication as to whether conditions of service, etc., changed during pendency or proceedings : Where an employer contravenes the provisions of section 33 during the pendency of proceedings before a Labour Court, Tribunal or National Tribunal, any employee aggrieved by such contravention, may make a complaint in writing, in the prescribed manner to such Labour Court, Tribunal or National Tribunal and on receipt of such complaint that Labour Court, Tribunal or National Tribunal shall adjudicate upon the complaint as if it were, a dispute referred to or pending before it, in accordance with the provisions of this Act and shall submit its award to the appropriate Government and the provisions of this Act shall apply accordingly.
" The basic object of these two sections broadly speaking appears to be to protect the workmen concerned in the disputes which form the subject matter of pending conciliation proceedings or proceedings by way of reference under section 10 of the Act, against victimisation by the employer on account of raising or continuing such pending disputes and to ensure that those pending proceedings are brought to expeditious termination in a peaceful atmosphere, undisturbed by any subsequent cause tending to further exacerbate the already strained relations between the employer and the workmen.
To achieve this objective a ban, subject to certain conditions, has been imposed by section 33 on the ordinary right of the employer to alter the terms of his employees ' services to their prejudice or to terminate their services under the general law governing contract of employment and section 33A provides for relief against contravention of section 33, by way of adjudication of the complaints by aggrieved workmen considering them to be disputes referred or pending in accordance with the provi sions of the Act.
This ban, however, is designed to restrict interference with the general rights and liabilities of the parties under the ordinary law within the limits truly necessary for accomplishing the above object.
The employer is accordingly left free to deal with the employees when the action concerned is not punitive or mala fide or does not amount to victimisation or unfair labour practice.
The anxiety of the legislature to effectively achieve the object of duly protecting the workmen against victimisation or unfair labour practices consistently with the preservation of the employer 's bona fide right to maintain discipline and efficiency in the industry for securing the maximum production in a peaceful harmonious atmosphere is obvious from the overall scheme of these sections.
Turning, first to section 33, sub section
617 (1)of this, section deals with the case of a workman concerned n a pending dispute who has been prejudicially affected by an action in regard to a matter connected with such pending dispute and sub section
(2) similarly deals with workmen concerned in regard to matters unconnected with such pending disputes.
Sub section (1) bans alteration to the prejudice of the workman concerned in he conditions of service applicable to him immediately before the commencement of the proceedings and discharge or punishment whether by dismissal or otherwise of the workman concerned for misconduct connected with the dispute without the express Permission in writing of the authority dealing with the pending proceeding.
Sub section (2) places a similar ban in regard to matters not connected with the pending dispute but the employer is free to discharge or dismiss the workman by paying wages for one month provided he applies to the authority dealing with the pending proceeding for approval of the action taken.
In the case before use we are concerned only with the ban imposed against orders of discharge or punishment as contemplated by cl.
(b) of the two sub sections.
There are no allegations of alteration of the complainant 's terms of service.
It is not necessary for us to decide whether the present case is governed by sub section
(1) or sub section
(2) because the relevant clause in both the sub sections is couched in similar language and we do not find any difference in the essential scope and purpose of these two subsections as far as the controversy before us is concerned.
It is noteworthy that the ban is imposed only in regard to action taken for misconduct whether connected or unconnected with the dispute.
The employer is, therefore, free to take action against his.
workmen if it is not based on any misconduct on their part.
In this connection reference by way of contrast may be made to sub section
(3) of section 33 which imposes an unqualified ban on the employer in regard to action by discharging or punishing the workman whether by dismissal or otherwise.
In this subsection we do not find any restriction such as is contained in cl.
(b) of sub sections
(1) and (2).
Sub section (3) protects "protected workman" and the reason is obvious for the blanket protection of such a workman.
The legislature in his case appears to be anxious for the interest of healthy growth and development of trade union movement to ensure for him complete protection against every kind or order of discharge or punishment because of his special position as an officer of a registered trade union recognised as such in accordance with the rules made in that behalf.
This explains the restricted protection in sub sections
(1) and (2).
It is in the background of the purpose and scope of section 3 3 (1 and (2) that we have to consider whether the action taken against the complainant is hit by either of these two sub sections.
We have seen the form and the language of the impugned order.
On 618 its face the language does not show that the complainant 's services were terminated because of any misconduct.
Prima facie, therefore, the impugned order is not an order discharging or punishing the complainant for any misconduct.
But then the complainant 's learned counsel Shri Menon argued that the face or the form of the order is not conclusive and that the Court is entitled to and indeed should go behind the form and by looking at the real substance of the matter try to find the real cause and then come to its conclusion whether or not the order is a mere camouflage for an order of dismissal for misconduct.
The true legal position has been stated by this Court more than once and is by now beyond controversy.
In one of the most recent decisions in The Workmen of Sudder Office, Cinnamara v The Management(1) this Court approvingly referred to two of its earlier decisions actually reproducing a passage from one of them.
This is what was said in Sudder Office case : "It is needless to point out that it has been held by this Court in The Chartered Bank, Bombay vs The Chartered Bank Employees ' Union ( 2 ) that if the termination of service is a colourable exercise of the power vested in the management or as a result of victimisation or unfair labour practice, the Industrial Tribunal would have jurisdiction to intervene and set aside such a termination.
In order to find out whether the order of termination is one of the termination simpliciter under the provisions of contract or of standing orders, the Tribunal has ample jurisdiction to go into all the circumstances which led to the termination simpliciter .
The form of the order of termination, is not conclusive of the true nature of the order, for it is possible that the form may be merely a camouflage for an order of dismissal for misconduct.
It is, therefore, open to the Tribunal to go behind the form of the order and look at the substance.
If the Tribunal comes to the conclusion that though in form the order amounts to termination simpliciter but in reality cloaks a dismissal for misconduct, it will be open to it to set aside the order as a colourable exercise of power by the management.
Principles to the same effect have also been reiterated in the later decision of this Court in Tata Oil Mill Co. Ltd. vs WorKmen & anr.
(3) where the Court observed as follows : "The true legal position about the Industrial Court 's justification and authority in dealing with (1) [1971] Il L.L.J. 620.
(2) [1960] Il L.L.J. 222.
(3) [1964] II L.L.J. 113.
619 cases of this kind is no longer in doubt.
It is true that in several cases, contract of employment or provisions in standing orders authorise an industrial employer to terminate the service of his employees after giving notice for one month or paying salary for one month in lieu of notice, and normally, an employer may, in a proper case, be entitled to exercise the said power.
But where an order of discharge passed by an employer gives rise to an industrial dispute, the form of the order by which the employee 's services are terminated would not be decisive; industrial adjudication would be entitled to examine the substance of the matter and decide whether the termination is in face discharge simpliciter or it amounts to dismissal which has put on the cloak of discharge simpliciter.
If the Industrial Court is satisfied that the order of discharge is punitive, that it is mala fide, or that it amounts to victimisation or unfair labour practice, it is competent to the.
Industrial Court to set aside the order and, in a proper case, direct the reinstatement of the employee.
" Shri Menon on behalf of the complainant, however, contended that ignoring the form and language of the impugned order and looking at the real substance of the matter it is clear as disclosed by the appellant in the further written statement that the complainant 's services were terminated because of a suspicion about his private conduct and behaviour with Air Hostesses whose names were considered not proper to be disclosed.
This, said the counsel, makes out an allegation of misconduct which induced the appellant to terminate the complainant 's services and the case, therefore, clearly falls within the mischief of section 33.
The impugned order, he added, is a colourable exercise of the power under Regulation 48, the real object of the appellant being essentially to punish the complainant for misconduct.
No doubt, the position of the industrial workman is different from that of a Government servant because an industrial employer cannot "hire and fire" his Workmen on the basis of an unfettered right under the contract of employment, that right now being subject to industrial adjudication : and there is also on the other hand no provision of the Constitution like articles 3 1 0 and 3 1 1 requiring consideration in the case of industrial workmen.
We are here only concerned with the question whether the impugned action of termination of the complainant 's services is for misconduct as contemplated by section 3 3 (II) (b) or section 3 3 (2) (b).
While considering this question it is open to the complainant to urge that reliance on Regulation 48 is not bona fide, it being a colourable exercise of the right conferred by that regulation.
He has in fact raised 620 this argument and it is this aspect which concerns us in this case.
Let us now scrutinies the present record for examining the position from this aspect. ' Now, the true position, as it appears to be clear from the record of this case, is that the complainant 's services were terminated under Regulation 48 by paying his salary for 30 days in lieu of notice.
The order does not suggest any misconduct on the part of the complainant and indeed it is not possible to hold this order to be based on any conceivable misconduct.
The form of this order is no doubt not decisive and attending circumstances are open for consideration, though motive for the order, if not mala fide, is not open to question.
The further written statement which the appellant was directed to file and which was filed without prejudice discloses the fact that the appellant had lost confidence in the complainant and this loss of confidence was due to a grave suspicion regarding the complainant 's private conduct and behaviour with Air Hostesses employed by the appellant, Regulation 48 which has been set out earlier as its plain language shows does not lay down or contemplate any defined essential pre requisite for invoking its operation.
Action under this Regulation can be validly taken by the employer at his sweet will without assigning any reason.
He is not bound to disclose why he does not want to continue in service the employee concerned.
It may be conceded that an employer must always have some reason for terminating the services of his employee.
Such reasons apart from misconduct may, inter, alia, be want of full satisfaction with his overall suitability in the job assigned to the employee concerned.
The fact that the employer is not fully satisfied with the overall result of the performance of his duties by his employee does not necessarily imply misconduct on his part.
The only thing that remains to be seen is if in this case the impugned order is mala fide.
The record merely discloses, that the appellant had suspicion about the complainant 's suitability for the job in which he was employed and this led to loss of confidence in him with the result that his services were terminated under Regulation 48.
In our view, loss of confidence in such circumstances cannot be considered to be mala fide.
We are unable to conceive of any rational challenge to the bona fides of the employer in making the impugned order in the above back ground.
The complainant, it may be remembered had to deal with Air Hostesses in the performance of his duties and if the appellant was not fully satisfied beyond suspicion about his general conduct and behaviour while dealing with them it cannot be said that loss of confidence was not bona fide.
Once bona fide loss of confidence in affirmed the impugned order must be considered to be immune from challenge.
The opinion formed by 621 the employer about the suitability of his employee, for the job assigned to him even though erroneous, if bona fide, is in our opinion final and not subject to review by the industrial adjudication.
Such opinion may legitimately induce the employer to terminate the employee 's services; but such termination can on no rational grounds be considered to be for misconduct and must, therefore be held to be permissible and immune from challenge.
The decision in the case of Management of U. B. Dutt & Co. vs Workmen of U. B. Dutt & Co.(1) relied upon by the com plainant 's learned counsel is of no assistance to him.
There one employed by the management as a cross cutter in the saw mill was asked to show cause why his services should not be terminated on account of grave indiscipline and misconduct and he denied the allegations of fact.
He was thereafter informed about a departmental enquiry to be held against him and was suspended pending enquiry.
Purporting to act under r. 18 (a) of the Standing Orders, the appellant terminated the services of S without holding any departmental enquiry.
On reference of the dispute to the Industrial Tribunal this action was held not to be bona fide but a colourable exercise of the power conferred under r. 13 (a) of the Standing Order and since no attempt was made before it to defend such action by proving the alleged misconduct, it passed an order for reinstatement of section Ouite clearly the facts there are not parallel to the facts before us.
The facts there are materially different.
We have proceeded on the assumption that the reason stated in the further written statement filed without prejudice pursuant to the direction of the Labour Court could be taken into account.
We, however, must not be understood to express any opinion on its propriety either way.
In our opinion the Central Government Labour Court, Bombay, was, for the reasons foregoing, not right in holding that the complainant was guilty of misconduct and that his services were terminated for that reason.
We, therefore, allow this appeal and setting aside the order of the Central Government Labour Court, Bombay, dismiss the complainant 's petition under section 33 A of the Act.
In the peculiar circumstances of the case there would be no order as to costs.
V.P.S. Appeal allowed.
(1) [1962] Supp. 2 S.C.R. 822.
| IN-Abs | The respondent had bean employed by the appellant as an Assistant Station Superintendent.
An order was passed terminating his services with immediate effect With payment of one month 's salary in lieu of notice.
He filed a complaint under section 33A of the before the Labour Court before which, in industrial dispute was pending alleging that the termination of his service was illegal for the reason inter alia that the approval of ' the Labour Court for such termination was not obtained.
The appellant contended that the respondent was not a workman and that he was not concerned in the industrial dispute pending in the Labour Court.
Pursuant to the directions of the Labour Court, the appellant filed n. written statement in which it was pleaded that without prejudice to the contention that this case should be decided 'an the aforesaid preliminary points raised by the appellant the order of termination of the respondents ' services was valid 'because his services were terminated under Regulation 48 of the Air India Employees ' Service Regulations framed with previous approval of the Central Government, and under that regulation the services of a permanent employee may be terminated without assigning any reason.
it was added that without prejudice to the plea that the appellant was not bound to disclose any reason for terminating the services of the respondent, the latter 's services we 're terminated be cause of the appellant 's total loss of confidence in the respondent on account of grave suspicions regarding his private conduct and behaviour with the Air Hostesses of the appellant Corporation.
The Labour Court held one the preliminary question that the respondent was a workman concerned in the industrial dispute pending before it and that his discharge was in breach of section 33 of the Act.
On the question Whether the action taken by the appellant, was hit by section 33 of the Act, HELD: (1) Section 33 (1) (b) bans the discharge or punishment,whether by dismissal or otherwise, of a workman for misconduct nected with a pending dispute without the express permission in writing of the authority dealing with the pending proceeding.
Section 33(2)(b) places a similar ban in regard to matters not connected with the pending dispute; but the employer is free to discharge or dismiss a workman by paying wages for one month provided he applies to the authority dealing with the pending proceeding for approval of the action taken.
Whether the action is taken under.
33 (1) (b) or section 33 (2) (b), the ban is imposed only in regard to election taken for misconduct whether connected or unconnected with the dispute.
Unlike under section 33(3) which gives a blanket protection to 'protected workmen ', an employer is free to take action against other workmen if it is not based off any misconduct on their part, [617B D, C G] 607 (2) In the present case, on the face of it, the language of the order does not show that the respondent 's services were terminated because of any misconduct.
Prima facie, therefore, the impugned order was not an order discharging or punishing the respondent for any misconduct.
[618A B] (3) Action under Reg.
48 can be validly, taken by an employer at his sweet will without assigning any reason, and he is not bound to disclose why he does not want to continue in service a particular employee.
[620D E] (4) It is however open to the respondent to urge that reliance on, Reg. 48 was not bona fide and that it was a colourable exercise of the right conferred by the Regulation, because, the form of the order is not decisive and attending circumstances are open to consideration though the motive for the order, if not malafide is not open to question.
[619H; 620B C] workmen of sudder office cinnamara v Management [1971] II L.L.J. 620.
Chartered Bank, Bombay vs Chartered Bank Employees ' Union, [1960] II L.L.J. 222 and Tata Oil Mills Co. Ltd. vs WorKmen , referred to.
(5) But the reason of the employer for the terminating the services of ' his employee need not be his misconduct but may, inter cilia, be want of full satisfaction with the employee 's overall suitability in the job assigned to the employee.
Such want of satisfaction does not imply misconduct of the employee.
[620E F] (6) The loss of confidence in the present case cannot be considered to be malafide.
Assuming that the reason stated in the appellant 's written statement could be taken into account, the bona fides of the appellant in making the impugned order could not be challenged.
The respondent had to deal with Air hostesses in the performance of his duties and if the appellant was not fully satisfied beyond suspicion about his general conduct and behaviour while dealing with them it could not be said that the loss of confidence was not bona fide.
Once bona fide loss of confidence is affirmed the impugned order must be considered to be immune from challenge.
The opinion formed by the employer about the suitability of his employee for the job assigned to him, even though erroneous, if bona fide is final and not subject to review by industrial adjudication.
Such an opinion may legitimately induce the employer to terminate the employee 's services, but, such termination can, on no rational grounds, be considered to be for misconduct, and must therefore be held to be permissible and immune from challenge.
[620F H; 621A B] Management of U.B. dutt & co. vs Workmen of U. B. Dutt & Co. [1962] Supp. 2 S.C.R. 822, distinguished.
[The question whether the reason stated in the appellant 's written statement filed without prejudice and pursuant to the direction of the Labour Court could be taker into account, left open.] [621E F]
|
Appeal No. 1113 of 1970.
Appeal from the judgment and order dated April 3, 1970 of the Bombay High Court in Company Appeal No. 1 of 1970.
V. M. Tarkunde, R. L. Mehta and 1.
N. Shroff, for the appellant.
M. C. Chagla and section N. Prasad, for Creditors Nos. 1, 3 to 6 and 10.
A. K. Sen and E. C. Agrawala, for creditor No. 9.
The Judgment of the Court was delivered by Ray, J.
This is an appeal by certificate, from the judgment dated 3 April, 1970 of the High Court of Bombay confirming 203 the order of the learned Single Judge refusing to wind up the respondent company.
The appellants are a partnership firm.
The partners are the Katakias.
They are three brothers.
The appellants carry on partnership business in the name of Madhu Wool Spinning Mills.
The respondent company has the nominal.
capital of Rs. 10,00,000 divided into 2000 shares of Rs. 500 each.
The issued subscribed and fully paid up capital of the company is Rs. 5,51,000 divided into 1,103 Equity shares of Rs. 500 each.
The three Katakia brothers had three shares in the company.
The other 1,100 shares were owned by N.C. Shah and other members described as the group of Bombay Traders.
Prior to the incorporation of the company there was an agreement between the Bombay Traders and the appellants in the month of May, 1965.
The Bombay Traders consisted of two groups known as the Nandkishore and the Valia groups.
The Bombay Traders was floating a new company for the purpose of running a Shoddy Wool Plant.
The Bombay Traders agreed to pay about Rs. 6,00,000 to the appellants for acquisition of machinery and installation charges thereof.
The appellants had imported some machinery and were in the process of importing some more.
The agreement provided that the erection expenses of the machinery would be treated as a loan to the new company.
Another part of the agreement was that the machinery was to be erected in portions of a shed in the compound of Ravi Industries Private Limited.
The company was to pay Rs. 3,100 as the monthly rent of the portion of the shed occupied by them.
The amount which the Bombay Traders would advance as loan to the company was agreed to be converted into Equity capital of the company.
Similar option was given to the appellants to convert the amount spent by them for erection expenses into equity capital.
The company was incorporated in the month of July, 1965.
The appellants allege that the company adopted the agreement between the Bombay Traders and the appellants.
The company however denied that the company adopted the agreement.
The appellants filed a petition for winding up in the month of January, 1970.
The appellants alleged that the company was liable to be wound up under the provisions of section 43 3 (c) of the as the company is unable to pay the following debts.
204 The appellants claimed that they were the creditors of the company for the following sums of money : A.(a) Expenses incurred by the appellants in connection with the erection of the plant and machinery.
Rs. 1,14,344.97 (b) Interest on the sum of Rs. 1,14,344.97 from 1 April, 1966 till 31 December, 1969 at 1% per mensem.
Rs. 51,453.13 (c) Commission on the sum of Rs. 1,14,344.
97 due to the app ellants at the rate of Ipercent per mensem from 1 April 1966 till 13 December,1969.
Rs. 51,453.12 B. (a) Compensation payable by the company to the appellants at the rate of Rs. 3,100 per month for 22 months and 14 days in respect of occupation of the portion of the shed given by the appellants to the company on the basis of leave and licence.
Rs.69,600.00 (b) Interest on the amount of com pensation from time to time by the said company to the appellants till 12 April, 1967.
Rs. 7,857.00 (c) Further interest on compensation from 13 April, 1967 to 31 December, 1969.
Rs. 21,576.00 C. (a) Invoices in respect of 3 machines.
Rs. 85,250.00 (b) Interest on Rs. 85,250 Rs. 37,596.00 (c) Commission at the rate of 1% per cent or Rs.85,250 Rs. 37,596.00 The appellants alleged that the company failed and neglected to show the aforesaid indebtedness in the books of account save and except the sum of Rs. 72,556.01.
The other allegations of the appellants were these.
The company incurred losses upto 31 March, 1969 for the sum of Rs. 6,21,177.53 and thereafter incurred further losses.
The company stopped functioning since about the month of Septem ber, 1969.
The company is indebted to a Director and the firms of M/s Nandkishore & Co. and M/s Bhupendra & Co. in which some of the Directors of the company are interested.
The in , debtedness of the company to the creditors including the appellant 's claim as shown by the company at the figure of Rs. 72,556.01 is for the sum of Rs. 9,56,829.47.
The liability of the company including the share capital amounted to Rs. 14,98,923.3 3.
The liability excluding the share capital of the company is Rs. 9,56,829.47 and the assets of the company on the valuation put by the company on the balance sheet amount to Rs. 8,81,171.96.
The value of the current and liquid assets is about Rs. 2,74,247.38.
The appellants on these allegations alleged that even after the proposed sale of the machinery at Rs. 4,50,000 the company would not be in a position to discharge the indebtedness of the company.
The proposed sale, of machinery for the sum of Rs. 4,50,000 was at a undervalue.
The market value was Rs. 6,00,000.
The Board did not sanction such a sale.
It was alleged that the substratum of the company disappear ed and there was no possibility of the company doing any business at profit.
The company was insolvent and it was just and equitable to wind up the company.
205 When the petition was presented to the High Court of Bombay the learned Single Judge made a preliminary order accepting the petition and directing notice to the company.
When the company appeared all the shareholders and a large number of creditors of the company of the, aggregate value of Rs. 7,50,000 supported the company and opposed winding up.
The company disputed the claims of the appellants under all the heads save the two amounts of Rs. 14,650 and Rs. 36,000 being the amounts of the second and third invoices.
The company produced books of account showing a sum of Rs. 72,556.01 due to the appellants, as on 31 March, 1969.
The company alleged that the appellants had agreed to reduction of the debt to a sum of Rs. 14,850 and to accept payment of the same out of proceeds of sale of the machinery.
The learned Single Judge held that the claims of the appel lants were disputed save that a sum of Rs. 72,556,.01 was payable by 'the company to the appellants and with regard to the sum of Rs. 72,556.01 the company alleged that there was a settlement at Rs. 14,850 whereas the appellants.
denied that there was any such compromise.
The learned Single Judge refused to wind up the company and asked the company to deposit the disputed amount of Rs. 72,556.01 in court.
The further order was that if within six weeks the appellants did not file the suit in respect of the recovery of the amount the company would be able to withdraw the amount and if the suit would be filed the amount would stand credited to the suit.
The High Court on appeal upheld the judgment and order and found that the alleged claims of the appellants were very strongly and substantially denied and disputed.
The first claim for erection of plant and machinery was to tally denied by the company.
The defences were first that the books of the company showed no such transactions; secondly, there was no privity between the company and the persons in whose names the appellants made the claims; thirdly, the alleged claims were barred by limitation; and, fourthly, there was never any demand for the alleged claims either by those persons or by ,the appellants.
The alleged claims for interest and commission were therefore equally baseless according to the defence of the Company.
The second claim for compensation was denied on the grounds ,that the appellants were not entitled to any compensation for use of The portion of the shed 'and the alleged claim was barred by imitation.
As to the claim for compensation the company relied on the resolution of the Board of Directors at which the Katakia brothers were present as Directors The Board resolved 206 confirmation of the arrangement with M/s Ravi Industries for use of the premises for the running of the industry at their shed at a monthly rent of Rs. 4,250: Prima facie the resolution repelled any claim for compensation or interest on compensation.
With regard to the claim of invoices the High Court held that the first invoice for Rs. 34,600 was paid by the company to the appellants.
The receipt for such payment was produced before the learned trial Judge.
The appellants also admitted the same.
As to the other two invoices for Rs. 14,650 and for Rs. 36,000 the amounts appeared in the company 's books.
According to the company the claim of the appellants was for Rs. 72,556.01 and the case of the company was that there was a settlement of the claim at Rs. 14,850.00.
The High Court correctly gave four principal reasons to re ject the claims of the appellants to wind up the company as creditors.
First, that the books of account of the company did not show the alleged claims of the appellants save and except the sum of Rs. 72,556.01.
Second, many of the alleged claims are barred by limitation.
There is no allegation by the appellants to support acknowledgement of any claim to oust the plea of limitation.
Thirdly, the Katakia brothers who were the Directors resigned in the month of August, 1969 and their three shares were transferred in the month of December, 1969 and up to the month of December, 1969 there was not a single letter of demand to the company in respect of any claim.
Fourthly, one of the Katakia brother was the Chairman of the Board of Directors and therefore the Katakias were in the knowledge as to the affairs of the company and the books of accounts and they signed the balance sheets which did not reflect any claim of the appellants except the two invoices for the amounts of Rs. 14,650 and Rs. 36,000.
The High Court characterised the claim of the appellants as tainted by the vice of dishonesty.
The alleged debts of the appellants are disputed, denied, doubted and at least in one instance proved to be dishonest by the production of a receipt granted by the appellants.
The books of the company do not show any of the claims excepting in respect of two invoices for Rs. 14,650 and Rs. 36,000.
It was said by the appellants that the books would not bind the appellants.
The appellants did not give any statutory notice to raise any presumption of inability to pay debt.
The appellants would therefore be required to prove their claim.
This Court in Amalgamated COmmercial Traders (P) Ltd. v.A. C. K. Krishnaswami and Anr.
(1) dealt with a petition to wind up the company on the ground that the company was indebted to the petitioner there for a sum of Rs. 1,750 being the net dividend (1) 35 Company cases 456.
207 amount payable on 25 equity shares which sum the company failed and neglected to pay in spite of notice of demand.
There were other shareholders supporting the winding up on identical grounds.
The company alleged that there was no debt due and that the company Was in a sound financial position.
The resolution of the company declaring a dividend made the payment of the dividend contingent on the receipt of the commission from two sugar mills.
The commission was not received till the month of May, 1960.
The resolution was in the month of December , 1959.
Under section 207 of the a company was required to pay a dividend which had been declared within three months from the date of the declaration.
A company cannot declare a dividend payable beyond three months.
This Court held that the non payment of dividend was bona fide disputed by the company.
It was not a dispute 'to hide ' its inability to pay the debts.
Two rules are well settled.
First if the debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company.
The court has dismissed a petition for winding up where the creditor claimed a sum for goods sold to the company and the company contended that no price had been agreed upon.
and the sum demanded by the, creditor was unreasonable (See London and Paris Banking Corporation (1).
Again, a petition for winding up by a creditor who claimed payment of an agreed sum for work done for the company When the company contended that the work had not been done properly was not allowed.
(See Re. Brighton Club and Norfold Hotel Co. Ltd. (2) Where the debt is undisputed the court will not act upon a defence that the company has the ability to pay the debt but the company chooses not to pay that particular debt (See Re.
A Company 94 S.J. 369).
Where however there is no doubt that the company owes the creditor a debt entitling him to a winding up order but the exact amount of the debt is disputed the court will make a winding up order without requiring the creditor to quantity the debt precisely (See Re.
Tweeds Garages Ltd. (3) The principles on which the court acts are first that the defence of the company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law and thirdly the company adduces prima facie proof of the facts on which the defence depends.
Another rule which the court follows is that if there is opposition to the making of the winding up order by the creditors the court will consider their wishes and may decline to make the winding up order.
Under section 557 of the Company Act 1956 (1) (3) (2) ; 208 in all matters relating to the winding up of the company the court may ascertain the wishes of the creditors.
The wishes of the shareholders are also considered though perhaps the court may attach greater weight to the views of the creditors.
The law on this point is stated in Palmer 's Company Law, 21st Edition page 742 as follows : "This right to a winding up order is, however, qualified by another rule, viz., that the court will regard the wishes of the majority in value of the creditors, and if, for some good reason, they object to a winding up order, the court in its discretion may refuse the order '.
The wishes of the creditors will however be tested by the court on the grounds as to whether the case of the persons opposing the winding up is reasonable; secondly, whether there are matters which should be inquired into and investigated if a winding up order is made.
It is also well settled that a winding up order will not be made on a creditor 's petition if it would not benefit him or the company 's creditors generally.
The grounds furnished by the creditors opposing the winding up will have an.
important bearing on the reasonableness of the case (See Re. P. & J. Macrae Ltd.(1).
In the present case the claims of the appellants are disputed in fact and in law.
The company has given prima facie evidence that the appellants are not entitled to any claim for erection work, because there was no transaction between the company and the appellants or those persons in whose names the appellants claimed the amounts.
The company has raised the defence of lack Of privity.
The company has raised the defence of limitation.
As to the appellant 's claim for compensation for use of shed the company denies any privity between the company and the appellants.
The company has proved the resolution of the company that the company will pay rent to Ravi Industries for the use of the shed.
As to the three claims of the appellants for invoices one is proved by the company to be utterly unmeritorious.
The company produced a receipt granted by the appellants for the invoice amount.
The falsehood of the appellants ' claim has been exposed.
The company however stated that the indebtedness is for the sum of Rs. 14,850 and the company alleges the agreement between the company and the appellants that payment will be made out of the proceeds of sale.
On these facts and on the principles of law to which reference has been made the High Court was correct in refusing the order for winding up.
Since the inception of the company Jayantilal Katakia a partner of the appellants was the Chairman of the company until 22 August, 1969.
His two brothers were also Directors of the company since its inception till 22 August, 1969.
The Bombay group had also Directors of the company.
(1) 209 The company proved the unanimous resolution of the Board at a meeting held on June, 1969 for sale of machinery of the company.
The Katakia brothers were present at the meeting.
The Katakia brothers thereafter sold their three shares to the Valia group.
The cumulative evidence in support of the case of the company is not only that the Katakia brothers consented to and approved of the sale of machinery but also parted with their shares of the company.
The three shares were sold by the Katakia Brothers shortly after each of them had written a letter on 27 July, 1969 expressly stating that they had no objection to the sale of the machinery and the letter was issued in order to enable the company to hold an Extra ordinary General meeting on the subject.
The company relied on the resolution of the Board meeting on 24 October, 1969 where it was recorded that the Valia group would sell their 367 shares and 3 other shares which they had purchased from the appellants to the Nandkishore group and the appellants would accept Rs. 14,850 in settlement of the sum of Rs. 72,000 due from the company and the company would make that payment out of proceeds of sale of the machinery.
The Board at a meeting held on 17 September, 1969 resolved that the proposal of R. K. Khanna to purchase the machinery be accepted.
On 20 December, 1969 an agreement was signed between R. K. Khanna and the company for the sale of the machinery.
At the Annual General Meeting of the company on 8 January, 1970 the Resolution for sale of the machinery was unanimously passed by the company.
It is in this background that the appellants impeached the proposed sale of the machinery as unauthorised and improvident.
The appellants themselves were parties to the proposed sale.
The appellants themselves wanted to buy the machinery at a higher figure.
These matters are within the province of the management of the company.
Where the shareholders have approved of the sale it cannot be said that the transaction is unauthorised or improvident according to the wishes of the shareholders.
It will appear from the judgment of the High Court that the creditors for the sum of Rs. 7,50,000 supported the company and resisted the appellants ' application for winding up.
There was some controversy as to whether all the creditors appeared or not.
At the hearing of this appeal the company gave a list of the creditors and notices were issued to the creditors.
Apart from the appellants, two other creditors who supported the appellants were Ravi Industries Ltd. whose name appears as one of the creditors as on 2 August, 1971 in the list of creditors furnished by the company and K. section Patel & Co. with a claim for Rs. 44,477.56 though their name does not appear in the list.
Among the creditors who 210 supported the company the largest amount was represented by Nandikshore and Company with a claim for Rs. 4,95,999.
The two creditors who supported the claim of the appellants in regard to the prayer for winding up were Ravi Industries Ltd. with a claim for Rs. 2,97,500 on account of rent and K. section Patel & Co. of Bombay with a claim for Rs.44,477.56.
It may be stated here that this claim of Rs. 44,477.56 was made on account of erection work of machinery and this identical claim was included in the list of expenses claimed by the appellants on account of erection work.
The company disputed the claim.
The High Court correctly found that the appellants could not sustain the claim to support winding up.
It is surprising that a claim of the year 1965 was never pursued until it was included as an item of debt in the petition for winding up the company.
With regard to the claim for rent, the company pursuant to an agreement between the company and Ravi Industries Private Ltd. credited Rowe Industries with the sum of Rs. 1,52,000 with the result that a sum of Rs. 1,45,500 would be payable by the company to Ravi Industries Ltd. in respect of rent.
The company alleges that Ravi Industries Pvt.
Ltd. supported the company in the High Court and that they have taken a completely different position ill this Court.
In this Court the company has also relied on a piece of writing dated 24 September, 1971 wherein Ravi Industries Private Ltd. acknowledged payment of Rs. 1,52,000 to Rowe Industries Pvt. Ltd. and further agreed to write off the amount of Rs. 1,45,500.
Ravi Industries Pvt.
Ltd. is disputing the same.
This appears to be a matter of substantial dispute.
The Court cannot go into these questions to settle debts with doubts.
Counsel for the appellants extracted observations from the judgment of the High Court that it was never in dispute that the company was insolvent and it was therefore contended the company should be wound up.
Broadly stated, the balance sheet shows the share capital of the company to be Rs. 5,51,500, the liabilities to be Rs. 9,77,829.47 and the assets to be Rs. 8,87,177.93.
The assets were less than the liability by Rs. 90,000.
Accumulated losses of the company for five years appear to be Rs. 6,21,17.53.
The plant and machinery which are shown in the balance sheet at Rs. 6,07.544.58 are agreed to be sold at Rs. 4,50,000.
There would then be a short fall in the value of the fixed assets by about Rs. 1,50,000 and if that amount is added to the sum of Rs. 90,000 representing the difference between the assets and liabilities the shortfall in the assets of the company would be about Rs. 2,50,000.
The appellants contended that the shortfall in the assets of the company by about Rs. 2,50,000 after the sale of the machinery would indicate first that the substratum of the company was 211 gone and secondly that the company was insolvent.
An allegation that the substratum of the company is gone is to be alleged and proved as a fact, The sale of the machinery was alleged in the petition for winding up to indicate that the substratum of the company had disappeared.
It was also said that there was no possibility of the company doing business at a profit.
In determining whether or not the substratum of the company has gone, the objects of the company and the case of the company on that question will have to be looked into.
In the present case the, company alleged that with the proceeds of sale the company in , tended to enter into some other profitable business.
The mere fact that the company has suffered trading losses will not destroy its substratum unless there is no reasonable prospect of it ever making a profit in the future, and the court is reluctant to hold that it has no such prospect.
(See Re.
Suburban Hotel Co.(1); and Davis & Co. vs Brunswick (Australia) Ltd. (2 ) The company alleged that out of the proceeds of sale of the machinery the company would have sufficient money for carrying on export business even if the company were to take into consideration the amount of Rs 1,45,000 alleged to be due on account of rent.
Export business, buying and selling yarn and commission agency are some of the business which the company can carry on within its objects.
One of the Directors of the Company is Kishore Nandlal Shah who carries on export business under the name and style of M// 'section Nandkishore & Co. in partnership with others.
Nandkishore & Co. are creditors 'of the company to the extent of Rs. 4,95,000.
The company will not have to meet that claim now.
On the contrary, the Nandkishore group will bring in money to the company.
This Nandkishore group is alleged by the company to help the company in the export business.
The company has not abandoned objects of business.
There is no such allegation or proof.
It cannot in the facts and circumstances of the present case be held that the substratum of the company is gone.
Nor can it be held in the facts and circumstances of the present case that the company is unable to meet the outstandings of any of its admitted creditors.
The company has deposited in court the disputed claims of the appellants.
The company has not ceased carrying on its business.
Therefore, the company will meet the dues as and when they fall due.
The company has reasonable.
prospect of business and resources.
Counsel on behalf of the company contended that the appel lants presented the petition out of improper motive.
Improper motive can be spelt out where the position is presented to coerce the company in satisfying some groundless claims made against it by the petitioner.
The facts and circumstances of the present case indicate that motive.
The appellants were Directors.
They sold, ' (1) (2) [1936] 1 A.F.R. 299.
212 their shares.
They went out of the management of the company in the, month of August, 1969.
They were parties to the proposed sale.
Just when the sale of the machinery was going to be effected the appellants presented a petition for winding up.
In the recent English decision in Mann & Anr.
vs Goldstein & Anr.
(1) it was held that even though it appeared from the evidence that the company was insolvent, as the debts were substantially ,disputed the court restrained the prosecution of the petition as an abuse of the process of the court.
It is apparent that the appellants did not present the petition for any legitimate purpose.
The appeal therefore fails and is dismissed with costs.
The company and the supporting creditors will get one hearing fee.
The amount of Rs. 72,000 which was deposited in court will remain deposited in the court for a period of eight weeks from this date and if in the meantime no suit is filed by the appellants within eight weeks the company will be at liberty to withdraw the amount by filing the necessary application.
In the event of the suit being filed within this period the amount will remain to the credits of the suit.
V.P.S. Appeal dismissed.
| IN-Abs | The appellants filed a petition for winding up of the respondent company, on the grounds : (1) that the company was unable to pay the debts due to the appellants, (2) that the company showed their indebtedness in their books of account for a much smaller amount, (3) that the company was indebted to other creditors, (4) that the company was effecting an unauthorised sale of its machinery, and (5) that the company had incurred losses and stopped functioning, and therefore the substratum of the company disappeared and there was no possibility of the company doing any business at profit.
The High Court dismissed the petition.
Dismissing the appeal to this Court, HELD : The rules for winding up on a creditor 's petition are if there is a bona fide dispute about a debt and the defence is a substantial one, the court would not ' order winding up.
The defence of the company should be in good faith and one of substance.
if the defence is likely to succeed on a point of law and the company adduced prima facie proof of the facts on which the defence depends, no order of winding up would be made by the Court.
Further under section 557 of the , in all matters relating to winding up of a company the court may ascertain the wishes of the creditors.
If, for some good reason the creditors object to a winding up order, the court, in its discretion, may refuse to pass such an order.
Also, the winding up order will not be made on a creditor 's petition if it would not benefit the creditor or the company 's creditors generally.
[207 D, G H; 208 C D] (1) In the present case, the claims of the appellants were disputed both in fact and in law.
The company had given prima facie evidence that the appellants were not entitled to any claim.
The company had also raised the defence of lack of privity and of limitation.
[208 D F] (2) One of the claims of the appellants was proved by the company to be unmeritorious and 'false, and as regards the admitted debt the company had stated that there was a settlement between the company and the appellants that the appellants would receive a lesser amount and that the company would pay it off out of the proceeds of sale of the company 's properties.
[208 F G] (3) The creditors of the company for the sum of Rs. 7,50,000 supported the company and resisted the appellants ' application for winding up.
[209 G] (4) The cumulative evidence in support of the case of the company is that the appellants consented to any approved of the sale of the machinery.
As shareholders, they had expressly written that they had no objection to the sale of the machinery and the letter was issued in order to enable the company to hold an extraordinary general meeting on the subject.
The company passed a resolution authorising the sale.
The 256 Sup.
Cl/72 202 appellants themselves were parties to the proposed sale and wanted to buy the machinery.
Where the shareholders had approved of the sale it could not be said that the transaction was unauthorised or improvident.[209 A F] (5) In determining whether or not the substratum of the company had gone, the objects of the company and the case of the company on that question would have to be looked into.
In the present case, the company alleged that with the proceeds of sale the Company intend to enter into some other profitable business.
such as export business which was within its objects.
The mere fact that it had suffered trading losses will not destroy its substratum unless there is no reasonable prospect of it ever making a profit in the future.
A court would not draw such an inference normally.
One of its largest creditors, who opposed the winding up petition would help it in the export business.
The company had not abandoned the objects of its business.
Their ,fore, on the facts and circumstances of the present case it could not be held that the substratum of the company had gone.
Nor could it be held that the company was unable to meet the outstandings of any of its admitted creditors.
The company had deposited money in court as per the directions of the Court and had not ceased carrying on its business.
[211A G] (6) On the facts of the case it is apparent that the appellants had presented the petition with improper motives and not for any legitimate purpose.
The appellants were its directors, had full knowledge of the company 's affairs and never made demands 'for their alleged debts.
They sold their shares, went out of management of the company and just when the sale of the machinery was going to be effected presented the petition for winding up.
[211 A; 212 A C] Amalgamated Commercial Traders (P.) Ltd. vs A. C. K. Krishnaswami & Anr., , London & Paris Banking Corporation, , Re.
Brighton Club & Norfold Hotel Co. Ltd., ; , Re. A. Company, 94 S.J. 369, Re.
Tweeds Garages Ltd., (1962) Ch.
406, Re. P. & J. Macrae Ltd., , Re.
Suburban Hotel Co. and Davis & Co.v.
Burnswick (Australia) Ltd., , and Mann & Am .v.
Goldstein & Anr., , referred to.
|
Appeal No. 12 of 1968.
732 Appeal from the judgment and order dated April 12, 1967 of the Bombay High Court, Nagpur Bench in Special Civil Application No. 812 of 1966.
M. N. Phadke and Mohinder Narain, for the appellant.
The Judgment of the Court was delivered by Mitter, J.
In this appeal by certificate the question involved is, whether the Labour Court at Nagpur could exercise jurisdiction under section 78(1)D of the Bombay Industrial Relations Act in a case where the employee of an industry governed by the Act had not complied with the provisions of section 42(4) of the said statute read with the proviso to the said sub section.
The Bombay High Court has held that it was not necessary for an employee first to approach the employer or to follow the procedure laid down in section 42(4) including the proviso before he could apply to the Labour Court for relief under section 7 8 (1) D.
The facts are as follows.
One Nathu, respondent No. 3 herein, was employed as a munshi in the appellant 's Bidi factor at Bhandara.
The appellant had framed a charge sheet against him in respect of certain acts of misconduct, gross negligence of duty, insubordination etc.
on May 13, 1965.
An enquiry in respect thereof was held on May 15th after receipt of written statement from Nathu.
Holding that the charges leveled against him were proved, the employer dismissed the third respondent with effect from August 1, 1965.
The said respondent filed an application challenging the order of dismissal before the Labour Court under section 78 of the Bombay Industrial Relations Act, 1946, hereinafter referred to as the 'Act ', on the 5th August.
His complaint was that the charge sheet was not proper, that the Head Office of the appellant had no authority to deal with his case tinder the Standing Orders, that no evidence was allowed or filed on behalf of the employer and that the finding was based only on his statement and in particular his cross examination.
He had been forced to append his signature to a certain paper without the same having been read over to him.
The Labour Court after holding an enquiry took the view that the findings of the enquiry officer were perverse, that the order of dismissal was passed by a person not authorised to exercise the power and consequently the Labour Court directed the reinstatement of the third respondent with all back wages.
The appellant preferred an appeal to the State Industrial Court contending, inter alia, that the third respondent had failed to comply with the provisions of law in that he did not make an application under section 42(4) of the Act which was a condition precedent to approaching the Labour Court and prayed that the order of the Labour Court should be set aside on that ground alone.
The Industrial Court confirmed the order of the Labour Court.
The appellant then filed a peti 733 tion under article 227 of the Constitution before the Bombay High Court.
The High Court field against the appellant.
Unfortunately, there is no appearance for the respondent before us.
In order to appreciate the scope of the Labour Court 's jurisdiction under the Act and in particular the attractability of section 78(1)D it is necessary to examine the scheme of the Act as a whole including the provisions relevant for this appeal.
The Act when first passed in 1946 known as the Bombay Industrial Relations Act was applicable to a limited area within the State.
In the Vidarbha region of the State, there was another similar Act in operation.
The Act suffered numerous amendments from time to time until 1965 when Maharashtra Act 22 of 1965 was passed The new, Act was described as an Act "to extend the Bombay Industrial Relations Act, 1946 throughout the State of Maharashtra and for that and for certain other purposes further lo amend that Act, and to repeal corresponding laws in force in any part of the State".
Under section 2 of that Act the Bombay Industrial Relations Act of 1946 as in force immediately before the commencement of the 1965 Act in the Bombay area of the State of Maharashtra was extended to the rest of the State.
The C.P. and Berar Act was repealed.
As a result, the Act now extends to the whole of the State.
Chapter I contains only three sections : section 2 deals with the extent, commencement and application of the Act and section 3 is the definition section.
Chapter 11 sets out the authorities to be constituted or appointed under the Act.
section 9 provides for the constitution of Labour Courts and section 10 of Indus trial Courts.
Chapter III containing sections 11 to 22 deals with registration of Unions and Chapter IV with approved Unions.
Chapter V deals with representatives of employers and employees and appearance in proceedings on their behalf.
Chapter VI deals with Powers and duties of labour officer and Chapter VIII deals with standing, Orders.
Chapter VIII containing sections 42 to 47 deals with "changes".
Chapter IX deals with Joint Committees, Chapter X with Conciliation Proceedings, Chapter XI with Arbitration and Chapter XII with Labour Courts, their territorial jurisdiction, heir powers, commencement of proceedings before the Labour etc.
It is not necessary to take note of other Chapters excepting section 123 in Chapter XIII which deals with the rule making power. 'the relevant definitive clauses in section 3 are "(8) "change" means an alteration in an industrial matter; (13) "employee" means any person employed to do any skilled or unskilled work for hire or reward in any industry, and includes (a) a person employed by a contractor to do any ,work for him in the execution of a contract with an 734 employer within the meaning of sub clause (e) of clause (14) (b) a person who has been dismissed, discharged or retrenched or Whose services have been terminated from employment on account of any dispute relating to change in respect of which a notice is given or an application made, under section 42 whether before or after his dismissal.
discharge, retrenchment or, as the case may be, termination from employment; but does not include (i) a per. ,on employed primarily in a managerial administrative, supervisory or technical capacity drawing basic pay (excluding allowances) exceeding five hundred and fifty rupees per month; (ii) any other person or class of persons employed in the same capacity as those specified in clause (i) above irrespective of the amount of the pay drawn by such person which the State Government may, by noti fication in the Official Gazette, specify in this behalf.
(17) "Industrial dispute" means any dispute or difference between an employer and employee or between employers and employees or between employees and employees and which is connected with any industrial matter; (18) "industrial matter ' means any matter relating to employment, work, wages, hours of work, privileges, rights or duties of employers or employees.
or the mode. terms and conditions of employment, and includes (a) all matters pertaining to the relationship between, employers and employees, or to, the dismissal or non employment of any person; (b) all matters pertaining to the demarcation of functions of any employees or class of employees; .
(c) all matters pertaining to any right or claim under or in respect of or concerning a registered agreement or a submission, settlement or award made under this Act; (d) all questions of what is fair and right in relation to any industrial matter having regard to the person immediately concerned and of the community as a whole;" 735 Under section 3 1 (1) every employer must submit for approval to the Commissioner, of Labour in the prescribed manner standing Orders regulating the relations between him and his employees.
with regard to the industrial matters mentioned in Schedule within six weeks from the date of the application of the Act to the industry.
Under sub section
(5) of the section : "Until standing orders in respect of an undertaking come into operation under the provisions of sub section (4), model standing orders, if any, notified in the Official Gazette by the State Government in respect of the industry shall apply to such undertaking." Schedule 1 to the Act contains among other matters items 10 and 11 relating to termination of employment including notice to be given by the employer and employee and punishment including warning, censure, fine, suspension or dismissal for misconduct, suspension pending enquiry into alleged misconduct and the acts or omissions which constitute misconduct.
Normally, therefore, standing orders must deal with miscon duct which can lead to dismissal or other punishment.
Under section 41 the provisions of the are not to apply to any industry to which the provisions of Chapter VII of the Act apply.
As 'industrial matter ' as defined in section 3(18) includes all matters pertaining to the dismissal or non employment of any person, an industrial dispute within the meaning of section 3(17) must necessarily arise when there is any difference between an employer and an employee about such dismissal.
The solution to the question before us turns on the interpretation of the relevant provisions in Chapter VIII headed "changes". 'Change ' as already noticed means any alteration in an industrial matter.
Under section 42(1) any employer intending to effect any change in respect of an industrial matter specified in Schedule 11 of which item 3 reads "Dismissal of any employee except as provided for in the standing orders applicable under this Act".
must give notice of such intention in the prescribed form to the representative of the employees.
He must also send a copy of such notice to the , Chief Conciliator, the Conciliator for the industry concerned for the local area, the Registrar, the Labour Officer and such other person as may be prescribed.
He has also to affix a copy of such notice at a conspicuous place of the premises where the employees affected by the change are employed.
Under sub section
(2) of section 42 an employee desiring a change in respect of an indus 736 trial matter not specified in Schedule I or Schedule III has to give notice in the, prescribed form to the employer with similar intimation to others.
Under sub section
(4) any employee desiring a chance in respect inter alia, of any industrial matter specified in Schedule III of which item 6 reads "Employment including (i) reinstatement and recruitment" must make an application to the Labour Court. 'This subsection has a proviso which runs : "Provided that no such application shall lie unless the employee or a representative union has in the prescribed manner approached, the employer with a request for the change and no agreement has been arrived at in respect of the change within the prescribed period.
" section 44 envisages an agreement between the parties regarding "change" and registration of the memorandum thereof by the Registrar.
Under section 44 A a memorandum of agreement arrived at is to be forwarded by either party to the Registrar by registered post and an agreement which is registered under section 44 is to come into operation as laid down in section 45.
The territorial jurisdiction of Labour Courts extends to local areas for which they are constituted under section 77 in Part XII.
section 78 runs as follows : "78.
(1) A Labour Court shall have power to A. decide (a) disputes regarding (i) the propriety or legality of an.
order passed by an employer acting or purporting to act under the standing orders; (ii)the application and interpretation of standing order; (iii) any change made by an employer or desired by an employee in respect of an industrial matter specified in Schedule III except item (5) thereof and matters arising out of such change; (b) industrial disputes (i) referred to it under section 71 or 72; (ii) in respect of which it is appointed as an arbitrator by a submission; 737 .lm15 (c)whether a strike, lock out, closure, stoppage or any change is illegal under this Act; B. try offenses punishable under this Act where the payment of compensation on conviction for an offence is provided for, determine the compensation and order it, ; payment; C. require any employer to (a) withdraw any change which is held by it to be illegal, or withdraw temporarily any change the legality of which is a matter of issue in any proceeding pending final decision, or (b) carry out any change provided such change is a matter in issue in any proceeding before it under this Act.
D.require an employer, where it finds that the order of dismissal, discharge, removal, retrenchment, termination of service, or suspension of an employee made; by the employer, (i) was for fault or misconduct committed by the employee which came to the notice of the employer more than six months prior to the date of such order;, or (ii) was in contravention of any of the provisions of ' any law, or of any standing order in force applicable to such employee, or (iii) was otherwise improper or illegal, (a) reinstate the employee forthwith or by a date specified by it in this behalf and pay him wages for the period beginning can the date of such order of dismissal, discharge, removal, retrenchment, termination of ' service or suspension, as the case may be, and ending on the date on which the Labour Court orders his reinstatement or on the date of his reinstatement, whichever is later, or (b) to pay to the employee in addition to wages (being wages for the period commencing on the date of his dismissal, discharge, removal, retrenchment or termination of service and ending on the date on which the Labour Court orders such payment), such sum not exceeding four thousand rupees by way of compensation, regard being had to loss of employment and possibility of getting suitable employment thereafter.
738 (2) Every offence punishable under this Act shall he tried by the Labour Court within the local limits of whose jurisdiction it was committed.
Explanations dispute falling under clause (a) of paragraph A of sub section (1) shall be deemed to have arisen if within the period prescribed under the proviso to sub section (4) of section 42, no agreement is arrived at in respect of an order, matter or change referred to in the said proviso.
" Clause D of section 78(1) was introduced in the Act of Maharashtra Act 22 of 1965.
section 31 of the Act of 1965 not only introduced cl.
D but also made changes in paragraphs A and C thereof.
The forerunner of Act 22 of 1965 i.e. Bill No. LXVI of 1964, the object of which was to make numerous changes in the Act shows in its Statement of Objects and Reasons that clause 31 of the Bill was meant to "enlarge the powers of the Labour Court under s.78".
According to this clause "The Labour Court is empowered (by paragraph D) to direct temporary withdrawal of any change the legality of which is a matter of issue in any proceedings before it, pending its final decision.
" The Labour Court was also thereby further empowered "to require an employer to reinstate an employee with full back wages or pay him wages and compensation not exceeding Rs. 2,500/. if the employee Was dismissed, discharged" etc.
The Statement of Objects and Reasons amply demonstrates that by introducing paragraph D in section 78(1) the legislature was 'Only seeking to arm the Labour Court with further and more effective powers to grant relief.
Under section 79(1) proceedings before a Labour Court in respect of disputes falling under clause (a) of paragraph A of sub section (1) of section 78 must be commenced on an application made by any of the parties to the dispute etc.
and under sub section
(2) every application under sub s.(1) has to be made in the prescribed from and manner.
Under section 84 an appeal lies to the Industrial Court against the decision of a Labour Court in respect _ of a matter falling under clause (a) or cl.
(c) of paragraph A of sub section
(1) ,of section 78 except in the case of lock out etc.
or a decision of such .court under paragraph C of sub section
(1) of the said section.
Reading section 78 as a whole, there is no doubt left in our minds 'that the legislature wanted the provision to be a comprehensive one.
It contains all the powers of the Labour Court in the matter of all disputes mentioned and gives it jurisdiction to punish 739 certain offenses under the Act.
It does not lay down the procedure for the attraction of such jurisdiction.
So far as disputes are concerned, the procedure is as laid down in section 79.
It will be noted that no mention is made in section 84 of paragraph D of section 78(1) but inasmuch as orders of dismissal, discharge, removal ,retrenchment, termination of service or suspension of an employee would come under section 78(1) paragraph A, the legislature felt it unnecessary to make any mention of an order under paragraph D in section 84.
Paragraph D, so far as we can see, is not referred to anywhere, else in the Act.
The question therefore narrows down to this i.e. whether the legislature by inserting paragraph D in section 78(1) intended to chalk out a wholly different course of action to that prescribed in Chapter VIII dealing with changes.
In our view, there is nothing in the Act which warrants such a conclusion.
The scheme of Chapter VIII seems to be that in regard to any "change" in an matter there must be compliance with the provisions of that Chapter.
In other words, effort must first be made by the employer intending to effect any change in respect of matters covered by section 42(1) or an employee desiring a change in respect of any order passed by the employer under standing orders which would of necessity include an order of dismissal, to see whether it was possible to come to any agreement and an application to the labour court could only be resorted to after efforts had been made to settle the dispute and no agreement had been arrived at.
The scheme of section 7 8 (1) seems to be that a Labour Court is to have power to decide, all the disputes covered by paragraph A. Paragraph B thereof gives the Labour Court the power to try offenses punishable under the Act and cognizance of such offenses .;an only be taken under section 82.
Paragraphs C and D set out what relief the Labour Courts are empowered to give including directions as may be found necessary in that behalf.
As already noted, the Statement of Objects and Reasons (A clause 31 of the Bill which later resulted in Act 22 of 1965, shows that the underlying dea was to enlarge the powers of the Labour Court.
The Legislature nowhere intended to make a complete departure from the procedure to be adopted when powers under section 78(1)D were to be exercised.
Rule 5 5 of the Bombay Industrial Relations Rules, 1947 shows how an application is to be made and the period within which it is to be made.
It must be held that a person who is dismissed would be an employee within the meaning of section 3(13) of the Act and we can 740 see no valid reason for differentiating the case of a dismissed employee from one who complains of some other change.
As the scheme of the Act is that disputes should be settled as far as possible and primarily through conciliation and agreement, it does not stand to reason that an employee should be able to side step all this by a direct reference to the Labour Court.
A Labour Court is a creature of the statute and it can only exercise such jurisdiction as the statute confers on it : if there are certain pre conditions to the exercise of its jurisdiction, it must refuse to entertain any such application unless such pre conditions are first complied with.
In the result we set aside the order of the High Court, allow the appeal and quash the orders of the Labour Court and the Industrial Court but do not make any order for consequential relief, in view of the solemn assurance given to this Court by Mr. Phadke, learned counsel for the appellant that his client does not desire to give effect to the order of termination of service passed on the third respondent.
In the circumstances of the case, we make no order as to costs.
K.B.N. Appeal allowed L1031 Sup.
Cl/72 2500 25 8 73 GIPF.
| IN-Abs | Against the order of the appellant company dismissing him, an employer filed an application before the Labour Court under section 78 of the Bombay Industrial Relations Act, 1946.
The Labour Court set aside the order.
The Industrial Court and the High Court confirmed the order of the Labour Court rejecting the appellant 's contention that the order of the Labour Court was liable to be set aside on the ground that the employee did not make an application under section 42(4) in Chapter VIII of the Act ' which was a condition precedent to approaching the Labour Court.
On the question whether the Labour Court could exercise jurisdiction under section 78(1) D of the Act in a case where the employee of an industry governed by the Act had not complied with the provisions of sub section (4) of section 42 of the Act read with the proviso to the sub section, HELD:Allowing the appeal.
(i) The scheme of Chapter VIII of the Act is that in regard to any "Change" in an industrial matter there must be compliance with the provisions of that chapter.
There is nothing in the Act which warrants the conclusion that the legislature by inserting paragraph D in section 78(i) intended to chalk out a wholly different course of action to that prescribed in Chapter VIII dealing with changes.
The ,scheme of section 78 (1) is that Labour Court is to have power to decide all the disputes covered by paragraph A.
In other words, efforts must first be made by the employer intending to effect any change in respect of matters covered by section 42(1), or an employee desiring a change in respect of any order passed by the employer under standing order which would of necessity include an order of dismissal, to see whether it was possible to come to any agreement and an application to the Labour Court could only be resorted to after efforts had been made to settle the dispute and no agreement had been arrived at.
[739C G] (ii) A person who is dismissed would, be an employee within the meaning of section 3(13) of the Act and there is no valid reason for differentiating the case of a dismissed employee from one who complains of some other change.
[739H]
|
minal Appeal No. 3 of 1972.
Appeal by special leave from the judgment and order dated January 25, 1971 of the Madhya Pradesh High Court, Indore Bench in Criminal Appeal No. 391 of 1969.
section K. Gambhir, for the appellant.
M. N. Shroff, for the respondent.
The, Judgment of the Court was delivered by Beg, J. Shiv Govind, the appellant , has obtained Special.
Leave to appeal against only that part of the Judgment and order of the High Court of Madhya Pradesh by which his sentence of one, year 's Rigorous Imprisonment, passed by the Additional Sessions ' Judge, Indore, upon a conviction under Section 366 Indian Penal Code, was enhanced to seven years ' Rigorous Imprisonment 836 and a fine of Rs. 100/ , and, in.
default of payment of fine, to three months ' further rigorous imprisonment.
The appellant, aged about 20 years at the time of the alleged offence of 9th of August, 1969, was the youngest of three persons who were jointly charged and tried for offences punishable under Section 366 and 354 I.P.C. The prosecution case was : Kumari Seema, a girl below 18 years of age, was offered a lift on his bicycle by the accused, Kamal Singh, aged 30 years, while she was returning to her homefrom her School on 9th August, 1969.
The girl hesitated.
But, as she reposed confidence in Kamal Singh, whom she looked upon as her uncle, she accepted the offer.
Kamal Singh took Kumari Seema on his bicycle to the Regal Cinema where she part took of some.
refreshment ordered by Kamal Singh.
Meanwhile, the appellant Shiv Govind and the accused Punani, aged 26, arrived in a car.
Kamal Singh asked Kumari Seema to go with the two younger men in their car.
Seema refused.
Then, Kamal Singh asked her to go on his bicycle to Yashwant Talkies.
She complied with this request.
At this Cinema, Kanial Singh deposited his Cycle at the Cycle stand.
The appellant Shiv Govind and his companion Punam had followed in their car.
The three men succeeded in persuading Seema, despite her initial refusal, to sit in the car and to go for a short pleasure trip in it on the, definite assurance that she will soon be reached home.
After the girl had sat in the car she was driven to a place called Mandow, a number of miles away from Indore, and was made to alight at a tourist 's bungalow.
There two rooms were engaged by the accused.
, Kamal Singh occupied one of the two rooms and the girl was closeted in the other room with the appellant and his companion Punam, who were both drunk.
One of the two youngmen caught hold of the hands of the girl while the other tried to undress her with the object of raping her.
Kumari Seema, at this point, feigned sudden indisposition so that the two youngmen had to bring her out into the gallery for fresh air.
She managed to escape while the accused went inside to fetch some water for her, She rushed into the house of one Babulal Kamdar and complained to him about the incident.
This led to a communication of information of the offences to the Police which went to the tourist 's bungalow.
and arrested the three accused who were brought to Police Station Nalcha where a First Information Report was lodged.
The Trial Court had examined the evidence given in support of the case stated above.
This included medical evidence on the question of the age of the girl, because, while the prosecution alleged that she was below 16 years of age, the accused pleaded that she was above 18 years of age.
Evidently, the case of the accused 837 Was that Kumari Seema was a consenting party to whatever took place.
Although the girl was attending a School, the entry of her age in the School Register was not disclosed.
Despite some discrepancies in the evidence relating to the age of the girl, the trial court came to the conclusion that it was between 16 to 19 years.
It relied mainly on expert evidence of Doctors who had used the ossification test.
The Trial Court had also noticed the discrepancies between the prosecution version, as set out above by Kumari Seema in her evidence in Court.
and the story given out by her in the First lnformation Report where she had stated that she had joined the party of the accused at the crossing of Bijasan Road.
The earlier version suggested that the girl had herself gone to meet the party of the accused by appointment.
The consent of the girl was, however, immaterial in view of the finding of the Trial Court about the age of the girl.
The fact that she was taken to Mandow, where something happened at the tourist 's bungalow which she disapproved of, was corroborated by the evidence of Babulal Kamdar, and Kailash Sharma, in addition to the two police constables of Mandow out post.
The Trial Court which had the advantage, of watching the demeanour of the girl, had come to the conclusion that, although the girl may have tried to improve her version and pretend that she was unwilling to accompany Kamal Singh, who had come in a car for her according to the first version, yet, the charge under Sec.
366 I.P.C., was established against each of the three accused and the charge under Sec.
354 I.P.C. was established against Shiv Govind, appellant, and his companion Punam.
The three accused were, therefore, convicted under Sec. 366, and each was sentenced to one year 's rigorous imprisonment.
The two accused Shiv Govind and Punam were also convicted under Sec.
354 I.P.C., and sentenced to four months rigorous imprisonment, but the two sentences were ordered to run concurrently.
When the case came up in appeal to the High Court, a notice: of enhancement of the sentence under Sec.
366 I.P.C. was issued to each of the three appellants, and their sentences were enhanced, as indicated above, after the appellants had been heard.
It is only Shiv Govind who has appealed to this Court.
Shiv Govind had also applied under Sec.
561A. Criminal Procedure Code to the High Court, after the dismissal of his appeal and enhancement of the sentence, by the High Court, claiming the benefit of Sec. 6 and 11 of the Probation of Offender 's Act.
But this application was rejected by the learned Judge who had enhanced the sentence passed upon the appellant, although he 838 round that the report of the Probation Officer about the conduct of the accused while undergoing the sentence, which was sent far, was favourable to the appellant.
It appears from the two Judg ments given by the learned Judge who enhanced the sentence of the appellant and who subsequently dismissed the application Linder Sec.
561A Criminal Procedure Code also, that the view taken by him was that, having regard to the facts and circumstances and of the case and the offence committed by the appellant, the enhanced sentence was deserved by him.
We have, therefore, examined the Judgment of the High Court Linder appeal before us in order to discover the special reasons Which induced the learned High Court Judge to differ from the ( )pinion of the Trial Court about the appropriate sentence to be imposed upon the appellant.
The only reason given by the learned Judge for enhancing the sentence was that Kumari Seema had reposed confidence in Kamal Singh, whom she regarded as an Uncle, so that she could not expect foul play from him.
The learned Judge thought the girl 's trust and confidence in Kamal Singh explained why she did not protest when she was taken in the car and then made to get down at the tourist 's bungalow.
It seems, however, from the account of the occurrence given in the Judgment under appeal, that the learned Judge was shocked by the plight of Kumari Seema, due to the perfidy of Kamal Singh, and by.
a contemplation of the possible consequences to her if she had not behaved in a particularly.
brave and intelligent manner so as to escape from her predicament.
The learned Judge mentioned that the girl had risked her life to escape.
We, however, find that there was no suggestion in the evidence anywhere that any threat to the life of Kumari Seema was held out.
There was no evidence that the girl had seriously struggled to escape or had raised shouts for help which would have brought people around to her aid.
Nor was there any evidence that the accused tried to obstruct her or to chase her when she escaped from the tourist 's bungalow allegedly by resorting to a ruse.
The High Court was so impressed by the girl 's uncorroborated version of her own heroism, which did not tally with her first version in the First Information Report, that it overlooked the infirmities in the girl 's evidence discussed by the trial court.
We find the trial court 's view of the whole case to be, quite balanced and objective.
We do not think that the severer view of the High Court could be reasonably justified.
It seems clear to us that the High Court had overlooked the principles, laid down by this Court repeatedly, which should 839 govern the exercise of powers of the High Court to enhance sen tences Imposed by trial courts.
In Bed Raj vs The State of Uttar Pradesh.
this Court observed at page 588 589 "A question of a sentence is a matter of discretion and it is well settled that when discretion has been properly exercised along accepted judicial lines, an appellate court should not interfere to the detriment of an accused person except for very strong reasons which must be disclosed on the face of the judgment; See for example the observations in Dalip Singh vs State of Punjab , 156) and Nar Singh vs State of Uttar Pradesh [1955](1) S.C.R. 238, 2411.
In a matter of enhancement there should not be interference when the sentence passed imposes substantial punishment.
Interference is only called for when it is manifestly inadequate.
In our opinion, the lese principles have not been observed.
It is impossible to hold in the circumstances described that the Sessions Judge did not impose a subs tantial sentence, and no adequate reason has been assigned by the learned High Court Judges for considering the sentence manifestly inadequate.
In the circumstances.
bearing all the considerations of this case in mind, we are of opinion that the appeal (which is limited to the question of sentence) should be allowed and that the sentence imposed by the High Court should be set aside and that of the Sessions Court restored".
We think that what was laid down by this Court.
in Bed Raj 's case (Supra) is fully applicable to the case before us.
We may also mention the similar views expressed by this Court in.
Alamgir & A nr., vs The State of Bihar (2).
We may observe that decision of this Court in Nabi Bux and Ors.
vs The State of Madhya Pradesh(: '), is distinguishable from the case before us.
In that case the High Court had enhanced a sentence having regard to all the facts and circumstances justifying the enhancement.
In the case before us we find that the High Court had not noticed a number of facts duly considered by the trial Court so that the exercise of power of enhancement of the sentence under Sec.
366 I.P.C. could not be reasonably justified here.
Consequently, we allow this appeal by setting aside the order of enhancement of sentence by the High Court of Madhya Pradesh and restore the sentence of one year 's rigorous imprisonment (1) [1955] (2) S.C.R. p. 583.
(2) [1959] Supp.
(1) S.C.R. 464.
(3) ; 840 passed upon the appellant by the learned Sessions Judge for the offence under Sec.
366 I.P.C. of which the appellant was convict ed.
The concurrent sentence of four months rigorous imprisonment under Sec.
354 I.P.C., which was not interfered with by the High Court, is maintained.
We understand that the appellant has already undergone more than one year 's imprisonment awarded to him and that he is in jail as his application for bail was rejected.
If this is so, the appellant will be released forthwith unless wanted in some other case.
K.B.N. Appeal allowed.
| IN-Abs | A question of sentence is a matter of discretion.
It is well settled that when discretion has been properly exercised along accepted judicial lines.
an appellate Court should not interfere to the detriment of an accused person.
Such interference will be justified only by strong reasons Which must be disclosed on the fact of the, judgment.
In a matter of enhancement there should not be interference when the sentence , passed imposes substantial punishment.
lnterference is only called for when it is manifestly inadequate.
[839 B] Where the trial court after taking into account all the circumstances end also the discrepancies in the prosecution version convicted the appellant to one years, imprisonment under section 366, Penal Code, and the High Court in appeal, enhanced the sentence to seven years ' imprisonment.
HELD : that the High Court had not noticed a number of facts duly considered by the trial court and, therefore, the exercise of the power of enhancement could not be justified.
[839 G] Bed Rai vs The State of Uttar Pradesh, ; , and Alamgir & Anr.
vs The State of Bihar, [1959] Supp.
I S.C.R. 464, referred to.
Nabi Bux and ors.
vs The State of Madhya Pradesh, A. 1.
R. , distinguished.
|
Appeal No. 118 of 1953.
Appeal from the Judgment and Decree dated the 28th July 1949 of the High Court of Judicature for the State of Punjab at Simla in Civil Regular First Appeal No. 365 of 1946 arising out of the Decree dated the 31st day of October 1946 of the Court of the SubJudge, 1st Class, Pathankot in Suit No. 110 of 1945.
Rajinder Narain, for the appellant.
K. L. Gosain (R. section Narula and Naunit Lal, with him), for the respondent.
January 21.
The Judgment of the Court was delivered by DAS J.
This is an appeal by the plaintiff in a suit for a declaration of his title as collateral within ' four degrees of Gurdial, who was a Sarswat Brahmin, resident of Pathankot in the district of Gurdaspur and the last male holder of the properties in suit.
Gurdial died many years ago leaving certain lands in villages Bhadroya, Kingarian and Pathankot, Tehsil Pathankot in the district of Gurdaspur, and leaving him surviving his widow Musammat Melo and a daughter Musammat Maya Devi, the respondent before us.
Some time in the year 1926, a portion of the land in village Bhadroya was acquired for the Kangra Valley Railway and a sum of Rs. 1,539 7 0 was awarded to Musammat Melo.
On ail objection by the appellant this amount was deposited in the Court of the Senior Subordinate Judge, Gurdaspur, with a direction to pay the interest on this amount to Musammat Melo.
On the 28th September 1944 Musammat Melo died and the Revenue Courts ordered mutations in respect of the lands in the three villages in favour of the respondent as the daughter of Gurdial.
On the 10th March 1945 the appellant filed the suit out of which this appeal arises against the respondent for a declaration that he was entitled to the lands mentioned in the plaint as well as to the sum of 1194 Rs. 1 539 7 0 in preference to the respondent under the custom governing the parties *hereunder the collaterals of the last male holder excluded the daughter.
The respondent contested the suit mainly on the grounds (i) that the suit for a mere declaration was not maintainable (ii)that the parties were governed by Hindu Law and not by custom, (iii)that the appellant was not a collateral of Gurdial at all, (iv)that the properties in suit were not ancestral, and (v) that there was no custom whereunder the collaterals of the father who was the last male holder excluded the daughter from succession to the selfacquired property of her father.
The Subordinate Judge in his judgment pronounced on the 31st October 1946 held (i) that the lands in suit being in possession of tenants, the suit for a declaration of title thereto was maintainable but the suit for a declaration in respect of the sum of Rs. 1,539 7 0 was not maintainable in view of the provisions of the Indian Succession Act relating to succession certificates, (ii)that the parties were governed by custom and not by Hindu Law, (iii)that the appellant was a collateral of Gurdial within four degrees, (iv)that the land in Khata No. 2 of village Kingarian was ancestral while the rest of the lands in suit were non ancestral, and (v) that there was a custom according to which daughter was excluded from inheritance by the collaterals up to the fourth degree with respect to ancestral as well as self acquired property of the last male holder as laid down in the case of Buta Singh vs Mt. Harnamon(1).
In the result, the Subordinate Judge decreed the suit in respect only of the lands in suit and ordered the parties to bear their own costs.
(1) A.I.R. 1946 Lah.
306. 1195 Against this judgment and decree the respondent preferred an appeal to the Lahore High Court.
The appellant preferred cross objections against the order as to costs and against the finding that the lands in the three villages except the land in Khata No. 2 of village Kingarian were non ancestral.
After the partition of India the appeal was transferred to the High Court of East Punjab.
By its judgment dated the 28th July 1949 the East Punjab High Court allowed the appeal and dismissed the cross objections on the following findings: (i) that the suit for declaration of title to the lands was maintainable as all the lands in suit were in the possession of tenants,, (ii) that the lands in suit except the land in Khata No. 2 of village Kingarian were non ancestral, and (iii) that according to the custom prevailing in the Gurdaspur district a daughter was entitled to succeed to non ancestral property in preference to collaterals even though they were within the fourth degree.
The High Court accordingly modified the decree of the Subordinate Judge to the extent that the declaration in the appellant 's favour was made to relate only to the land in Khata No. 2 of village Kingarian which was held to be ancestral.
On an application made by the appellant on the 26th August 1949 the High Court, by its order dated the 5th June 1950, granted him a certificate of fitness to appeal to the Federal Court.
After the commencement of the Con stitution of India the appeal has come before this Court for final disposal.
The first question raised before us but not very seriously pressed is as to whether the lands in suit other than those in Khata No. 2 in village Kingarian were ancestral or self acquired.
Our attention has not been drawn to any material on the record which induces us to take a view different from the view concurrently taken by the Courts below.
We, therefore, see no force or substance in this contention, 153 1196 The main fight before us has been on the question as to whether there is a custom in the Gurdaspur district governing the parties under which a collateral within the fourth degree excludes the daughter of the last male holder from succession to the self acquired property of her father.
The customary rights of succession of daughters as against the collaterals of the father with reference to ancestral and non ancestral lands are stated in paragraph 23 of Rattigan 's Digest of Customary Law.
It is categorically stated in subparagraph (2) of that paragraph that the daughter succeeds to the self acquired property of the father in preference to the collaterals even though they are within the fourth degree.
Rattigan 's work has been accepted by the Privy Council as "a book of unquestioned authority in the Punjab".
Indeed,the correctness of this paragraph was not disputed before this Court in Gopal Singh vs Ujagar Singh(1).
The general custom of the Punjab being that a daughter excludes the collaterals from succession to the selfacquired property of her father the initial onus, there fore, must, on principle, be on the collaterals to show that the general custom in favour of the daughter 's succession to the self acquired property of her father has been varied by a special local custom excluding the daughter which is binding on the parties.
Indeed, it has been so held by the Judicial Committee in Mst.
Subhani vs Nawab(2) and the matter is now well settled.
The appellant claims to have discharged this initial onus in two ways, namely (1) by producing the Riwaj i am of the Gurdaspur district prepared by Mr. Kennaway in 1913 and (2) by adducing evidence showing that the collaterals of one Harnam Singh, who was also a Sarswat Brahmin of the Gurdaspur district and indeed a member of this very family of Gurdial succeeded in preference to his daughter.
It is pointed out that no instance has been proved on the part of the respondent showing that the daughter ever excluded the collaterals from succession to the self acquired property of the father.
The trial Court (1) ; (2) I.L.R. 1197 as well as the High Court took the view that the evidence as to the succession to the property of Harnam Singh was of no assistance to the appellant for the reason that the evidence was extremely sketchy, that it did not appear whether the properties left by Harnam Singh were ancestral or self acquired or whether the properties left by him were of any substantial value at all as would have made it worth while for the daughter to claim the same in addition to the properties gifted to her by her father during his lifetime.
Further, the fact that the daughter did not contest the succession of the collaterals to the properties left by Harnam Singh, even if they were self acquired, might well have been the result, as held by the High Court, of some family arrangement.
We find ourselves in agreement with the Courts below that the instance relied upon by the appellant is wholly insufficient to discharge the onus that was on him to displace the general custom recorded in paragraph 23(2) of Rattigan 's Digest of Customary Law.
The appellant contends that in any case he has fully discharged the onus that was on him by producing in evidence the Riwaj i am recording the custom of the district of Gurdaspur which was compiled by Mr. Kennaway in 1913.
Reference is also made to the earlier Riwaj i ams of the Gurdaspur District prepared in 1865 and 1893.
Answer to question 16 as recorded in the Riwaj i am of 1913 shows that subject to certain exceptions, which are not material for our purpose, the general rule is that the daughters are excluded by the widow and male kindred of the deceased., however remote.
This answer goes much beyond the answers to the same question as recorded in the Riwaj i ams of 1865 and 1893 for those answers limit the exclusion in favour of the male kindred up to certain specified degrees.
The answer to question 17 of the 1913 Riwai i am like those to question 17 of the 1865 and 1893 Riwaj i ams clearly indicates that except amongst the Gujjars of the Shakargarh tehsil all the remaining tribes consulted by the Revenue authorities recognised no distinction as to the rights of the daughters to inherit (i) the immovable or 1198 ancestral and (ii) the movable or self acquired property of their respective fathers.
It is claimed that these answers quite adequately displace the general custom and shift the onus to the respondent to disprove the presumption arising on these Riwaj i ams by citing instances of succession contrary to these answers.
In support of this contention reference is made to the observations of the Privy Council in Beg vs Allah Ditta(1) that the statements contained in a Riwaj i am form a strong piece of evidence in support of the custom therein entered subject to rebuttal.
Reliance is also placed on the observations of the Privy Council in Mt. Vaishno Ditti vs Mt. Rameshri(2) to the effect that the statements in the Riwaj i am might be accepted even if unsupported by instances.
The contention is that on production by the appellant of the Riwaj i am of the Gurdaspur district the onus shifted to the respondent to prove instances rebutting the statements contained therein.
This, it is urged, the respondent has failed to do.
" There is no doubt or dispute as to the value of the entries in the Riwaj i am.
It is well_settled that though they are entitled to an initial presumption in favour of their correctness irrespective of the question whether or not the custom, as recorded, is in accord with the general custom, the quantum of evidence necessary to rebut that presumption will, however, vary with the facts and.
circumstances of each case.
Where, for instance, the Riwaj i am lays down a custom in consonance with the general agricultural custom of the province, very strong proof would be required to displace that presumption; but where, on the other hand, the custom as recorded in the Riwaj i am is opposed to the custom generally prevalent, the presumption will be considerably weakened.
Likewise, where the Riwaj i am affects adversely the rights of the females who had no opportunity whatever of appearing before the Revenue authorities, the presumption will be weaker still and only a few instances would be sufficient to rebut it.
[See Khan Beg vs Mt. (1) [1916] L.R. 44 I.A. 89.
(2) Lah.
186; L.R. 55 I.A. 407 1199 Fateh Khatun (1), Jagat Singh vs Mst.
Jiwan The principles laid down in these cases were approved of by the Judicial Committee in Mst.
Subhani 's case supra.
Learned counsel appearing for the appellant contends that even if the presumption as to the correctness of the Riwaj i am be weak, the respondent has not cited a single instance of a daughter having excluded the collaterals from succession to the selfacquired property of her father and has, therefore, failed to discharge the onus that was thrown on her as a result of the production by the appellant of the Riwaj i am of 1913 and, consequently, the appellant must succeed.
This argument overlooks the fact that in order to enable the appellant to displace the general custom recorded in Rattigan 's work and to shift the onus to the respondent the appellant must produce a Riwaj i am which is a reliable and trustworthy document.
It has been held in Qamar ud Din vs Mt. Fateh Bano(3) that if the Riwaj i am produced is a reliable and a trustworthy document, has been carefully prepared and does not contain within its four corners contradictory statements of custom and in the opinion of the Settlement Officer is not a record of the wishes of the persons appearing before him as to what the custom should be, it would be a presumptive piece of evidence in proof of the special custom ,set up, which if left unrebutted by the daughters would lead to a result favourable to the collaterals.
If, on the other hand, it is not a document of the kind indicated above then such a Riwaj i am will have no value at all as a presumptive piece of evidence.
This principle has been followed by the East Punjab High Court in the later case of Mohammad Khalil vs Mohammad Bakhsh (4).
This being the position in law, we have to scrutinise and ascertain whether the Riwaj i ams of the Gurdaspur district in so far as they purport to record the local custom as to the right of succession of daughters to the self acquired properties of their respective father are reliable and trustworthy documents.
(1) , Lah.
276, 296, 297.
(2) A.I.R. 1935 Lah.
(3) Lah.
(4) A.I.R. 1949 E.P. 252.
1200 Twenty two tribes including Brahmins were consulted by Mr. Kennaway who prepared the Riwaj i am of 1913.
In paragraph 4 of the Preface Mr. Kennaway himself states that many of the questions related to matters on which there really existed no custom and the people had merely stated what the custom should be and not what it actually was.
In Appendix 'C ' are collected 56 instances of mutuations in which the daughter inherited.
In these there are four instances relating to Brahmins.
Answer to question 16, as recorded in this Riwaj i am, has been discredited and shown to be incorrect in at least three cases, namely, Gurdit Singh vs Mt. Malan(1), Kesar Singh vs Achhar Singh(1) and Buta Singh vs Mt. Harnamon(3).
The answer to question 16 as recorded in the 1913 Riwaj i am, it was pointed out, went much beyond the answer given to the same question in the Riwaj i ams of 1865 and 1893.
The answer to question 17 of the 1913 Riwaj i am that no distinction is to be made between ancestral and self acquired property has not been accepted as correct in not less than six cases, namely, Bawa Singh vs Mt. Partap(4), Jagat Singh vs Mt. Jiwan(5), Kesar Singh vs Gurnam Singh(1), Najju vs Mt. Aimna Bibi (7) Gurdit Singh vs Mt. Man Kaur(8), and Labh vs Mt. Fateh Bibi(9).
The statements in a Riwaj i am the truth of which is doubted by the compiler himself in the preface and which stand contradicted by the instances collected and set out in Appendix 'C ' of the same Riwaj i am and which have been discredited in judicial proceedings and held to be incorrect cannot, in our opinion, be regarded as a reliable or trustworthy document and cannot displace the initial presumption of the general custom recorded in Rattigan 's book so as to shift the onus to the daughter who is the res pondent.
The appellant relies on the cases of Ramzan Shah vs Sohna Shah("), Nanak Chand vs Basheshar Nath(11), Mt. Massan vs Sawan Mal(" ') and Kesar Singh vs (1) Lah.
364.(2) A.I.R. 1936 Lah. 68. (3) A.I.R. 1946 Lah. 306.(4) A.I.R. 1935 Lah.
(5) Ibid, 617.
(6) Ibid, 696.
(7) A.I.R. 1936 Lah.
493.(8) A.I.R. 1937 Lah.
(9) A.I.R. 1940 Lah.
436.(10) [1889] 24 P.R, 191.
(11) [19O8]43 P.R. 15.
(12) A.I.R. 1935 Lah.
453, 1201 Achhar Singh(1).
The first three cases are of no assistance to him although the second and third relate to Brahmins of Gurdaspur, for the properties in dispute ' in those cases were ancestral and the respondent does not now dispute the appellant 's right to succeed to her father 's ancestral propertie 'section These cases, therefore, do not throw any light on the present case which is concerned with the question of succession to selfacquired property.
Further, in the last case, the collaterals were beyond the fourth degree and it was enough for the Court to say that irrespective of whether the properties in dispute were ancestral or selfacquired the collaterals in that case could not succeed.
It is also to be noted that the earlier decisions werenot cited or considered in that case.
In our opinion the appellant has failed to discharge the onus that was initially on him and that being the position no burden was cast on the respondent which she need have discharged by adducing evidence of particular instances.
In these circumstances, the general custom recorded in Rattigan 's book must prevail and the decision of the High Court must be upheld.
We accordingly dismiss this appeal with costs.
Applal dismissed.
| IN-Abs | It is now well settled that the general custom of the Punjab being that a daughter excludes the collaterals from succession to the self acquired property of her father the initial onus, therefore, must, on principle, be on the collaterals to show that the general custom in favour of the daughter 's succession to the self acquired property of her father has been varied by a special local custom excluding the daughter which is binding on the parties.
It is also well settled that though the entries in the Riwaj i am are entitled to an initial presumption in favour of their correctness irrespective of the question whether or not the custom, as recorded, is in accord with the general custom, the quantum of evidence necessary to rebut that presumption will, however, vary with the facts and circumstances of each case.
Where, for instance, the Riwaj iam lays down a custom in consonance with the general agricultural custom of the province, very strong proof would be required to displace that presumption; but where, on the other hand, the custom as recorded in the Riwaj i am is opposed to the custom generally prevalent, the presumption will be considerably weakened, Likewise, 1192 where the Riwaj i am affects adversely the rights of the females who had no opportunity whatever of appearing before the Revenue authorities, the presumption will be weaker still and only a few instances would be sufficient to rebut it.
If the Riwaj i am produced is a reliable and a trustworthy document, has been carefully prepared, and does not contain within its four corners contradictory statements of custom, and in the opinion of the Settlement Officer is not a record of the wishes of the persons appearing before him as to what the custom should be, it would be a presumptive piece of evidence in proof of the special custom setup, which if left unrebutted by the daughters would lead to a result favourable to the collaterals.
If, on the other hand, it is not a document of the kind indicated above, then such a Riwaj i am will have no value at all as a presumptive piece of evidence.
The Riwaj i ams of the Gurdaspur district prepared by Mr. Kennaway in 1913 in so far as they purport to record the local custom as to the right of the daughter to succeed to the self acquired property of her father are not reliable and trustworthy documents.
The answer to question 16 and the answer to question 17 re corded therein do not contain the correct record of custom.
Held, that the appellants collateral within fourth degreea Saraswat Brahmin of Pathankot in the district of Gurdaspur had failed to discharge the onus that initially rested on him that the respondent (the daughter) was excluded by him in respect of the nonancestral property of her father and that therefore no burden was cast on her of adducing evidence of particular instances.
The general custom laid down in para 23 of Rattigan 's Digest of Customary Law that "a daughter is preferred to collaterals in regard to the self acquired property of tier father" was approved by the Supreme Court.
Butta Singh vs Mt. Harnamon (A.I.R. 1946 Lab. 306), Gopal Singh vs Ujagar Singh ( ; , Mst.
Subhani vs Nawab (I.L.R. [1940] Lab.
154), Beg vs Allah Ditta ( [1916] L.R. 44 I.A. 89), Mt. Vaishno Ditti vs Mt. Rameshri ( Lab. 186; L.R. 55 I.A. 407), Khan Beg vs Mt. Fateh Khatun ( Lab.
276), Jagat Singh vs Mst.
Jiwan (A.I.R. 1935 Lab.
617), Qamar ud din vs Mt. Fateh Bano ([1943] I.L.R. 26 Lab. 110), Mohammad Khalil vs Mohammad Bakhsh (A.I.R. 1949 E.P. 252), Gurdit Singh vs Mt. Malan ([1924] I.L.R. 5 Lab.
364), Kesar Singh vs Achhar Singh (A.I.R. 1936 Lab.
68), Bawa Singh vs Mt. Partap (A.I.R. 1935 Lab. 288), Kesar Singh vs Gurnam Singh (A.I.R. 1935 Lab.
696), Najju vs Mt. Aimna Bibi (A.I.R. 1936 Lab. 493), Gurdit Singh vs Mt. Man Kaur (A.I.R. 1937 Lab. 90), Labh vs Mt. Fateh Bibi (A.I.R. 1910 Lab. 436), Ramzan Shah vs Sohna Shah ([1889] 24 P.R. 191), Nanak Chand vs Basheshar Nath ( [1908] 43 P.R. 15) and Mt. Massan vs Sawan Mal (A I R. 1935 Lab. 453), referred to, 1193
|
Appeal No. 243 of 1971.
Appeal by special leave from the judgment and order dated September 3, 1970 of the Madhya Pradesh High Court in Miscellaneous Petition No. 256 of 1970.
797 C. K. Daphtary, L. M. Singhvi, section K. Mehta, K. L. Mehta and K. R. Nagaraja, for the appellant.
B. Sen and I. N. Shroff, for respondents Nos. 1, 3 and 4.
section section Khanduja, section K. Dhingra and Promod Swaroop for res pondent No. 2.
It may at the outset be mentioned that the appointment of the Vice Chancollor of the Saugar University is made by the Chancellor of that University under section 13 of the University of Saugar Act, 1946 (hereinafter referred to as "the Act") from 1 panel of not less than three persons recommended by the Committee constituted under sub section (2) of that section.
The Committee to be constituted under sub section (2) was to consist of three persons, two of whom shall be elected by the Executive Council by single transferable vote from amongst persons not connected with the University or a College and the third shall be.
nominated 'by the 'Chancellor who was, also empowered to appoint one of them as Chairman of the Committee.
It is unnecessary to refer to other provisions of this section because these are not relevant for the purpose of this appeal.
It appears that under the above provisions a Committee to submit a panel of names for the appointment of a Vice Chancellor for the University was duly constituted consisting of two persons elected by the executive Committee of the University, namely, G. K. Shinde, Retired Chief Justice and Justice T. P. Naik of the Madhya Pradesh High Court while the third member Shri C. B. Agarwal Retired Judge of the, Allahabad High Court was nominated by tfie Chancellor, Rajmata Vijaya Raje Scindia who also appointed G. K. Shinde as the Chairman of the Committee.
The Chairman thereafter appears to have carried on a correspondence to fix, a convenient place and time for the meeting, which was ultimately fixed at Indore on the 4th of April 1970.
Justice Naik was, however, unable to attend the meeting and in, his absence the other two persons, Shri Shinde panel of and Shri Agrawal met; as a Committee and submitteds names from which the Chancellor appointed the appellant on 7th April 1970 as a vice Chancellor with effect from 22nd June 1970 for, a period of five years.
The appellant at the time of the appointment, it seems, was acting as Vice Chancellor.
1061SupCI/72 798 On the 9th of April 1970, the Governor of Madhya Pradesh, Shri K. C., Reddy promulgated Ordinance No. I of 1970 by section 2 of which sub section (1) of section II was substituted by a new sub section (1) where under the Governor of Madhya Pradesh was made an ex officio Chancellor of that University.
By section 3, it was provided that as from the date of the coming into force of that Ordinance, the Chancellor in office immediately, before the date aforesaid shall cease to hold office of the Chancellor and the Governor of Madhya Pradesh shall assume the said office.
By virtue of this Ordinance Rajmata Vijaya Raje Scindia ceased to be.
the Chancellor.
On the 23rd April 1970, the Governor again passed another Ordinance by section 2 of which, he substituted section 43 of the Act by a new section 43.
By section 3 a new section 43A was also added.
Section 4 made the amendments made by sections 2 and 3 to operate retrospectively as from the commencement of the original Act.
The amended sections 43 and 43A are as follows "43.
If any question arises whether any person hi,,, been duly appointed, elected, nominated or coopted as, or is entitled to be, a member of any authority or other body of the University or any officer of the University, the matter shall be referred to the Chancellor whose decision thereon shall be final.
43A. The Chancellor may, either on his own motion or on the application of any party interested, review any order passed by himself or his predecessor in office if he is of the opinion that it is not in accordance with the provisions of this Act, the statutes, the Ordinance or the Regulations or is otherwise improper and pass such orders in reference thereto as he may think fit." After the above Ordinances were promulgated, the Secretary to the Governor of Madhya Pradesh wrote on the 20th May 1970 to the appellant as follows : "The question has come up before the Chancellor whether the meeting of the committee constituted by his predecessor under section 1 3 (2) (9 the Act held on 4th April 1970 at Indore at which only two members out of the three were present was legal, and whether the recommendations made by the committee at that meeting were legally valid.
The Chancellor has been advised that the meeting held on the 4th April with only two men present and.
the decisions taken at the meeting .were not legal.
As, a consequence, the orders issued by the University office dated 14th April would have to be rescinded.
799 Before the Chancellor takes action in accordance with legal advice, he has desired that you should be asked if you have anything to state why such action should not be taken.
I am desired to request you to send your reply as early as possible, and at the latest within a week".
To this letter the appellant sent a reply on the 9th June 1970 after having earlier obitained an extension of time.
In that reply he tried to make out a case that the recommendation of the Committee of two members out of three was perfectly valid and in support of it he cited various authorities and also a precedent of the same Governor who as the Chancellor of Indore University seems to have maintained the selection made 'by his predecessor in similar circumstances.
The Governor did not, however, accept the appellant 's plea but passed the following impugned orders on the 15th June 1970 : "WHEREAS, on applications made in that behalf, the Chancellor is of the opinion that order dated the 7th April 1970, passed by his predecessor in office appointing Shri Ishwar Chandra as Vice Chancellor of the University of Saugar with effect from the 22nd June 1970, for a period of five years is not in accordance with provisions of section 13 of the University of Saugar Act, 1946 (XVI of 1946) (hereinafter referred to as the said Act); NOW, THEREFORE, in exercise of the powers conferred by section 43A of the said Act, 1, the Chancellor of the University of Saugar, hereby (i) cancel the aforementioned order dated the 7th April 1970 appointing Shri Ishwar Chandra as ViceChancellor; and (ii) direct that the committee be constituted for submission of panel in accordance with the provisions of section 13 of the said Act".
On the 1st July 1970, a Writ Petition was filed in the High Court of Madhya Pradesh and it appears that on the 3rd July 1970 the Court directed the appellant to produce the correspondence between the Chairman, and the members of the Selection Committee in respect of the meeting to be held to recommend the names for the appointment of a Vice Chancellor.
The appellant, if seems, produced the correspondence with an affidavit on the 25th July 1970 stating that he had obtained the correspondence from the Chairman of the Committee.
the former Chief,Justice Shinde.
On the ' 3rd of September 1970 'rule nisi was refused.
800 On the 19th September 1970 die application for leave to appeal to the Supreme, Court was also rejected.
In the latter order two facts had 'been stated which have been challenged as incorrect.
The first one was that the Chairman had at first fixed Bhopal as the venue of the meeting and secondly.that as the working Vice Chancellor of the University, the petitioner had access to all the documents relating to the meeting and his detailed reply given to the Chancellor was grounded on some of them.
Though there is some justification in these contentions what has to be seen is whether the order rejecting the Writ Petition was justified, and if so, now that the order of the Chancellor has been impugned, i.e that order valid.
It is clear from the Governor 's impugned order that the appellant 's appointment was held to be invalid because only two members of the Committee were present at the meeting.
The High Court while holding that in the absence of any provision in the relevant enactment or the rules or regulations made thereunder, a majority of members of a selection committee like the one in the case before them would constitute the quorum, however presumed that the question for consideration of the Chancellor was not merely one relating to the existence of the quorum requisite for a valid meeting but something different.
On that assumption it examined the correspondence which ensued between the Chairman and Justice T. P. Naik to ascertain whether in fact a valid meeting had been called.
According to the learned Judges, Justice Naik had written to the Chairman to say that he, the Chairman, was determined to hold the meeting presumably in his absence, and, therefore, the High Court thought that if the Chancellor, acting under section 43A of the Act formed the opinion that the meeting held on that date was not legal, it cannot be said that there was no prima facie material for the formation of that opinion, reached by him after giving to the, petitioner an oppor tunity to state why the action proposed should not be taken.
The assumption in this order rejecting the Writ Petition is not warranted, firstly, because the correspondence does not show that there was any deliberate attempt made by the Chairman to exclude one of the members in this case, Justice T. P. Naik, and secondly, that the Chancellor had because of this exclusion, declared the meeting held on the 4th April 1970 as not being valid.
We have already pointed out that the Chancellor was merely concerned with the legality of the recommendation made by two out of three members and not that,any attempt was made by the ' Chairman, to, exclude one of the members, Neither the showcase notice, nor the reply given by the appellant to that notice, nor even: the order of the Chancellor indicates any such ground as that assumed by the High Court to form the basis of the,Chancellor 's order.
The correspondence shows that the Chairman 801 had written a letter on the 12th February 1970 in which , he inquired of Justice Naik whether the 7th and 8th March 1970 would suit him to meet at Bhopal to consider the names for the panel.
Later on the 20th February 1970, he wrote another letter saying that the other member was abroad, and therefore, the meeting which was proposed to be held on the 7th or 8th cannot be held and that he would let him know when a new date was fixed.
In fact, Justice Naik replied on the 27th February 1970 acknow ledging these letters and asking him to let him know the date of the meeting as and when fixed.
On the 8th March 1970 Mr. Shinde again wrote to Justice Naik fixing the meeting on the 12th March 1970 at 10.30 a.m. at Indore and also suggested that if necessary they may meet the next day, the 22nd March 1970.
On the 16th March 1970 Shinde sent a telegram to Justice Naik asking him to wire if 4th April was suitable at Indore.
On the 18th March 1970, he again sent a telegram to him saying : "Doctors Forbid travel stop wire whether 4th & 11th April suitable for Indore".
Justice Naik sent two telegrams, one on the 21st March 1970 saying that 4th is suitable at Saugar or Bhopal and another on the 27th March 1970 stating that both 4th and lath suitable at Saugar or Bhopal.
He also wrote two letters on the 26th and 27th to Shinde.
Shinde had earlier written on the, 24th March 1970 to Justice Naik in which he said as follows "The contents of your telegram, were conveyed to me on the phone today.
It appears that 4th and 11th.
April both are suitable to you at Saugar and Bhopal.
As I told you before, I am recovering from the attack of virus fever and am, therefore, not, ' strong enough to undertake a car journey of 120 miles to, Bhopal.
There is no @ convenient plan ,to come: to Bbopal either.
If I come by plane I shall have to stay over the night at the Circuit House and as I am still on diet, the Circuit House food will not suit me.
As you can come up to Bhopal you can easily come to Indore either by Car or 'by Plane.
The plane leaves Bhopal at about 9.00 a.m. and reaches Indore at about 9.30 am.
After attending the meeting you can leave by plane which leaves for Bhopal at about 2.00 p.m. As far as Lunch is concerned, if you let me know if you are vegetarian or non vegetarian, I can arrange to give you lunch at my place.
If it is impossible for You to come to Indore I would request you to send me your suggestions regarding suitable names for the post of Vice Chancellor of the Saugar University by the 3rd of April.
I would, however, request you to make it colonyient to attend the meeting at Indofe.
I have already sent you a tele gram to the effect that the meeting is fixed on the 4th 802 of April at Indore in the Meeting Room of the University of Indore at 10.30 a.m." Hoping to hear from you by the return of post and with kind regards".
Before this letter reached to the telegram received by him, Justice Naik wrote a letter to Shinde as follows : "I am in receipt of your telegram intimating to me that you have fixed the meeting to consider panel of names for Saugar University on the 4th of April 1970, at 10.30 a.m. at Indore in the Indore University.
I regret my inability to be present at Indore on the date and time specified, though I may be able to attend the meeting if 'the venue is changed to Bhopal.
It is very surprising that you should have fixed the meeting on the 4th of April at Indore, even though I had informed you by a telegram on the 17th of March 1970, that it would not be possible for me to attend it there on that date.
Anyway, knowing full well that it would not be pos sible for me to be present at Indore at 10.30 a.m. on April 4, 1970, you seem determined to hold the meeting there presumably in my absence.
I can only regret your decision.
If you are still interested in having my presence for the meeting, you may fix it either on the 4th or the, 11th April 1970 at Saugar or Bhopal, though Bhopal would be more convenient to me personality.
I hope you have recovered from the effects of your illness by now".
This letter shows that though Justice Naik knew about the illness of Shinde, he somehow seems to have assumed, and if we may say so, without justification that Shinde was determined to hold it there, presumably in his absence.
On the 27th March 1970, the next day, he however, after the receipt of the letter of the 24th instant from Side did not take up the attitude that the meeting was being held presumably to keep him away from attending it.
Justice Naik, however, tried to explain his difficulty.
He said : "I am in receipt of your letter dated 24th March 1970.
1 am sorry to note that you have not yet recovered from the effects of your illness.
I do hope you shall soon get well.
803 As for my coming to Indore, I had considered the possibility of my going there by.
air from Bhopal but I am informed that the journey is very bumpy these days due to weather conditions and I do get terribly sick if the journey is bumpy.
I had, therefore, to give up the idea of going by air, and as I cannot spare more than a day for the meeting, I had intimated to you that it would not be possible for me to come to Indore for the meeting scheduled for the 4th of April 1970 at 10.30 a.m. in Indore University.
As for your kindly suggestion that I may by a letter suggest names to you for your consideration, I am of opinion that it would not only not be fair to the persons whose names I may suggest but also not be in keeping with the letter and spirit of the Saugar University Act.
With kind regards".
This letter clearly negatives the assumption in the High Court 's order that Shinde was trying to keep out Justice Naik from the meeting.
On the other hand, Shinde in that letter had requested Justice Naik to suggest names of persons to be considered which prima facie negatives any intention on his part to keep Justice Naik away from the meeting.
There is also nothing in the materials on the record to show that the correspondence cited above was persued by the Chancellor either at the time when the show cause notice was given to the appellant or at the time of making the impugned Order.
It cannot, therefore, be assumed that the Governor was influenced by the above correspondence.
It is rather unfortunate that the appellant 's Writ Petition was dismissed in limited and without a proper appreciation of all the relevant facts.
There is little doubt that the impugned Order made by the Chancellor was based entirely on the legality of the meeting where only two out of three members were present when the name of the appellant was recommended.
The High Court delivered into the correspondence to sustain the order of the Chancellor on grounds other than those relied upon by him in that order for dismissing the Writ Petition in limine, which in our view, was not justified.
It is also not denied that the meeting held by two of the three members on the 4th April 1970 was legal because sufficient notice was given to all the three members.
If for one reason or the other one of them could not attend, that does not make the meeting of others illegal.
In such circumstances, where there is no rule or regulation or any other provision for fixing the quorum, the presence of the majority of the members would constitute it a valid meeting and matters considered there at cannot be held to be invalid.
804 This proposition is well recognised and is also so stated in Halsbury 's Laws of England, Third Edition (Vol.
IX, page 48, Para 95).
It is, therefore, unnecessary to refer to any decisions on the subject.
In the view we have taken, the appeal is allowed with costs against respondent 3, the order of the Chancellor revoking the appointment of the appellant is set aside and the appellant is declared to have been validly appointed as Vice Chancellor Of the Saugar University as from the 22nd June 1970.
G.C. Appeal allowed.
| IN-Abs | From a panel of names recommended by a Selection Committee constituted under section 13(2) of the University of Saugar Act, 1946 the then Chancellor of the University appointed the appellant as Vice Chancellor.
Under Ordinance No. 1 of 1970 the Governor of Madhya Pradesh became, the Chancellor of the University.
Exercising his powers of review under section 43A of the Act the Governor, as Chancellor, after notice to the appellant, set aside his appointment as Vice Chancellor on 'the ground that only two out of the three members of the Selection Committee were present when his name was included in the panel.
The appellant filed a writ petition in the.
High Court.
The High Court called for the correspondence between the Chairman of the Committee and the member who was absent at the meeting.
On the basis of a letter written by the absent member to the Chairman, the High Court can to the conclusion that the member had been deliberately kept out of the meeting and held that the Chancellor was justified in the opinion formed by him under section 43 (A).
Allowing the appeal, this Court, HELD : (i) The High Court sustained the order of the Chancellor on grounds other than those relied upon by him in that order, for dismissing the writ petition in limine].
The order made by the Chancellor was based entirely an the legality of the meeting where only two of the three members were present.
Then was nothing to show that the corres pondence was persued by the Chancellor.
Further, the correspondence did not support the assumption in the High Court 's order that the Chairman was trying to keep out any member from the meeting.
[803 D G] (ii) If for one reason or the other one of the members of the Committee, after due notice, could not attend, it did not make the meeting of the others illegal.
in such circumstances where there was no rule or regulation or any other provision for fixing quorum in the presence of the majority of the members would constitute a valid meeting and matters considered thereat could not be held to be invalid.
[803 H]
|
Appeals Nos. 2024 and 2025 of 1972.
786 C. K. Daphtary, R. C. Misra, Advocate General for the State of Orissa, Santosh Chatterjee and G. section Chatterjee, for the appellants (in both the appeals).
M. C. Setalvad and Vinoo Bhagat, for respondent No. 1 (in C.A. No. 2024 of 1971).
Vinoo Bhagat, for respondent No. 1 (in C.A. No. 2025 of 1971).
The Judgment of the, Court was delivered by Hegde, J.
These appeals by certificate raise common questions of law for decision.
The questions of law arising for decision can be more conveniently brought out if the material facts are first set out.
It is sufficient, if we refer to the facts in Civil Appeal No. 2024 of 1971.
The 1st respondent in Civil Appeal No. 2024 of 1971 is carrying on the business of selling country liquor. 'In pursuance of the order made by the State of Orissa, the Excise Commissioner notified on January 8, 1971 that the exclusive privilege of selling by retail the country liquor in the eight specified shops in the Cuttack District for the period from April 1, 1971 to March 31, 1972 will be sold by public auction on February 15, 1971 and on the following days.
The auction was accordingly held on the notified day.
The 1st respondent was the highest bidder for those eight shops.
His bids were provisionally accepted by the Collector subject to confirmation by the Government.
The Government rejected those bids being of the view that inadequate price had been offered as a result of collusion between the bidders.
It ordered the Excise Commissioner to call for tenders in respect of those shops.
After the tenders were duly received, the Government accepted the tender in respect of one shop and rejected the other tenders as it was again of the opinion that the price offered was inadequate.
Thereafter it sold the seven shops by negotiating with some of the tenderers.
The price ultimately fetched was substantially more than that offered either at the auction or as per tenders.
Thereafter the 1st respondent moved the, High Court of Orissa under article 226 of the Constitution for a direction to the Government to confirm his bids and cause the necessary licences to be issued to him.
Various pleas were taken in support of the relief asked for.
Such of them that were pressed before us will be referred to later.
The Government resisted that application.
The High Court came to the conclusion that the Government had no power to refuse to confirm the bids of the highest bidders except on good grounds and the ground that had commended itself to the Government for refusing to confirm the bids were irrelevant.
It 787 also opined that the absolute power conferred on the Government to confirm or refuse to confirm the highest bids without giving any reason was an unguided power and consequent by violative of articles 14 and 19 (1) (g) of the Constitution.
The High Court was further of the opinion that monetary considerations were irrelevant for 'deciding the question whether the highest bid should be confirmed or not.
Aggrieved by that decision, the State of Orissa has come up in appeal.
Before proceeding to pronounce on the contentions advanced at the hearing, it is convenient to set out the relevant provisions of law as well as the orders passed by the Government under section 29 of the Bihar and Orissa Excise Act, 1915 (as amended upto October 6, 1970) (to be hereinafter referred to as the Act).
The preamble to the Act reads "Whereas it is expedient to amend and reenact the law in the Province of Bihar and Orissa relating to the import, export, transport, manufacture, possession, and sale of certain kinds of liquor and intoxicating drugs; And whereas the previous sanction of the Governor General has been obtained,, under section 5 of the Indian Councils Act, 1892, to the passing of this Act; It is hereby enacted as follows Section 22 deals with the grant of exclusive privilege of manufacture and sale of country liquor or intoxicating drugs.
To the extent it is material for our present purpose, it reads : "The State Government may grant to any person, on such conditions and for such period as it may think fit, the exclusive privilege (a). . . . . . (b). . . . . . (c). . . . . . (d). . . . . . (e) of manufacturing and supplying wholesale and selling retail, any country liquor or intoxicating drug within any specified local area : Provided that public notice shall be given of the intention to grant any such exclusive privilege, and that any objections made by any person residing within the area affected shall be considered before an exclusive 788 privilege is granted." Sub section
(2) says : "No grantee of any privilege under sub section
(1) shall exercise the same unless or until he has received a license in that behalf from the Collector or the Excise Commissioner.
" Section 29 deals with payment for grant of exclusive privilege.
It reads : "(1) Instead of or in addition to, any duty leviable under this Act, the State Government may accept payment of a sum in consideration of the grant.
of any exclusive privilege under section 22.
(2) The sum payable under sub section
(1) shall be determined as follows : (a) by calling tenders or by auction or otherwise as the State Government may, by general or special order direct; and (b) by such authority and subject to such control as may be specified in such order." Excise revenue is defined in section 2(9) : " "Excise revenue" means revenue derived or derivable from any duty, fee, tax, payment other than a fine imposed by a Criminal Court or confiscation imposed or ordered under this Act or any other law for the time being in force relating to liquor or intoxicating drugs and includes any payment to be made to the State Government under section 29.
" In exercise of the powers conferred by section 29(2) of the Act, the State Government issued an order on January 6, 1971 directing that any sum payable under the aforesaid section for grant of the exclusive privilege of manufacturing and selling by retail of country liquor shall, unless otherwise directed by the State Government, in any particular case or cases for any reason, 'be determined by auction to be held in accordance with the procedure specified below: "(i) the dates and centers for the auction shall be fixed and notified by the Excise Commissioner with the prior approval of Government and the Collector shall then issue notice for auction and give wide publicity to the same in such manner as ' he considers necessary, 15 days before the date fixed for commencement of the auction; (ii) the auction shall determine the amount of monthly consideration money and shall ordinarily 789 be conducted by the Collector and in his absence by the Additional District Magistrate; Provided that the State Government in by depute an officer from head quarters to aid and advise the officer conducting such sales; (iii) the officer conducting the auction may satisfy himself as to the solvency of any bidder and may not allow a person of doubtful solvency or a person to whom grant of a licence for retail sale of any intoxicant is prohibited under Orissa Excise Rules, 1965 to offer bids in the auction; (iv) the officer conducting the auction shall be at liberty to close the auction if he is satisfied that, there has not been sufficient or fair competition in which case he may publicly adjourn the auction, to a specified hour on the following day or on ' some other convenient day to be notified by him in the auction hall; (v) the highest bid in an auction shall ordinarily be, accepted provisionally by the Collector subject to confirmation by the State Government and in case where the officer conducting the auction, refuses to accept the highest bid as offered, he shall record the reasons for such non acceptance and shall report forthwith the same to the Excise Commissioner for further action after receipt of advances from the highest bidder; (vi) when any bid in an auction for an exclusive privilege or privileges is provisionally accepted by the Collector, the bidder shall deposit two months ' consideration money as an advance deposit which will be refunded in case the provisional acceptance is not confirmed by the State Government.
No sale shall be deemed to be final unless confirmed by the State Government who shall be at liberty to accept or reject any bid without assig ning any reason therefore; (vii) no licence for any exclusive privilege shall be granted until acceptance of the bid is confirmed by the State Government; (viii) when any bid in an auction for any exclusive privilege is provisionally accepted but the advance deposit is not paid, the exclusive privilege shall 790 be put to reauction as soon as possible at the risk and loss of the defaulter; (ix) all bids in an Auction shall be offered by the bidder in person or by his agent legally authorised for the purpose.
" As mentioned earlier in pursuance of the above order, the Collector held an auction in respect of the shops mentioned earlier.
The highest bidder had made the necessary deposits.
the Government did not accept his bids.
On March 7, 1971, the Government issued the following order "Whereas for determining the sums payable for the grant of exclusive privilege of manufacturing and selling by retail of country liquor auction had been held in the district of Cuttack in accordance with the procedure laid down in the order of the Government of Orissa in the Excise Department No. S.R.O. 12/71, dated the 6th January 1971; Whereas due to collusive bids among the bidders at the said auction it is not possible to determine the said sums in the aforesaid manner; Now, therefore, in exercise of the powers conferred by sub section (2) of Section 29 of the Bihar and Orissa Excise Act, 1915 (Bihar and Orissa Act 2 of 1915) read with the Order No. S.R.O. 12/71, dated the 6th January, 1971, the State Government do hereby direct that the procedure for determining the aforesaid sum in respect of the grant of exclusive privilege of manufacturing and selling by retail of country liquor in the local areas specified in the Schedules I for the year 1971 72 shall be as laid down in Schedule II hereof SCHEDULE I . .
SCHEDULE II 1.
The sum payable under sub section (1) of Section 29 of the said Act for grant of exclusive privilege of manufacturing and selling by retail of country liquor in the aforesaid local areas shall be determined by the Excise Commissioner by calling tenders which may be 791 for individual local area or for lots of such area as the Excise Commissioner may consider proper; 2.
Tender notice shall be issued by the Excise Com missioner and published in the Notice Board of his office the C uttack Collectorate and the offices of Sub Divisional Officers in that district and shall also be widely published in such manner as the Excise Commissioner considers necessary.
The tender notice shall, among other things,, mention that it is open to the State Government not to accept any tender or to order for calling fresh tenders or otherwise for such reason as they deem proper in the public interest; 4 to 8. . . . . . . 9.
The Excise Commissioner shall prepare a list of all the tenders received and submit the list with his recommendations of any particular tender with sufficient reasons alongwith the tender papers to the State Government for approval.
The tenderers whose tenders have been recommended for acceptance shall deposit two month 's consideration money as an advance deposit which will be refunded in case their tenders are not approved by Government.
10. . . . . . . " As mentioned earlier, the Government accepted the tender in respect of only one shop and sold the exclusive privilege to sell country liquor in other shops by negotiation.
Before us the writ petitioners did not challenge the validity of any of the provisions in the Act; possibly in their own interest.
They are not interested in raising any contention which might vitiate the auctions held.
The contentions urged on behalf of the writ petitioners have to be examined, in the background that the provisions of the Act are not contended to be invalid.
One of the contentions taken on behalf of the writ petitioners was that the power retained by the Government "to accept or to reject any bid without assigning any reason therefore" in cl.
(6) of the order made by the Government on January 6, 1971 in exercise of its powers under section 29(2) of the Act was an arbitrary power and therefore it is violative of articles 14 and 1 9 ( 1 (g).
This contention has been upheld by the High Court.
It was urged on behalf of the writ petitioners that they have a fundamental right to carry on trade or business in country liquor.
That right can 792 be regulated only by imposing reasonable restrictions in the interest of the general public.
Restrictions imposed by the order in question cannot be considered as reasonable restrictions in the interest of the general public.
It was further urged that the power retained by the Government to accept or to reject the highest bid without assigning any reason is an unguided power and hence it is violative of article 14.
These contentions were accepted by the High Court.
To us, none of these contentions appear to be well founded.
As seen earlier section 22 of the Act confers power on the Government to grant to any person on such conditions and for such period as it may think fit the exclusive privilege of selling in retail any country liquor.
Section 29 empowers the Government to accept payment of a sum in consideration for the grant of any exclusive privilege under section 22 either by calling tenders or by auction or otherwise as it may by general or special order direct.
The, powers conferred on the State Government by section 22 and section 29 are absolute powers.
As seen earlier, the validity of those provisions has not been challenged before us.
Under section 29(2) the Government had power to dispose of any of the exclusive privileges mentioned in section 22 either by calling for tenders or by auction or otherwise as it may by general or special order direct.
That being the amplitude of the power of the Government, we fail to see how the Government can be said to have conferred on itself arbitrary power under clause (6) of its order made on January 6, 1971, when it provided that : " No sale shall be deemed to be final unless confirmed by the State Government who shall be at liberty to accept or reject any bid without assigning any reason therefore.
" The power that the government reserved for itself under that clause is nothing more than what was conferred on it by the legislature under section 22 and section 29 of the Act.
It is not possible to challenge the validity of the order made without challenging the validity of section 29 itself.
It is true that this Court has ruled that the right to trade in intoxicating drugs is also a right to carry on any trade or business within the meaning of article 19 (1) (g) see Krishna Kumar Narula vs Jammu Kashmir State and ors(1).
At the same time, it was held by this Court in Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer and ors.(2) that for determining reasonable restrictions within the meaning of Art ' 19 (6) of the Constitution on the right given under cl.
19 (1) (g) regard must be had to the nature of the business and the conditions prevailing in a particular trade; State has power to prohibit trades which are illegal or immoral or injurious to the health and (1) ; (2) ; 793 welfare of the public and there is no inherent right in a citizen to sell intoxicating liquors by retail.
In that case the court held that the provisions in the Excise Regulation 1 of 1915 purporting to regulate trade in liquor in all its different spheres are not invalid.
It was further held in that case that the charge of licence fee by public auction is more in the nature of a tax than a licence fee though it is described as a licence fee.
One of the purposes of the Regulation is to raise revenue.
Revenue is collected by the grant of contracts to carry on trade in liquor and these contracts are sold by auction.
The grantee is given a licence on payment of the auction price.
The Regulation specially authorises this.
The decision in Lala Harichand Sarda vs Mizo District Council and anr.
(1) relied on by the writ petitioner does not bear on the point under consideration.
it deals with power to grant or refuse to grant licence to trade in some ordinary commodity under Lushai Hill Distt.
Regulation.
Even apart from the power conferred on the Government under sections 22 and 29, we fail to see how the power retained by the Government under cl.
(6) of its order dated January 6, 1971 can be considered as unconstitutional.
As held by this Court in Cooverjee Bharucha 's case (supra), one of the important purpose of selling the exclusive right to sell liquor in wholesale or retail is to raise revenue.
Excise revenue forms an important part of every State 's revenue.
The Government is the guardian of the finances of the State.
It is expected to protect the financial interest of the State.
Hence quite naturally, the legislature has empowered the Government to see that there is no leakage in its revenue.
It is for the.
Government to decide whether the price offered in an auction sale is adequate.
While accepting or rejecting a bid, it is merely performing an executive function.
The correctness of its conclusion is not open to judicial review.
We fail to see how the plea of contravention of article 19(1)(g) or article 14 can arise in these cases.
The Government 's power to sell the exclusive privileges set out in section 22 was not denied.
It was also not disputed that those privileges could be sold by public auction.
Public actions are held to get the best possible price. 'Once these aspects are recognised, there appears to be, no basis for contending that the owner of the privileges in question who had offered to sell them cannot decline to accept the highest bid if he thinks that the price offered is inadequate.
There is no concluded contract till the bid is accepted.
Before there was a concluded contract, it was open to the bidders to withdraw their bids see Union of India and ors.
vs M/s. Bhimsen Walaiti Ram (2) .
By merely giving bids, the bidders had not acquired any vested rights.
The fact that the Government was the seller (1) ; (2) ; 794 does not change legal position once its exclusive right to deal with those privileges is conceded.
If the Government is the exclusive owner of those privileges, reliance on article 19(1)(g) or article 14 becomes irrelevant.
Citizens cannot have any fundamental right to trade or carry on business in the properties or rights belonging to the Government, nor can there be any infringement of article 14, if the Government tries to get the best available price for its valuable rights.
The High Court was wholly wrong in thinking that purpose of sections 22 and 29 of the Act was not to raise revenue.
Raising revenue as held by this Court in Cooverjee Bharucha 's case (supra) was one of the important purposes of such provisions.
The fact that the price fetched by the sale of country liquor is an excise revenue does not change the nature of the right.
The sale in question is but a mode of raising revenue.
Assuming that the question of arbitrary or unguided power can arise in a case of this nature, it should not be forgotten that the power to accept or reject the highest bid is given to the highest authority in the State i.e. the Government which is expected to safeguard the finances of the State.
Such a power cannot be considered as an arbitrary power.
If that power is exercised for any collateral purposes, the exercise of the power will be struck down.
It may also be remembered that herein we are not dealing with a delegated power but with a power conferred by the legislature.
The High Court erroneously thought that the Government was bound to satisfy the Court that there was collusion between the bidders.
The High Court was not sitting on appeal against the order made by the Government.
The inference of the Government that there was a collusion among the bidders may be right or wrong.
But that was not open to judicial review so long as it is not proved that it was a make believe one.
The real opinion formed by the Government was that the price fetched was not adequate.
That conclusion is taken on the basis of Government expectations.
The conclusion reached by the.
Government does not affect any one 's rights.
Hence, in our opinion the High Court misapplied the ratio of the decision of this Court in Barium Chemicals Ltd. and anr.
vs Company Law Board and ors.(1) and Rohtas Industries Ltd. vs section T. Agarwal (2) .
It was next urged that having had recourse to the auction method once, the Government was precluded from either calling for tenders or to sell by negotiation.
The High Court has accepted that contention.
We are unable to agree with the High Court in its conclusion.
Neither the provisions of the Act nor the order issued by the Government lend any support to such a conclusion.
(1) (2) ; 795 Once the Government declines to accept the highest bid, the auction held became useless.
Similar is the effect when the Government refused to accept the highest tender.
That left the Government free to have recourse to other methods.
The power given to the Government by the Act to sell the exclusive privilege in such other manner as it thinks fit is a very wide power.
That power is unrestricted.
It undoubtedly includes the power to sell the privileges in question by private negotiation.
It was urged that before adopting the method of selling the privileges by private negotiation.
The Government is required by section 29 (2) (a) to make an order that the, privileges in question will be sold by private negotiation.
The Government has failed to make such an order.
Hence the sales effected are invalid.
We, are, unable to accept these contentions.
In the cases of public auctions or in the case of calling for tenders, orders from the Government directing its subordinates to notify or hold the auctions or call for tenders is understandable.
Public auctions as well as calling for tenders are done by subordinate officials.
Further due publicity is necessary in adopting those methods.
TOP require the Government to make an order that it is going to sell one or more of the privileges in question by negotiating with some one is to make a mockery of the law.
If the Government can enter into negotiation with any person, as we think it can, it makes no sense to require it to first make an order that it is going to negotiate with that person.
We must understand a provision of law reasonably.
Section 29 (2) (a) does not speak of any order.
It says that "the State Government may by general or special order direct".
The direction contemplated by that provision is a direction to subordinate officials.
It is meaningless to say that the Government should direct itself.
In the result these appeals are allowed and the writ petitions dismissed.
No costs.
V.P.S. Appeals allowed.
| IN-Abs | The first respondent was carrying on business of selling country liquor.
In exercise of the powers conferred by section 29(2) of the Bihar and Orissa Excise Act, 1915, the appellant issued an Order and in pursuance of that Order a date was notified for selling by public auction the exclusive privilege.
of selling by retail, country liquor in 8 shops.
The respondent was the highest bidder but his bid was rejected because the Government was of the view that inadequate prices had been offered as a result of collusion between the bidders.
Thereafter, tenders were called for and the appellant accepted the tender in respect of one shop and rejected the others as it was again of the opinion that the price offered was inadequate.
Thereafter, the remaining 7 shops were ' sold by private negotiation for substantially higher prices.
A writ petition filed by the respondent in the High Court was allowed mainly on the ground that the power centered on the Government by cl.
(vi) of the Order, that no sale shall be deemed to be final unless confirmed by the State who shall be at liberty to accept or reject without assigning any reason, was an unguided power violative of articles 14 and 19(1) (g).
Allowing the appeal to this Court, HELD : (1) Section 22 of the Act confers power on the Government to grant to any person on such conditions and for such period as it may think fit the exclusive privilege of selling in retail country liquor; and section 29 empowers the Government to accept payment in consideration of the grant either by calling tenders or by auction or otherwise as it may by general order direct.
The powers conferred on the State Government by sections 22 and 29 are absolute.
The Government cannot be said to have conferred on itself arbitrary power under cl.
(vi) of its Order, passed under section 29(2), because, the power that the Government reserved for itself under that clause is nothing more than what was conferred on it by the Legislature under the sections.
Since the validity of the sections was not challenged the validity of the Order could not also be challenged.
[792 B F] (2) Even otherwise, one of the important purposes of selling the exclusive right to sell liquor in wholesale or retail is to raise revenue; and excise 'revenue forms an important part of every State 's revenue.
The Government is a guardian of the finances of the State and is expected to protect its financial interests.
The fact that the prices fetched by the sale of the privilege to sell country liquor is an excise revenue does not change the nature of the right in the Government.
Therefore, the 785 Legislature has empowered the Government to see that there is no leakage in the revenue.
It was for the Government to decide whether the price offered in an auction is adequate and the conclusion reached by the Government does not affect anyone 's rights.
[793 D F; 794 F G] (3) Public auctions are held to get the best possible price and there is no completed contract till the bid is accepted.
There is, therefore, no basis for, contending that the owner of the privileges who had offered to sell them cannot decline to accept the highest bid if he thinks that the price offered is inadequate, and, it makes no difference that the Government was the seller.
[793 G H; 794 A] (4) If the Government is exclusive owner of the privileges, the respondent could not rely on article 14 and 19(1)(g), because, citizens cannot have any fundamental right to trade or carry on business in the properties or rights belonging to Government, nor can there be any infringement of article 14 if Government tries to get the best available price for its valuable, rights.
Further there is no inherent right in a citizen to sell intoxicating liquor by retail.
[793 A; 794 A B] Coverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer and Ors., ' ; and Union of India and Ors.
vs M/s. Bhimsen Walait Ram, ; , followed.
(5) Assuming that the question of arbitrary or unguided power can be raised it should be remembered that the power to accept or reject the highest bid is given to the highest authority in the State, namely, the Government, which is expected to safeguard the finances of the State and it is not a case of delegated power but of power conferred by the Legislature.
While accepting or rejecting a bid Government is performing an executive function and the correctness of its conclusion is not open to Judicial review where the power is not used for any collateral purpose.
[793 F , 794 C E] (6) The real conclusion.
of the Government was that the price fixed was inadequate and hence High Court erred in thinking that the Government was bound to satisfy the Court that there was collusion between the bidders.
[794 E F] Barrium Chemicals Ltd. and Anr.
vs Company Law Board and Ors.
[1966] Supp.
S.C.R. 311 and Rohtas Industries Ltd. vs section T. Agarwal; , referred to.
(7) The Government was not precluded, having had recourse to the auction method once, from either calling for tender or selling by negotiations.
Once the Government declines to accept the highest bid or the tender price offered, the government was free to have recourse to other methods.
The pow(* given to the Government to sell in such other manner as it thinks fit is a very wide and unrestricted power and includes within it the power to; sell the privilege by private negotiation.
[795 A B] (8) The Government is not required by section 29 (2) (a) to make an order that the privilege will be sold by private negotiation, since, it makes no sense to require Government to first make an order that it is going to negotiate.
The section only says that the State Government 'may by general or special order direct ' and the direction contemplated is one to subordinate officials and not to itself.
[795 D F]
|
ns Nos. 13, 14, 70, 83, 437, 438, 439, 440, 441, 442, 443 and 444 of 1971.
Under Article 32 of the Constitution of India for the enforce, ment of the Fundamental Rights.
R. Gopalakrishnan, for the petitioners (in W.Ps.
Nos. 13 and 14 of 1971).
K. Parasaran and K. Jayaram, for the petitioners (in W.P. No. 70.of 1971).
M. Natesan and K. Jayaram, for the petitioners in (W.P. No. 83 of 1971).
K. Parasaran and M. Narasimhan, for the petitioners (in W.P. No. 437 of 1971).
V. G. Ramchandran and M. section Narasimhan, for the petitioners (in W.P. Nos. 438 and 444 of 1971).
M. Natesan and M. section Narasimhan, for the petitioners (in W.Ps.
Nos. 439 and 443 of 1971).
section Annadurai Ayyangar and M. section Narasimhan, for the petitioners (in W.P. No. 441 of 1971).
N. A. Palkhiwala, A. J. Rana and M. section Narasimhan, for the petitioners (in W.P. No. 442 of 1971).
M. section Narasimhan, for the petitioner (in W.P. No. 440 of 1971).
818 S Govind Swaminadhan, Advocate, General for the State of Tamil Nadu, section Mohan, N. section Sivan and A. V. Rangam, for the respondent (in all the petitions).
The Judgment of the Court was delivered by Palekar, J.
In these 12 petitions under Article 32 of the Constitution filed by the hereditary Archakas and Mathadhipatis of some ancient Hindu Public temples in Tamil Nadu the validity of the Tamil Nadu Hindu Religious and Charitable Endowments (Amendment) Act, 1970 (hereinafter referred to as the Amendment Act, 1970) is called in question, principally, on the ground that it violates their freedom of religion secured to them under Articles 25 and 26 of the Constitution.
The validity of the Amendment Act had been also impugned on the ground that it interfered with certain other fundamental rights of the petitioners but that ease was not pressed at the time of the hearing.
The temples with which we are concerned are Saivite and Vaishnavite temples in Tamil Nadu.
Writ Petitions 70, s3, 437, 438, 439, 440 441, 442, 445 and 444/71 are filed by the Archakas, and I Writ Petitions 13 and 14/1971 are filed by the Mathadhipatis to whose Math some temples are attached.
As, common questions were involved in all these petitions, arguments were addressed principally in Writ Petitions 13/1971 and 442/ 1971, and we are, assured by counsel for both sides that they cover the points involved In all the other petitions.
The State Legislature of Tamil Nadu enacted The Tamil Nadu Hindu religious and Charitable Endowments Act, 1959 being (Tamil Nadu Act xxii of 1959) hereinafter referred to as the principle Act.
It came into force on December 2, 1959.
It was an Act to amend and consolidate the law relating, to the administration and governance of Hindu Religious an Charitable Institutions and Endowments in the State of Tamil Nadu.
it applied to all Hindu religious public institutions and endowments in the we of Tamil Nadu and repeated several Acts which had previously governed the administration of Hindu Public Religious Institutions.
It is sufficient to say here that the provisions of the Principal Act applied to the temples in the present Petitions and the petitioners have no complaint against any of its provisions.
Section 55 of that Act provided for the appointment of office holders and servants in such temples, and section 56 provided for ;he, punishment of office holders kind servants.
Section 55, broadly speaking, gave the trustee of the temple the power to appoint the office holders or servants of the temple and ;also provided that where the office or service is hereditary the person next in the line of succession shall be entitled to succeed.
In only 819 exceptional cases the trustee was entitled to depart from the, principles of next in the line of succession, but even so, the, trustee was under an obligation to appoint a fit person to perform the functions of the office or perform the service after having due, regard to the claims of the members of the family, Power to make rules was given to Government by section 116 (2) (xxiii) and it was open to the Government to make rules providing for the qualifications to be possessed by the Officers and servants for appointment to non hereditary offices in religious institutions, the qualifications to be possessed by hereditary 'servants for succession to office and the conditions of service of all such officers and servants.
Under this rule making power the State Government made the Madras Hindu Religious Institutions (Officers and Servants) Service Rules, 1964.
Under these rules an Archak or Pujari of the deity came under the definition of 'Ulthurai servant '. 'Ulthurai servant ' is define as, a servant whose duties relate mainly to the performance of rendering assis tance in the performance, of pujas, rituals and other services to the deity, the recitation of mantras, vedas, prabandas, the varams and similar invocations and the performance of duties connected with such performance of recitation.
Rule 12 provided that every 'ulthurai servant ', whether hereditary or nonhereditary whose duty it is to perform pujas and recite mantras, vedas, prabandams, thevarams and other invocations shall, before succeeding, or appoint to an office, obtain a certificate of fitness for performing his office, from the head of an institution imparting instructions in Agamas and ritualistic matters and recognised by the Commissioner, by general or special order or from the head of, a math recognised by the Commissioner, by general or special order, or such other person as may be designated by the Commissioner, from time to time, for the purpose.
By this rule the proper worship in the temple, was secured whether the Archaka or Pujari was a hereditary Archaka or Pujari or not.
Section 107 of the Act emphasized that nothing contained in the Act shall, save as otherwise provided in section 106 and in clause (2) of Article 25 of the Constitution, be deemed to confer any power or impose any duty in contravention of the rights conferred on any religious denomination or any section thereof by Article 26 of the Constitution.
Section 106 deals with the removal of discrimina tion in the matter of distribution of prasadam or theertham to the Hindu worshippers.
That was a reform in the right direction and there is no challenge to it.
The Act as a whole, it is conceded, did not interfere with the religious usages and practices of the temples.
The Principal Act of 1959 was amended in certain respects by the Amendment Act of 1970 which came into, force on January 820 8, 1971.
Amendments were made to sections 55, 56 and 116 of the Principal Act and some consequential provisions were made in view of those amendments.
The Amendment Act was enacted as a step towards social reform on the recommendation of the Committee on Untouchability, Economic and Educational Development of the Scheduled Castes.
The Statement of Objects and Reasons which are reiterated in the counter affidavit filed on behalf of the State of Tamil Nadu is as follows : "In the year 1969 the committee on untouchability, Economic and Educational Development of the Scheduled Castes has suggested in its report that the hereditary priesthood in the Hindu Society should be abolished, that the system can be replaced by an ecclesiastical Organisation of men possessing the requisite educational qualifications who may be trained in recognised institutions in priesthood and that the line should be open to all candidates irrespective of caste, creed or race.
In Tamil Nadu Archakas, Gurukkals and Poojaries are all Ulthurai servants in Hindu temples.
The duties of Ulthurai servants relate mainly to the performance of poojas, rituals and other services to the deity, the recitation of mantras, vedas, prabandas, the varams and similar invocations and the performance of duties connected with such performance and recitations.
Sections 55 and 56 of the Tamil Nadu Hindu Religious and Charitable, Endowments Act, 1959 (Tamil Nadu Act 22 of 1959) provide for appointment of office holders and servants in the religious institutions by the trustees by applying the rule of hereditary succes sion also.
As a step towards social reform Hindu temples have already been thrown open to all Hindus irrespective of caste. .
In the light of the recommendations of the Committee and in view of the decision of this Court in Gazula Dasaratha Rama Rao vs State of Andhra Pradesh & Ors.(1) and also as a further step towards social reform the Government considered that the here ditary principle of appointment of all office holders in the Hindu temples should be abolished and accordingly it proposed to amend sections 55, 56 and 116 of the Tamil Nadu Hindu Religious and Charitable Endowments Act, 1959 (Tamil Nadu Act XXII of 1959).
It is the complaint of the petitioners that by purporting to introduce social reform in the matter of appointment of Archakas and Pujaris, the State has really interfered with the religious (1) ; 821 practices of Saivite and Vaishnavite temples, and instead of introducing social reform, taken measures which would inevitably lead to defilement and desecration of the temples.
To appreciate the effect of the Amendment Act, it would be more convenient to set out the original sections 55, 56 and 116 of the Principal Act and the same sections as they stand after the amendment.
Unamended Section Sec.
55 Appointment of office holders and servants in religious institutions.
(1) Vacancies, whether permanent or temporary, among the office holders or servants of a religious institution shall be filled up by the trustee in cases where the office or service is not here ditary.
(2)In cases where the office or service is hereditary, the person next in the line of succession shall be entitled to succeed.
(3) Where, however, there is a dispute respecting the right of succession, or where such vacancy cannot be filled up immediately or where the person entitled to succeed is a minor without a guardian fit and willing to act as such or there is a dispute respecting the person who is entitled to act as guardian, or where the hereditary officeholder or servant is on account of incapacity illness or otherwise unable to perform the functions of the office or perform the service, or is suspended from his office under sub section (1) of section 56, the trustee may appoint a fit person to perform the functions of the office or perform the service, until the disability of the office holder or servant ceases or another person succeeds to the office or service, as the case may be.
Amended Section Sec.
55 Appointment of office holders and servants in religious institutions.
(1) Vacancies, whether permanent or temporary among the office holders or servants of a religious institution shall be filled up by the trustee in all cases.
Explanation: The expression 'Office holders or servants shall include archakas and poojaris. ' (2) No person shall be entitled to appointment to any vacancy referred to in sub section (1) merely on the ground that he is next in the line of succession to the last holder of office.
(3) Omitted.
822 Explanation : In making any appointment under this subsection, the trustee shall have due regard to the claims of members of the family, if any, entitled to the succession.
(4) Any person aggrieved by an order of the trustee under sub section (3) may, within one month from the date of the receipt of the order by him, appeal against the order to the Deputy Com missioner.
56 Punishment of office holders and servants in religious institutions.
(1) All Office holders and servants attached to a religious institution or in receipt of any emolument or prequisite therefrom shall, whether the office or service is hereditary or not, be controlled by the trustee; and the trustee may, after following the prescribed procedure, if any, fine, suspend, remove or dismiss any of them for the breach of trust incapacity, disobedience of orders: neglect of duty, misconduct or other sufficient cause.
(2) Any office holder or servant punished by a trustee under sub section(1) may, within one month from the date of the receipt of the order by him, appeal against the order to the Deputy Commissioner.
(3) A hereditary officeholder or servant may, within one month from the date of the receipt by him of the order of the Deputy Commissioner under sub section (2), prefer an appeal to the Commissioner against such order.
116 (xxiii) (1) The Government may, by notification, make rules to carry out the purposes of this act.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for (Xxiii) The qualifications to be possessed by the officers and servants ' for appointment to nonhereditary offices in religious in stitutions, the qualifications to be possessed by hereditary servants for succession to office and the conditions of service of all such officers and servants.
(4) Any person aggrieved by an order of trustee under section (1) may within one month from the date of receipt of the order by him appeal against the order of the, Deputy Commissioner.
56 Punishment of office holders and servants in religious institutions (1) All office holders and servants attached to a religious institution or in receipt of any emolument or perquisite therefrom shall be controlled by the Trustee and the trustee may after following the prescribed procedure, if any, fine, suspend, remove or dismiss any of them for breach of trust, incapacity, disobedience of orders, neglect of duty, misconduct or other sufficient cause.
(2) Any office holder or servant Punished by a trustee under sub section (1) may within one month from the date of receipt of order by him appeal against the order to the Deputy Commissioner.
(3) Omitted.
II 6 (xxiii) (xxiii) The qualifications to be possessed by the officers and servants for appointment to offices in religious institution and the conditions of service of all such officers and servants.
823 It is clear from a perusal of the above provisions that the Amendment Apt does away with the hereditary right of succession to the Office of Archaka even if the, Archaka was qualified under Rule 12 of the Madras Hindu Religious Institutions (Officers and Servants) Service Rules, 1964.
It is claimed on behalf of the petitioners that as a result of the Amendment Act, their fundamental rights under Article 25(1) and Article 26(b) are violated since the effect of the amendment is as follows : (a) The freedom of hereditary succession to the office of Archaka is abolished although succession to it is an essential and integral part of the faith of the Saivite and Vaishnavite worshippers.
(b) It is left to the Government in power to prescribe or not to prescribe such qualifications as they may choose to adopt for applicants to this religious office while the Act itself gives no indication whatever of the principles on which the, qualifications should be based.
The statement of Objects and Reasons which is adopted in the counter affidavit on behalf of the State makes it Clear that not only the scope but the object of the Amendment Act is to over ride the exclusive right of the denomination to manage their own affairs in the matter of religion by appointing Archakas belonging to a specific denomination for the purpose of worship (c) The Amendment Act gives the right of appoint ment for the first time to the trustee who is under the control of the Government under the provisions of the Principal Act and this is the very negation of freedom of religion and the principle of non interferance by the State as regards the practice of religion and the right of a denomination to manage its own affairs in the matter of religion.
Before we turn to these questions, it will be necessary to refer to certain concepts of Hindu religious faith and practices to understand and appreciate, the position in law.
The temples with which we are concerned are public religious institutions established in olden times.
Some of them are Saivite temples and the others are Vaishnavite temples, which means, that in these temples God Shiva and Vishnu in their several manifestations are Worshipped.
The image of Shiva is worshipped by his worshippers who are called Saivites and the image of Vishnu is worshipped by his worshippers who are known as Vaishnavites.
The institu 824 tion of temple worship has an ancient history and, according to Dr. Kane, temples of deities had existed even in the 4th or 5th century B.C. (See : History of Dharmasastra Vol.
II Part II page 710. ) With the construction of temples the institution of Archakas also came into existence, the Archakas being professional men who made their livelihood by attending on the images.
Just when the cult of worship of Siva and Vishnu started and developed into two distinct cults is very difficult to say, but theme can be no doubt that in the times of the Mahabharata these cults were separately developed and there was keen rivalary between them to such an extent that the Mahabharata and some of the Puranas endeavoured to inculcate a spirit of synthesis by impressing that there was no difference between the two deities.
(See page 725 supra.) With the establishment of temples and the institution of Archakas, treatises on rituals were compiled and they are known as 'Agamas '.
The authority of these Agamas is recognised in several decided cases and by this Court in Sri Venkataramana Devaru vs The State of Mysore(1).
Agamas are described in the last case as treatises of ceremonial law dealing with such matters as the construction of temples, installation of idols therein and conduct of the worship of the deity.
There are 28 Aganias relating to the Saiva temples, the important of them being the Kamikagama, the Karanagama and the Suprabedagama.
The Vaishnavas also had their own Agamas.
Their principal Agamas were the Vikhanasa and the Pancharatra.
The Agamas contain ela borate rules as to how the temple is to be constructed, where the principal deity is to be consecrated, and where the other Devatas are to be installed and where the several classes of worshippers are to stand and worship.
Where the temple was constructed as per directions of the Agamas the idol had to be consecrated in accordance with an elaborate and complicated ritual accompanied by chanting of mantras and devotional songs appropriate to the deity.
On the consecration of the image in the temple the Hindu worshippers believe that the Divine Spirit has descended into the image and from then on the image of deity is fit to be worshipped.
Rules with regard to daily and periodical worship have been laid down for securing the continuance of the Divine Spirit.
The rituals have a two fold object.
One is to attract the lay worshipper to participate in the worship carried on by the priest or Archaka.
It is believed that when a congregation of worshippers participates in the worship a particular attitude of aspiration and devotion is developed and confers great spiritual benefit.
The second object is to preserve the image from pollution, defilement or desecration.
It is part of the religious belief of a Hindu worshipper that when the image is polluted or defiled the Divine Spirit in the image diminishes or even vanishes.
That is a situation (1) ; 825 which every devotee or worshipper looks upon with horror.
Pollution or defilement may take place in variety of ways.
According to the Agarnas, an image becomes defiled if there is any departure or violation of any of the rules relating to worship.
In fact, purificatory ceremonies have to be performed for restoring the sanctity of the shrine ; (910)].
Worshippers lay great, store by the rituals and whatever other people,.
not of the faith, may think about these rituals and ceremonies, they are a part of the Hindu Religious faith and cannot be dismissed as either irrational or superstitious.
An illustration of the importance attached to minor details of ritual is found in the case of His Holiness Peria Kovil Kelvi Appan Thiruvenkata Ramanuja Pedda Jiyyangarlu Varlu vs Prathivathi Bhayankaram Venkatachrlu and others(1) which went up to the Privy Council.
The contest was between two denominations of Vaishnava worshippers of South India, the Vadagalais and Tengalais.
The temple was a Vaishnava temple and the controversy between them involved the question as to how the invocation was to begin at the time of worship and which should be the concluding benedictary verses.
This gives the measure of the importance attached by the worshippers to certain modes of worship.
The idea most prominent in the mind of the worshipper is that a departure from the traditional rules would result in the pollution or defilement of the image which must be avoided at all costs.
That is also the rationale for preserving the sanctity of the Garbhangriha or the sanctum sanctorum.
In all these temples in which the images are consecrated, the Agamas insist that only the qualified Archaka or Pujari step inside the sanctum sanctorum and that too after observing the daily disciplines which are imposed upon him by the Agamas.
As an Archaka he has to touch the image in the course of the worship and it is his sole right and duty to touch it.
The touch of any body else would defile it.
Thus under the ceremonial law pertaining to temples even the question as to who is to enter the Garbhagriha or the sanctum sanctorum and who is not entitled to enter it and who can worship and from which Place in the temple are all matters of religion as shown in the above decision of this Court.
The Agamas have also rules with regard to the Archakas.
In Saivite temples only a devotee of Siva, and there too, one belonging to a particular denomination or group or sub group is entitled to be the Archaka.
If he is a Saivite, he cannot possibly be an Archaka in a Vaishnavite Agama temple to whatever caste he may belong and however learned he may be.
Similarly, a Vaishnavite Archaka has no place as an Archaka in a Saivite temple.
Indeed there is no bar to a Saivite worshipping in a Vaishnavite temple as a lay worshipper or vice versa.
What the Agamas pro (1) 73 Indian Appeals 156.
826 hibit is his appointment as an Archaka in a temple, of a different denomination ' DR.
Kane has quoted the Brahmapurana on the topic of Punah pratistha (Re consecration of images in temples) at page 904 of his History of Dharmasastra referred to above.
The Brahmapurana says that "when an image is broken into two or is reduced to particles, is burnt, is removed from its pedestal, is insulted, has ceased to be worshipped, is touched by beasts like donkeys or falls on impure ground or is worshipped with mantras of other detities or is rendered impure by the touch of outcastes and the like in these ten contingencies, God ceases to indwell therein.
" The Agamas appear to be more severe in this respect.
Shri R. Parthasarthy Bhattacharya, whose authority on Agama literature is unquestioned, has filed his affidavit in Writ Petition No. 442 of 1971 and stated in his affidavit, with special reference to the Vaikhanasa Sutra to which he belongs, that according to the texts of the Vaikhansa Shastra (Agama), persons who are the followers of the four Rishi traditions of Bhrigu, Atri, Marichi and Kasyapa and born of Vaikhanasa parents are alone competent to do puja in Vaikhanasa temples of Vishnavites.
They only can touch the idols and perform the ceremonies and rituals.
None others, however, high placed in society as pontiffs or Acharyas, or even other Brahmins could touch the idol, do puja or even enter the Garbha Griha.
Not even a person belonging to another Agama is competent to do puja in Vaikhanasa temples.
That is the general rule with regard to all these sectarian denominational temples.
It is, therefore, manifest that the Archaka of such a temple besides being proficient in the rituals appropriate to the worship of the particular deity, must also belong, according to the Agamas, to a particular denomination.
An Archaka of a different denomination is supposed to defile the image by his touch and since it is of the essence of the religious faith of all worshippers that there should be no pollution or defilement of the image under any circumstances, the Archaka undoubtedly occupies in important place in the matter of temple worship.
Any State action which permits the defilement or pollution of the image by the touch of an Archaka not authorised by the Agamas would violently interfere with the religious faith and practices of the Hindu worshipper in a vital respect, and would, therefore, be prima facie invalid under Article 25(1) of the Constitution.
This Court in Sardar Syadna Taher Saifuddin Saheb vs The State of Bombay(1) has summrised the position in law as follows (pages 531 and 532).
"The content of articles 25 and 26 of the Constitution came up for consideration before this Court in the Commissioner, Hindu Religious Endowments Madras (1) ; 827 vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Matt(1); Mahant Jagannath Ramanuj Das vs The State of Orissa(2); Sri Venkatmona Devaru vs The State of Mysore(3); Durgah Committee, Ajmer vs Syed Hussain Ali(4) and several other cases and the main principles underlying these provisions have by these decisions been placed beyond controversy.
The first is that the protection of these articles is not limited to matters of doctrine or belief they extend also to acts done in pursuance of religion and therefore contain a guarantee for rituals and observances, ceremonies and modes of worship which are integral parts of religion.
The second is that what constitutes an essential part of a religious or religious practice has to be decided by the courts with reference to the doctrine of a particular religion and include practices which are regarded by the community as a part of its religion.
" Bearing these principles in mind, we have to approach the controversy in the present case.
Section 55 of the Principal Act as it originally stood and Rule 12 of the Madras Hindu Religious Institutions (Officers and Servants) Service Rules, 1964 ensured, so far as temples with hereditary Archakas were concerned, that there would be no defilement of the image.
By providing in sub section (2) of section 55 that "in cases, where the office or service is hereditary, the person next in the line of succession shall be entitled to succeed", it ensured the personal qualification of the Archaka that he should belong to a particular sect or denomination as laid down in the Agamas.
By Rule 12 it also ensured that the Archaka would be proficient in the mantras, vedas, prabandams, thevarams etc.
and thus be fit for the preformance of the puja, in other words, that he would be a person sufficiently qualified for performing the rituals and ceremonies.
As already shown an image becomes defiled if there is any departure or violation of any of the rules relating to worship, and this risk is avoided by insisting that the Archaka should be an expert in the rituals and the ceremonies.
By the Amendment Act the principle of next in the line of succession is abolished.
Indeed it was the claim made in the statement of Objects and Reasons that the hereditary principle of appointment of office holders in the temples should be abolished and that the office of an Archaka should be thrown open to all candidates trained in recognised institutions in priesthood irrespective of caste.
creed or race.
The trustee, so far as the amended section 55 went, was authorized to appoint any body as an Archaka in (1) ; (2) ; , (3) ; (4) [1962] 1 S.C.R,.
828 any temple whether Saivite or Vaishnavite as long.
as he possessed a fitness certificate from one of the institutions referred to in rule 12.
Rule 12 was a rule made by the Government under the Principal Act.
That rule is always capable of being varied or changed.
It was also open to the Government to make no rule at all or to prescribe a fitness certificate issued by an institution which did not teach the Agamas or traditional rituals.
The result would, therefore, be that any person, whether he is a Saivite or Vaishnavite or not, or whether he is proficient in the rituals appropriate to the temple or not, would be eligible for appointment as an Archaka and the trustee 's discretion in appointing the Archaka without reference to personal and other qualifications of the Archaka would be unbridled.
The trustee is to function under the control of the State, because under section 87 of the Principal Act the trustee was bound to obey all lawful orders issued under the provisions of the Act by the Government, the Commissioner, the Deputy Commissioner or the Assistant Commissioner.
It was submitted that the innocent looking amendment brought the State right into the sanctum sanctorum through the agency of the trustee and the Archaka.
It has been recognised for a long time that where the ritual in a temple cannot be performed except by a person belonging to a denomination, the purpose of worship will 'be defeated : See Mohan Lalji vs Gordhan Lalji Maharaj(1).
In that case the claimants to the temple and its worship were Brahmins and the daughter 's sons of the founder and his nearest heirs under the Hindu law.
But their claim was rejected on the, ground that the temple was dedicated to the sect following the principles of Vallabh Acharya in whose temples only the Gossains, of that sect could perform the rituals and ceremonies and, therefore, the claimants had no right either to the temple or to perform the worship.
In view of the Amendment Act and its avowed object there was nothing, in the petitioners submissions to prevent the Government from prescribing a standardized ritual in all temples ignoring the Agamic requirements, and Archakas being forced on temples from denominations unauthorised by the Agamas.
Since such a departure, as already shown, would inevitably lead to the defilement of the image, the powers thus taken by the Government under the Amendment Act would lead to interference with religious freedom guaranteed under Articles 25 and 26 of the Constitution.
The force of the above submissions made on behalf of the petitioners was not lost on the learned Advocate General of Tamil Nadu who appeared on behalf of the State.
He, however, side tracked the issue by submitting that if we, were to consider in (1) 35 Allahabad (p.c) 283 at page 289.
829 isolation only the changes introduced in section, 55 by the Amendment Act the situation as described on behalf of the, petitioners could conceivably arise.
He did not also admit that be was bound by either the statement of Objects and Reasons or the reiteration of the same in the counter affidavit filed on behalf of the State.
His submission was that we have to take the Principal Act as it now stands after the amendment and see what is the true effect of the same.
He contended that the power given to, the trustee under the amended section 55 was not an unqualified power because, in his submission, that power had to be read in the context of section 28 which controlled it.
Section 28(1) provides as follows : "Subject to the provisions of the Tamil Nadu Temple Entry Authorization Act 1947, the trustee of every religious institution is bound to administer its affairs and to apply its funds and properties in accordance with the terms of the trust, the usage of the institution and all lawful directions which a competent authority may issue in respect thereof and as carefully as a man of ordinary prudence would deal with such affairs, funds and properties if they were his own.
" The learned Advocate General argued that the, trustee was bound under this provision to administer the affairs of the temple in accordance with the terms of the trust and the usage of the institution.
If the usage of the institution is that the Archaka or Pujari of the temple must be of a particular denomination then the usage would be binding upon him and he would be bound to make the appointment under section 55 in accordance with the usage of appointing one from the particular denomination.
There was nothing in section 55, in his submission, which released him from his liability to make the appointment in accordance with the said usage.
It was true that the principle of the next in line of succession was not binding on him when making the appointment of a new Archaka, but in his submission, that principle is no part of the usage, the real usage being to appoint one from the deno mination.
Moreover the amended section, according to him, does not require the trustee to exclude in every case the hereditary principle if a qualified successor is available and there was no reason why the trustee should not make the appointment of the next heir, if found competent.
He, however, agreed, that there was no such legal obligation on the trustee under that section.
He further contended that if the next in line of succession principle is regarded as a usage of any particular temple it would be merely a secular usage on which legislation was, competent under Article 25 (2) (a) of the Constitution.
Going further, he contended that if the hereditary principle was regarded as a religious 7 L1061Sup CT/72 830 practice that would be also amenable to legislation under Article 25 (2) (b) which permits legislation for the purpose of social welfare and reform.
He invited attention to the report of the Hindu Religious Endowments Commission ( 1 960 1962) headed by Dr. C. P.Ramaswami Aiyar and submitted that there was a crying need for reform in this direction since the hereditary principle of appointment of Archakas had led to grave malpractices Practically destroying the sanctity of worship in various religious institutions.
We have found no difficulty in agreeing with the learned Advocate General that section 28( 1 ) of.
the Principal Act which directs the trustee to administer the affairs of the temple in accordance with terms of the trust or the usage of the institution, would control the appointment of the Archaka to be made by him under the amended section 55 of the Act.
In a Saivite or a Vaishnavite temple the appointment of the Archaka will have to be made from a specified, denomination, sect or group in accordance with the directions of the Agamas governing those temples.
Failure to do ski would not only be contrary to section 28 (1) but would also interfere with a religious practice the inevitable result of which would be to defile the image.
The question, however, remains whether the trustee, while making appointment from the specified denomination, sect or group in accordance with the Agamas, will be bound to follow the hereditary principle as a usage peculiar to the temple.
The learned Advocate General contends that there is no such invariable usage.
It may be that, as a matter of convenience, an Archaka 's son being readily available to perform the worship may have been selected for appointment as an Archaka from times immemorial.
But that, in his submission, was not a usage.
The principle of next in line of succession has failed when the successor was a female or had refused to accept the appointment or was under some disability.
In all such cases the Archaka was appointed from the particular denomination, sect or group and the worship was carried on with the help of such a substitute.
It, however, appears to us that it is now too late in the day to contend that the hereditary principle in appointment was not a usage.
For whatever reasons, whether of convenience or otherwise, this hereditary principle might have been adopted, there can be no doubt that the principle had been accepted from antiquity and had also been fully recognised in the unamended section 55 of the Principal Act.
Sub section (2) of section 55 provided that where the office or service is hereditary, the person next in the line of succession shall be entitled to succeed and only a limited right was given under sub section (3) to the trustee to appoint a substitute.
Even in such cases the. explanation to sub section (3) provided that in making the appointment of the substitute the trustee should have, due regard to the claims.of the members of the family, if any.
entitled to the succession.
Therefore, it cannot be denied as a 831 fact that there are several temples in Tamil Nadu where the appointment of an Archaka is governed by the. usage of hereditary succession.
The real question, therefore, is whether such a usage should be regarded either as a secular usage or a religious usage.
If it is a secular usage, it is obvious,legislation would be permissible under Article 25(1) (a) and if it is a religious usage it would be, permissible if it falls squarely under sub section 25 (1) (b).
Palkhivala on behalf of the petitioners insisted that the appointment of a person to a religious office in accordance with the hereditary principle is itself a, religious usage and amounted to a vital religious practice, and, hence falls within Articles 2 5 .
and 26.
In his submission, priests, who are to perform religious ceremonies may be chosen by a temple on such basis as the temple chooses to adopt.
It may be election, selection, competition.
nomination or hereditary succession.
He, therefore, contended that any law which interferes with the aforesaid basis of appointment would violate religious freedom guaranteed by Articles 25 and 26 of the Constitution.
In his submission the right to select a priest has an immediate, bearing on religious practice and the eight of a denomination to manage its own affairs in matters of religion.
The priest is more important than the ritual and nothing could be more vital than chosing the priest.
Under the pretext of social reform.
he contended, the State cannot reform a religion out of existence and if any denomination has accepted the hereditary principle.for chosing its priest that would be a religious practice vital to the religious faith and cannot be changed on the ground ,that it leads to social reform.
Mere substitution of one method of appointment of the, priest by another was, in his submission no social reform.
It is true that a priest or an Archaka when appointed has to perform some religious functions but the question is whether the appointment of a priest is by, itself a secular function or a religious practice.
Mr. Palkhivala gave the illustration of the spiritual head of a math belonging to a denomination of a Hindu sect like the Shankaracharaya and expressed horror at the idea that such a spiritual head could be, chosen by a method recommended by the State though in conflict with,the usage and the traditions of the particular institution.
Where, for example, a successor of a Mathadhipati is, chosen by the Mathadhipati by giving hit" mantra deeksha or where the Mathadhipati is chosen by his immediate disciples, it would be, he contended, extra ordinary for the State to interfere and direct that some other mode of appointment should be followed on the ground of social reform.
Indeed this may strike one as an instrusion in the matter of religion.
But, we are affraid such an illustration is inapt when we. are considering the appointment of an Archaka of a temple.
The Archaka has 832 never been regarded as a spiritual head of any institution.
He may be, an accomplished person, well versed in the Agamas and rituals necessary to be performed in a temple but he does not have the status of a spiritual head.
Then again the assumption made that the Archaka may be chosen in a variety of ways is not correct.
The Dharam karta or the Shebair makes the appointment and the Archaka is a servant of the temple.
It has been held in K., Seshadri Aiyangar v, Ranga Bhattar(1) that even the position of the hereditary Archaka of a temple is that of a servant subject to the disciplinary power of the trustee.
The trustee can enquire into the conduct of such a servant and dismiss him for misconduct.
As a servant he is subject to the discipline and control of the trustee as recognised by the unamended section 56 of the Principal Act which provides "all office holders and servants attached to a religious institution or in receipt of any emolument or perquisite therefrom shall, whether the office or service is hereditary or not, be.
controlled by the trustee, and the trustee may, after following the prescribed procedure, if any, fine, suspend, remove or dismiss any of them for breach of trust, incapacity, disobedience of orders, neglect of duty, misconduct or other sufficient cause.
" That being the position of an Archaka, the act of his appointment by the trustee is essentially secular.
He owes his appointment to a secular authority.
Any lay founder of a temple may appoint the Archaka.
The Shebaits and Managers of temples exercise essentially a secular function in choosing and appointing, the Archaka.
That the son of an Archaka or the son 's son has been continued in the office from generation to generation does not make any difference to the principle of appointment and no such hereditary Archaka can claim any right to the office.
See : Kali Krishna Ray vs Makhan Lal Mookerjee(2); Nanabhai Narotamdas vs Trimbak Balwant Bhandare(3) and Maharanee Indurjeet Keoer vs Chundemun Misser(4).
Thus the appointment of an Archaka is a secular act and the fact that in some temples the hereditary principle was followed in making the appointment would not make the successive appointments anything but secular.
It would only mean that in making the appointment the trustee is limited in respect of the sources of recruitment.
Instead of casting his net wide for selecting a proper candidate, he appoints the next heir Of the last holder of the office.
That after his appointment the Archaka performs worship is no ground for holding that the appointment is either a religious Practice or a matter of religion.
In view of sub section (2) of section 55, as it now stands amended, the choice of the trustee in the matter of appointment of (1) I.L.R. 35 Madras 631.
(2) I.L.R. (3) 87 80) Vol.
4 Unreported Printed Judgments of the Bombay High Court page 169.
(4) XVI Weekly Reporter, 99. 833 an Archaka is no longer limited by the operation of the rule of next in line of succession in temples where the usage was to appoint the Archaka on the hereditary principle.
The trustee is not bound to make, the appointment on the sole ground that the candidate is the next in line of succession to the last holder of Office.
To that extent, and to that extent alone, the trustee is released from the obligation imposed on him by section 28 of the Principal Act to administer the affairs in accordance with that part of the usage of a temple which enjoined hereditary appoint ments.
The legislation in this respect, as we have shown, does not interfere with any religious practice or matter of religion and, therefore, is not invalid.
We shall now take separately the several amendments which were challenged as invalid.
Section 2 of the Amendment Act amended section 55 of the Principal Act and the important change which was impugned on behalf of the petitioners related to the abolition of the hereditary principle in the appointment of the Archaka.
We have shown for reasons already mentioned that the change effected by the Amendment is not invalid.
The other changes effected in the other provisions of the Principal Act appear to us to be merely consequential.
Since the hereditary principle was done away with the words "whether the office or service is hereditary or not" found in section 56 of the Principal Act have been omitted by section 3 of the Amendment Act.
By section 4 of the latter Act clause (xxiii) of subsection (2) in section 116 is suitably amended with a view to deleting the reference to 'the qualifications of hereditary and non hereditary offices which was there in clause (xxiii) of the Principal Act.
The change is only consequential on the amendment of section 55 of the Principal Act.
Sections 5 and 6 of the Amendment Act are also consequential on the amendment of sections 55 and 56.
These are all the sections in the Amendment Act and in our view the Amendment Act as a whole must be regarded as valid.
It was, however.
submitted before us that the State had taken power under section 116(2) clause (xxiii) to prescribe qualifica tions to be possessed by the Archakas and, in view of the avowed object of the State Government to create a class of Archakas irrespective of caste, creed or race, it would be open to the Government to prescribe qualifications for the office of an Archaka which were in conflict with Agamas.
Under Rule 12 of the Madras Hindu Religious Institutions (Officers and Servants) Service Rules, 1964 proper provision has been made for qualifications of the Archakas and the petitioners have no objection to that rule.
The rule still continues to be in force.
But the petitioners.
apprehend that it is open to the Government to substitute any other rule for rule 12 and prescribe qualifications which were in conflict with 834 Agamic injunction.
For example at present the Ulthurai servant whose duty it, is to, perform, pujas and recite vedic mantras etc.
has to obtain the fitness certificate for his Office from the head of, institutions which impart instructions in Agamas and ritualistic mattors.
The; Government,, however, it is submitted, may hereafter change its mind, and prescribe qualifications which take no note "of Agamas and Agamic rituals and direct that the Archaka candidate? should produce a fitness certificate from an institution which, does not specialize in teaching Agamas and rituals.
It is submitted, that the Act does, not provide guidelines to the Government in; the matter of prescribing qualifications.
with regard to the fitness of an Archaka for performing the rituals and ceremonies in these temples and it will be open to the Government to prescribe a simple standardized curriculum for pujas in the several temples ignoring the tradition pujas and rituals followed in those temples.
In our opinion the, apprehensions ;of the petitioners are unfounded;, Rule 12 referred to above still holds the field and there is no good reason to think that the State Government wants to revolutinise temple worship by introducing methods of worship not current in the several temples.
The rule making power con ferred on the .
Government by section 116, is only intended with a view to carry out the purposes of the Act which are essentially secular.
The Act no where gives the indication that one of the purposes of the Art is to effect change in the rituals and cere monies: followed in the terms.
On the other hand, section 107 of the Principal Act emphasizes that nothing contained in the Act would be deemed to confer any power or impose any duty in con travention of 4th rights conferred on any religious denomination or any section there of by Article 26 of the Constitution.
Simi larly section 105 provides that nothing contained in the Act shall (a) save as otherwise expressly provided in the Act or the , rules made thereunder, affect any honour emolument or perquisite to which any person is entitled by custom or otherwise in any religious institution, or its established usage in regard to any other matter.
Moreover, if any rule is framed by the Government which purports to interfere with the rituals and ceremonies of the temples the same will be liable to be challenged by those who are interested in the temple worship.
In out opinion, therefore, the apprehensions now expressed by the petitioners are groundless and premature.
In the result these Petitions fail but in the circumstances of the case there shall be no order as to costs.
V.I.P.S. Petitions dismissel.
| IN-Abs | Section 55 of the Tamil Nadu Hindu Religious.
and Charitable En dowments Act, 1959, gave the trustee of a temple the power to appoint the officer holders or servants of the temple and also provided that where the office or service is hereditary, the person next in the line of succession shall be entitled to succeed.
In only exceptional cases the trustee was entitled to depart from the principle of next in the line of succesion, but even so, the trustee was under an obligation to appoint a fit person to perform the service after having due regard to the claims of the members of the family.
Section II 6 (2) (xxiii) of the Act gave power to the Government to make rules providing for the qualifications to be possessed by the officers and servants and their conditions of service.
The State Government framed the Madras Hindu Religious Institutions (Officers and Servants) Service Rules, 1964.
Rule 12 provided that an Archaka, whether hereditary or nonhereditary whose duty it is to perform Pujas, shall, before succeeding to the office or appointment to the Office, obtain a certificate of fitness for performing the duties of his office from the head of an institution imparting, instructions in Agamas or from the ' head of a math recognised by the 'Commissioner or front such other person as may be designated by the Commissioner.
The Act was amended by the Amending Act of 1970.
The Amending Act did away with the hereditary right of succession to the office of Archaka.
The petitioners who were Archakas of saivite and Vaishnavite temples and Mathadhipatis to whose Maths temples are attached firm writ petitions in this Court contending that the amendments violated articles 25 and 26 of the Constitution.
Dismissing the petition HELD : (1) The protection of Arts, 25 and 26 of the Constitution is not limited to matters of, doctrine or believe, they extend also to ' 'acts done in pursuance of religion and therefore contain a guarantee for rituals and observances etc.
which are the integral parts of religion.
What constitutes aft essential part of a religion or religious practice has to be decided by the Courts with reference to the doctrine of at particular teli including practices which are regarded by the community as a part of its religion.
[8271] Sardar Syedna Taher Saifuddin Saheb vs The State of Bombay, [1962] *pp. 2 S.C.P. 490, referred to.
(2) With the establishment of temples and the, institution of Archakas in the temples, treatises on rituals were compiled known as Agamas .
The rituals have a two fold aspect, to attract the lay worshippers and to 816 preserve the image of the Deity from pollution, defilement or desecration.
Pollution or desecration may take place in a variety of ways and according to the Agamas, an image becomes defiled if there is any departure or violation of the rules relating to worship.
Further, in all the temples in which images are consecrated the Agamas insisted that only the qualified Archaka shall step inside the sanctum sanctorum after observing certain disciplines imposed by the Agamas.
Hence the Archaka of such a temple, besides being proficient in the rituals appropriate to the worship of the particular Deity, must also belong to a particular denomination; because, an Archaka of a different denomination would defile the image by his touch.
[825 F H; 826 E G] Sri Venkataramana Devaru vs The State of Mysore, [1958] S.C.R. 895, His Holiness Peria Kovil Kelvi Appean Thiruvenkata Ramanuja Pedda Jiyyangarlu Varlu vs Prathivathi Bhayankaram Venkatacharlu, 73 I.A. 156 and Mohan Lalji vs Gordhan Lalji Maharaj, 35 Allahabad P.C. 283, referred to.
(3) The hereditary principle in the appointment of an Archaka had been adopted and accepted from antiquity and had also been fully recognised in the unamended section 55.
But the change effected by the amendment to section 55, namely, the, abolition of the principle of next in the line of succession is however, not invalid, because, the usage is a secular and not a religious usage.
[833 A C] (a) An archaka has never been regarded as a spiritual head however accomplished and well versed in the agamas and rituals he may be.
He is a servant of the temple subject to the discipline and control of the trustee as recognised by the unamended section '56 of the Act.
That being his position the act of his appointment by the trustee is essentially secular, 'though after appointment he performs some religious functions.
That after his appointment he performs worship is no ground for holding that his appointment is either a religious Practice or a matter of religion.
He owes his appointment to a secular authority.
Any lay founder of a temple may appoint him and the She baits and Managers of temples .exercise an essentially secular function in choosing and appointing the Archaka.
The fact that in some temples the hereditary principle was followed in making the appointment would not make the successive appointments anything but secular.
[832 A G] K. Syedna Taher Saifuddin Saheb vs Ranga Bhattar, I.L.R. , Kali Krishna Ray vs Makhan Lal Mookerjee, I.L.R. , Nanabhai Narotamdas vs Trimbak Balwant Bhandare, (1878 80) Vol. 4 (Unreported printed judgments of the Bombay High Court p. 169) and Maharanee Indurjeet Koer vs Chundemun Misser, XVI Weekly Reporter, :89, referred to.
(b) The power given to the trustee under the amended section to appoint any body as an Archaka so long as he possessed a fitness certificate under r. 12 was not an unqualified power, because the power had to be read with section 28 of the Act which controlled it.
Section 28 directs the trustee to administer the affairs of the temple, in accordance with the terms of the trust or usage of the institution.
Therefore, the appointment of the Archaka ' will have to be made from the specified denomination, sect or group in accordance with the directions of the Agamas governing the temple.
In view of.
the amended section 55(2).
, the choice of the trustee in .the matter of appointment of an archaka is no longer limited by the Operation of next in line of succession in temples where the usage was 817 to appoint the Archaka on the hereditary principle.
To that extent the trustee is released from the obligation imposed on him by section 28 to administer the affairs in accordance with that part of the usage of a temple which enjoined hereditary appointments.
But the legislation in this fact does not interfere with any religious practice.
[832 H 833 C] (4) The other changes effected in the other provisions of the Act are merely consequential, and therefore, the Amendment Act as a whole must be regarded as valid.
[833 F] (5) The rule making power is conferred by section 116 on the Govern ment with a view to carry out the purposes of the Act which are essentially secular.
The Act nowhere gives the indication that one of its purposes is to effect a change in the rituals and ceremonies followed in the temples.
Section 105 and 107, on the contrary, emphasize that there shall not be any contravention of the rights conferred on any religious denominations of any section thereof, by article 26 of the Constitution.
Rule 12 still holds the field and there is no reason to think that the State Government would frame rules to revolutionise temple worship by introducing methods of worship not current in the several temples.
If any such rule is framed by Government which purports to interfere with the rituals and ceremonies of the temples, it will be liable to be challenged by those who are interested in the temple worship.
[834 C G]
|
Appeal No. 2580 of 1969.
Appeal from the judgment and order dated August 6, 1969 of the Andhra Pradesh High Court in Writ Petition No. 3124 of 1967.
A.Subba Rao, for the appellants.
S.P. Nayar, for respondent No. 1.
P.Ram Reddy and A. V. V. Nair, for respondents Nos. 2 and 3.
P. P. Rao and T. V. section Narasimhachari, for respondent No. 4.
The Judgment of the Court was delivered by Beg, J.
This appeal, from a Judgment and order of the Andhra Pradesh High Court dismissing the appeallant 's Writ Petition, comes up before us by Certificate under Article 133(1)(a) of the Constitution, in the following circumstances One Buchivenkata Rao had filed application on 1 9 1959 and 1 8 1960 under Mineral Concession Rules, There in after referred to as 'the Rules ' before the Collector of Nellore, for the grant of a mining lease to him of an area mentioned in his applications.
He alleged that his applications complied with the rules framed under the Mines and Minerals (Regulation and Development Act of 1957.
The State Government rejected the application of 11 8 1960 on 7 12 1960, but granted the application made on 4th October, 1950, by the Respondent Kumara Rajah of Venkatagiri (hereinafter referred to as Venkatagiri).
The ground on which the application of the appellant Rao, was rejected was that Venkatagin ' had a prior claim.
The appellant Rao had then preferred a Revision application to the Central Government under the Mineral Concession Rules which came into force on 11th November, 1960,.
667 The Central Government had rejected the revision application on the ground that it was not filed within the prescribed time.
Upon a Writ Petition filed in the High Court of Andhra Pradesh, the order of rejection of the revision application by the Central Government was quashed.
The Central Government was directed to consider Rao 's application on merits.
The Central Government had, after giving due opportunity to be heard to the appellant Rao, dismissed his application on 18th October, 1967, holding that Venkatagiri had priority over his claim.
Rao then filed a second Writ Petition which was dismissed on 26th September, 1969.
The judgment and order of dismissal are now under appeal before us.
The judgment of the High Court shows that the appellant Rao had relied on the following three grounds only at the time of agruments on his Writ Petition : firstly, that the application of Venkatagiri was not made in accordance with Rule 27 and 32 of the said Rules of 1949; secondly, that the application of Venkatagiri was not for a fresh lease but for the continuation of a previous lease so that it did not fall within the purview of the rules; and, thirdly, that the Central Government had, not considered in detail the various comments offered by the State Govt.
with regard to each ground of revision.
A contention noticed by the High Court, as a separate ground of attack, was that the Central Govt.
had relied upon a ruling of a Single Judge of the Punjab High Court in J. A. Trivadi Brothers vs Union of India(1), holding that Rules 27 to 29 did not make defective applications void, but this view had been reversed by a Division Bench of that Court.
This was no really a separate ground but a contention relating to the effect of failure to comply strictly with Rules 27 to 29 of the Rules of 1949.
The main contention of Rao was that the application of Venkatagiri had to be disregarded as it failed to comply with the rules, and, therefore, was not an application in the eye of law, so that, out of several competing applications, Rao 's application.
ought to have been granted.
The High Court, made it clear that other grounds were taken in Rao* petition, but were not argued there.
In this Court, a fresh ground, neither taken nor argued before the High Court, is sought to be urged in addition to the other grounds before the High Court which were repeated before us.
We will take up the grounds advanced in the High Court and again in this Court before considering the entertain ability of the fresh ground.
At this stage, before dealing with the first ground, we may set out the relevant rules 27 and 32 of 1949 which run as follows "27.
Application for mining, lease An application for a mining lease shall, in case of land in which the mine (1) A.I.R. 1959 Punjab 589.
668 rals belong to Government, be made to the State Government concerned through such officer or authority as it may appoint in this behalf and shall contain the following particulars : (a)(i) If the applicant is an individual, his name, nationality, profession, and residence, and (ii) if the applicant is a partnership firm, a company or an association or body of individuals, whether in corporated or not, its name, nature and place of business, place of registration of incorporation and except in the case of a company which is not a private company as defined in the Indian Companies Act, 1913 (VII )of 1913) the names and addresses of the individuals constituting such partnership firm, company, association or body.
(b) The number and date of the notification of the grant or renewal of certificate: of approval of the applicant; (c) A description, illustrated by a map or plan, showing as accurately as possible the situation, boundaries and area of the land in respect of which the lease is required; (d) The mineral or minerals which the applicant intends to mine; (e) The areas and minerals within the jurisdiction of the State Government for which the applicant or any person joint in interest with him already holds a mining lease; (f) If the applicant holds a prospecting license for the area applied for, the number and date of such license; (g) The period for which the lease.
is required; and (h) The industry, if any, which the applicant proposes to develop and the location of such industry.
Explanation : The map or plan referred to in item (c) should give sufficient information to enable identification of the area in respect of which the lease is required".
Priority (1) If more than one application regarding the same land is received, preference shall be given to the application received first.
unless, the State Govern 669 ment, for any special reason, and with the prior approval of the Central Government decides to the contrary.
Provided that where more than one application in respect of the same land is received on the same day, the State Government, after taking into consideration the matters specified in sub rule (2) and after obtaining the prior approval of the Central Government, may grant the mining lease to such one of the applicants whom it considers to be the most suitable.
Provided further that no application shall be deemed to be incomplete for the purposes of this rule on account of the omission or misdescription of the number and date of the prospecting licence and of the profession or residence or nationality in the case of an individual or of the place of business in the case of a partnership firm, a company or an association or body of individuals, whether incorporated or not, if such omission or misdescription, is corrected within a period specified by the State Government or an Officer appointed by that Government in this behalf.
(2) The matters referred to in the proviso to subrule (1) shall be the following namely: (i) experience of the applicants in mining; (ii) financial soundness and stability of the applicants; (iii) special knowledge of geology or mining and the technical staff already employed or to be employed for the work.
It is clear to us that the details mentioned in Rule 27 are intended for the correct identification of the individual to whom the lease is to be granted, the minerals which are to be mined, the area in respect of which the lease was to be granted, and the qualifications of the applicant.
Considerable emphasis was placed on the word 'shall ' in Rule 32 with regard to the priority to be given between different applicants.
This rule does not directly affect the question whether an application for a lease could be considered a proper application or not by the authorities concerned.
The second proviso to this rule, however, provides for the manner in which certain defects may be cured.
Rule 32, sub rule (2), introduced in 1955 before the grant of the application of Venkatagiri, shows that the individual qualifications of the applicants including their special knowledge, their capacity to engage technically efficient staff, their financial soundness and stability, had to be taken into account in determining the question of priority.
Again Rule 670 26, imposing certain restrictions, prohibits the grant of the lease to any person who does not hold a certificate of approval from the State Government or who has not produced an Income tax clearance certificate.
It does not prohibit any grant on the ground that the application for it is defective or not accompanied by a map.
The form of the application seems to be subordinate to the essential facts, to be taken into account before granting a lease.
There is no provision in the Act showing that the defects in an application which is accompanied by the fee prescribed in Rule 28 cannot be subsequently removed.
The information given in the application is intended for the satisfaction of the authorities granting the lease so that, after considering inherits and making a grant, proper details are embodied in the lease actually granted.
It was not urged anywhere that, as a result of any defects in the applica tion, of Venkatagiri, the lease.
itself could not be executed.
This indicates that the omission to file a proper map initially was cured.
The High Court had relied on a decision of this Court in Banarsi Das vs Cane Commissioner, U.P.(1) where conditions similar to those laid down by Rule 27 were held to be directory.
It had also held that, even assuming that some of the requirements in the rules may be mandatory, it could not be held that the mere want of a map or of details, describing the area for which the lease was applied for, would make the application itself void or of no effect.
We are, therefore, unable to find any error in the view adopted by the High Court that the supply of necessary details was directory and not mandatory.
If it did not produce a defect which affected the validity of the lease, and the details supplied in the application corresponded with the contents of the lease after the alleged lacuna had been filed up, the grant of the lease to Venkatagiri was valid.
As regards the second ground that the application of Venkatagiri had to be interpreted as an application for the continuation of an already existing lease and not for the grant of 'a fresh lease, we find that the High Court had rejected this contention by pointing out that the application was on a form which complied, with Rule 27 so that it could be treated as a fresh application.
We find nothing wrong with the High Court 's interpretation of the application made by Venkatagiri.
The High Court had also found, as a fact, that the order of the Central Government disclosed that it was based on relevant considerations and could not be said to have omitted consideration of anything material simply because the details of matters considered were not fully set out.
We concur with this view and are (1) A.I.R. 1963 S.C. 1947.
unable to hold that the order of the Central Government was vitiated on the third ground urged on behalf of Rao.
We may now refer to the fresh question which was sought to be raised on behalf of the appellant by means of an application before us.
This was, that this Court had pointed out in Nookala Satharamaiah vs Kotaiah Naidu & Ors.(1), that, on 15th September, 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 nine months from the date of its receipt, and had, held that the effect of the amended Rule 57, which was further amended on 14 9 1956, was that an application remaining undisposed of within the period prescribed will be deemed to be rejected.
It was urged that we should allow this point to be argued for the first time in this Court although it was neither raised nor argued in the High Court.
it was submitted that this was a pure question of law on which no investigation of facts afresh was required.
On the other hand, it has been contended, on behalf of the contesting respondent, that a new _point should not be allowed to be urged at this stage for which reliance was placed on Bhagwati Saran & Anr.
vs State of Uttar Pradesh(2), section L. Aggarwal v ' General Manager, Hindustan Steel Ltd.(3), Chitra Ghosh & Anr.v.
Union of India & Ors.(4) Even if we had been disposed to consider this new ground on the plea that exceptional circumstances justified our going into it, we must here point out another fact which affects the very maintainability of the appeal before us now.
The appellant B. Rao died on 18 2 1970.
His sons filed an application in this Court on 20 7 1970 for impleading them as the heirs and legal representatives of the deceased.
This application was tentatively allowed, on 3 11 1970, under the orders of the Registrar of this Court, subject to such objections to the rights of the substituted appellants to be heard and to continue this appeal on behalf of the deceased ' as may be taken before us at the hearing of the appeal.
It has to be remembered that, in order to enable a legal re presentative to continue a legal proceeding, the right to sue or to pursue a remedy must survive the death of his predecessor.
In the instant case, we have set out provisions showing that the rights which an applicant may have had for the grant of a mining lease, on the strength of an alleged superior claim, cannot be separated from his personal qualifications.
No provision has been pointed out to us in the rules for impleading an heir who could continue.
the application for a mining lease.
The scheme under the rules (1) ; (3) ; at 365.
(2) ; at 568.
(4) ; at 420. 672 seems to be that, if an applicant dies, a fresh application has to be presented by his heirs or legal representatives if they themselves desire to apply for the grant of a lease.
It may be that the heir,, and legal representatives, if they are continuing the business or industry of the deceased and have, the required qualifications, obtain priority over an earlier applicant on account of special reasons for this preference.
But, in each case, they have to apply afresh and set out their own qualifications.
It has not been shown to us that any of the legal representatives have applied afresh.
The legal, representatives only claim to be entitled to succeed the deceased Buchivenkata Rao under a will.
The assumption underlying the application is that, whatever right the deceased may have had to .obtain a lease survived and vested in the heirs after his death.
We are unable to accept the correctness of this assumption.
In support of the contention on behalf of the heirs of Buchivenkata Rao, our attention was drawn to the case of Dhani Devi vs Sant Bihari & Ors.(1) which related to a right to obtain transfer of a permit for a Motor vehicle under Section 61, sub.
section 1(2) of the Motor Vehicle Act.
It was held there that, in the case of the death of an applicant for the grant of a permit in respect of his motor vehicle, the Regional Transport Authority had the power to substitute the person succeeding to the possession of the vehicle in place of the deceased applicant.
It was pointed out there that the right to the permit was related to the possession of the vehicle.
Moreover, there was a rule enabling the Transport Authorities to substitute the heir or legal representatives of the .deceased.
No such rule applicable to the case of the heirs of the deceased Buchivenkata Rao has been pointed out to us.
Therefore, we are unable to hold that the heirs, who have been heard, had any right to continue, the appeal before us.
This feature of the case is decisive not only on the right to be heard on the fresh ground but also on the right to advance any argument in support of the appeal of the deceased.
We may mention that it was also urged that the matter was so, old that any reversal of the grant of the mining lease to Venkatagiri, as long ago as 1960, would involve considerable dislocation and injury to respondent Venkatagiri without any fault on his part.
The respondent Venkatagiri must have invested considerable amount of money in mining operations.
The acceptance of the claim of Venkatagiri by the Government on the strength of which Venkatagiri made his investment clothes Venkatagiri 's claim with an equity which could not be defeated without clear proof of some legal right or interest of another claimant.
We are (1) ; 673 unable to see any such right in the heirs of the deceased Buchivenkata Rao.
Consequently this 'appeal is dismissed but we make no orders as to costs in this Court.
V.P.S. Appeal dismissed.
| IN-Abs | The application of one B for a mining lease was rejected on the ground that another applicant V had a prior claim.
B 's writ application was dismissed by the High Court and while his appeal in this Court was pending he died and his sons were allowed to be impleaded as legal representatives subject to any objection that may be taken to their right to continue the appeal.
it was not in accordance with r. 27 of the Mineral Concession Rules and because of want of a map and 'some details regarding area, and therefore, whether B 'section appli cation should have been granted, HELD : (1) The details mentioned in r. 27 are intended for the correct identification of the individual to whom the lease is to be granted, the minerals which are to be mined the area in respect of which the lease was to be granted and the qualifications of the applicant.
Rules 32(2), introduced in 1955, before the grant of V 's application, shows that individual qualifications of the applicants including their special knowledge, .their capacity to engage technically efficient staff, their financial soundness and stability, bad to be taken into account in determining the question of priority.
There is no prohibition against the grant of an application on the ground that the application is defective or not accompanied by a map.
There is also no provision in the Act showing that defects in an application could.
not be subsequently removed.
The form of the application is subordinate to the essential facts to be taken into account before granting a lease.
The information given in the application is intended for the satisfaction of the authorities granting the lease, so that, .after considering the merits and making a grant up Proper details are embodied in the lease actually granted.
ply of necessary details is directory and not mandatory.
It was not the cage here that as a result of the defects in V 's application the lease itself could not be executed.
Therefore, the mere want of a map or of details describing the area for which the lease was applied for, would not make the application itself void or of no effect.
If it did not produce a defect which affected the validity of the leak, and the details supplied in the application corresponded with the contents of the lease after the alleged lacuna had been removed the grant of the lease to V was valid.
[669 F H; 67OB F] (2) In order to enable a legal representative to continue a legal proceeding, the right to sue or pursue a remedy must survive the death of his predecessor.
Under the rules, the right of an applicant on the strength of a superior claim cannot be separated 'from his personal qualifications.
[671 G H] 666 Moreover, there is no provision in the Rules for imploding an heir to continue the application for a mining lease.
The scheme under the Rules is that if an applicant dies, a fresh application has to be presented by the heirs or legal representatives if they desire to apply far the grant of a lease.
It may be that they may obtain priority over an earlier applicant if they are continuing the business or industry of the decreased, but it would be on a fresh application setting out their qualifications.
Therefore, the heirs had no right to continue the appeal in this Court.
[672A C] Dhani Devi vs Sant Bihari & Ors.
, ; , distinguished.
(3) The acceptance of V 's claim by the Government on the strength of which he had made his investment, clothes his claim with an equity which could not be defeated without clear proof of some overriding legal right or terest of another claimant, and, there is no such right in the heirs of B [672G H]
|
Appeal No. 2097 of 1968.
Appeal from the judgment and order dated August 11, 1965 of the Delhi High Court in C.W. No. 197 D of 1965.
Jagdiish Swarup, Solicitor General of India, section N. Prasad, B. D. Sharma and section P. Nayar, for the appellant.
S.C. Manchanda, section Balakrishnan and P. N. Lekhi, for the respondent.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by certificate from a judgement of the Punjab High Court by which the petition under article 226 of the Constitution filed by the respondent was allowed and the ban imposed on the sale of a news weekly called "The Indian Observer" by the licensees of the Railway Book Stalls throughout the country under directions issued by the appellant was set aside.
According to the writ petition, the petitioner was the owner and publisher of a weekly newspaper known as "The Indian Observer" which had a wide sale in India, its weekly circulation being approximately 1,35,000 copies.
Till March 1965 the .aforesaid news weekly was being sold at all the railway stations 867 which were managed and were under the administrative control of the Railway Board.
It was alleged that the policy of the news weekly was to publish a constructive criticism and fair comment in public interest on the working of different departments of the Government and to suggest remedial measures.
, In,some of the copies of the news Weekly, certain matters regarding the maladministration of the Railway had been published.
Reference was made in particular to the issue of 11th September, 1964 in which allegations were made about the black marketing in deluxe train tickets.
It was stated to have attained the magnitude of a big racket operating in the country resulting in lot of gain by corrupt means to the Railway staff.
It is unnecessary to give the details but according to the allegations made in the news weekly, the Railway staff was corrupt and the reasons for the corruption were also given.
Other comments were made which reflected adversely on the working of the Indian Railways.
According to the petitioner all these statements and resolutions annoyed the Railway Authorities and on 22nd September, 1964, the Circulation Manager of the Petitioner company received a letter from M/s Gulab Singh (P) Ltd., one of the licensees, of the Railway Board for sale of printed matters intimating that the Northern Railways administration had banned the sale, of "The Indian Observer" on the Railway Book Stalls.
Subsequently, when the petitioner took up the matter with the authorities concerned, the General Manager, Northern Railways, wrote to him informing him that temporary permission had been given to the railway contractors of printed matters to sell the news weekly subject to proper review of that paper and final orders which would be given later.
The General Manager asked the petitioner to supply copies of 12 old issues which was done.
Finally, the petitioner was informed by means of a letter dated the 16th March: 1965 that the sale of the weekly "The Indian Observer" could not be permitted on the railway stations.
In the return which was filed by the Joint Director, Traffic (General), Railway Board, it was not denied that the news weekly "The Indian Observer" was being sold at the, railway stations by the licensed contractors.
It was asserted that the petitioner had been publishing "sexy and obscene literature" Lind the licensees had been raising objections on this score.
The articles published in the Pews weekly were considered to be of low taste, and it was decided that it would not be in public interest to allow its sale at the railway Platforms by the, licencees.
The allegations made in the petition about the statements relating to corruption and maladministration in the Railways which had been published in some of the issues of the news weekly was not denied.
It was, however.
maintained that the Railway Board had taken the action 868 not because of the publication of those articles but because of the sexy and obscene literature of low taste which was being published in the news weekly.
Before, the High Court, section 28 of the Indian Railways Act 1890, hereinafter called the "Act", and the relevant sub clauses of clause 742 of the Indian Railway Code were pressed into service for challenging the ban which had been imposed on the sale of the news weekly.
The High Court was of the view that the petitioner before it had cited and produced instances of publications which were freely on sale on the bookstalls on the railway platforms to show that the material which was sought to be excluded or) grounds on obscenity, was hardly distinguishable from the other popular magazines of foreign and Indian origin.
Reliance was placed on the provisions of clause 742 of the Indian Railway Code which established that a publication to attract the ban imposed by the Railway Board must have been previously prohibited by the Government.
As the Railway Board was not authorised to exclude any publication from sale on its own determination that it was obscene, it was held that the order which was made by that Board was without authority.
The ban had hit the writ petitioner who had been made the object of discriminatory treatment.
Consequently, the restriction imposed on the sale of "The Indian Observer" was quashed.
Section 120A of the Act which was inserted for the first time by Act No. 13 of 1959 provides that if a person canvasses for any custom or hawks or exposes for sale any article whatsoever, in any railway carriage or upon any part of a railway except under and in accordance with the terms and conditions of a licence by the railway administration shall be punishable with fine which may extend to two hundred and fifty rupees.
He can also be removed from the carriage or any part of the railway by any railway servant so authorised.
It appears that prior to the insertion of this section, rules hadbeen framed under section 47 (1) of the Act.
Rule 17 ofPart 11 of the Rules laid down that no person could canvass for any custom or hawk or expose for sale any article whatsoever, on any train, station, platform or premises without a licence granted by the railway administration.
Clause.
I of Rule 17 has been incorporated in section 120A(1) of the Act in 1959, that Clause having been deleted from the rule.
The book stalls on the railway platforms where books, manazines and newsp apers are sold, belong to the licencees who have entered into an agreement with the President of India.
It is not disputed that according to the usual clauses in these agreements of licence, the ale of newspapers shall not be stopped by the licencees at any time save when it is due to causes beyond the, control of the: 869 licensee.
The learned Solicitor General produced a sample agree ment in court which was not objected to by the counsel for the respondent.
According to clause 3(b) thereof the licensor can reserve to himself the right to require the licencee to sell specified books or types of books and periodicals and the licencee was bound to comply with such requirements.
Under clause 5 the licensor had the right of prohibiting the sale, or exhibition of any publication of an obscene or scurrilous nature and of any publication to which good, sufficient, and reasonable objections could be shown and the decision of the licensor was to be final and binding oil the licensee.
The Railway Board which is the appellant before us has issued certain instructions and laid down essential principles and policy directions which have been Published in the form of a Code called the "Indian Railway Code" for the Traffic Department (Commercial).
It may be Mentioned that the Solicitor General himself maintained that all those were of a mandatory nature and it is stated in the preface to the Code.
Chapter VII, Part A of this Code deals with catering and vending services.
Part B relates to book stalls, sale of newspapers and periodicals on railway platforms.
Clause 742 to the extent it is material is reproduced below (v) The sale of obscene books and pictures and publications prohibited by the Government should be strictly banned.
(viii)The contractors should provide equal opportunity to all the popular newspapers for in their stalls on the same terms.
A list of popular newspapers and magazines should be drawn up by the Railway Administration in consultation with the Zonal Railway Bookstall Advisory Committee".
The main argument of the learned Solicitor General on behalf of the appellant is that sale of books on railway platforms or in railway carriages is a matter which is regulated by the terms of the agreement of licence between the bookstall contractors and the railway authorities and it is open to the appropriate authority to stop the sale of any newspaper or publication which was considered obscene or scurrilous or to which sufficient and reasonable objections could be shown.
In the letter of the Railway Board dated March 26, 1965 it was stated that it had come to the Board 's, 870 notice that the "Indian Observer" generally contained "articles written in very low taste bordering oh obscenity".
It was further .stated that after a perusal of few Copies of the said weekly the Board had come to the conclusion that it was not fit for sale at railway stations.
It was desired that the book stall contractors should be, instructed to stop with immediate effect the sale of the "Indian Observer" from their bookstalls as well as on the platforms as also along train side and in station premises.
According to the Solicitor General the action taken by the Railway Board was perfectly competent and was taken in accordance with the terms of the licence granted to the book stall contractors.
It is urged that ,the respondent had no right or locus standi to insist on or ask for the sale of the Indian observer oil the platforms etc., which are the private property of the railway and where the sale .of any publication could only be subject to such terms and conditions as obtained between the licensor or licencee.
Before the High Court and before us the main complaint of the present respondent is based On an infraction of Article 14 of the Constitution and it has been asserted that the news weekly "Indian Observer" was singled out for discriminatory treatment inasmuch as publications containing similar material were not prohibited from sale by the Railway Board on the book stalls at the platforms and in the trains etc.
The High Court had found as a fact that publications which were freely on sale on the book stalls to whom licences had been given were such that they were hardly distinguishable from the "Indian Observer" on the ground news weekly inquestion had been sold on railway platforms since 1963 nor wasit suggested that the Railway Board had ever accorded individual sanction for the sale of every single book and publication at the book stalls of the Railway Administration.
Now in the Indian Railway Code the policy or the principle laid down in categorical terms in sub clause (viii) of Clause 742 is that the contractor should provide equal opportunity to all the popular newspapers for sale in their stalls on the same terms.
This was subject to certain conditions, one of which was that the sale of obscene books and pictures and publications prohibited by the Government should be strictly banned.
(vide sub clause v).
The letter written by the railway itself to which a reference has been made, does not impose the ban on the ground that the "Indian Observer" is an obscene publication which has been prohibited by the Government.
In that letter there was first a recital of what had come to the Board 's notice i.e. that the articles written in the said news weekly were in very low taste bordering on obscenity.
There was no finding or decision that it was a publication which was obscene.
The conclusion of the Board 871 simply was that the "Indian Observer" was not fit for sale at the Railway stations.
The other condition laid down in sub clause (v) that its sale had been prohibited by the government was neither mentioned nor has it been shown that any such order had been made by the government prohibiting the sale of the "Indian Observer" on the ground that it is obscene.
The learned Solicitor General contends that the word 'Government ' in sub clause (v) means the Railway Board because according to section 2 of the , Central Government may by notification in the official gazette invest the Railway Board either absolutely or subject to conditions with all or any of the powers or functions of the Central Government under the Act.
Our attention has not been drawn to any provision in the Act or the rules framed thereunder by which the Central Government can prohibit the sale of any obscene book, picture or publication on.
It appears that the aforesaid clause.
has reference to a prohibition 'unposed by the Central Government under some enactments other than the Act.
It is not claimed that the Railway Board could impose a ban under any other enactment.
Nor has it been suggested that the Central Government had passed any order prohibiting the sale of the Indian Observer under any statutory provision.
Even on the assumption that the Board could make such an order as is contemplated by sub clause (v) of clause 742 it cannot take any advantage of that provision because in the letter dated March 26, 1965 it was nowhere stated that the publication of the news weekly was being banned on the ground of obscenity.
It is thus apparent that the High Court was fully justified in taking the view that the "Indian Observer" had been sin led out for being banned and this clearly amounted to a discriminatory,treatment.
The question that has next to be resolved is whether article 14 could be invoked by the respondent in the present case.
It has not been and indeed cannot be disputed that the Railway Board will fall within the definition of "State" as given in article 12 of the Constitution.
The learned Solicitor General has relied on Railway, Board vs Niranjan Singh(1).
It was laid down that there was no fundamental right under article 19(1) for anyone to hold meetings in government premises.
The Northern Railway was the owner of the Premises and was entitled to enjoy its property in the same manner as any private individual, subject to any such restrictions as the law or the usage placed on them.
We are unable to appreciate how the ratio of that decision could be applied to the present case.
The meetings of workers which had taken place there had been held inside workshops, stores and depots and within office compounds, Railway platforms may be the property (1).[1969] 3 S.C.R. 548. 872 of the railways, but it cannot be disputed that every bona fide traveller or every other member of the public who, buys a platform ticket can have access to the railway platforms.
It is true that under Rule 15 of the General Statutory Rules and Orders, a railway administration may exclude and, if necessary, remove from the station platform or any part of the railway premises any person who is not a bona fide passenger and who does not have any business connected with the railway or any person who having arrived at a station by train and having no business connected with the railway refuses to leave the railway premises when required to do so.
But that is a right which is reserved for being exercised only in the circumstances mentioned in the rule.
There is no analogy between a station platform and a government office.
Even otherwise the crux of the matter is that the respondent is not seeking to us the station platform or any part of the railway premises by sending any of its own representatives to hawk or sell the news weekly there.
All that the respondent says is that the railway administration has itself directed that the bookstall contractors who were its licensees should provide equal opportunity to all the popular newspapers for sale in their stalls.
These very contractors are now being directed to discriminate between the respondent and owners or publishers of other popular newspapers on grounds which have no legal basis or justification.
The administrative act or order of the Railway Board can, therefore, be challenged under article 14.
The respondent is not asking for the enforcement of any such fundamental right as would come within the rule laid down in the previous decision of this Court.
In other words what the present respondent is challenging is the order of the Railway Board which led to the stoppage of the sale of the news was weekly on the Railway platforms etc.
If that order is discriminatory and, cannot be justified on anyof the well known grounds.
the respondent can challenge it in a Petition under Art.226 of the Constitution as violative of Art.14.
There is no parallel between the facts of this case and the decision relied upon by the learned Solicitor General.
We concur with the view of the High Court that the impugned order of the Railway Board was discriminatory.
No proper or valid grounds have been shown for sustaining the discrimination made.
A certain amount of discussion took place before us with regard to the applicability of section 28 of the Act which contains pro hibition against under preference being shown by the Railway Administration in any respect whatsoever.
Tn the view that we have taken about the applicability of article 14 we do not consider it necessary to decide whether the respondent could take advan tage of the provisions of that section.
873 Lastly, we may refer to a preliminary objection which was raised on behalf of the respondent to the certificate which was granted by the High Court.
It has been urged that the certificate is defective because in the order dated July 7, 1968 granting it the Bench has virtually given a decision as if an appeal was being entertained against the judgment dated August 11, 1965 by which the writ petition was allowed.
It does appear that Deshpande J., who delivered the order of the Division Bench granting the certi ficate has made certain observations which seem to suggest that the previous decision was incorrect.
Although such an order will not per se vitiate the certificate, both judicial propriety and decorum demand that a Bench while considering the question of granting certificate for appeal to this Court ought not to be critical of or express any dissent from the judgment appealed against because it has no such jurisdiction and all that it has to decide is whether the requirement of the Articles of the Constitution on which a certificate can be granted, have been satisfied.
The appeal fails and it is dismissed with costs.
G.C Appeal dismissed.
| IN-Abs | The sale of the Indian Observer, a news weekly, at railway platforms was banned by an order of the appellant board in March 1965.
The respondent who was owner and publisher of the Indian Observer filed a writ petition in the High Court alleging that the ban had been imposed because the new weekly had carried certain articles which were critical of the Railway administration.
The appellant 's case in the High Court was that the ban had been imposed because the news weekly carried sexy and obscene matter.
The High Court allowed the writ petition holding that similar publications were allowed to be sold by the licencees of railway bookstalls and the ban on Indian Observer was therefore dis criminatory.
The High Court also held that under clause 742 of the Indian Railway Code the appellant had no authority to impose the ban.
In appeal against the High Court 's decision.
HELD : (i) In the Indian Railway Code the policy and principle, laid down in categorical terms in sub clause (viii) of Clause 742 is that the contractor should provide equal opportunity.
to all the popular newspapers for sale in their stalls, on the same terms.
This was subject to certain conditions one of which in sub clause (v) was that the sale of obscene books and pictures and publications by the government should be strictly banned.
However the letter written by the railway dated March 26, 1965 did not impose the ban on the ground that Indian Observer was an obscene publication which had been prohibited by the government.
In that letter there was first a recital of what had come to the Board 's notice i.e., that the articles written in the said news weekly were in very low taste bordering on obscenity.
There was no finding or decision that it was a publication which was obscene.
The conclusion of the Board simply was that the Indian Observer was not fit for ,ale, at Railway station,;.
The other condition laid down in sub clause (v) that its sale has been prohibited by the Government was neither mentioned nor had it been shown that any such order had been made by the government prohibiting the sale of the Indian Observer on the ground that it was obscene.
The Central Government was not shown to have, any power under the Railways Act or rules thereunder to ban the sale of any obscene book or publication and it was not claimed that the Railway Board could impose the ban under any other enactment.
For the above reasons the order imposing the ban could not be justified under clause 742 of the Indian Railway Code.
(ii) The High Court had found as a fact that publications which were freely on sale on the bookstalls to whom licences has been given were 866 such that they were hardly distinguishable from the Indian Observer on the ground of obscenity.
It was not disputed before the High Court that the news weekly in question had been sold on railway platforms since 1963 nor was it suggested that the Railway Board had ever accorded individual sanction for the sale of every single book and publication at the book stalls of the Railway Administration.
The Railway Administration had itself directed that the book stall contractors who were its licencees should provide equal opportunity to all the popular newspapers for sale in their stalls.
These very contractors were now being directed to discriminate between the respondent and owners or publishers of other popular newspapers on grounds which had no legal basis or justification.
The administrative act or order of the Railway Board (which fell within the definition of 'State ' in article 1) of the, Constitution) could therefore be challenged by the appellant in a petition under article 226 of the Constitution as violative of article 14.
Since no proper or valid grounds had been shown for sustaining the discrimination made, the view of the High Court that the impugned order of the Railway Board was discriminatory must be upheld.
Railway Board vs Niranjan Singh, [1069] 3 S.C.R. 548, distinguished.
(iii)Judicial propriety and decorum demand that a Bench while considering the question of granting a certificate for appeal to this Court ought not to be critical of or express any dissent from the judgment appealed against because it has not such jurisdiction and all that it has to decide is whether the requirement of the Articles of the Constitution on which a ,certificate can be granted have been satisfied.
|
minal Appeal No. 117 of 1971.
Appeal by Special Leave from the Order dated February 11 1971 of the Rajasthan High Court in S.B. Criminal Misc.
Application , No. 152 of 1971.
Sobhag Mal Jain, for the appellant.
K. Balder Mehta, for the respondent.
907 The Judgment of the Court was delivered by Beg, J.
The appellant was convicted under Section 406 Indian, Penal Code and sentenced to six month 's rigorous impnsonment and a find of Rs. 500/ , and, in default of payment of fine, to three months further rigorous imprisonment, by the Munsif Magistrate of Karoli, District Bharatpur, Rajasthan.
On an appeal by him to the Court of Sessions, his conviction was set aside, but ,the Trial Court was directed to proceed with the case afresh from the stage at which the appellant should have been properly examined under Section 342 Criminal Procedure Code.
The appellant was then given a full opportunity, under Section 342 Criminal Procedure Code, to explain the facts and circumstances appearing against him in the case.
Thereafter, he also produced five witnesses in defence.
He was, however, convicted again and sentenced to two years rigorous imprisonment and to pay fine of Rs. 2,000/ , and, in default to undergo one year 's further rigorous imprisonment.
The appellant again appealed to the Court of Sessions which dismissed his appeal.
The appellant then filed a Revision application which was dismissed summarily by the High Court of Rajasthan.
Soon after that, the appellant made another attempt to invoke the inherent jurisdiction of the High Court, by applying under Sec.
561A Criminal Procedure Code, to get at least an illegality in the sentence corrected, but this also failed.
A prayer for a certificate of fitness of the case to appeal to this Court was also rejected by the High Court.
The appellant then applied under article 136 of the Constitution to this Court.
That application was admitted only an the question of the period of imprisonment awarded in default of payment of fine.
It is this question only which has been argued before us.
Section 33 of the Criminal Procedure Code runs as follows "33(1) The Court of any Magistrate may award such terms of imprisonment in default of payment of fine as it authorised by law in case of such default Provided that (a) the term is not in excess of the Magistrate s powers under this Code; (b) in any case decided by a Magistrate where imprisonment has been awarded as part of the substantive, sentence, the period of imprisonment awarded in default of payment of the fine shall not.
exceed one fourth of the period of imprisonment which such Magistrate is competent to inflict as punishment for the offence otherwise than as imprisonment in default of payment of the fine. 908 (2) The imprisonment awarded under this section may be in addition to a substantive sentence of imprisonment for the maximum term awardable by the Magistrate under Section 32".
The Munsif Magistrate who convicted the appellant had the powers of a Magistrate 1st Class which are restricted, by Section 32,sub.s(1) (a), to imposing imprisonment for a term not exceeding two years and fine not exceeding Rs. 2,000/ .
Reading Section 32 and 33 together, it was clear that, in the case before us, the Munsif Magistrate could not award more than six months imprisonment in default of payment of fine.
In answer to the appellant 's contention, based on Section 33 of the Criminal Procedure Code, learned Counsel for the State of Rajasthan placed Section 65 Indian Penal Code before us.
This Section reads as follows "65.
The term for which the Court directs the offender to be imprisoned in default of payment of a fine shall not exceed one fourth of the term of imprisonment which is the maximum fixed for the offence, if the offence be punishable with imprisonment as well as fine".
It will be seen that even where Section 65 Indian Penal Code is applied by a Court the term of imprisonment in default of payment of fine cannot exceed one fourth of the term of imprisonment which is the maximum period which can be awarded for an offence of which an accused is convicted.
An offence under Section 406 Indian Penal Code is punishable with imprisonment which can extend to only three years rigorous imprisonment and a fine.
Thus, even if Section 65 Indian Penal Code could be applied, the period of imprisonment in default of payment of fine could not exceed nine months.
It is clear that Section, 65 only fixes a maximum period of imprisotiment which can be awarded for default of payment of fine whenever any court convicts.
On the other hand, Section 33 Criminal Procedure Code governs specifically the powers of 1st Class Magistrates on this matter.
Section 33 Criminal Procedure Code also contains the principle embodied in Section 65 Indian Penal Code in its application to Magistrates.
Just as a 1st Class,Magistrate trying an offence punishable under Section 406 Indian Penal Code cannot impose the maximum amount of imprisonment prescribed by this Section, because his powers of awarding imprisonment are specifically limited to those conferred to Section 32 Criminal Procedure Code, so also he cannot, by resorting, to Section 65 Indian Penal Code, award a 'period of imprisonment in 909 default of payment of fine on the erroneous assumption that he has the power to award the maximum sentence prescribed by Section 406 Indian Penal Code.
Section 65 of the Indian Penal Code was enacted in 1860.
In 1872 Section 309 of the Criminal Procedure Code 1872 enacted : "where a person is sentenced to fine only the Magistrate may award such terms of imprisonment in default of payment of fine as is allowed by law provided that the amount does not exceed the Magistrate 's powers under this Act",.
It was held in Reg.
vs Muhammad Saib(1), that Section 309 of the Code of 1972 over ruled the provisions of Section 65 Indian Penal Code.
On a parity of reasoning, Section 33 of the Criminal Procedure Code of 1898, with which we are concerned here, would over ride Section 65 Indian Penal Code.
or, to be more accurate, apply more specifically to Magistrates.
In Queen Empress vs Venkatesagadu & Ors.
(2) it was held that Section 33 of the Criminal Procedure Code of 1882 did not authorise a Magistrate to pass sentence in default of payment of fine in excess of the term prescribed by Section 65 Indian Penal Code.
Here, reliance was placed upon a decision of Full Bench of the Allahabad High Court in the Empress of India vs Darba & No case has been cited before us in which an attempt was made to justify an order of a Magistrate, whose jurisdiction to punish is limited by Section 33 Criminal Procedure Code, by applying Section 65 Indian Penal Code.
It is obvious that the two Sections must be harmonised.
This means that, while a Magistrate 's powers are specifically limited by Section 33 Criminal Procedure Code, they must also be so exercised as not to contravene Section 65 Indian Penal Code.
As the sentence of one year 's rigorous imprisonment in default of payment of fine passed by the Munsif Magistrate was in excess of his powers, we allow this appeal to the extent that we reduce only the sentence of one year 's rigorous imprisonment awarded in default of payment of fine to six months rigorous imprisonment The rest of the sentence, which is quite legal, must stand.
We may observe here that it would have been better if this obvious illegality and excess of power could have been corrected by the High Court when the matter was brought to its notice by means of an application under Section 561A Criminal Procedure Code.
V.P.S. (1) I.L.R. 1 mad.
277 (FB).
(2) I.L.R. (3) I.L.R. 1 All.
| IN-Abs | The appellant was convicted by a first class Magistrate under section 406, I.P.C., and was sentenced to two years regorous imprisonment, a fine of Rs. 2000/ and, in default to one year 's further rigorous imprisonment.
On the question of the period of imprisonment that could be imposed in default of payment of fine, HELD : Even if section 65, I.P.C., could be applied the period of imprisonment in default of payment of fine could not exceed nine months since an offence under section 406 I.P.C. is punishable with imprisonment up to three years.
But reading sections 32 and 33, Cr.
P.C. together the Magistrate could not have awarded more than six months imprisonment in default of payment of fine.
The terms section 33 Cr.
P.C. and section 65 I.P.C., must therefore be harmonised.
Hence it must be held that while a Magistrate 's power are specifically limited by section 33 Cr.
P.C. they must also be exercised so as not to contravene section 65 I.P.C. [908 D G] Therefore, just as a First Class Magistrate trying an offence punishable under section 406 I.P.C., cannot impose the maximum sentence of imprisonment prescribed by the section, because this powers of awarding imprisonment are Specifically limited to a term not exceeding two years by section 32, Cr.
P.C. so also necessary , by resorting to section 65 I.P.C., award a period of imprisonment in default of payment of fine, on the erroneous assumption that he has the power to award the maximum sentence prescribed by section 406 1 P C. [908 G H; 909 A] Hence, three sentence of imprisonment in default of fine cannot exceed six months.
Reg vs Muhammad Sahib, I.L.R. ; Queen Empress vs Venkatesagadu, 1.
L. R. and Empress of India vs Darba, I.L.R.
I All. 46.1, referred to.
|
Appeal No. 1499 of 1971.
Appeal from the judgment and order dated August 23, 1971 of the Delhi High Court in Civil Writ Petition No. 517 of 1971.
M. C. Chagla and R. Gopalakrishnan, for the appellants.
Jagadish Swarup, Solicitor General of India, G. L. Sanghi, B. D. Sharma and section P. Nayar, for respondents Nos. 1 and 2.
A. K. Sen and H. K. Puri, for respondents Nos. 15, 39 to 48, 51, 103 and 123.
J. D. Jain, for respondent No. 55.
The Judgment of the Court was delivered by Ray, J.
This in an appeal by certificate from the _judgment dated 23 August, 1971 of the High Court of Delhi dismissing the writ petitions of the appellants.
The two appellants were promoted in the years 1958 and 1959 respectively to the Military Engineer Service Class I (hereinafter referred to as the Class I Service).
The appellant No. 1 _joined the Military Engineer Service as a temporary overseer on 1 May, 1942.
He was promoted to the grade of Superintendent Grade I on 1 May, 1949.
In the month of April, 1957 he was selected to be promoted to the grade of temporary Assistant Executive Engineer in Class I Service and he was promoted in fact in the month of April, 1958.
Respondents Nos.
4 to 21, 107 to 122 and 124 to 126 were appointed to the said Class I Service after they had appeared at competitive examination while the rest were appointed by direct recruitment after having been interviewed by the Union Public Service Commission.
All the respondents were appointed to the said Class I Service in the years 1962, 1963 and 1964.
The appellants contended first that the respondents who were directly appointed to Class I Service by interview were not within the purview of recruitment to Class I Service by competitive examination.
The Military Engineer Service Class I (Recruitment, 900 Promotion and Seniority) Rules which came into force on 1 April, 1951 speak in rule 3 of recruitment to the Class I Service (,a) by competitive examination in accordance with Part 11 of the Rules and (b) by promotion in accordance with part III of the Rules The appellants contended that appointment to Class I Service by interview was not one of the methods recruitment contemplated in the Rules, and, therefore, the respondents who were appointed by interview could not be said to be validly appointed in accordance with the Rules.
The second contention of the appellants was that the respon dents were recruited to Class I Service by interview and competitive examination after the appellant had been promoted to Class I Service and were therefore not to be confirmed in permanent posts before the appellants.
Class I Rules mention recruitment by competitive examination and by promotion.
In 1961 on the results of the competitive examination no candidates were avail able for allotment to Class I Service against temporary posts.
In 1962 there was a state of emergency.
Engineers were immediately required to fill the temporary posts in Class I Service.
To meet the emergency the Union Government in consultation with the Union Public Service Commission decided to recruit candidates by advertisement and selection by the Union Public Service Commission.
The Government with the aid of selection and interview by the Union Public Service Commission directly recruited some respondents to Class I Service in the years 1962, 1963 and 1964.
The candidates were selected after viva voce examination.
It, therefore, follows that the method of recruitment by interview was adopted to meet the emergency specially when the mode of appointment by competitive exammation failed.
The candidates who were selected were put through a period of probation of 2 years.
Only on a satisfactory completion of probation the candidates were allowed to continue in service.
On completion of 3 years continued service in the grade and after qualifying the necessary departmental test the respective officers were declared quasipermanent in the grade in terms of Central Civil Service (Temporary Service) Rules.
During the years 1962, 1963 and 1964 particularly and until the year 1969 the Class I Service Rules were not statutory in character.
The Union Government relaxed the Rules both in regard to recruitment by interview and in regard to the quotas fixed by the Rules for direct recruitment and recruitment by promotion to Class I Service.
In the year 1967 rule 20 of Part II of Class I Service Rules was amended by introduction of sub rules (h), (i), (i) and (k).
901 Rule 20 referred to the period of probation in the case of recruitment by competitive examination: Sub rule (i) stated that "50 per cent of the permanent vacancies to be filled through the competitive ad hoc recruitment conducted by the Commission after 17 May, 1963, shall be reserved for graduates engineers who are commissioned in the Armed Forces on a temporary basis during the present emergency and later released," subject to certain conditions enumerated therein.
Rule 24 was also introduced by way of amendment in the year 1967.
Rule 24 occurs in Part IV of the Rules.
It may be stated here that Part 11 of the Rules deals with recruitment to Class I Service by competitive examination, Part HI with recruitment to Class I Service by promotion and Part IV deals with miscellaneous Rules.
Rule 24 stated that where the Central Government was of opinion that it was necessary or expedient so to do, it might by order, for reasons to be recorded by it in writing and after consultation with the Union Public Service Commission relax all or any of the rules with respect to any class or category of persons or posts.
In 1969 the Class I Service Rules were amended.
The impor tant amendments were rule 4 and substitution of rule 21 in place of rules 21, 22 and 23.
Rule 4 dealt with the quotas fixed for direct recruitment and promotion to Class I Service.
The substituted rule 21 stated that appointment by promotion was to be made by selection and promotion was not to be as a matter of right.
The real importance of the amendments of the rules in the year 1969 lies in the fact that the amendments were made by the President in exercise of the powers conferred by the proviso to Article 309 ' of the Constitution.
As a result of the 1969 amendment it follows that the entire body of rules of Class I Service became statutory rules by incorporation.
The appointments to Class I Service by interview were made by the Government in consultation with the Union Public Service Commission.
The selection was made by the Union Public Service Commission.
The appointments by competitive examination proved fruitless.
The country was in a state of emergency.
Appointment and selection by interview was the only course possible.
It could not be said that all appointments should have been made by promotion.
That would be not in the interest of the Service.
The Service Rules were administrative in character.
The Government relaxed the rules.
The amendments of the rules in 1967 recognised the reality of the situation of appointment by interview.
That is why the 1967 amendment recognised that 50 per cent of "the direct recruits by competitive/ad hoc appointment were to be reserved for graduate engineers who were commissioned in the Armed Forces on a temporary basis.
" 902 on a temporary basis.
" Ultimately, when the rules were, amended in 1969 and the rules became statutory in character not only the recruitment by interview but also the relaxation of rules was regularised.
The result is that the respondent who were appointed by interview fell within the class of direct recruits.
The only other contention on behalf of the appellants was that they were promoted to Class I Service in the years 1958 and 1959 respectively and were thus senior to the respondents who were recruited to the Service subsequently, and, therefore, the appellants should be confirmed in Class I Service in priority to the respondents.
The promotion of the appellants was to temporary posts in Class I Service.
The appellants were to be confirmed in permanent posts.
The respondents who were appointed by competitive examination and by interview were also appointed to temporary posts.
They were also to be confirmed in permanent posts after having served the period of probation in accordance with the rules.
The recruitment to Class I Service during the years 1951 to 1958 was on the quotas fixed by rule 4 of the Class I Rules on the ratio of 10 per cent for departmental promotion and 90 per cent for direct recruitment.
Though rule 4 fixed the quotas on the ratio of 10 per cent for departmental promotion and 90 per cent for direct recruitment the Union Government in consultation with the Union Public Service Commission relaxed the rules and revised as an interim measure the existing quota of 10 per cent of departmental candidates for promotion to 50 per cent in the years 1959 to 1963 inclusive.
From 1964 to 1968 the quota fixed by rule 4 was followed again.
Finally, in 1969 the rules were amended and the quota for departmental promotion was 25 per cent and for direct recruitment at 75 per cent.
In this background the recruitment against temporary posts between the years 1951 and 1971 was indicated by a chart prepared by the Government and accepted to be correct.
The recruitment against temporary posts indicated the following features Between 1951 and 1956 the total recruitment against temporary posts was 84 whereof 75 were allocated for direct recruits and 9 for departmental promotees.
But in fact the recruitment by interview was for 29 and by departmental examination.
During the years 1957 and 1963 the number of vacancies for recruitment to temporary posts was 675 whereof 339 were allocated for direct recruits and 336 for departmental promotees.
Only 20 were recruited by competitive examination and 171 by interview and the remaining 484 were instances of departmental promotion.
Be tween the years 1964 and 1968 the total recruitment was 264 whereof 238 were allocated for direct recruits and 26 for departmental promotees.
In fact, recruitment was of 139 persons by 903 competitive examination and of 98 by interview and 27 'by departmental promotion.
Between the years 1969 and 1971 there were 45 vacancies to temporary posts whereof 33 were allocated for direct recruits and 12 for departmental promotees.
I were recruited by competitive examination and 34 were promoted departmentally.
The recruitment against temporary posts during the years 1951 and 1971 shows that during the relevant years 1959 to 1963 the Union Government relaxed the quota and increased the quota of 10 per cent to 50 per cent for departmental promotion.
At cannot therefore be said that any injustice was done to the departmental promotees or that any advantage was gained by the persons who were recruited by interview.
It is because of the conditions of emergency that the quota for filling the temporary posts was half for departmental promotees and half for direct recruitment.
The confirmation against permanent posts was also in according ance with the quotas fixed by rule 4 for the years 1951 to 1958, namely, 10 per cent for departmental promotion and 90 per cent for direct recruitment.
During the years 1959 to 1963 inclusive the Union Government in consultation with the Union Public Service Commission relaxed the quota rule and increased the quota for departmental promotees from 10 per cent to 50 per cent and reduced the quota of direct recruitment from 90 per cent to 50 per cent.
In the year 1959 126 permanent posts were available whereof 63 were allocated for direct recruits and the other 63 were for departmental promotees.
In 1960 there were 14 permanent posts and 7 were allocated for direct recruits and 7 for departmental promotees.
Again, in 1961 there were 23 permanent posts available.
12 were allocated for direct recruits and 11 for departmental promotees.
For 1962 there were 20 permanent posts whereof 10 were allocated for direct recruits and the other 10 for departmental promotees.
In 1963 there were 11 permanent posts whereof 5 were allocated for direct recruits and 6 for departmental promotees.
In 1964 there were 9 permanent posts whereof 8 were allocated for direct recruits and one for departmental promotee.
In 1965 there were 15 permanent posts whereof 13 were allocated for direct recruits and two for departmental promotees.
In 1966 there were 113 permanent posts whereof 82 were allocated for direct recruits and 11 for departmental promotees and 20 for released officers in accordance with the revised rule in the year 1967.
In 1967 there were 45 permanent posts whereof 40 were allocated for direct recruits and 5 for departmental promotees.
In 1968 there were 14 permanent posts available whereof 13 were allocated for direct recruits and one for departmental promotee.
The position with regard to filling of permanent posts shows that during the years 1951 to 1958 the quota was 10 per cent for 904 departmental promotees and 90 per cent for direct recruitment but during the years 1959 to 1963 the quota was changed with the result that half of the permanent posts were filled by departmental promotion and the other half by direct recruitment.
From 1964 to 1968 the old quota of 10 per cent for departmental promotion and the remaining 90 per cent for direct recruitment was resorted to.
In 1969 rule 4 was changed 'with the result that there were 25 per cent for departmental promotion and the remaining 75 percent for direct recruitment.
In the year 1959 the direct recruits who were confirmed in permanent posts were recruited by the Union Public Service Commission by interview during the years 1951 to 1956.
In 1960 the direct recruits through interview who were confirmed had been selected through interview by the Union Public Service Commission between the years 1953 and 1956.
In 1961 the direct recruits who were confirmed in permanent posts were those who had been selected by the Union Public Service Commission through interview during the years 1956 to 1957.
In 1962 the direct recruits who were confirmed in permanent posts were those who had been selected by the Union Public Service Commission through interview during the years 1956 to 1958.
In 1963 the direct recruits who were confirmed in permanent posts were those who had been selected by the Union Public Service Commission through interview between the years 1958 to 1961.
In 1964 the direct recruits who were confirmed in permanent posts were those recruited in 1962 by the Union Public Service Commission through interview.
In 1965 the direct recruits who were confirmed in permanent posts were those recruited by the Union Public Service Commission through interview in 1962 and 1963.
In 1965 13 direct recruits were confirmed and they included some of the respondents.
In 1966 82 direct recruits were confirmed against permanent posts and they were persons who had been selected by the Union Public Service Commission through interview during the year 1963 and they included some of the respondents.
In the year 1959 when the Government in consultation with the Union Public Service Commission revised as an.
interim measure the increase of the quota of departmental promotion of candidates from 10 to 50 per cent and followed that system up to the end of 1963 a question arose as to how the then existing permanent vacancies were to be filled and the Union Public Service Commission advised that the same might be filled by confirmation of direct recruits, namely, those recruited on the basis of competitive examination and by advertisement and selection and promotees in the ratio of 11.
The advice of the Union Public Service Commission was accepted and the Departmental Promotion Committee acted on that basis.
It is apparent that during those years there was a relaxation in the observance of rules in the case of appellants and the other departmental promotees.
The Union Government 905 all throughout acted in consultation with the Union Public Service Commission.
The departmental promotees gained considerable advantage by relaxation of the rules.
The direct recruits were not shown any preference at all.
The proportion of confirmation of departmental promotees and of direct recruits by interview was 1 : 1 In the year 1967, the Government was again faced with the question of confirmation of direct recruits by interview as well as by competitive examination against permanent vacancies in the grade falling in the direct recruitment quota prescribed in the rules.
The Union Public Service Commission advised that direct recruits by interview and by competitive examination could be confirmed against permanent vacancies within the fixed quota of direct recruits.
The result was that in 1969 the Class I Service Rules were amended and the quota for departmental promotion was raised from 10 to 25 per cent and the quota of direct recruits was reduced from 90 to 75 per cent.
The appellants can have no grievance with regard to confirmation.
The departmental promotees have been confirmed against permanent posts within their quota in order of seniority.
Departmental promotees who have been confirmed up to the year 1970 had been promoted to Class I Service before the appellants.
On the other hand, direct recriuts consisting of those recruited by competitive examination as well as by interview have been confirmed against permanent vacancies within their quota.
As a matter of fact between the years 1959 and 1963 inclusive the quota fixed for departmental promotees was increased from 10 to.50 per cent and thereby the confirmation of departmental promotees and direct recruits was equally balanced.
The direct recruits who were appointed by interview fell within the class of direct recruits.
The quota fixed for direct recruits was never infringed by absorbing direct recruits by interview beyond the quota.
The confirmation of direct recruits and departmental promotees against permanent vacancies was in accordance with the quota fixed.
By reason of relaxation of rules in regard to increase of quota for departmental promotees they gained advantage during the years 1959 to 1963 when because of the emergency direct recruits by interview were selected by the Union Public Service Commission.
For the foregoing reasons the appeal fails and is dismissed.
In view of the fact that there was no order as to costs in ' the High Court parties will bear their own costs.
G.C. Appeal dismissed.
| IN-Abs | The two appellants were promoted in the years 1958 and 1959 respectively to the Military Engineer Service Class 1.
Some of the respondents were appointed to the said class I Service after they had appeared at the competitive examination while the rest were appointed by direct recruitment after having been interviewed by the Union Public Service Commission.
All the respondents were appointed to the service in the years 1962, 1963 and 1964.
The respondents were confirmed in their posts before the appellants.
The appellants filed writ petitions in the High Court which were dismissed.
In appeal before this Court the appellants contended (i) that the respondents who were directly appointed to class I service by inter view were not within the purview of recruitment to Class I service by competitive examination under the Military Engineer Service Class I (Recruitment Promotion and Seniority) 'Rules; (ii) that the respondents were recruited to Class I Service by inter view and competitive examination after the appellant had been promoted to Class I service and were therefore not to be confirmed in permanent posts before the appellants.
HELD : (i) The appointments to Class I Service by interview were made by the Government in consultation with the Union Public Service Commission.
The selection was made by the Union Public Service Commission.
The appointment by competitive examination proved fruitless.
The country was in a state of emergency.
The appointment and selection by interview was the only course possible.
It could not be said that all appointments should have been made by promotion; that would not he in the interest of the service.
The Service Rules were administrative in character.
The Government relaxed the rules.
The amendments of the rules in 1967 recognised the reality of the situation of appoint ment by interview.
That is why the 1967 amendment recognised that 50% of "the direct recruit by competitive ad hoc appointments were to be reserved for graduate ceneers who were commissioned in the Armed Forces on a temporary basis Ultimately, when the rules were amended in 1969 and the rules became statutory in character, not only the recruitment by interview but also the relaxation of rules was regularised.
The result is that the respondents who were appointed by interview fell within the Class I direct recruits.
[901 F 902 A] (ii) The appellants should have no grievance with regard to confirmation.
Departmental promotees had been confirmed against permanent posts within their quota in order of seniority.
The departmental promotees who had been confirmed up to the year 1970 had been promoted to 899 class I Service before the appellants.
On the other hand direct recruits consisting of those recruited by competitive examination as well as by inter view had been confirmed against permanent vacancies within their quota.
As a matter of fact between the years 1959 and 1963 inclusive the quota fixed for departmental promotees was increased from 10 to 50% and thereby confirmation of departmental promotees and direct recruits was equally balanced.[905 D F] Accordingly, the appeal must fail;
|
o. 1052 of 1971.
Appeal by special leave from the judgment and order dated May 27, 1971 of the Punjab and Haryana High Court in Execu tion Second Appeal No. 1783 of 1970.
M. C. Chagla, V. C. Mahajan, section K. Mehta and K. L. Mehta and K.R. Nagaraja, for the appellant.
M. C. Setalvad, 0.
C. Mathur, J. B. Dadachanji and Ravinder Narain, foi the respondent.
The Judgment of the Court was delivered by P. Jaganmohan Reddy,, J.
The respondent who was constructing a building, had leased it out on a monthly tenancy to the appellant on the 1st November 1959.
The building was ulti mately completed in March 1960.
On 14 1 1963 he filed a suit and got a decree for ejectment on 14 8 1969.
On 29 8 1969 he filed an execution petition but the executing court dismissed it on 16 4 1970 on the ground that the conditions prescribed in the notification of the Government of Punjab under section 3 of the Punjab Urban Rent Restriction Act 1949 (hereinafter called the Act ') dated 30 7 1965, exempting such decrees from section 13 of the said Act were not complied with.
An appeal against this judgment was unsuccessful.
On a second appeal the High Court held that the decree was executable inasmuch as that decree was exempted under the notification.
This appeal is by special leave against that judgment.
Before we notice the conditions prescribed for the exemption of decrees of eviction against tenants from the provisions of the Act, it is necessary to refer to section 13 of the Act in so far as it is relevant and the notification exempting decrees obtained by certain categories of landlords from those provisions.
It is wellknown that due to the non availability of housing accommodation in urban areas and the consequent hardship to tenants who were already occupying buildings on lease, almost all the States enacted legislation by and under which the landlords ' rights to evict tenants as well as the right to recover higher exorbitant rents were considerably cut down.
The main scheme of these Acts generally was to make it obligatory on landlords intending to 924 evict tenants to make applications before the authority prescribed under the Act only on the grounds specified in the particular legislation, The Rent Control Authority alone could make an enquiry and order eviction.
The jurisdiction of the civil courts was taken away.
In some of the States, such as in Uttar Pradesh, civil courts were allowed to entertain eviction suits but subject to prior leave being obtain from the District Magistrate.
In other words, in that State two rounds of litigation were provided for Similarly, applications for fixation of fair rent where the rent charged was considered to be exorbitant could also be made before these authorities.
These restrictions could not, however, serve as a panacea for solving the accommodation problem in urban cities consequent on the phenomenal migration of population into those areas which was further aggravated by large scale exodus due to the partition of India.
It, therefore, became necessary for each of the State Governments not only to undertake building schemes itself but also to encourage persons who had the means to build by exempting newly constructed building which were let out to tenants from rent control restrictions for a particular period.
One of such legislations is the Act with which we are now concerned.
Unlike other Rent Control legislations, this Act adopts rather a novel method, in that while it permits suits being filed and decrees obtained, it places restrictions against their execution except on specified grounds.
In this case, however, we are not concerned with the novelty of the legislation or the hard ship, expense and delay which is caused to the landlord or the tenant by the innovation adopted by it.
We may now read the relevant provisions of section 13 which are as under : " 13 (1).
A tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of this Act or otherwise and whether before or a fter the termination of the tenancy, except in accordance with the provisions of this section, or in pursuance of an order made under section 13 of the Punjab Urban Rent Restriction Act 1,947, as subsequently amended.
(2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf.
If the Controller, after giving the tenant a reasonable opportunity of showing cause against the applicant, is satisfied (here the grounds upon which he should be satisfied have been set out) the controller may make an order directing the tenant to put the landlord in possession of the building or, 925 rented land and if the Controller is not so satisfied he shall make an order rejecting the application Provided that the Controller may give the tenant a reasonable time for putting the landlord in possession of the building or rented land and may extend such time so as not to exceed three months in the aggregate.
(3) (a) A landlord may apply to the Controller for an order directing the tenant to put the landlord in possession (The grounds on which he can apply have been set out) (b) The Controller shall, if he is satisfied that the claim of the landlord is bona fide make an order directing, the tenant to put the landlord in possession of the building or rented land on such date as may be specified by the Controller and if the ' 'Controller is not so satisfied, he shall make an order rejecting the application (c) x x x x x Provided that the Controller ipay give the tenant a reasonable times for putting the landlord in possession of the building or rented land and may extend such time so as not to exceed three months in the aggregate.
(4) x x x x x (5) x x x x x The Government under section has been empowered to, direct that all or any of the provisions of the Act shall not apply to any particular building.
or rented land or any class of building or rented lands.
Pursuant to this power, the State Government was notifying exemptions from time to time during, a period of 20 years, the first notification it appears having been issued on the 8th March 1951 which exempted buildings constructed in 1951 and 1952 from the provisions of the Act for a period of 5. years with effect from the date of completion of any such building.
Thereafter followed several notifications which exempted buildings constructed in each of the years after 1952.
The notification with which we are now concerned was issued on 30 7 1965 and is in the following terms: ".
In exercise of the powers conferred by section 3 of the Punjab Urban Rent Restriction Act 1949 and all other powers enabling him in this behalf, the 13 L1061 Sup.
Cl/72 926 Governor of Punjab is pleased to direct that the provisions of section 13 of the said Act shall not apply in respect of decrees for ejectment of tenants in possession of building which satisfy the following conditions, namely : (a) Buildings constructed during the years 1959, 1960, 1961, 1962 and 1963 are exempted from all the provisions of the said Act for a period of five years to be calculated from the dates of their completion, and (b) During the aforesaid period of exemption suits for ejectment of tenants in possession of those buildings were or are instituted in civil courts by the landlords against the tenants and decrees of ejectment were or are passed".
Under the above notification, the provisions of section 13 are made inapplicable to decrees in respect of buildings constructed during the years specified in (a) for a period of 5 years to be calculated from the dates of their completion provided during the said period suits had been instituted by the landlords against the tenants.
There is no doubt, from the facts set out above, the building in respect of which exemption from the application of section 13 is being claimed, was completed in March 1960 and a suit had also been filed on 14th January 1963 before the expiry of the period of 5 years from that date.
It is contended by the learned Advocate for the appellant that the decree in that suit having been passed on 14th August 1969 after the period of 5 years from the date of construction, the exemption from the restrictions placed by section 13 will not be available, because according to him not only the suit should be filed but the decree for eviction should be obtained within the said period of 5 years.
This contention on the very face of it would lead to incongruity or would, if accepted, have the effect of nullifying the very purpose for which the exemption was being given.
We were reminded with a somewhat emphatic assertion what appears to us to be unexceptional that the Courts are not concerned with the policy of the legislature or with the result, whether injurious of otherwise, by giving effect to the language used nor is it the function of the Court where the meaning is clear not to give effect to it merely because it would lead to hardship.
It cannot, however, be gainsaid that one of the duties imposed on the Courts in interpreting a particular provision of law, rule or notification is to ascertain the meaning and intendment of the legislature or of the delegate, which in exercise of the powers conferred on it, has made the rule or notification in question.
In doing so, we must always presume that the impugned provision was designed to 927 effectuate a particular object or to meet a particular requirement and not that it was intended to negative that which it sought to achieve.
It is clear that the Government intended to grant certain inducements to persons who had ,the means to construct buildings by exempting any such building so constructed or a period of 5 years.
The period of 5 years could commence from the date of construction or from some other date.
Initially, as the earlier notifications would show, that exemption of 5 years was given from the date when the building was constructed but by the impugned notification it was intended to confer the benefit by giving exemption of 5 years from a subsequent date, namely, the date of the institution of a suit, provided it was instituted within a period of 5 years from the date of the construction of the building.
A closer reading of the notification would show ,that it was intended to clarify and provide a workable solution in respect of building constructed in 1959, 1960, 1961, 1962 and 1963.
These buildings had already been exempted, from the pro visions of section 13 by two earlier notifications, the first one in 1960 giving exemption upto 31 12 1963 and the second in 1963 for 5 years from the date of completion of the building.
It is clear from the language of the notification that what is exempted is the decree for ejectment of a tenant from the application of section 13.
The very purpose of exemption of buildings from the operation of section 13 was to give landlords the rights which as owners of buildings they had under the ordinary law, namely, to give them on lease act rents which they thought were remunerative and to evict tenants during that period without any fetters imposed by the Act.
If no provision was made for exempting such decrees in respect of the exempted buildings, the exemption granted will be illusory.
Clause (b), therefore, provided for the time during which that suit in which the decree has been passed should be filed.
The decrees passed in such suits will be executable free from the fetters imposed by section 13 of the Act.
It is obvious that the filing of a suit by itself does not confer any exemption be.cause what is exempted from the provisions of section 13 is the decree.
A suit filed, therefore, must end in a decree though that decree may be passed subsequent to the expiry of the 5 years ' period during which exemption from the application of section 13 has been granted.
The learned Advocate for the respondent has suggested a construction which is consistent with our reading of the notification and that is that the words 'were ' or 'are ' used in clause (b) both in respect of the filing of the suits and the, passing of the decrees would indicate that these suits should have been filed or are hereafter to be filed and likewise decrees of ejectment had been passed or are hereafter to be passed.
In other words, the suits must have been already filed during the period of exemption 928 or are to be instituted during such period.
This language had to be used because the 5 years ' exemption in respect of the buildings constructed in 1959 would end in 1964 while the notification was issued in 1965.
There is no question of suits being; filed in respect of these buildings hereafter, as such decrees in suits filed before 1964 would be exempted.
In respect of the buildings constructed in 1960, there would be some buildings in respect of which the five: years ' exemption period would have expired before the notification and, therefore, the suits in respect of such buildings i during the relevant period in 1960 should have been filed before that period expired and where the exemption expires after the notification, suits could be filed thereafter but before the ' exemption expires.
In respect of 1961, 1962 and 1963 there is of course no difficulty because there is sufficient period for filing suits if they had not been filed by the time the notification was issued.
Taking.
the typical case of a, building constructed in 1961, the period of 5 years ' exemption would expire in 1966 and under the first part of clause (b) it would be open to the landlord to file a suit for ejectment even on the last day of ;the expiry of the ;5 years exemption, If so, it would be absurd to postulate that a decree would be given immediately thereafter,.
as that would be the result, if 'the contention that :both the, suit and the, decree should be passed within the period of exemption, is accepted.
This could not have, been the intention of the Government in publishing the notification under section 3.
, It is clear to our minds, as it was to the High Court that under clause(b) the filing of the suit within the period of exemption is the only condition that is necessary to satisfy one of the requirements of the.
exemption, the other requirement being the passing of the decree in respect of which no time has been prescribed.
If the decree, as contended by the learned Advocate for the appellant, has to be obtained within the period of 5 years, there was no need to specify that the suit had to be filed within that period because the ,exemption from the requirements of section 13 is only.
in respect of the decree and not the suit, There was, therefore, no need to mention about the time of, the filing of the suit.
In the view we have taken, the construction placed by the High Court is the only construction that is possible on the language of the notification.
This appeal is accordingly dismissed with costs.
G.C. Appeal dismissed.
| IN-Abs | Under the Punjab Rent Restriction Act, 1949 a landlord can evict a tenant only on the grounds and according to the procedure provided in section 13 of the Act.
Section 3 of the Act provides for exemption to be granted by Government from the operation of section 13.
By notification dated July 30, 1965 the Government of Punjab granted such ex emption in respect of building constructed during the year 1959 to 1963 for a period of 5 years from the date of their completion, on the .condition that during the aforsaid period of exemption suits for ejectment of tenants in respect of those, buildings "were or are" institutes in civil courts and decrees of ejectment "were or are" passed.
The respondent had let out to the appellant a building which was completed in 1960.
A suit for ejectment of the appellant was filed in 1963 and decree was obtained in 1969.
In proceeding for execution the question was whether the .decree, having been obtained more than 5 years after completion of the building, was exempt from operation of section 13.
The High Court in second appeal held in favour of the respondent.
In appeal to this Court by special leave, the appellant contended that the decree in the suit having been passed after 1 period of 5 years from the date of construction, exemption from restrictions placed by section 13 will not be available because not only the suit should be filed but the decree for eviction should be obtained within the said period of 5 years.
HELD : The filing of the suit within the period of exemption is the only condition that is necessary to satisfy one of the requirements of the exemption, the other requirement being the passing of the decree in respect of which no time has been prescribed.
If the degree, as contended by the appointment has to be obtained within the period of 5 years, there was no need to specify the at the suit had to be filed within that period because the exemption from the requirements of section 13 is only in respect of the decree and not the suit.
[928 F] The use of the words 'were or are ' in respect of decree ,is A will as suits supports the above interpretation.
The suit should have been filed or are her , after, to filed and likewise decrees of ejectment bid been passed or are hereafter to be passed.
Further, a suit may conceivably be filed on the last day of the expiry of the 5 years exemption.
If so it will be absurd to postulate that a decree would be given immediately thereafter, as that would be the result, if the contention that both the suit.and the decree should be passed within the period of exemption.
is accepted.
[927 H 928 E] 923 A statue must be interpreted in the light of its object.
The very purpose of the exemption of buildings ' from 'the operation of section 13 was to give landlords the light which as owners of buildings they had under the ordinary law, namely, to give them on lease at rents which they thought remunerative and to evict tenant 's during that period without any fetters imposed by the Act.
If no provision was made for exempting such decrees in respect of the exempted buildings the exemption granted will be illusory.[1926 H 927 E] Accordingly the appeal must fail.
|
Appeal No. 1611 of 1968.
Appeal from the judgment and order dated December 5, 1966 of the Allahabad High Court in Special Appeal No. 760 of 1966 and Petition for Special Leave to appeal (civil) No; 676 of 1972, 912 V. M. Tarkunde, J. P. Goyal; and Sobhag Mal Jain, for the appellant.
E. C. Agarwala and A. T. M. Sampat, for respondent No. 2.
The Judgment of the Court was delivered by Dua,J.
The following dispute between M/s.
Bijli Cotton Mills (P) Ltd., and their workmen was referred to the Industrial Tribunal 11, U.P. for adjudication : "Should the employers be required to pay wages for the festival holidays allowed to their workmen in a year ? If so, from which date and with what other details ? According to the workmen the employers had been giving 17 festival holidays to their workmen in a year and though those holidays should have been paid ones the employers were not making any payment.
The dispute was originally espoused at the instance of Hathras Mazdoor Panchayat but later three other unions namely Sooti Mill Mazdoor Panchayat, Congress Mazdoor Sangh and Suti Mill Karmachari Sangh were also accorded right of representation on their applications.
The employer mills contested the claim on various grounds.
The plea on the merits in substance was to the effect that neither in law nor in practice was there any provision for festival holidays with wages.
The Mill, it was averred, was already paying was for three holidays allowed to the workmen under the U.P. Industrial Establishments (National Holidays) Act (U.P. Act XVIII of 1961) and in the entire Agra region in which this Mill is situated to textile mill pays wages for festival holidays.
It was added that the Mill was an uneconomic unit and was not in a position to bear any extra burden.
The Congress Mazdoor Sangh, the Sooti Mill Karmachari Sangh and the Hathras Mazdoor Panchayat filed separate written statements on behalf of the workmen and pleaded that the grant of holidays without wages was illegal and against social Justice.
The employer Mill filed rejoinder statement to the written statements of all the Unions, pleading that the holidays mentioned by the Unions were not allowed to the workmen at the employer ', initiative but were _granted because the workmen demanded the same and these holidays were substituted by other days in lieu of holidays, and as they were paid for the days on which they worked on account of these holidays there was no Toss of wages caused to the workmen.
On july 15, 1965 the parties made their statements under,r. 12 of the U.P. Industrial Disputes Rules, 1957, which provides 913 for procedure at first.
sittings of die Tribunal requiring the parties to state their respective cases.
Shri M. P. Jaiswal, on behalf of the employers admitted that the company gives 17 festival holidays to all its employees, 15 of which are; those mentioned in the written statement of the Congress Mazdoor Sangh and two others being Sankranti and Baldev Chat observed on Bhadon Sukla Chat.
All these holidays were stated by him to be paid holidays in the sense that the workers were allowed to work on their unpaid rest days in substitution of the said festival holidays.
The unpaid rest days were the.
same as those provided and observed under section 52 of the Factories Act as unpaid holidays.
It was admitted that the monthly raters were paid for 365 days in a year whereas piece raters were paid according to the quantum of work done by them on working days in a month.
The national holidays given by the employer are not substituted on any rest day and if any national holiday falls on a rest day the employer pays single day 's wages if no work is done.
If a holiday is substituted on rest day then only one day 's wages are paid.
After this statement four representatives of the contesting unions stated that whenever the management takes work, from the workers on a rest day only one day 's wages are paid and it was emphatically denied that holidays were substituted on a rest day.
Monthly raters, according to these representatives, get their wages for all 365 days.
After these statements the Presiding Officer of the Tribunal put the following question to Shri Jaiswal : Q : Whether the festival holidays observed in the Mill are paid or unpaid ? A : They are paid holidays and payment is made by substitution as stated earlier.
Thereafter it appears that the workmen did not lead any evidence but Shri M. P. Jaiswal, Secretary of the Mills appeared as a witness on behalf of the employer.
He filed two charts showing the festival holidays observed in ,he Mills in the year 1964 and upto July, 1965.
He proved these charts stating that they bad been prepared from the Mills ' Muster Rolls and that they were true copies correctly prepared from the records of the Mills.
These two charts were marked as exhibit E 1 and exhibit E 2. )When the witness tried to depose about the holidays in the Kanpur Textile Mills, the question was disallowed.
While cross examined by Shri B. D. Seth, on behalf of the workmen, Mr. Jaiswal stated that in Ex E 1 only two holidays for Holi were substituted, one on February 23, 1964 and the other on March 1, 1964, the remaining two not being substituted.
In the case of Diwali also.
two holidays were 914 substituted leaving unsubstituted the remaining two holidays.
On being" cross examined by Shri O.P. Gautam also on behalf of the work men the witness stated that in 1965 as well only two holidays on account of Holi were substituted, the remaining two being un substituted.
In the preceding years also the position was stated to be the same in regard to Holi holidays.
The following :two questions and answers may also be re produced Q : When you take work on Sunday which is a weekly holiday on which date you give the festival holiday ? A : As such we do not give the weekly rest day on the day on which the festival falls within the limits allowed under the Factories Act. 0 : Is there any limit for festival holidays in Factories Act ? A : There is no such limit nor any such direction in the Factories Act.
For substitution there is a restriction in Sections 51 and 52 of the Factories Act.
Exhibits E 1 and E 2 show festival holiday for the year 1964 and 1965 and these charts corroborate the answers elicited from Shri Jaiswal that for Holi and Diwali only two days on which substitution was allowed were paid for, the remaining two holidays being unpaid.
It may be pointed out that ;the Tribunal, after the statements of the parties under r. 12, framed the following issue : "Whether the festival holidays are given to the work .
men in the form of substituted holidays on weekly rest days ? If so are the workmen other than the monthly raters entitled to only one day 's wages or two days ' wages i.e., one day 's wages for the work done on the weekly rest day and one day 's wages for the substituted holiday ?" It appears that the language of this issue was not objected to by either party and this appears to be the real crux of the controversy which emerged after the statements of the parties requiring decision by the Tribunal.
It was not disputed before the Tribunal that the employers had been giving 17 festival holidays to all the workmen besides three national holidays.
The plea taken by the employers in their pleadings that the holidays are not paid holidays was in the opinion of the Tribunal given the go by in the 915 statement of Shri Jaiswal recorded under r 12 on.
July 15, 1965.
The Tribunal then dealt with that statement and observed that after that statement it was for the, employers to show how payment for the festival holidays Was made by them.
To reproduce the words of the award : "In the written statement without stating whether the festival holidays were paid or unpaid they pleaded that neither in law nor in practice there was any provision for festival holidays with wages and that in the entire Agra Region no textile mill was paying wages for the festival holidays.
Originally it appeared that the employers wanted to set up that the festival holidays were unpaid but at the time of the statement under rule 12, Shri Jaiswal took a contrary position and stated that all the festival holidays were paid holidays and the payment was made in the sense that they were substituted on rest days.
I have already shown how this statement is in correct and no impartial mind will be wrong in drawing a legitimate inference that the purpose of the employers in setting up inconsistent pleas or in giving in consistent statements was only to conceal the truth or it may be that the purpose was to confuse the issue.
" A little lower down, after observing that Shri Jaiswal was not the kind of witness who would give straight answers to straight questions and that the witness had to be warned for this attitude observed : "From the employers own pleadings the statement of Shri Jaiswal recorded under rule 12 and his deposition, it is evident that 17 festival holidays besides three National Holidays are all paid holidays but the employers had been wrongfully depriving their workmen of their dues in this behalf." The Tribunal, while dealing with the case of monthly raters observed that they were not entitled to the relief because they were paid for all the 365 days in a year.
The case of daily raters or piece raters being different (they were paid according to the number of days on which they worked or the quantum of work thev turned out) they were held entitled to festival holidays with wages.
Daily raters were accordingly held entitled to payment on the basis of their daily wage whereas piece raters were held entitled to get the average earning to be calculated on the basis of the average of the last one month immediately preceding the holiday.
The relief granted.
by the award was stated thus "My award, therefore is that the employers shall pay wages to their daily rated and piece rated Workmen 946 for 17: festival holidays besides, three National Holidays, i.e., to each or their workmen who: are daily raters and piece raters with effect, from, the 1st January, 1965.
For the holidays which have accrued, from the 1st January 1965 fill the date of enforcement of the award and ' which are.
given in the list exhibit E 2 the employers shall pay the arrears and in future all the. festival ' holidays and National Holidays shall be paid for.
If the employers substitute festival holidays on a rest day, for that day they shall.
pay double the wages.
" The appellant, feeling aggrieved by this award, presented a writ petition in the Allahabad High Court under article 226 of the Constitution complaining that the Industrial Tribunal had misread ' and misinterpreted the statement of the parties recorded under r. 12 particularly the statement of Shri Jaiswal.
It was also averred that the question of festival holidays depends on so many other factors particularly custom and usage and the Industrial Tribunal had committed a serious error in shutting out evidence in regard to the practice prevalent at Kanpur in respect of the custom and usage regarding festival holidays in the textile industry there.
The main textile industry in the State of Uttar Pradesh according to the appellant 's averment is concentrated at Kanpur.
The alleged admission by Shri Jaiswal contrary to the appellant 's pleading and contrary to the case set up by both parties could: not be conclusive and the Industrial Tribunal illegally based its finding on such alleged admission.
The High Court dismissed the writ petition holding that it was open to the Industrial Tribunal to allow or disallow any question which it considered relevant or irrelevant and the High Court, in exercising its jurisdiction under article 226 of the Constitution, could not go into the correctness or otherwise of the order disallowing a particular question to be put to a witness such function being vested only in an appellate court.
The grounds that the Industrial Tribunal, had misread the statement of Shri Jaiswal in holding that, he had made an admission that 17 paid festival holidays were being allowed to the workmen was also considered to be impermissible in the High Court in writ jurisdiction because that pertains to the appreciation of evidence.
The statement made by Shri Jaiswal under r. 12, according to the High: Court, was capable of the interpretation that it contained an admission that the employers were giving 17 paid festival holidays to their workmen.
Not being satisfied that three impugned award suffered from any error of jurisdiction or from any manifest, error of law the writ petition was dismissed.
Special appeal form the judgment of the learned single Judge to a Bench of two Judges was summarilly dismissed, on, December 917 5, 1966, However, leave to appeal to this Court was granted by the Divisional Bench on February, 16,1968, the petitioner having been held, to.
quote the words of the High Court "entitled to a certificate.
either under cl.
(a) or, (b), of article 13 3 ( 1) of the Constitution".
The High Court also, certified "that the value of the subject matter of dispute before the High Court and in appeal is not less than Rs. 20,000/ ; alternatively, it is certified that the judgment of this Court involves directly or indirectly a claim res pecting wages amounting to more than Rs. 20,000/ .
", Before, us the respondents raised, an objection that the certificate granted ' by the High Court was incompetent and, therefore, should be cancelled.
Out attention was drawn to article 133(1),(a) and (b) of the Constitution and it was pointed out that the High Court missed that part of sub article
133(1) where it is stated that " where the judgment, decree or final order appealed from affirms the decision of the court immediately below in any case other than a case referred to in sub clause (c), if the High Court further certifies that the appeal involves some substantial question of law.
" Merely because the value of the subject matter in dispute is more than Rs. 20,000/ , the respondent contended, it does not by itself justify the grant of a certificate under cl.
(a) or cl.
In the application for the requisite certificate the prayer included cl.
(c) of article 133(1) as well, but apparently at the time of arguments the submission was confined to cls.
(a) and (b) alone.
The appellant, when faced with this difficulty, submitted that this Court should, on its oral request, grant special leave to appeal after condoning delay and it also filed a formal written application for special leave to appeal accompanied with an application for condonation of delay.
For adopting such a course the appellant relied on an unreported decision of this Court in The District Board (afterwards Zila Parishad), Allahabad vs Syed Tahir Hussain & ors.(1) There the appellant had come to this Court on a certificate purporting to have been granted under article 133 of the Constitution.
At the time of hearing it was objected on behalf of one of the respondents there that the certificate could only be granted if there was a substantial question of law and since the certificate did not disclose on its face the existence of any such question, the appeal was incompetent.
This Court, in view of its earlier decision in Shri Durga Prasad & anr.
vs The Banaras Bank Ltd.(2), sustained this objection and in the absence of a certificate of the High Court showing the existence of some substantial question of law held the appeal to be incompetent.
The appellant in, that case when faced with a similar situation, had made an oral request praying for special leave, undertaking to.
file a written (1) C.A. No; 578 of 1963 decided on July 23,1965.
(2) [1964] 1 S.C.R. 475.
918 petition for that purpose supported by an affidavit and accompanied by an application for condonation of delay.
This Court considered the case to be fit and proper for granting special leave which granted on oral prayer but the appellant there Ws directed to file special leave petition in this Court within a week.
The appellant in the present case also filed during the course of hearing special leave petition No. 676 of 1972 duly supported by an affidavit and Civil Miscellaneous Petition No. 1319 of 1972 with a supporting affidavit praying for (i) condonation of delay, (ii) treating court fee paid on C.A. No. 1611 of 1968 as court fee on special leave to appeal and (iii) the security deposit.
in the earlier appeal being treated as security in the special leave appeal.
We heard all the matters together.
We consider the case to be covered by the precedent cited and accordingly held the certificate granted by the High Court to be incompetent and, therefore, liable to be cancelled.
With the cancellation of the certificate C.A. No. 1611 of 1968 must be dismissed; but in the circumstances there would be no order as to costs.
With regard to the prayer for granting special leave to appeal there can be no dispute that this Court is fully competent to entertain this prayer and if the cause of justice so demands, to grant the same and consider the special leave to, appeal on the merits.
Article 136 is couched in very wide terms and it vests this Court with discretionary power for setting right grave injustice in fit cases.
In Shri Durga Prasad 's case (supra), this Court, having regard to all the circumstances, did not consider that to be a fit case for granting special leave to appeal whereas in the later case of the District Board (afterwards Zila Parishad) Allahabad (supra), it may be recalled, this Court granted special leave to appeal on oral request, directing, that a formal special leave application be filed within a week.
After considering all the circumstances we consider the present case to be fit for granting special leave to appeal and for condoning the delay.
We order accordingly.
The appellant, however, must pay full court fee payable within two weeks but the security already deposited in C.A. No. 1611 of 1968 may be treated as security in the special leave appeal.
The result, therefore, is that now we have the fresh appeal by special leave before us for decision.
The appellant 's learned counsel drew our attention to the statements of the respective cases of the parties before the Industrial Tribunal and also to the statement of Shri Jaiswal under r. 12.
In our view the statement of Shri Jaiswal had, as a matter of law, to be read as a whole and also in the back ground and along with the pleadings as disclosed in the respective statements of cases of the parties in order to understand whether Shri Jaiswal 's statement 919 amounted to, a clear and conscious admission eliminating a crucial, part of the controversial issue.
Reading them as ' a whole we do not consider it possible to hold that the appellant had admitted ,that the 17 festival holidays were being given by.
them as paid ' holidays dispensing with the enquiry into the question referred for adjudication to the industrial Tribunal.
It may in this connection be pointed out that the real purposes and object of r. 12 is only to pinpoint the precise.
controversy by requiring the, parties to state their respective cases at the very first sitting of the Tribunal.
This statement is not like the testimony of a witness, part Of which can be accepted and thereat rejected.
11 was only in the nature of a supplementary pleading designed mainly to remove vagueness and to clear ambiguities or indefiniteness in the pleadings.
This statement had, therefore, to be read and considered as a whole.
If it was considered unsatisfactory in some respects this factor could be taken into account in appreciating the pleadings and evidence led in the case while coming to the final decision but it could not debar the appellant from leading evidence on the controversial issue as if such issue did not arise.
It is noteworthy that even the workmen did not plead that the festival holidays were (treated as paid holidays but no payment was as.
a matter of fact being made.
The holidays were of course allowed to the workmen but the written statement on behalf of the appellant unequivocally denied that there was any provision in law or practice for allowing festival holidays with wages and it also denied that in the Agra region where the appellant 's mill is situated any textile mill was paying wages for festival holidays.
The appellant Mill it was emphasised could not be treated on a different footing.
It was further pointed out that the appellant Mill was a highly uneconomic mill an, , was not in a position to take any extra burden.
The statement made by Shri Jaiswal under r. 12 could on no reasonable hypothesis be considered to have replaced this unequivocal and clear plea.
It is true that Shri Jaiswal tried to be somewhat clever by stating that the festival holidays were paid in the sense that the workers were allowed to work on unpaid rest days in substitution of the said festival holidays.
But this statement clearly explains in unambiguous terms the sense in which Shri Jaiswal meant to say that the festival holidays were paid.
The facts contained in the explanation lead to the only conclusion that festival holidays are not paid as 'the National Holidays are.
This statement read with the detailed explanation which constitutes its real core could not logically serve as a ground for ignoring the unequivocal denial in the written statement particularly when even the workmen did not set up this case.
The Industrial Tribunal had, in our opinion, erroneously 92O ignored the real plea and had on the basis of this manifest blatant error, which is clear on the face of the record, disallowed the evidence on the question of the practice and custom.
in the textile 'industry in Kanpur.
In Shri Jaiswal 's statement we find a clear distinction drawn that three National Holidays were paid holidays and the other festival holidays were such for which the workers were allowed to work on substituted rest days.
It was also clearly mentioned in that statement that if a holiday is substituted on a rest day then the workmen gets only one day 's wages.
This important part of the statement was virtually ignored by the Tribunal.
The facts being clearly stated, in our view, the Industrial Tribunal was wrong in law in holding that the appellant 's written plea was modified by reason of the statement under r. 12 or that there was a clear admission superseding the earlier plea.
The learned Single Judge of the High Court, in our opinion, also missed the real point; and if the real plea was ignored and it was erroneously held that Shri Jaiswal 's statement under r. 12 constituted an admission overriding the earlier plea and as a result evidence on that plea was excluded, then it was an eminently fit case for interference under article 226 of the Constitution, the error being gross and palpable which was manifest on the face of the record and the same having resulted in failure of justice by excluding evidence on the mos vital point.
The Division Bench on special appeal from the judgment of the learned single Judge fell into the same error in summarily dismissing the appeal in limine without even recording a speaking order on the crucial point of substance arising in the case which went to the root of the matter.
The question of festival holidays requires consideration from several aspects.
Employers and workers have always differed in their suggestions about the level at which uniformity in the number of holidays should generally be achieved.
In the Report of ,the National Commission on Labour prepared in August, 1969 we find at p. 105 that the workers ' organisaitions generally favour a minimum of 7 to 12 paid holidays in a year without mainly any differentiation as between different categories of employees.
Enployers, on the other hand, feel that the number of paid holidays enjoyed by workers in India is already on the high side, and, 'therefore, uniformity should be achieved at a much lower level.
The opinion of the Commission contained, in its Report supported the view of its Study Group on Labour Legislation which recomended three paid National Holidays viz. 26th January (Republic Day, 15th August (Independence Day) and 2nd October (Mahatma Gandhi 's Birth Day) and five paid festival holidays as may be fixed by the appropriate Government in consultation with the representatives, of employers and employees.
The Report also suggests that there is a trend towards industry wise uniformity in 921 the matter of holidays, as in the case of jute and coal.
Incidentally it may be mentioned that in U.P., the U.P. Industrial Establishments (National Holidays) Act No. XVIII of 1961 and rules made under section 9 thereof provide for paid National Holidays but that Act does not deal with festival holidays.
In the case before us, according to the appellant, the 17 festival holidays as directed by the award would impose on the appellant industry an additional burden to the extent of about Rs. 1,49,600 as was stated in the order of the Allahabad High Court while granting leave.
Custom, practice and uniformity in the industry without prejudicially affecting efficiency and increased production are some of the relevant factors which have to be taken into account in determining the number of paid festival holidays per year.
The question affects national economy and the present instance may well be cited in future in deciding similar questions in other allied concerns in the region.
The effect of such instances, therefore, does not remain confined only to the establishment concerned but has its impact on other concerns as well.
This aspect has been completely ignored by the Industrial Tribunal which has proceeded solely on the basis of the statement of Shri Jaiswal as interpreted by it.
This statement being the sole basis of the Tribunal 's conclusion if it is not possible to read in this statement any admission having the effect of giving up the only crucial plea that the workmen have no right to 17 paid holidays than this is clearly a misreading of that statement and the Tribunal 's order must be held to be tailed by a manifest error of law on the face of the record which has resulte in grave failure of justice as evidence on the only material point in issue was illegally shut out.
In our view, the High Court also fell into the same error and did not apply its mind to the real point which arose for decision in the case.
We accordingly allow this appeal, set aside the orders of the High Court and of the Industrial Tribunal and remit the case back to the Tribunal for a fresh decision on the merits after permitting the parties to lead relevant evidence in accordance with law and in the light of the observations made above.
As the whole trouble arose because of the unsatisfactory nature of the statement made by Shri Jaiswal, who was also found by the Tribunal as a person who was not inclined to give straight answers to straight questions, it is only just and proper that the appellant should pay the respondents ' costs both in this Court and in the High Court.
The court fee, as already directed, must be paid by the appellant within two weeks.
| IN-Abs | An industrial dispute arose between the appellant and its workmen as to 'whether the employers were required to pay wages for the festival holidays allowed to their workmen in a year.
The appellant contested the workmen 's claim mainly on the grounds that neither in law nor in practice was there any provision for festival holidays with wages, that the appellant was already paying wages for three holidays allowed to the workmen under the U.P. Industrial Establishment (National Holidays) Act, 1961 and that in the entire region in which this mill is situated, no textile mill pays wages for festival holidays.
The mill was stated to be an uneconomic unit and, therefore, not in a position to b@r an extra burden.
The workmen, on the other band, in their separate written statements, filed through three Unions.
pleaded that the grant of holidays without wages was illegal and against social justice.
In their rejoinder the appellant pleaded that the holidays mentioned by the Unions were (,ranted because the workmen had demanded the same and those holidays were substituted by other days in lieu of holidays and as they were paid for the days on which they worked on account of those holidays there was no loss of wages caused to them.
The Tribunal by its award made the appellant liable to pay to their daily rated and piece rated workmen for 17 festival holidays, besides three national holidays, plus arrears, on the ground that the Secretary of,the appellant mill admitted that the festival holidays were paid holidays in the sense that workers were allowed to work on their unpaid rest days in substitution of the said festival holidays.
The appellant being aggrieved by the award presented a writ petition before the High Court which was dismissed by a single Judge.
Special leave to a Divisional Bench of the High Court was dismissed in Iimine, but the Bench certified the case to be fit for appeal to this Court.
The appellant was held entitled ' to certificate either under cl.
(a) or cl.
(b) of article 133(1) of the Constitution on the ground that value of the subject matter of dispute or claim The respondent in the Supreme Court objected to the competence of the certificate on the ground that though the judgment of the Division Bench was one of affirmance the certificate did not disclose on its face the existence 'of any substantial question of law.
This objection was upheld but as the case was considered fit for special leave, on oral request special leave was granted on the condition that the appellant would file a formal application for special leave accompanied by an application for condoning the delay 911 Allowing the appeal on the merits, HELD : By reading the statement of the Secretary of the appellant along with the pleadings as disclosed in the respective statement of cases of the parties, it is not possible to bold that the appellant had admitted that the 17 festival holidays were being given by them as paid holidays dispensing with the enquiry into the question referred for adjustment to the Industrial Tribunal.
Even the workmen did not plead that the festival holidays were treated as paid holidays.
The Secretary 's statement that no festival holidays were paid in the sense that the workers were allowed to work on unpaid rest days in substitution of the said festival holidays.
This statement clearly explains that sense in which the Secretary meant to say that the festival holidays were paid.
The facts contained in the explanation lead to the only conclusion that festival holidays are not paid as the festival holidays are.
This statement read with the detailed explanation could not logically serve as a ground for ignoring the unequivocal denial in the written state ment.
The industrial Tribunal, was therefore, wrong in holding that the statement made by the Secretary was an admission on behalf of the appellant.
The learned single Judge also missed the real point and held that the Secretary 's statement constituted an admission and all 'facts evidence was therefore, excluded.
The Division Bench fell into the, same error in summarily dismissing the appeal in limine.
(920 A EJ (ii) The U.P. Industrial Establishments (National Holidays) Act, 1961 and rules provide for paid National Holidays but that Act dotes not deal with festival holidays.
In determining the number of paid festival holidays per year, certain facts, like custom, practice and uniformity in the industry without prejudicially affecting efficiency and increased produCtion are some of the relevant factors to be taken into account.
The question affects national economy and does not remain confined only to the establishment concerned but has its impact on other concerns as well.
This aspect has been completely ignored by the, Industrial Tribunal.
Further the Tribunal proceeded solely on the basis of misreading of the Secretary 's statement.
thereby ignoring the plea taken by the appellant.
There is.
thus the manifest error of law apparent on the fact of the record which resulted in grave failure of justice, because evidence on the only material point was illegally shut out.
[921 A] The District Board (afterwards Zila Parishad Allahabad vs Syed Tahir Hussain & ors C.A. No. 57 8 of 1963 decided oh July 23, 1965, Shiri Durga Prasad & Anr.
vs The Banaras Bank Ltd., [1964] 1 S.C.R.475.preferred to.
|
minal Appeal No. 156 of 1969.
Appeal by special leave from the judgment and order dated April 15, 1969 of the Calcutta High Court in Criminal Revision No. 1114 of 1963.
C. K. Daphtary and D. N. Mukherjee, for the appellants.
P.K. Chatterjee and G. section Chatterjee, for respondent No. 1.
P. K. Mukherjee, for respondent No. 2.
The Judgment of the Court was delivered by Beg, J.
On 11 7 1963 Sunilakshva Choudhry a Director of the Metropolitan Industrial Corporation Ltd., Calcuta, having been authorised by its Board of Directors, filed a complaint against the appellant Debendra Nath Bhattacharjee (or Bhattacharya), a former Director, and Banamali Pathak, Cashier of the Bengal 16 L1061SupCI/72 974 Luxmi Cotton Mills Ltd., and Hiran Roy, Chief.
Accountant of the Bengal Luxmi Cotton Mills Ltd., alleging offence punishable under Sections 408/409/467/471/477A/109 Indian Penal Code.
The complainant alleged that, when the Life Insurance business was nationalised in 1956 the Metroplitan Insurance Co. Ltd. (hereinafter referred to as 'the Company ') received a sum of about Rs. 10,25,523/ as compensation, and the Company was transformed into Metropolitan Industrial Corporation (hereinafter referred to as 'the Corporation ').
The business of the Corporation was said to be confined to making of loans, and dealings in stocks and shares.
The complainant was Director of the Company in 1957 and the accused appellant D. N. Bhattacharjee was alleged to he its Managing Diecor with absolute control over the funds of the Company and the only person authorised to operate the tanking account of the Company with.
the Metropolitan Bank Ltd. Roundabout October, 1958, alth ugh, the appellant Bhattacharjee was said to have ceased to be the Managing Director, yet, he is alleged to have continued to exercise the powers he had possessed as Managing Director, After the Company became the Corporation Certain activities of the appellant D N. Bbattacha jee are alleged to ,have come to light and compelled his resignation on 28 2 1963 so that he handed over some of the Books and records of the Court oration to the complainant.
The complainant after having, examined the records handed over by D. N. Bhattacharjee claimed to have found monthly pay sheets containing names of certain employees who were not employees of the Corporation at all and who were suspected to be fictitious as they could not be traced.
The complainant alleged that, on further enquiry, he round that the Corporation had not employed anybody at all but had taken occasional help from certain employees of sister concerns which had their offices in the same building.
In other words, the complainant claimed to have discovered that the pay sheets of the Corporation were totally false and fabricated.
He also complained that fictitious signatures of suport different persons appeared to him to have been made by a single person so as to appear as signatures of different actually existing individuals.
The complainant alleged that his suspicions were confirmed by sending these alleged signatures to a Handwriting Expert for opinion.
Accordinq to the complainant, all this was done at the instance of or with the cornplicit of D. N. Bhattacharjee and with the aid of the two other co accused.
It was asserted that D. N. Bhattacharjee bid full knowledge of what was taking place and had dishonestly misappropriated and converted to his own use large sums of money belonging to the Corporation.
He and the two co accused, who are said to have actually made the entries, were alleged to have been engaged in a conspiracy .
The complainant gave a list of five witnesses, including that of a Handwriting Expert, and he relied 975 upon a number of account books, documents, and records of the Company and the Corporation.
After an enquiry in to the allegation contained in the complaint a Presidency Magistrate found prima facie evidence of a conspiracy ,to commit breach of trust by forging, receipts and us of forged receipts and falsification of accounts.
On 2 8 1963, the Presidency Magistrate, ordered the case to be put up before the Chief Presidency Magistrate for further orders.
On 10 8 1963, the Chief Presidency Magistrate, after giving particulars of the prosecution case and the evidence produced to support it, went on to observe "In assessing the evidence adduced for the purpose of taking out a process, certain broad facts and circumstances and probabilities cannot, in my opinion, be overlooked".
The Chief Presidency Magistrate then mentioned the reasons which, in his opinion, justified a dismissal of the complaint without issue of process.
He pointed out : firstly, that the Company, which was admitted to be a going concern, must have had some of its own employees,who must have been taken over, by the Corporation in 1960 , second, that D., N. Bhattacharjee, at the time of his resignation on 28 2 1963 had handed over the records and account books of the Company to the complainant which fact indicated that be "probably." did not know that any of these were forged for fabricated; thirdly, that it was "improbable" that the Corporation could carry on its business without its own employees; fourthly, that evidence had not, been led to show :what enquiries were made to indicate that the, names oft the pay sheet were fictitious fifthly, that the complainant had himself admitted that one or two persons shown in the pay sheet might have been employed by the Corporation and that this "demolished" the whole prosecution case of fictitious entries; and, Sixthly, that the opinion of the Handwriting Expert "does not appear to be emphatic" and was also not supported by "sufficient reasons".
On these grounds, the Chief Presidency Magistrate , after holding that there were "really, no sufficient grounds to proceed further" dismissed the complaint under Sec.
203 Criminal Procedure Code.
The complainant then invoked the Revisional jurisdiction of the Calcutta High Court.
That Court, after an examination of the complaint, the evidence produced for the purpose of issuing process to the accused persons, and the order of the Chief Presidency Magistrate, came to the conclusion that the order of dismissal of the complaint under Sec.
203 Criminal Procedure Code was improper.
The High Court held that the order contained ape mature verdict on the merits of the case.
Furthermore, the High Court pointed out that the Chief Presidency Magistrate had misread the oral evidence in finding that the complainant said that one or two persons 976 mentioned in the pay sheets might have been employed by the Company sometimes.
A correct reading of the evidence of the complainant, which we have also examined, was that one or two persons may have been employed by the Company, from time to time but none of the persons whose names appeared in the pay sheets were any of those persons.
Even if the complainant had said that some of the entries in the account books.
,appeared to be, deliberately false, the complaint would not have merited a forthright dismissal without further enquiry.
The High Court, in our opinion, rightly considered the order pronouncing a judgment on the merits of 'the, case on bare Probabilities and surmises to be Premature.
High Court very rightly, did not express any opinion on, merits of the prosecution case 'beyond saying that the case called for further, enquiry.
it, therefore, set aside the order of dismissal under Section 203 of the Criminal Procedure Code and, sent back the case for further enquiry in accordance with law.
The accused have come up to this Court by Special leave against the above mentioned Order of the High Court for further enquiry into the case.
It is urged that the High Court should not have, in exercise of its revisional jurisdiction, set aside the Chief Presidency Magistrate 's order.
We are unable to accept this contention because we think that the Presidency Magistrate had not correctly understood the scope and purpose of the power to dismiss a complaint under Section 203 Criminal Procedure Code.
It has to be remembered that an order of dismissal of a com plaint under Section 203 Criminal Procedure Code has to be, made on judicially sound grounds.
It can only be made where the reasons given disclose that the proceedings cannot terminate successfully in a conviction.
It is true that the Magistrate is not debarred, at this stage, from going into the merits of the evidence produced by the complainant.
But, the object of such consideration of the merits of the case, at this stage, could only be to determine whether there are sufficient grounds for proceeding further or not.
Ile mere existence of some grounds which would 'be material in deciding whether the accused should be convicted or acquitted does not generally indicate that the case must necessarily fail.
On the other hand, such grounds.
may indicate the need for proceeding further in order to discover the truth after a full and proper investigation.
If, however, a bare perusal of a complaint or the evidence led in support of it show that essential ingredients of the offences alleged are absent or that the dispute is only of a civil nature or that there are such patent absurdities in evidence produced that it would be a waste of time to proceed further, the complaint could be properly dismissed under Section 203 Criminal Procedure Code.
977 In the case before us, the learned Magistrate was in error in assuming that merely because the.
names of one or two former employees of the Company may be mentioned in the pay sheets the whole prosecution case was actually demolished.
Moreover, as the High Court had rightly pointed out, the complainant 's actual evidence had fully supported and not contradicted any part of the complaint.
No such absurdity was revealed by he complainant 's evidence as to merit a forthright dismissal of the complaint under Section 203 Criminal Procedure Code.
What the Magistrate had to determine at the stage of issue of process was not the, correctnes or the probability or improbability of individual items of evidence on disputable grounds, but the existence or otherwise of a prima facie, case on the assumption that what was stated could be% true unless the prosecution allegations were so fantastic that they could not reasonably be held to be true.
As we, in agreement with the High Court, think that the order of the Chief Presidency Magistrate in dismissing the complaint was premature and was also based on obvious 'misconceptions, we dismiss this appeal.
V.P.S. Appeal dissmissed.
| IN-Abs | An order of dismissal of complaint under section 203 Cr.
P.C., has to be made on judicially sound grounds.
It can only be made where the reasons given disclose that the proceedings cannot terminate successfully in a conviction.
A Magistrate is not debarred,.
at this stage, from going into the merits of the evidence produced by the complainant, but the, object of such consideration could only be to whether There are sufficient grounds for proceeding further.
The mere existence of some grounds which would be material in deciding whether the accused should be convicted or acquitted does not generally indicate that the case must necessary fail.
On the other hand, such grounds indicate the need for proceeding further in order to discover the truth after a full and proper investigation.
If, however, a bare perusal of a complaint or the evidence led in support of it show that the essential ingredients of the offences alleged are absent or that the dispute is only of a civil nature or that there are such patent absurdities in the evidence produced that it would be a waste of time to proceed further the complaint could be properly dismissed under the section.
[9176 F H] Where, therefore, the Magistrate dismisses a complaint on a misreading of the oral evidence and the evidence, in fact, does not reveal,any absurdity so as to merit a forthright dismissal of the complaint under the section, such an order is.
fit to be set aside by the High Court.
|
minal Appeal No. 132 of 1954.
Appeal by Special Leave granted by the Supreme Court by its Order dated the 3rd September, 1954 from the Judgment and Order dated the 15th June ' 1954 of the High Court of Judicature for the State of Punjab at Simla in Criminal in Appeal No. 287 of 1954 arising out of the Judgment and Order dated the 14th April 1954 of the Court of Additional Sessions Judge in Session Case No. 4 of 1954.
J.G. Sethi, (Naunit Lal, with him), for the appellant.
1204 Gopal Singh and P. G. Gokhale, for the respondent.
January 25.
The Judgment of the Court was delivered by IMAM J.
This appeal by Nanak Chand comes by special leave against the judgment of the Punjab (1) High Court.
The appellant was convicted by the High Court under section 302 of the Indian Penal Code and the sentence of death passed on him by the Additional Sessions Judge of Jullundur was con firmed.
On the facts alleged by the prosecution there can be no doubt that Sadhu Ram was killed on the 5th of November, 1953, at about 6 45 P.m. at the shop of Vas Dev P. W. 2.
It is alleged that the appellant along with others assaulted Sadhu Ram.
The appellant was armed with a takwa.
Numerous injuries were found on the person of Sadhu Ram.
According to the doctor, who held the postmortem examination, injuries 1, 3 and 4 were due to a heavy sharp edged weapon and could be caused by a takwa.
It was denied by the prosecution that the deceased was assaulted by any other person with a takwa.
According to the Medical evidence, injuries 1, 3 and 4 individually, as well as collectively, were enough to cause: death in the ordinary course of nature.
In the Court of Sessions the appellant along with others was charged under section 148 and section 302, read with section 149 of the Indian Penal Code.
The Additional Sessions Judge, however, held, that the charge of rioting was not proved.
He, accordingly found the appellant and three others guilty under section 302 read with section 34 of the Indian Penal Code.
He acquitted the other three accussed There was an appeal by three convicted persons to the High Court and the high court convicted the appellant alone under section 302 of the Indian Penal Code, confirming the sentence of death but altered the conviction of the other accused 'from section 302/34 to section 323, Indian Penal Code.
it held that the provisions of section 34 of the Indian Penal Code did not apply.
1205 On behalf of the appellant questions of law and questions of fact were urged.
It will be unnecessary to deal with the questions of fact if the argument on points of law is accepted.
The principal question of law to be considered is as to whether the appellant could legally be convicted for murder and sentenced under section 302, Indian Penal Code when he was not charged with that offence.
It was urged that as the appellant had been acquitted of the charge of rioting and the offence under section 302/149 of the Indian Penal Code, he could not be convicted for the substantive offence of murder under section 302, Indian Penal Code, without a charge having been framed against him under that section.
Reliance has been placed on the provisions of the Code of Criminal Procedure relating to the framing of charges, the observations of the Privy Council in Barendra Kumar Ghosh vs Emperor(1) and certain decisions of the Calcutta High Court to which reference will be made later on.
It was urged that for every distinct offence of which a person is accused, there shall be a separate charge and every such charge shall be tried separately except in cases mentioned under sections 234, 235, 236) 237 and 239 of the Code of Criminal Procedure.
Section 149 of the Indian Penal Code creates a specific offence and it is a separate offence from the offence of murder punishable under section 302 of the Indian Penal Code.
The provisions of sections 236, 237 and 238 of the Code of Criminal Procedure did not apply to the facts and circumstances of the present case.
Off behalf of the Prosecution, however, it was urged that section 149 did not create any offence at all and therefore no separate charge was obligatory under section 233 of the Code of Criminal Procedure and that in any event the provisions of sections 236 and 237 of the Code of Criminal Procedure did apply and the appellant could have been convicted and sentenced, under section 302 of the Indian Penal Code, although no charge for the substantive offence of murder had been framed against him.
(1) Cal, 197, 1206 It is necessary, therefore, to examine the provisions of section 149 of the Indian Penal Code and consider as to whether this section creates a specific offence.
Section 149 of the Indian Penal Code is to be found in Chapter VIII of that Code which deals with offences against the public tranquillity.
Section 149 of the Indian Penal Code reads: "If an offence is committed by any member of an unlawful assembly in prosecution of the common object of that assembly, or such as the members of that assembly knew to be likely to be committed in prosecution of that object, every person who, at the time of the committing of that offence, is a member of the same assembly, is guilty of that offence".
This section postulates that an offence is committed by a member of an unlawful assembly in prosecution of the common object of that assembly or such as a member of the assembly knew to be likely to be committed in prosecution of that object and declares that in such circumstances every person, who was a member of the same assembly at the time of the commission of the offence, was guilty of that offence.
Under this section a person, who is a member of an unlawful assembly is made guilty of the offence committed by another member of the same assembly, in the circumstances mentioned in the section, although he had no intention to commit that offence and had done no overt act except his presence in the assembly and sharing the common object of that assembly.
Without the provisions of this section a member of an unlawful assembly could not have been made liable for the offence committed not by him but by another member of that assembly.
Therefore when the accused are acquitted of riot and the charge for being members of an unlawful assembly fails, there can be no conviction of any one of them for an offence which he had not himself committed.
Similarly under section 150 of the Indian Penal Code, a specific offence is created.
Under this section a person need not be a member of an unlawful assembly and yet he would be guilty of being a member of an unlawful assembly and guilty of an offence which may be committed by 1207 a member of the unlawful assembly in the circumstances mentioned in the section.
Sections 149 and 150 of the Indian Penal Code are not the only sections in that Code which create a specific offence.
Section 471 of the Indian Penal Code makes it an offence to fraudulently or dishonestly use as genuine any document which a person knows or has reason to believe to be a forged document and it provides that such a person shall be punished in the same manner as if he had forged such document.
Abetment is an offence under the Indian Penal Code and is a separate crime to the principal offence.
The sentence to be inflicted may be the same as for the principal offence.
In Chapter XI of the Indian Penal Code offences of false evidence and against public justice are mentioned.
Section 193 prescribes the punishment for giving false evidence in any stage of a judicial proceeding or fabricating false evidence for the purpose of being used in any stage of a judicial proceeding.
Section 195 creates an offence and the person convicted of this offence is liable in certain circumstances to be punished in the same manner as a person convicted of the principal offence.
Sections 196 and 197 to 200 of the Indian Penal Code also create offences and a person convicted under any one of them would be liable to be punished in the same manner as if he had given false evidence.
It was, however, urged on behalf of the Prosecution that section 149 merely provides for constructive guilt similar to section 34 of the Indian Penal Code.
Section 34 reads: "When a criminal act is done by several persons, in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone".
This section is merely explanatory.
Several persons must be actuated by a common intention and when in furtherance of that common intention a criminal act is done by them, each of them is liable for that act as if the act bad been done by him alone.
This section does not create any specific offence.
As was pointed out by Lord Sumner in Barendra Kumar Ghosh vs Emperor(1) " 'a criminal act ' means that (1) Cal. 197, 1208 unity of criminal behaviour which results in something, for which an individual would be punishable, if it were all done by himself alone, that is, in a criminal offence".
There is a clear distinction between the provisions of sections 34 and 149 of the Indian Penal Code and the two sections are not to be confused.
The principal element in section 34 of the Indian Penal Code is the common intention to commit a crime.
In furtherance of the common intention several acts may be done by several persons resulting in the commission of that crime.
In such a situation section 34 provides that each one of them would be liable for that crime in the same manner as if all the acts resulting in that crime had been done by him alone. ' There is no question of common intention in section 149 of the Indian Penal Code.
An offence may be committed by a member of an unlawful assembly and the other members will be liable for that offence although there was no common intention between that person and other members of the unlawful assembly to commit that offence provided the conditions laid down in the section are fulfilled.
Thus if the offence committed by that person is in prosecution of the common object of the unlawful assembly or such as the members of that assembly knew to be likely to be committed in prosecution of the common object, every member of the unlawful assembly would be guilty of that offence, although there may have been no common intention and no participation by the other members in the actual commission of that offence.
In Barendra Kumar Ghosh vs Emperor(1) Lord Sumner dealt with the argument that if section 34 of the Indian Penal Code bore the meaning adopted by the Calcutta High Court, then sections 114 and 149 of that Code would be otiose.
In the opinion of Lord Sumner, however, section 149 is certainly not otiose,, for in any case it created a specific offence.
It postulated an assembly of five or more persons having a common object, as named in section 141 of the Indian Penal Code and then the commission of an offence by one member of it in prosecution of that object and he referred to Queen vs Sabid Ali and (1) Cal, 197, 1209 Others(1).
He pointed out that there was a difference between object and intention, for although the object may be common, the intentions of the several members of the unlawful assembly may differ and indeed may be similar only in respect that they are all unlawful, while the element of participation in action, which is the leading feature of section 34, was replaced in section 149 by membership of the assembly at the time of the committing of the offence.
It was argued, however, that these observations of Lord Sumner were obiter dicta.
Assuming though not conceding that may be so, the observations of a Judge of such eminence must carry weight particularly if the observations are in keeping with the provisions of the Indian Penal Code.
It is, however, to be remembered that the observations of Lord Sumner did directly arise on the argument made before the Privy Council, the Privy Council reviewing as a whole the provisions of sections 34, 114 and 149 of the Indian Penal Code.
On behalf of the appellant certain decisions of the Calcutta High Court were relied upon in support of the submission made, viz. Panchu Das vs Emperor(2), Reazuddi and Others vs King Emperor(3) and Emperor vs Madan Mandal and Others( ' ).
These decisions support the contention that it will be illegal to convict an accused of the substantive offence under a section without a charge being framed if he was acquitted of the offence under that section read with section 149 of the Indian Penal Code.
, On the other hand, the prosecution relied upon a decision of the.
Full Bench of the Madras High Court in Theetkumalai Gounder and Others vs King Emperor(5) and the case Queen Empress vs Bisheshar and Others(6).
The decision of the Madras High Court was given in April, 1924, and reliance was placed upon the decision of the Allahabad High Court.
The decision of the Privy Council in Barendra Kumar Ghosh 's case was in October, 1924.
The Madras High Court, therefore, did not have before it the decision of the Privy Council.
It is impossible to, say what view might have been expressed (1) [1873] 20 W.R. (Cr.) 5.(2) Cal.
(3) [1961] 6 O.W.N 98.(4) ,Cal.
(5) Mad. 746.(6) All.
1210 by that court if the Privy Council 's judgment in the aforesaid case had been available to the court.
The view of the Calcutta High Court had been noticed and it appears that a decision of the Madras High Court in Taikkottathil Kunheen(1) was to the effect that section 149 of the Indian Penal Code is a distinct offence from section 325 of the Indian Penal Code.
Because of this it was thought advisable to refer the matter.
to a Full Bench.
Two questions were referred to the Full Bench: (1) When a charge omits section 149, Indian Penal Code, and the conviction is based on the provisions of that section, is that conviction necessarily bad, or does it depend on whether the accused has or has not been materially rejudiced by the omission? (2) When a charge has been framed under sections 326 and 149, Indian Penal Code, is a conviction under section 326, Indian Penal Code, necessarily bad, or does this also depend on whether the accused has or has not been materially prejudiced by the form of the charge? The Full Bench agreed with the view expressed by Sir John Edge in the Allahabad case that section 149 created no offence, but was, like section 34, merely declaratory of a principle of the common law, and its object was to make it clear that an accused who comes within that section cannot put forward as a defence that it was not his hand which inflicted the grievous hurt.
It was observed by Spencer, J. that a person could not be tried and sentenced under section 149 alone, as no punishment is provided by the section.
Therefore the omission of section 149 from a charge does not create an illegality by reason of section 233 of the Code of Criminal Procedure which provides that for every distinct offence of which any person is accused there shall be a separate charge.
They did not agree, with the general statement in Reazuddi 's case(2) that it is, settled law that when a person is charged by implication under section 149, he cannot be convicted of the substantive offence.
A charge for a substantive offence under section 302, or section 325 of the Indian Penal Code, etc.
is for a distinct and separate offence from that under section (1) [1928] 18 L.W. 946.
(2) (1901] 1211 302, read with section 149 or section 325, read with section 149, etc.
and to that extent the Madras view is incorrect.
It was urged by reference to section 40 of the Indian Penal Code that section 149 cannot be regarded as creating an 'offence ' because it does not itself provide for a punishment.
Section 149 creates an offence but the punishment must depend on the offence of which the offender is by that section made guilty.
Therefore the appropriate punishment section must be read with it.
It was neither desirable nor possible to prescribe one uniform punishment for all cases which may fall within it.
The finding that all the members of an unlawful assembly are guilty of the offence committed by one of them in the prosecution of the common object at once subjects all the members to the punishment prescribed for that offence and the relative sentence.
Reliance was also placed upon the decision of the Patna High Court in Ramasray Ahir vs King Emperor(1) as well as the decision of the Allahabad High Court in Sheo Ram and Others vs Emperor(1).
In the former case the decision of the Privy Council in Barendra Kumar Ghosh 's case was not considered and the decision followed the Full Bench of the Madras High Court and the opinion of Sir John Edge.
In the latter case the Allahabad High Court definitely declined to answer the question as to whether the accused charged with an offence read with section 149, Indian Penal Code, or with an offence read with section 34, Indian Penal Code, could be convicted of the substantive offence only.
After an examination of the cases referred to on behalf of the appellant and the prosecution we are of the opinion that the view taken by the Calcutta High Court is the correct view namely, that a person charged with an offence read with section 149 cannot be convicted of the substantive offence without a specific charge being framed 'as required by section 233 of the Code of Criminal Procedure.
It was urged that in view of the decision of this Court in Karnail Singh and another vs State of Punjab(1) a conviction under section 302, read with see (1) Patna 484.
(2) A.I.R. 1948 All. 162, (3) , 155 1212 tion 149, could be converted into a conviction under section 302/34 which the trial Court did.
There could be no valid objection, therefore, to converting a conviction under section 302/34 into one under section 302 which the High Court did. ' This argument is unacceptable.
The High Court clearly found that section 34 was not applicable to the facts of the case and acquitted the other accused under section 302/34, that is to say the other accused were wrongly convicted by the trial court in that way but the appellant should have been convicted under section 302.
The High Court could not do what the trial court itself could not do, namely, convict under section 302, as no separate charge had been framed under that section.
It was urged by the Prosecution that under the provisions of section 236 and section 237 of the Code of Criminal Procedure a person could be convicted of an offence which he is shown to have committed although he was not charged with it.
Section 237 of the Code of Criminal Procedure is entirely dependent on the provisions of section 236 of that Code.
The provisions of section 236 can apply only in cases where there is no doubt about the facts which can be proved but a doubt arises as to which of several offences have been committed on the proved facts in which case any number of charges can be framed and tried or alternative charges can be framed.
In these circumstances if there had been an omission to frame a charge, then under section 237, a conviction could be arrived at on the evidence although no charge had been framed.
In the present case there is no doubt about the facts and if the allegations against the ap pellant that he bad caused the injuries to the deceased with takwa was established by evidence, then there could be no doubt that the offence of murder bad been committed.
There was no room for the application of section 236 of the Code of Criminal Procedure.
It had been argued on behalf of the prosecution that no finding or sentence pronounced shall be deemed invalid merely on the ground that no charge was framed.
Reliance was placed on the provisions of section 535 of the code of criminal procedure 1213 Reference was also made to the provisions of section 537 of that Code.
Section 535 does permit.
a court of appeal or revision to set aside the finding or sentence if in its opinion the non framing of a charge has resulted in a failure of justice.
Section 537 also permits a court of appeal or revision to set aside a finding or sentence if any error, omission or irregularity in the charge has, in fact, occasioned a failure of justice.
The explanation to the section no doubt directs that the court shall have regard to the fact that the objection could and should have been raised at an earlier stage in the proceedings.
In the present case, however, there is no question of any error, omission or irregularity in the charge because no charge under section 302 of the Indian Penal Code was in fact framed.
Section 232 of the Code of Criminal Proce.
dure permits an appellate court or a court of revision, if satisfied that any person convicted of an offence was misled in his defence in the absence of a charge or by an error in the charge, to direct a new trial to be had upon a charge framed in whatever manner it thinks fit.
In the present case we are of the opinion that there was an illegality and not an irregularity curable by the provisions of sections 535 and 537 of the Code of Criminal Procedure.
Assuming, however, for a moment that there was merely an irregularity which was curable we are satisfied that, in the circum stances of the present case, the irregularity is not curable because the appellant was misled in his defence by the absence of a charge under section 302 of the Indian Penal Code.
By framing a charge under section 302, read with section 149 of the Indian Penal Code against the appellant, the Court indicated that it was not charging the appellant with the offence of murder and to convict him for murder and sentence him under section 302 of the Indian Penal Code was to convict him of an offence with which he had not been charged.
In defending himself the appellant was not called upon to meet such a charge and in his defence he may well have considered it unnecessary to concentrate on that part of the prosecution ease, Attention has been 1214 drawn to the Medical evidence.
With reference to injury No. I the doctor stated that the wounds were not very clean cut.
It is further pointed out that the other incised injuries on the head were bone deep.
The bone, however, had not been out.
Injuries on the head although inflicted by a blunt weapon may sometimes assume the characteristics of an incised wound.
Reference was made to Glasgow on Medical Jurisprudence, 9th Ed., at page 241, where it is stated that under certain circumstances, and in certain situations on the body, wounds produced by a blunt instrument may stimulate the appearance of an incised wound.
These wounds are usually found over the bone which is thinly covered with tissue, in the regions of the head, forehead, eyebrow, cheek, and lower jaw, among others.
It is also pointed that Vas Dev P.W. 2 bad admitted that Mitu took away the takwa from the appellant after Sadhu Ram had been dragged out of the shop but no takwa blow was given outside the shop.
Prakash Chand P.W. 4, another eye witness, also admitted that Mitu had taken the takwa from the appellant when they had come out of the shop.
It was urged that if a specific charge for murder had been framed against the appellant, he would have questioned the doctor more closely about the incised injuries on the head of the deceased, as well as the prosecution witnesses.
It is difficult to hold in the circumstances of the present case that the appellant was not prejudiced by the non framing of a charge under section 302, Indian Penal Code.
Having regard to the view expressed on the question of law, it is unnecessary to refer to the arguments on the facts.
The appeal is accordingly allowed and the conviction and the sentence of the appellant is set aside and the case of the appellant is remanded to the court of Sessions at Jullundur for retrial after framing a charge under section 302 of the Indian Penal Code and in accordance with law.
Appeal allowed.
| IN-Abs | Section 34 of the Indian Penal Code is merely explanatory.
It does not create any specific offence.
Under this section several persons must be actuated by a common intention and when in further (1) A.I.R. 1936 Lah.
1202 ance of that common intention a criminal act is done by them, each of them is liable for that act as if the act had been done by him alone.
There is a clear distinction between the provisions of section 34 and section 149 of the Indian Penal Code and the two sections are not to be confused.
The principal element in section 34 of the Indian Penal Code is the common intention to commit a crime.
In furtherance of the common intention several acts may be done by several persons resulting in the commission of that crime.
In such a situation section 34 provides that each one of them would be liable for that crime in the same manner as if all the acts resulting in that crime had been done by him alone.
There is no question of common intention in section 149 of the Indian Penal Code.
An offence may be committed by a member of an unlawful assembly and the other members will be liable for that offence although there was no common intention between that person and the other members of the unlawful assembly to commit that offence provided the conditions laid down in the section are fulfilled.
Thus if the offence committed by that person is in prosecution of the common object of the unlawful assembly or such as the members of that assembly knew to be likely to be committed in prosecution of the common object, every member of the unlawful assembly would be guilty of that offence, although there may have been no common intention and no participation by the other members in the actual commission of that offence.
There is a difference between object and intention, for although the object may be common, the intentions of the several members of the unlawful assembly may differ and indeed may be similar only in one respect namely that they are all unlawful, while the element of participation in action, which is the leading feature of section 34, is replaced in section 149 by membership of the assembly at the time of the committing of the offence.
A charge for a substantive offence under section 302, or section 325 of the Indian Penal Code, etc.
is for a distinct and separate offence from that under section 302, read with section 149 or section 325, read with section 149, etc.
A person charged with an offence read with section 149 cannot be convicted of the substantive offence without a specific charge being framed as required by section 233 of the Code of Criminal Procedure.
There was no room for the application of section 236 of the Code of Criminal Procedure to the facts of the present case.
The provisions of section 236 of the Code of Criminal Procedure can apply only in cases where there is no doubt about the facts which can be proved but a doubt arises as to which of several offences have been committed on the proved facts in which case any number of charges can be framed and tried or alternative charges can be framed.
In the present case there was no doubt about the facts and if the allegation against the appellant that he had caused the injuries to the deceeased with takwa was established by evidence, then there could be no doubt that the offence of murder had been committed, 1203 In the present case there was no question of any error, omission or irregularity, in the charge within the meaning of section 537 of the Code of Criminal Procedure because no charge under section 302 of the Indian Penal Code was in fact framed.
There was an illegality in the present case and not an irregularity which was curable by the provisions of sections 535 and 537 of the Code of Criminal Procedure.
Assuming however that there was merely an irregularity which was curable, the irregularity in the circumstances of the case was not curable because the appellant was misled in his defence by the absence of a charge under section 302 of the Indian Penal Code.
By framing a charge under section 302, read with section 149, Indian Penal Code against the appellant, the Court indicated that it was not charging the appellant with the offence of murder and to convict him for murder and sentence him under section 302 of the Indian Penal Code was to convict him of an offence with which he had not been charged.
In defending himself the appellant was not called upon to meet such a charge and in his defence he may well have considered it unnecessary to concentrate on that part of the prosecution ease.
Barendra Kumar Ghosh vs Emperor ( (1925] I.L.R. 52 Cal. 197), Queen vs Sabid Ali and others ( [1873] 20 W.R. (Cr.) 5), Panchu Das vs Emperor ( Cal.
698), Beazuddi and Others vs King Emperor ([1901] , Emperor vs Madan Mandal and Others ( Cal. 662), Theethumalai Gounder and Others vs King Emperor ([1924] I.L.R. , Queen Empress vs Bisheshar and Others ( All. 645), Taikkottathil Kunheen ( [1923] 18 L.W. 946), Bamasray Ahir vs King Emperor ( Patna 484), Sheo Ram and Others vs Emperor (A.I.R. 1948 All. 162), and Karnail Singh and another vs State of Punjab ( , referred to.
|
minal Appeal No. 165 of 1969.
Appeal by special leave from the judgment and order dated April 15, 1969 of the Punjab and Haryana High Court in Criminal Appeal No. 876 of 1966.
Nur ud din Ahmed and J. P. Aggarwal, for the appellants.
V. C. Mahajan and R. N. Sachthey, for the respondents.
The Judgment of the Court was delivered by Beg, J.
Garib Singh, aged 36 years, Mohinder Singh, aged 15 years, Bhagat Singh, aged 25 years, Rain Singh, aged 65 years, Gurdial Singh, aged 66 years, were jointly charged and tried by the Additional Sessions Judge of Patiala for rioting and offences committed in the course of it.
Garib Singh was charged separately under Sections 148 and 307 Indian Penal Code for an injury he was alleged to have given in the abdomen of Sarwan Singh (P.W. 7) with a Barchha, and for offences punishable under Sections 324 anti 323 Indian Penal Code with the aid of Section 149 Indian Penal Code.
Mohinder Singh was separately charged under Sections 148 and 324 Indian Penal Code for inflicting an incised wound on Chanan Singh (P.W. 8) with a spear, and, under, Sections 307 and 323 read with Section 149 Indian Penal Code.
Bhagat Singh was separately charged under Sections 147 and 323 Indian Penal Code for causing simple injuries with A lathi on Gurdev Singh (P.W. 9) and Ralla Singh (P.W. 10) and With the aid of Section 149 Indian Penal Code for offences punishable under Sections 307 and 324 Indian Penal Code.
Ram Singh 980 and Gurdial Singh, who were also said to have been members of ' an unlawful assembly which caused injuries to the party of the complainant Sarwan Singh at about sunset on 24 10 1965, the date on which the festival of Diwali fell, were alleged to have only instigated their companions by, giving lalkaras and saying that Sarwan Singh should not be spared.
They were, therefore, charged separately only under Section 147 Indian Penal Code and for offences under Sections 323, 324, and 307 Indian Penal Code with the help of Section 149 Indian Penal Code.
None of the accused persons was, however, charged with any offence with the aid of Section 34 Indian Penal Code.
The learned Sessions ' Judge Who tried the accused persons had after elaborately examining the prosecution and defence versions, found the prosecution case to be "shroded in mystery as to how all the accused got together, armed variously in the house of Ram Singh and assaulted hi in (i.e. Sarwan Singh) all of a sudden by darting out of the, house of Ram Singh".
The picture thus painted by the learned Sessions ' Judge to convince himself of the melo dramatic artificiality of the prosecution version did not really accord with prosecution evidence which was that, when Sarwan Singh was passing in front of the house of Ram Singh, the accused came out and surrounded him, and that Sarwan Singh thereupon raised an alarm which brought the other injured witnesses, who had tried to salve him, to the scene.
It was only when Ram Singh and Gurdial Singh gave, 'lalkaras ' or instigated the others to attack and not to spare Sarwan Singh that the assault was alleged to have begun.
It is not unlikely that even this version did not bring out the whole truth.
The defence version, put forward through Kartar Singh (D.W. 2), was that, on the Diwali night of 24 10 1965, at about 8 p.m., one Gurdev Singh (P.W. 12) son of Mangal Singh, had come with Chanan Singh (P.W. 8) the injured and Ralla Singh (P W. 10) and Gurdev Singh Harijan and had a quarrel with Sarwan Singh (P.W. 7) injured, and with one Gurbux Singh (parentage not given) over the ownership of a tractor which was parked nearby.
It was stated by Kartar Singh that both sides were drunk and that Gurdev Singh son of Mangal Singh had given a barchha blow to Sarwan Singh and Gurbux Singh had given a barchha blow to Chanan Singh.
It was sought to be proved by the defence, through other witnesses, that, after this incident, there was a compromise between the two sides so that Gurdev Singh son of Mangal Singh, at the instance of Sarwan Singh, agreed to forego the unpaid price of the tractor, amounting to Rs. 5,000/ , and to patch up the quarrel.
It was not even attempted to be explained by the defence version how an agreement could emerge so suddenly not 981 only to patch up a quarrel in which a very serious injury was sustained by Sarwan Singh but also to involve accused persons in place of the actual assailants of Sarwan Singh and others.
The suggestion, however was that the section case, according to which there was litigation between proses Singh and Bhagat Singh accused on one side and Sarwan Singh (P.W. 7) on the other, and the intervention of Chanan Singh (P.W. 8), who had his own scores to settle with Garib Singh, explained the implication of all .the accused persons.
The learned Sessions ' Judge was, we find, ,more mystified by certain features in the prosecution ' case than impressed by I the very unnatural and incredible defence version.
He had, therefore, acquitted all the accused persons for what he considered to.
the weaknesses.
of the prosecution case, but he had also mentioned the defence version as, though it could conceivably contain some truth.
On an appeal filed by the State of Punjab, a Division Bench 'of the High Court listed and then examined each of the features of the evidence in the case which had baffled tie learned Sessions Judge.
It then re assessed the whole prosecution evidence itself.
It came to the conclusion that the injured eye witnesses, namely, Sarwan Singh (P.W. 7), Chanan Singh ' (P.W. 8), Gurdev Singh .son of Sadda Ram (P.W. 9), Ralla Singh (P.W. 10) must be believed, at any rate with regard to the three accused persons, namely, Garib Singh, Mohinder Singh and Bhagat Singh, who were alleged to have actually caused injuries to them.
It, therefore, convicted the three appellants before us by special leave by applying Section 34 I.P.C. Garib Singh was convicted under Section 307 I.P.C. separately, for the injury caused to Sarwan Singh (P.W. 7) and sentenced to five years rigorous imprisonment and he was also convicted and sentenced to one year 's rigorous imprisonment under Section 324/34 and to three months ' rigorous imprisonment under Section 323/34 I.P.C. Mohinder Singh was convicted separately and sentenced to one year 's rigorous imprisonment under Section 324 I.P C., to three years ' rigorous imprisonment under Section 307/34 Indian Penal Code, and to three months ' rigorous imprisonment under Section 323/34 I.P.C. Bhagat Singh was convicted separately and sentenced to three months ' rigorous imprisonment under Section 323 I.P.C., to five years ' rigorous imprisonment under Section 307/34 I.P.C. and to one year 's, rigorous imprisonment under Section 323/34 I.P.C. All the sentences were directed to run concurrently.
The High Court had stistained the acquittal of Ram Singh and Gurdial Singh for two reasons firstly, because the delay, in the making of the First Information Report, which was shown to have been lodged on the next day i.e. to say 25 10 1965 at 11.30 a.m. 982 at Police Station Ghanaur in ' District Patiala at a distance of only 1 1/2 miles from village Burki where the occurrence was shown to have taken placed and, secondly, because both Rain Singh and Gardial Singh "are said to have been empty handed at the time of the occurrence "and to neither of whom any injuries are attributed".
It may be recalled here, that these two accused persons were only said to have participated by giving lalkaras and saying that Sarwan Singh should not be spared.
, The High Court thought that this evidence of instigation was not enough to establish beyond reasonable 'doubt the participation ' of Ram Singh and Gurdial Singh in the assault which took place upon the injured persons.
Such allegations of participation by giving lalkaras are sometimes made only to show additional overt acts so as to, take in at least "five persons arid make out the ingredients of an offence under Section 147 against all of them.
When delayed lodging of the First Information Report indicated that deliberation and consulta tion for implication of some innocent persons with guilty ones was possible, this distinction made by the High Court could not be said to be unreasonable.
The High Court had, after examining the evidence of each of the defence witnesses, emphatically rejected the unnatural defence version as utterly unworthy of credence.
It had rejected the testimony of Kartar Singh (D.W. 2), the only alleged eye witness of the defence version, on the ground that he stated that he had not, before he appeared to give evidence in the witness box on 7 4 1966, disclosed anything about the incident to anyone.
It considered this statement of the Witness to be wholly unnatural.
On examining the evidence of this witness, we find that he had also stated that he was not examined by the Police, and.
presumably to explain this allegation, he had even stated that the Police had not come to the village.
Furthermore, he had stated that Gurbux Singh (whose identity is uncertain, as there are more than one Gurbux Singh mentioned in the evidence on record, and, for all we know, there may be others with this name) had given a barchha blow to Chanan Singh on his umblicus which is quite absurd as there was no injury at all on the umblicus of Chanan Singh.
The witness stated that, although Sarwan Singh, Chanan Singh, Ralla Singh, Gurdev Singh. were all armed with lathis no blow with lathis were given by them.
His evidence does not explain the lathi injuries of any of the injured persons at all.
His statement could not, therefore, be characterised as even an attempt to satisfactorily explain injuries.
We have no doubt, after examining his evidence.
that he could not be an eve witness of the occurrence at all.
The remaining defence witnesses, Gurbux Singh (D.W. 1).
Babu Singh (D W. 3).
and Vishnu Sarut) (D W. 4), either made statements based on hear say or attempted to prove the highly unnatural alleged agreement or compromise between 983 Sarwan Singh whose condition, disclosed by medical evidence, was such that he could not be in 'a position to say much about anything for several days let alone enter into negotiations and compromise.
We have, therefore, no doubt in our minds that the High Court was quite right in completely rejecting the defence Version which could not even pass muster as a possible explanation, for whatever it may be worth, as the learned Sessions Judge wrongly seemed to think that it could.
We have only disposed of the defence version first because the learned Counsel for the appellants, placed it in the forefront and tried to convince us that it was not as.
incredible as the High Court thought it to be.
Learned Counsel for the appellants asserted that truth is stranger than fiction.
We think that, at any rate in appraising evidence led in law Courts, such an assumption would be extremely hazardous one to adopt.
If it were adopted it would introduce an illegal criterion for appraising evidence.
Section 3 of the Indian Evidence Act enables a Court to employ only the standards of a prudent man in judging what is to be deemed to be proved according to law.
And, Section 114 of the Evidence Act enables Courts to presume only that which accords with the ordinary,.
course of events and human nature and not what would be an aberration from such a course.
Indeed, if such a principle was to be applied in judging some of the features of the prosecution case before us, which are assailed by the learned Counsel for the appellants, these features will appear to be more and not less credible.
The degree which proof must reach before a Court trying a criminal case will convict is no doubt that which a prudent man will employ in reaching a conclusion beyond reasonable doubt whereas an accused need not prove his case to the same extent in order to succeed.
But, the standards employed in judging each version are those of a reasonable and prudent man.
Such a man can only adopt what is natural to expect and what accords with common sense and ordinary experience but not what is extraordinary and unexpected as a reliable test of credibility of witnesses.
The approach of the learned Sessions Judge to the whole case seems to us to have been affected by an overemphasis of minor points emerging from evidence in the case which were magnified into major defects of the prosecution case.
Perhaps there is no uniform method of arriving at correct or at least satisfactory conclusions upon veracity of versions placed before the Court which can be applied to all cases.
It may be possible to decide many cases by determining the main or crucial point on which the decision of the case one way or the other may turn.
In other cases, where many disputable points,are involved none of which is conclusive, a more elaborate and comprehensive treatment of the 984 various points involved in the, whole case may became necessary.
Courts have however to attempt to separate the "chaff from the grain" in every case.
They cannot abandon this attempt on the ground that: the case is baffling unless the evidence ' is really so confusing or conflicting that the process cannot be reasonably Carried out.
The method to be employed in making this attempt was stated as follows by one of us (Beg, J.) in Chet Ram vs State(1); " Courts, in search of the core of truth, have to beware of being misled by half truths or Individually defective pieces of evidence.
Firstly, undeniable facts and circumstances should be examined.
Secondly, the pattern of the case thus revealed in the context of a whole sequence of proved facts, must be scrutinized to determine whether a natural, or probable and, therefore, a credible course of events is disclosed.
Thirdly, the minutias of evidence, including established discrepancies, should be put in the crucible of the whole context of an alleged crime or occurrence and tested, particularly with reference to the proved circumstances which generally provide a more reliable indication of truth than the faulty human testimony ' so that the process of separating the grain from the chaff may take place.
Fourthly, in arriving at an assessment of credibility of individual witnesses, regard must be had to the possible motives for either deliberate mendacity or subconscious bias.
Lastly, the demeanour and bearing of a witness in Court should be carefully noticed and an appellate Court has had, in this respect, an advantage which it does not possess".
It seems to us that the High Court had undoubtedly corrected erroneous approach of the learned Sessions Judge by pointing out obvious answers to the points which the learned Session, s Judge Seemed to regard as riddles incapable of solution.
For example, the delay in lodging the First Information Report, although suspicious, could certainly be satisfactorily explained by the fact that the stab wound in Sarwan Singh 's stomach was so ,serious that his statement could not be taken for several days afterwards, Dr. Prem Nath (P.W. 1), who examined him at 5.25 a.m. on 25 10 1965 found that a small portion of the omen turn was protruding from the wound, 5 c.m. X 3.5.
c.m., and the injured was found in severe pain.
The only other injury on his body was an abrasion I c.m.
X I c.m.
on the margin of the right ,elbow joint.
Dr. H. M. Nahar (P.W. 2), stated that the injured Temained under the effect of morphine sulphate upto 26.10 1965, (1) [1971] (1) Simla Law Joal p. 153 @ p. 157. 985 after which his condition improved The abdominal injury was considered by the Doctor to be dangerous to life.
Another injured person Chanan Singh (P.W., 8)whose brother was said to have filed a Civil suit against Nand Singh, the, father.
of Garib 'Singh appellant, and Jaimal Singh, brother of Gurdial accused, was not shown to be connected with Sarwan Singh, Indeed, as already mentioned above, the suggestion of the defence was that he had come to the scene with persons opposed to Sarwan Singh.
He had an oblique incised penetrating wound 1 1/2 " * 3/4 " X 4" on the right side of his chest and a swelling on the left, elbow.
Just as Sarwan Singh was taken in a cart to Patiala after the occurrence, he had been taken to Rajpura alongwith Rallar singh (P.W. 10) who had received three simple injuries with blunt weapon.
Gurdev Singh (P.W. 9), who had received two contusion and a faint contusion with blunt weapons had also gone with Chanan Singh and Ralla Singh to Rajpura, where they were all medically examined.
It, therefore, appears that the injured were, quite naturally, more concerned with getting their injuries attended to than with lodging a report immediately at the nearest Police Station.
The High Court had in these circumstances, not given undue importance to the delay in the lodging of a First Information Report on 25 10 1965 signed by Chanan Singh.
The learned Sessions Judge had used another fact against the prosecution without looking at the obviously.
good answer to it foundin the evidence.
This fact was that, on: 1 25 130 1965 at 8.30 a.m. Head Constable Kartar Singh (P.W. 14) had been giventhe injury reports and the First Information Report signed by Chanan Singh, when Gurdev Singh met him but did not tell him that he had himself witnessed the occurrence.
Kartar Singh (P.W. 14), had said that he had waited to ascertain facts from Chanan Singh himself, who was lying injured in a hospital at Rajpura, before sending the First Information Report to the Police State so that the case may be registered.
In these circumstances, we, think that the High Court was quite right in not using some.
delay in the lodging of the First Information Report," in the same way as the learned Sessions Judge had done it.
The High Court used it, no doubt, as one of the grounds, for finding ' allegations against the alleged instigators as possible exaggerations but it had not, doubted the bona fides of the whole prosecution case on this ground.
Another fact which had impressed the trial court very much was the failure of the Police to find any, marks of blood on the path in front of the house of Ram Singh where the occurrence was shown to, have taken place.
It had to be remembered that there Were only two injuries one on the, body of Sarwan Singh and another on the body of Chanan Singh, which could bleed and that 986 the blood would first get soaked in the clothes of the injured.
Morer, by the time the police had come to the, spot next day quite a number of people and vehicles may have passed to and fro over the path.
After the occurrence, even during the preceding night, which was that of Diwali, a number of persons must have passed over the path.
Hence the failure of the police to find any blood in front of the house of Ram Singh was also not so inexplicable as the learned Sessions Judge seems to have thou lit it to be. ' Another feature on which considerable emphasis was placed, in the course of arguments before us, was that Garib Singh appellant was alleged to have inflicted the most serious injury of all in this case, on the abdomen of Sarwan Singh, when this accused was an important witness of the case of Sarwan Singh against Ram Singh and Bhagat Singh who had challenged the adoption of Sarwan Singh.
Garib Singh was said to be a witness of the adoption deed put forward by Sarwan Singh.
It Was, therefore, Contended that Sarwan Singh would not have liked to displease Garib Singh.
It was also urged that there was no, reason why Garib Singh should take it into his head to suddenly attack Sarwan Singh, whose alleged adoption deed had been witnessed by him.
This may appear to be a somewhat peculiar feature in the case.
But we have no evidence before us to show what Garib Singh was doing in the ' company of Ram Singh and Bhagat Singh.
It is not inconceivable that either these two told him something to put him against Sarwan Singh, or, Sarwan Singh, finding him in the corn pany of his adversaries, had said something.
Garib Singh, who denied participation in the occurrence, could not be expected to say What had incensed him.
We think that the High Court had taken a correct and reasonable view in holding that, unless Garib Singh had actually caused the injury to Sarwan Singh, it would be most unnatural for Sarwan Singh, situated as he was in his litigation with Ram Singh and Bhagat Singh, to make such an allegation against Garib Singh.
This inference was far more natural and reasonable than that Garib Singh was falsely implicated by all the witnesses simply to oblige Chanan Singh.
An overall consideration of all the facts and circumstances in the case, the important features of which have been noticed by us, and a reading of the Judgments of the Sessions Judge as well as of the High Court have led us to the conclusion that, whatever error there was in the approach of the learned Sessions Judge in appraising the worth of the prosecution and defence versions, was rectified by the High Court.
We are of opinion that those features of the case to which the learned, Sessions Judge had attached disproponate importance were put in their proper perspective by the High Court We, therefore, do not think that this is a fit case for 987 interference by this Court in this appeal by special leave with the view of the High Court about the substantial truthfulness of the prosecution case and the utter incredibility of the defence version.
There is, however, one essential aspect of the case which seems to have escaped the attention of the High Court.
It is that the whole pattern of the case indicates that there was very little likely hood of any pre concert.
The High Court had itself rejected the version that Ram Singh and Gurdial Singh had instigated and said that Sarwan Singh should not be spared.
If this instigation was there and had been acted upon Sarwan Singh would have received many more injuries.
The nature of the injuries, proved by the medical evidence, indicated unmistakably that the occurrence was a short and sudden affair.
Such a short and sudden occurrence could take place on the evening of Diwali at a chance meeting when Sarwan Singh found Garib Singh in the company of his adversaries, Ram Singh and Bhagat Singh.
It is possible that something was said to Garib Singh either by Sarwan Singh when he found him in, the company of his adversaries, or, before that, by Ram Singh and Bhagat Singh which impelled Garib Singh to attack Sarwan Singh., These, however, are matters of pure conjecture.
Nevertheless, taking the totality of facts and circumstances particularly the nature of injuries, the Diwali night, and the place of occurrente on a public thoroughfare, into account, we are inclined to believe that the pattern of the case was not that of a pre planned attack.
There was some force in the submission, which was noticed by the Sessions Judge, that a pre planned attack was more likely to have taken place elsewhere and not on a public thoroughfare in front of the house of Ram Singh.
The learned Counsel for the appellant also submitted that Ram Singh and his associates were not likely to know the time at which.
Sarwan Singh would pass Ram Singh 's house that evening.
The prosecution evidence is that Sarwan Singh was going to untie his cattle.
It is possible that it was known in the village that Sarwan Singh passed the house of Ram Singh at that time every evening, but there was no evidence led to show that this was so and that, therefore, the accused were waiting for him to come.
Mere carrying of spears which is not unusual for Sikhs, would not establish pre planning.
A consideration of the above mentioned aspect, which was not discussed by the High Court, leads us to the conclusion that this was not a case in which Section 34 Indian Penal Code, for which there was not even a charge framed against the appellants, could be applied so unhesitatingly as the High Court had done.
It would have been possible to apply it even though no, charge was 988 framed for it if the evidence establishing it had been clear and free from doubt.
We may also mention the two cases cited before us to contend that the High Court should not have interfered at all with the appraisal of evidence by the trial Court.
These were : Khedu Mohton & Ors.
vs State of Bihar(1), and Laxman Kalu Nikalje vs The State of Maharashtra (2 ) .
In Khedu Mohton 's case(3), an appellate court had set aside the conviction of the accused persons on certain grounds including that the four eye witnesses of the alleged occurrence were unreliable because they were interested persons.
The High Court had interfered with an acquittal by an appellate Court.
This Court had said, with regard to the conclusion reached in that particular case by the acquitting Judge : " Unless the conclusions reached by him are palpably wrong or based on erroneous view of the law or that his decision is likely to result in grave injustice, the High Court should be reluctant to interfere with his conclusions.
If two reasonable conclusions can be reached on the basis of the evidence on record then the view in support of the acquittal of the accused should be preferred.
The fact that the High Court is inclined to take a different view of the evid ence on record is not sufficient to interfere with the order of acquittal".
We think that the present case is distinguishable from that case in as much as the approach of the Trial Court, in the case before us, shows that it was misled by attaching undue importance to individual features of the case which had been viewed in their correct perspective by the High Court.
The Trial Court had ignored the very important fact that it is contrary to the ordinary course of human nature for injured persons, without showing strong grounds for it, to omit the names of their actual assailants and to substitute wrong persons in their places.
Implication of the innocent with guilty ones is more easily credible than a wholesale substitution, out of enmity, of the innocent for the actual assailants, Such quick substitution was not, for the reasons already mentioned, conceivable in the present case.
As we have already indicated, the High Court, in the case before us, had coffected an error in the approach and in the reasoning of the Sessions Judge rather than upset the findings of the Sessions ' Judge or the credibility of witnessess at the trial.
The trial Court had not held that the injured eye witnesses could not be believed.
It had not weighed evidence so much as given a catalogue of reasons for suspecting the prosecution case without considering what (1) ; @ 840 841.
(2) ; 989 could be said in Answer.
Appraisement involves ,weighing of one set of facts or inferences from them against the opposite one fairly and reasonably.
In Laxman Kalu Nikalje 's case(1) it was laid down by Court at page 688 "We may say here that it is now the settled law that the powers of the High Court in an appeal against the acquittal are not different from the powers of the same court in hearing an appeal against a conviction.
The High Court in dealing with such an appeal can go into all questions Of fact and law and reach its own conclusions on evidence provided it pays due regard to the fact that the matter had been before the Court of Sessions and the Sessions Judge had the chance and opportunity of seeing the witnesses depose to the facts.
Further the High Court in reversing the judgment of the Sessions Judge must pay due regard to all the reasons given by the Sessions Judge for disbelieving a particular witness and must attempt to dispel those reasons effectively before taking a contrary view of the matter.
It may also be pointed out that an accused starts with a presumption of innocence when lie is put up; for trial and his acquittal in no sense weakens that presumption, and this presumption must also receive adequate consideration from the High Court.
" We think that the principles laid down above by this Court were applied by the High Court in dealing with the case before us.
It had not set aside, as already indicated, the verdict of a Court of trial based upon the special advantage it derives from watching witnesses depose.
As we have already observed, we think that the High Court had erred in applying Section 34 Indian Penal Code to the facts and circumstances of the case before us.
As we are satisfied that the occurrence which led to the prosecution of the appellants must have arisen out of a sudden quarrel over some exchange of words in circumstances which have not been brought out by the evidence in the case, we are unable to hold the appellants guilty of any offence with the aid of Section 34 Indian Penal Code.
We, therefore, set aside the convictions and sentences of Garib Singh under Section 324/34 and 323/34 Indian Penal Code but we maintain his conviction under Section 307, and, in the special circumstances of this case, reduce his sentence to three years rigorous imprisonment from five years rigorous imprisonment.
We also set aside the convictions and sentences of the appellant Bhagat Singh under Section 307/34 and 324/34 Indian Penal (1) ; 17 1061Sup Cl/72 990 Code, but maintain his conviction under Section 323 indian Penal Code and sentence of three months rigorous imprisonment for that offence.
As regards Mohinder Singh appellant, a youngster who was bound to have been misguided by the example of older people and against whom no previous conviction is disclosed, while setting aside his conviction and sentence under Section 307/34 and 323/34 Indian Penal Code, we maintain his conviction under Section 324, Indian Penal Code, but reduce his sentence under Section 324 India Penal Code to the period already undergone.
This appeal is partly allowed to the extent indicated above.
G.C. Appeal allowed in part.
| IN-Abs | Five persons including three appellants were jointly charged and tried for rioting and offence committed in the course of it.
The Sessions Judge acquitted all the accused because he found the prosecution story to be art ficial.
He also took into account the delay in lodging the first information report and the fact that there were no 'blood marks found where the injured persons were alleged to have fallen down.
The High Court in appeal filed by the.
State re assessed, the evidence and reversed the judgment of acquittal in respect of the three appellants.
The appellants had been charged in respect of vicarious offences under section 149, of the Indian Penal Code, but the High Court, in view of the acquittal of two of the five accused, convicted he appellants in respect of those offences under section 34 of the Code.
In appeal by special leave this Court had to consider (i) whether the reversal of the judgment of the trial court by the High Court was justified with reference to principles of appreciation of evidence and the decisions of the Court, (ii) whether the conviction of the appellants by recourse to section 34 was justified on the facts of the case, HELD: (i) Perhaps there is no uniform method of arriving at correct or at least satisfactory conclusions upon veracity of versions placed before the Court which can be applied to all cases.
It may be possible to decide many cases by determining the main or crucial point on which the decision of the case one way or the other may turn.
In other cases, where many disputable points are revolved, none of which is conclusive, a more elaborate and comprehensive treatment of the various points involved in the whole case may be necessary.
Courts have, however, to attempt to, separate the "chaff from the grain" in every case.
They cannot abandon this attempts on the ground that the case is baffling unless the evidence is really so confusing or conflicting that the process cannot be reasonably carried out.
[983 H 984B] Chet Ram vs State, [1971] 1 S.L.I.153, referred to.
(ii) In judging the credibility of aversion the Court must apply the standards of a reasonable and prudent man.
[983 F] (iii) In the present case the High Court had undoubtedly corrected the erroneous approach of the learned Sessions Judge by pointing out obvious answers to the points which the Sessions Judge seemed to regard as riddles incapable of solution.
For example, the delay in lodging the First Information Report, although suspicious, could certainly be satisfactorily, explained by the fact that the stab would in the stomach of one of the victims was so serious that his statement could not be taken for several days afterwards.
The absence of blood at, the place of occurrence 979 was given undue importance by the trial court inasmuch 'as the blood might have got soaked in the clothes of the victims.
Secondly after the occurence, a number of persons must have passed to and fro over the path, where the occurrence took place, before the arrival of the police next day.
The principles laid down by this Court were applied by the High Court in dealing with the case and interference by this Court in respect of the appraisal of evidence by the High Court would not be justified.
[984 P G; 986 A B] Khedu Mohton & Ors.
vs State of Bihar, ; and Laxman Kalu Nikalje vs The State of Maharashtra, ; , referred to.
(iv) The High Court however erred in applying section 34 I.P.C. to the facts of the present case.
Taking the totality of circumstances, particularly the nature of the injuries, the Diwali night, and the place of occurrence on a public thoroughfare into account, the pattern of the case was not that of a pre plained attack.
Mere carrying of spears which was not unusual for Sikhs would not establish pre planning.
The conviction of the appellants with reference to section 34 must therefore be set aside.
[987 D G; 989 G H]
|
Appeal No. 889 of 1971.
Appeal from the order dated December 9, 1970 of the Madhya Pradesh High Court in Miscellaneous Petition No. 267 of 1969.
L. section Baghel, Pramod Swarup and section section Khanduja, for the appellants.
R. Paniwani and section K. Gambhir, for respondent No. 1.
R. P. Kapur, for respondents Nos. 2 and 3.
The Judgment of U Court was delivered IV Hegde, J. This is an appeal by certificate.
It relates to the .elections to Municipal Council, Sidhi.
The elections were held 60 in 1969.
In that election six persons ie.
four appellants and respondents 5 and 6 in this appeal were elected.
Thereafter the first respondent herein an elector and apparently a busy body filed a petition under Article 226, of 'the Constitution in the High Court of Madhya Pradesh challenging the validity of the election of all the returned candidates on several grounds.
The High Court accepted that petition and set aside the election of all the returned candidates.
The only ground on which the election of the returned candidates was set aside is that the returned candidates in their nomination papers had merely mentioned the number of the wards for which they were candidates but had failed to mention the names of those wards.
It is not the case of the election petitioner nor is it the finding of the High Court that there was any difficulty in identifying the ward in which the concerned returned candidate wanted to seek election.
The Returning Officer did not find any such difficulty.
He accepted their nomination papers.
Admittedly every ward had a specific number in addition to having a name.
The High Court was of the opinion that the successful candi dates failure to, mention the name of the wards in their nomination papers was fatal and therefore the Returning Officer was not competent to accept their nomination.
It thought that it was mandatory for all the, candidates to mention in their nomination papers the names of the wards in which they wanted to seek election.
Further it opined that a mere mentioning of the number of the ward may lead to clerical errors and therefore the rule making authority had prescribed that the name of the ward also should be mentioned in the nomination paper.
It is nobody 's case that in the nomination papers with which we are concerned there are any errors as regard the ward numbers.
Let us now examine whether the High Court was justified in taking such a technical view of the matter.
The election to the municipal councils is regulated by Rule 13 of the Rules framed under the Madhya Pradesh Municipalities Act, 1961.
Rule 13 (1) reads "13(1)(i).
On or before the date fixed for filing nomination paper of candidates each candidate shall, either in person or by his proposer or seconder, between the hours of 11 O 'clock in the forenoon and 3 O 'clock in the afternoon, deliver to the supervising officer a nomination paper completed in For IV. and subscribed by the candidate himself as assenting to the nomination and by two duly qualified voters of the ward as proposer and seconder.
61 The relevant column in Forma IV reads "Name and number of the ward".
Going back to Rule 13 it is necessary to notice sub rule (vi) of that rule which says.
: "The supervising officer shall not reject any nomination paper on the ground of any defect which is not a substantial character.
" The question for decision is whether the non mentioning of the names of the wards in the nomination papers is a defect of a substantial character ? For deciding that question we must first find out the reason behind the rule requiring the candidates to mention the names and the number of the wards in which they want to contest.
It is obvious that the particulars in question are required to identify the constituency in which a candidate is desirous of seeking election.
That purpose will be served if either the number of the ward or its name is given unless there are more than one wards having the same name.
Once the number of the ward is mentioned in the nomination paper the identification of the constituency is complete.
The name of the ward is merely an additional piece of evidence to identify the constituency.
if the number of the ward is mentioned there will be no difficulty for the Returning Officer to find out in which constituency the candidate wants to seek election.
We have no hesitation in holding that the nomination papers of the returned candidates were rightly accepted by the Returning Officer as they substantially complied with rules.
If a nomination is accepted by the Returning Officer the presumption is that the nomination is a valid nomination.
It is for the party who challenges its validity to establish his plea by showing that there was no substantial compliance with law.
Form III in the Rules prescribes the form of notice calling for election of councillors.
That form reads : "Election of Councillor(s) for Ward(s) No. . of the .
Municipality, Tehsil District . .
This form shows that even when the authorities call upon the electors to elect councillors they do so with reference to ward numbers and not with reference to the names of the wards evidently because in the case of names of the wards more than one ward may have the same or similar names but in the case of number no such difficulty can arise.
If there is a possibility of an error creeping into numbers there is similar possibility in the case of names.
The candidates have to guard against such errors.
The question whether the failure to mention the name of the constituency, in which the candidate wants to seek election in his nomination paper per se vitiates his nomination came up for consi 62 deration before this Court in Rangilal Chowdhury vs Dahu San & ors.
That case related to a bye election for the Dhanbad assembly constituency in the Bihar State.
In his nomination paper the candidate had mentioned the constituency in which he was seeking election as 'Bihar '.
nomination paper was rejected by the Returning Officer on the ground that the candidate had not mentioned the name of the constituency in which he desires to seek election.
This Court differing from the opinion taken by the Returning Officer held that the nomination paper was valid in law.
The ground on which this Court came to.
that conclusion was that the election in question was a bye election; it pertained to only one constituency ie.
Dhanbad.
That, being so there was no difficulty for the Returning Officer to identify the constituency in which the candidate wanted to seek election.
The ratio of that decision is that so long as there is no difficulty in identifying the constituency in which the candidate wants to seek election any omission in filling the, column relating to tile constituency will be considered as unsubstantial.
A somewhat similar view was taken by this Court in Ram Awadesh Singh vs Smt.
Sumitra Devi & Ors.(2) Mr. Panjwani appearing for respondent No. 1 invited our attention to certain decisions where the courts had taken the view that the particulars mentioned in the nomination papers before them did not sufficiently comply with the rules.
That was because, that from the particulars given in the nomination papers it was not possible to definitely identify the constituency in which the concerned candidates desired to contest. 'nose decisions were rendered on the peculiar facts of those cases.
The real test as mentioned earlier is whether from the particulars given in a nomination paper the constituency from which the candidate wants to seek election can be reasonably identified.
Once it is held that test is satisfied then the requirement of the rule is met.
Any failure to give further particulars canno t be considered as substantial.
In the result this appeal is allowed and the order of the High Court is set aside and the Writ Petition is dismissed.
The first respondent will pay the costs of the appellants herein both in this court as well as the High Court.
The other respondents will bear their own costs S.C. Appeal allowed.
| IN-Abs | According to Rule 13 framed under Madhya Pradesh Municipalities Act, 1961, a candidate for election to the Municipal Council shall deliver to the supervising officer a nomination paper completed in Form IV and the relevant column in Form IV required the candidate to mention the "name and number of the Ward".
Further, sub rule (IV) of Rule 13 provided that the 'supervising officers shall not reject any nomination paper on the ground of any defect which is not of substantial character High Court in a writ petition set aside the elections of 6 persons to the 'Municipal Council on the ground that they only mentioned the question whether the number of the wards but not their names.
On non mentioning the names of the wards in teh nomination paper was a defect of a substantial character, HELD .
: The nomination papers of the returned candidates were rightly accepted by th` Returning Officer as they substantially complied with the Rule.
The particulars in question were required to identify the constituency in which a candidate was desirous of seeking election.
That purpose was served when either the number and the ward, or its name was given unless them were, more than on a ward having the same name the identification of the constituency was complete.
The name of the ward .was merely an additional piece of evidence to identify the constitute Once the number of the ward was mentioned there was no difficulty for the Returning Officer to find out in which constituency tin candidates wanted to seek election.
[61D] Rangila Chowdhury vs Dultu Sen & Ors. ; and Rain Awadesh Singh vs Smt.
Sumitra Devi & Ors., A.I.R. , referred to.
|
o. 1574 of 1971.
Appeal by special leave from the judgment and order dated July 6/7, 1971 of the Bombay High Court in Special Civil Application No. 619 of 1971.
section V. Gupte and P. N. Tiwari, for the appellants.
K. section Chawla, section N. Mishra and section section Jauhar, for the respondents.
The Judgment of the Court was delivered by Mitter, J.
This is an appeal by special leave from a judgment and order of the Bombay High Court in a Special Civil Application from a decision.
of the Court of Small Causes Bombay in exercise of its revisionary jurisdiction.
The revisional court had reversed the decision of the trial court and remanded the matter for disposal ,of the issues other than issues 2 to 8 tried as preliminary issues and decided in favour of the plaintiffs before the Court of Small Causes.
The facts are as follows.
Respondent No. 1 was the owner of a flat on the second floor of Block No. 8 'Shyam Niwas ', Warden Road, I Bombay.
She was a member of a Co operative Housing Society and had acquired the flat from the said society.
In 1959 she had put the appellant Sabharwal Brothers in possession of the flat for a period of 11 months on payment of Rs. 510/ per month.
There was an agreement in writing which purported to show that the possession was to be on leave and licence basis.
This agreement was signed by a partner of Sabharwal Brothers who also became member of the said Co operative Society.
There were repeated renewels of the said agreement until 25th October, 1962 when the first respondent asked the appellants to vacate possession on the ground that she required the flat for her personal occupation.
As this was not complied with, she filed a statement of claim before the Registrar of Co operative Societies on the ground that there was 55 a dispute within the meaning of section 91(1) of the Maharashtra Co operative Societies Act (Thereinafter referred to as the 'Act ') which required adjudication There was a challenge to the jurisdiction of the nominee of the Registrar to whom it was referred by the appellants.
The proceedings before the nominee went on for some time on July 3, the nominee made an award to the effect the, appellants were occupying the flat on leave and licence basis.
Anticipating the award the appellants filed a suit in the Court of Small Causes Bombay stating that they were in occupation of the flat as tenants and as such entitled to protection under the Bombay Rent Act, 1947 and the first respondent had no right to evict them.
In her written statement the defendant denied that the plaintiffs were tenants contending, inter alia, that the plaintiffs were occupying the flat only on leave and licence basis etc.; that the dispute between the parties had been referred to the Registrar of Co operative Societies for disposal and finally that the Court of Small Causes had no jurisdiction to entertain and try a suit involving such a dispute.
The Small Causes Court framed no less than twelve issues of which issues 2 to 8 related to the maintainability of the suit and the jurisdiction of the court in view of the provisions of section 91 (1) (d) of the Act.
The Small Causes Court held that the suit was maintainable and answered the other preliminary issues in favour of the plaintiff.
The matter was taken in revision to a Bench of the said Small Causes Court.
The Bench took a different view holding that the Registrar 's nominee did have jurisdiction to try the dispute between the parties and remanded the proceedings to the trial court for disposal of the suit after deciding on issue as to res judicata by reason of the award of the nominee.
The High Court dismissed the Special Civil Application of the plaintiffs holding that the revisional court of the Small Causes was justified in coming to the conclusion that it was not open to the plaintiffs to contend that the Registrar or his nominee had no jurisdiction to entertain the dispute on the two grounds on which it was challenged.
Before us the main points urged on behalf of the appellants were: first, whether there was any dispute between the parties touching the business of the Co operative Society which could be decided by the Registrar or referred by him to a nominee for disposal; and, secondly whether the suit filed in the Small Causes Court was maintainable having regard to the nature of the relief sought.
The central question, therefore,.is, whether the dispute between the parties is capable of reference under the Act.
The relevant portion of section 91 (1 ) (b) of the Act runs as follows (1) Notwithstanding anything contained in any other law for the time being in force, any dispute touch 56 ing the constitution . management or business of a society shall be referred by any of the parties to the dispute. if both the parties thereto are one or other of the following: (a). . . . . . . . . (b) a member, past member or a person claiming through a member etc. " section 91(3) provides : "Save as otherwise provided under subsection (3) of section 93, no court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to in sub section (1).
We may also note the relevant portion of section 163 (1) which provides: I ) Save as expressly provided in this Act, no civil or revenue court shall have any jurisdiction in respect of (a) (b) any dispute required to be referred to the Registrar, or his nominee (c) Before the Court of Small Causes reference was made to bye law No. 2 of the Society to show that the objects of the society were inter alia to carry on the trade of buying,selling, hiring and letting land in accordance with the co operative principles and under Regulation No. 5 in form 'A ' printed at the end of the bye laws "No tenant shall assign, underlet, vacate or part with the possession of the tenement or any part thereof without the consent in writing of the society.
" The Bench of the Court of Small Causes referred to the above provisions and observed that the bye laws of the society constituted an agreement between the members of the society and a breach thereof would affect the defaulting member 's right of membership of the society and consequently a dispute relating to the letting of the flat was a dispute which touched the business of the society.
57 (Mitter, J.) The High Court referred to section 91 of the Co operative Socities Act.
and section 28 of the Bombay Rent Act and observed: "There is a competition between two authorities, a court and the Registrar 's nominee, both exercising exclusive jurisdiction in respect of matters coming within their jurisdiction." and concluded that on general principles of law it would not be proper to allow the same question to be agitated again under a different guise.
It also observed that the decision taken by the Assistant Registrar and the nominee could have been decided by an appeal and as no appeal had been filed the provisions of law must have their effect with the result that the decision of the dispute by the nominee of the Registrar had become final.
With all respect to the High Court, it seems to us that there was a fundamental error in the above approach.
No doubt it was the business of the society to let out premises and a member had no unqualified right to let out his flat or tenement to another by virtue of the bye laws and a breach of the bye laws could affect the defaulting member 's right to membership.
But we are not able to see how letting by a member to another member would touch the business of the society which included inter alia the trade of buying, selling, hiring and letting land in accordance with co ope rative principles.
The letting of flat by respondent No. 1 was a transact ion of the same nature as the society itself was empowered to enter into but such letting by itself did not concern the business of the society in the matter of its letting ' out flats.
Nothing was brought to our notice to show that such a letting would affect the business of the society once it had sold the flat to the respondent No. 1.
The position might have been different if the latter had himself been a tenant of the flat under the society.
"To touch" means "to come in contact with" and it does not appear that there is a point of contact between a letting by the respondent No. 1 and the business of the society when the society was not itself the landlord of the flat.
Reference was made at the Bar to Deccan Merchants Co opera tive Bank Ltd. vs M/s Dalichand Jugraj Jain and others(, ').
The facts there were very different from those of the instant case.
(1) [1969] 1 S.C.R. 887.
5 LI208 Sup C I/72 58 But the Court had to consider the question of competing jurisdiction under the Bombay Rent Act and the Act and it is pertinent to note the observations at p.902"that the two acts can be harmonised best by holding that in matters covered by the Rent Act, its provisions, rather than the provisions of the Act, should apply." In the result we allow the appeal, set aside the judgement and order of the High Court And of the Bench of the Court of Small Causes.
The matter is now to go back to the Court of Small Causes for disposal according to law.
The appellants will have the costs incurred in this Court.
Appeal allowed.
| IN-Abs | The respondent was the owner of the flat on the second floor of a Building in Bombay.
She was a member of a Co operative Housing Society and had acquired the flat from that society.
In 1959 she had put the appellant in possession of the flat for a period of 11 months on payment of Rs. 5101 per month.
According to the written agreement the possession was given on leave and licence basis.
The government was signed by one of the partners of the appellant firm who also became members of the said Co operative Society.
The agreement was renewed until 25th October, 1962 when the first respondent asked the appellants to vacate possession on the ground that she required the flat for personal occupation.
As this was not complied with she filed a statement of claim before the Registrar of Co operativc Societies on the ground that there was a dispute within the meaning of section 91(1) of the Maharashtra Co operative Societies Act.
The Registrar referred the case to a nominee whose jurisdiction was challenged by the appellants.
Nevertheless the proceedings before the nominee went on for some time and on July 3, 1964 the nominee made an award to the effect that the appellants were occupying the flat on leave and licencee basis.
The appellants, anticipating the award, filed a suit in the Court of Small Causes Bombay stating that they were in occupation of the flat as tenants and as such entitled to protection under the Bombay Rent Act, 1947.
The Small Causes Court held that the suit was maintainable and answered the other preliminary issues in favour of the plaintiff.
In revision the bench of the Small Causes Court held that the Registrar 's nominee did have jurisdiction to try the dispute between the parties and remanded the proceedings to the trial court for disposal of the suit after deciding an issue as to res judicata by reason of the award of the nominee.
The High Court up held the order of the bench.
In this Court the questions that fell for consideration were (1) Whether there was any dispute between the parties touching the business of the co operative society which could be decided by the Registrar or referred by him to a nominee for disposal and (2) Whether the suit filed in them Small Causes Court was maintainable having regard to the nature of the relief sought.
Allowing the appeal HELD : (i) No doubt it was a business of the society to let out premises and a member had no unqualified right to let out his flat or tenement to another by virtue of the bye laws and a breach of the byelaws could affect the defaulting member 's right to membership.
But HELD : (i) No doubt it was a business of the society to let Out touch the business of the society which included inter alia the trade of buying, selling, hiring and letting land in accordance with cooperative principles.
The letting of flat by respondent No. 1 was a transaction of 54 the same nature as the society it if was empowered to enter into but such letting out itself did not concern the business of the society in the matter of its letting out flats.
There was nothing to show that such letting would effect the business of the society once it had sold the flat to the respondent No. 1.
The position might have been different if the latter had himself been a tenant of the flat under, the society.
"To touch" means "to corn in contact with" and it did not appear that there was a point of contact between a letting by the respondent No. 1 and the business of the society when the society was not itself the land lord of the flat.
[57D G] (ii) As observed by this Court in an earlier case the Bombay Rent Act and the Maharashtra Cooperative Societies Act can be harmonised best by holding that in matters covered by the Rent Act, its provisions rather than the provisions of the Co operative Societies Act, should apply.
[58A] Deccan Merchants Co operative Bank Ltd. vs M/s, Dalkhand Jugraj Jain and others, [1969] 1 S.C.R., 887, distinguished.
|
Appeal No. 158 of 1968.
Appeal from the Judgment and Order dated February 6, 1967 of the Bombay High Court in Special Civil Application No. 1987 of 1965.
WITH Civil Miscellaneous Petition No. 1300 of 1972.
(Application by the Respondents for revocation of certificate granted by the High Court.) Soli Sorabji, K. D. Mehta, P. C. Bhartari and O. C. Mathur for the appellant.
M. C. Bhandare, Sunanda Bhandare and K. Rajendra Chowdhary, for respondents Nos. 1, 2, 4, 5, 7, 8, 10, 12, 13, 95, 96, 98.
100, 101 to 104 and 108, The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, on certificate, by the Bombay Gas Co. Ltd., is directed against the judgment and order dated 931 February 6, 1967 of the Bombay High Court in Special Civil Application No. 1987 of 1965.
The High Court set aside the decision of the Court of Small Causes, Bombay, in Payment of Wages Appeals Nos. 162 and 163 of 1962 and remanded the proceedings to the Additional Authority for calculating and awarding over time wages that may be due to the respondents Nos. 1 to 80 herein.
The High Court further reversed the decision of the Court of Small Causes, Bombay, in Payment of Wages Appeal No. 61 of 1963 and restored the orders passed by the Third Additional Authority in favour of the respondents Nos. 8 1 to 1 1 8 herein, regarding their right to get wages for weekly off days.
C.M.P. No. 1300 of 1972 is an application filed by the, respondents in the civil appeal for revoking the certificate for leave to appeal to this Court granted by the High Court to the appellant herein.
We will briefly state the circumstances under which the appeal has come to this Court on certificate: The respondents Nos. 1 to 14 who were employed under the appellant as Syphon Pumpers filed on March 3, 1958 before the Additional Authority 14 applications under section 15 of the Payment of Wages Act (hereinafter to be referred as the Act) claiming over time wages for the period February 1957 to January, 1958.
On the same date the respondents Nos. 15 to 80, who were employed under the appellant as Mains workers filed before the same Authority 66 applications claiming over time wages for the same period.
The claim was substantially based under the provisions of the Bombay Shops, and Establishments Act, 1948 (hereinafter to be referred as the Establishments Act).
The appellant raised two, grounds of defence: (a) The claims were barred by the Award, Part II of the Industrial Tribunal, Bombay dated March 30, 1950 in Reference (IT) No. 54 of 1949; and (b).
The applicants were not workmen covered by the Establishments Act.
On October 13, 1962, the Additional Authority held that the Award, referred to, by the Company was no bar to the said employees claiming over time wages.
But the said Authority accepted the contention of the Company that the applicants are not covered by the Establishments Act, which gives them the benefit of weekly off days with wages under section 18(3).
In this view the applications filed by the respondents Nos. 1 to 80 herein were dismissed.
The said applicants filed before the Court of Small Causes.
Bombay, which was the Appellate Authority, Payment of Wages Appeals Nos. 162 and 163 of 1962 challenging the decision dated October 13, 1962 of the Additional Authority, .dismissing their applications.
During the years 1962 63, the respondents Nos. 81 to 118 herein, in the Civil Appeal filed 38 applications before the Third Additional Authority under section 15 of the Act claiming wages for weekly off days.
The said respondents were working in Mains, 932 Heating.
Appliances.
and Fitting Departments of the appellant.
Here again, the basis of the claim was under the provisions of the Establishments Act.
The appellant raised the same two defences as in respect of the claim for overtime wages.
The Third Additional Authority, by it,$ judgment dated April 26, 1963, held that the Award, Part II of the Industrial Tribunal, Bombay, dated March 30, 1950 in Reference (IT) No, 54 of 1949 is no bar to entertain the applications of the said employees.
The said authority further held that the district office in which the said applicants were employed is a "Commercial Establishment" under the Establishments Act and as such they were entitled to wages for weekly off days under section 18(3) of the said Act.
Accordingly, the, said authority directed the appellant to pay the amounts mentioned in the judgment to respondents Nos. 81 to II 8 and also to pay certain amount by way of corn sensation.
The appellant filed Payment ,of Wages Appeal No. 61 of 1963 before the Court of Small Causes, Bombay which was the Appellate authority, challenging the decision of the Third Additional Authority dated April 26, 1963 regarding payment of wages for 'weekly off days.
81 to 118 were heard together and .disposed of by a common judgment dated February 11, 1965 by the Appellate Authority, the Court of S mall Causes, Bombay.
It was held that the claims of all the workmen for over time wages and wages for weekly off days were barred by the Award, Part II dated March 30, 1950 of the Industrial Tribunal, Bombay, in Re ference (IT) No. 54 of 1949 and that the.
said award was still in force and binding on the parties.
Accordingly, the Payment of Wages Appeals Nos. 162 and 163 of 1962 were dismissed and Payment of Wages Appeal No. 61 of 1963 was allowed.
It must however be stated that though the Appellate Authority, .the
under the Establishments Act., The Appellate Authority held that the district office, of the Company though situated,within the,, compound of the factory is a "Commercial Establishment" under the Establishments Act.
Accordingly, the Court of Small Causes agreed 'With the finding of the Third 933 Additional Authority, that the workman were governed by the provisions of the Establishments Act and as such are entitled to the benefit conferred on them by that Act.
However, in view of the fact that the Claims of all the workmen were held to be barred in view of the award in Reference (IT) No. 54 of 1949, the workmen 's appeals were dismissed and the appeal , filed by the company was allowed.
As stated earlier, the decision of the court of small causes resulted in the dismissal of all the applications filed by the workmen before both the Additional Authority and the Third Additional Authority.
All the 118 workmen filed before the Bombay High Court, Special Civil Application.
No. 1987 of 1965 under articles 226 and 227 of the Constitution for quashing the judgment of the Court of Small Causes, Bombay, dated February 11, 1965.
By its judgment and order dated February 6, 1967, the High Court held that neither the claim of the respondents Nos. 1 to 80 for over time wages, nor the claim of the respondents Nos. 8 1 to 1 1 8 for wages for weekly off days was barred by the Award, Part 11, dated March 30, 1950 in Reference (IT) No. 54 of 1949.
So far as the respondents Nos. 1 to 80 were concerned, the High Court has set aside the judgment of the Court of Small Causes, Bombay, ;is well as the order dated October 13, 1962 of the Additional Authority and remanded their applications to the latter for ascertaining and decreasing the amount of over time wages that may be due to them.
Regarding the respondents Nos. 8 1 to II 8 the High Court has set aside the judgment of the Court of Small Causes, Bombay, and restored the order dated April 26, 1963 of the Third Additional Authority recognising their claim for wages for weekly off days.
It is seen from the judgment of the High Court that the Company did not challenge the finding of the Court of Small Causes that the workmen are employed in a "Commercial Establishment" and as such are entitled to the benefits of the provisions of the Establishments Act.
The High Court has also stated that the reason given by the counsel appearing for the Company for not challenging that finding was that it was not open to the Company, which was I respondent in the writ petition to challenge the said finding in those proceedings.
Therefore the High Court has adjudicated upon the only question whether the Award bars the claims of the workmen as held by the Court of Small Causes.
On this point, as pointed out earlier, the High Court disagreed with the decision of the Court of Small Causes.
The appellant filed on April 6, 1967 in the High Court Application No. 869 of 1967 praying, for the grant of a certificate of fitness to enable it, to appeal to this Court In the application of the appellant, after setting out the nature of the applications filed before 934 the Additional and Third Additional Authorities, the amounts claimed by the work men, the decision of the said two Authorities as well as the judgment and order of the Court of Small Causes, and the High Court, it was stated that the amount or value of the subject matter before all the Authorities, in the appeals, as well as in the High Court and still in dispute in the proposed appeal to this Court, was Rs. 20,000 and upwards.
It was further stated that in any event the case is a fit one for appeal to this Court.
Accordingly, the appellant prayed for the grant of a certificate that the amount or value of the subject matter in the said Special Civil Application, applications before the Additional and Third Additional Authorities, in the appeals before the Court of Small Causes and in dispute in the proposed appeal to this Court was Rs. 20,000 and upwards or in the alternative on the ground that the case is a fit one for appeal to this Court.
It will be seen, that though the appellant did not specify under which clause of article 133(1) the certificate was asked for, nevertheless a perusal of the averments made in the petition and the prayers made therein show that the appellant was asking for a certificate under clauses (a) and, or (c) of article 133(1).
The High Court after hearing all parties, by its order dated October 19, 1967 directed a certificate to issue under article 133(1)(b) of the Constitution.
The respondent ha; filed C.M.P. No. 1300 of 1972 requesting this Court to revoke the certificate granted to the appellant by the High Court on October 19, 1967.
If the certificate is revoked, that will result in our holding that the appeal is not competent.
Hence we will deal with the application for revocation of the certificate.
In the affidavit filed in support of the application for revocation, the following averments are made: The appeal refers to two sets of claims which are separate and independent of each other one for over time wages and the other for wages for weekly off days.
The applications in respect of these two different claims were filed by the concerned workmen before two different Authorities under the Act and were also disposed of separately by those Authorities.
Separate appeals were preferred before the Court of Small Causes.
Though a common judgment was delivered by the Court of Small Causes, the two sets of claims have been dealt with independently and separately in the judgment, as there were, separate and different appeals.
The claim for weekly off days wages comes only to Rs. 6675 and that was the value of the subject matter before the Third Additional Authority and in the appeal before the Court of Small Causes as well as in the writ petition before the High Court.
The same is the value of the subject 935 matter of the appeal to this Court.
The value of the subject matter of the claim in respect of over time wages was only Rs. 10660 before the Additional Authority and in the appeals before the Court of Small Causes, in the High Court, as well as in the appeal before this Court.
The value of the subject matter of neither of the two separate and distinct claims is Rs. 20,000; and even if both the claims are added, the value of the subject matter is less than Rs. 20,000.
It was, in view of this circumstance, that the High Court did not grant a certificate under Art.133(1)(a).
The High Court did not consider the case as a fit one for appeal to this Court, and hence no certificate was granted under Art.133(1)(c).
What has weighed with the High Court in granting a certificate under Art.133(1)(b) is the circumstance that the nature of the demands made by the workmen were such that they are recurring claims arising in the future also and as such the final judgment and order in the writ petition involve directly or indirectly a claim respecting property of the value of not less than Rs. 20,000.
This view of the High Court is erroneous and contrary to the decisions of this Court and as such the grant of ' certificate by the High Court is erroneous.
Along with the application, the respondents have filed a statment to show that the value of the subject matter of the claim regarding over time wages does not exceed Rs. 10660.
At this stage it may be mentioned that according to the appellant this schedule deals only with the claims made by the Mains workers and it does not include the amount claimed by the 14 Syphon Pumpers.
In this affidavit the averments made are as follows : Though the appeal has been.
pending in this Court for a considerable time, the respondents have filed the application for revocation of the certificate only when the appeal was about to be heard.
It is pointed out that the respondents opposed before the High Court the application for grant of certificate on the ground that the aggregate of all claims put together amounts only to Rs. 17678.80 P., and hence no certificate should be granted.
The appellant had filed a rejoinder giving details regarding the value of the subject matter of the appeal to this Court.
As per the particulars given therein, the value of the subject matter of the entire claim in respect of overtime wages, weekly off days wages and compensation is of the value of Rs. 26822.09.
Therefore, the amount or value of the subject matter in dispute in the court of the first instance and still in dis pute in the appeal is Rs. 26822.09, which is well over the prescribed limit of Rs. 20,000.
The claim for weekly off days wages at the rate claimed by the workmen on the date of the judgment of the High Court, that is February 6, 1967 became crystalised in, the aggregate amount of over Rs. 30,000.
Similarly, the claim 936 for over.
time wages as a result, and effect of the judgment of the High Court, as on the date of the decision in the writ petition, also exceeds the sum of Rs. 20,000.
The respondents raised a controversy regarding the amount or value of the subject matter in dispute before the High Court in application No. 869 of 1967.
But, inasmuch as the recurring claims of both weekly off days wages and over time was, at the time of the High Court 's judgment in the writ petition on February 6, 1967, had crystalised into amounts exceeding Rs. 20,000, the High Court issued the certificate under Art.133(1)(b) and that the certificate so issued under the said Article is perfectly valid.
We have set out fairly elaborately the claim made by the resPondents in C.M.P. No. 1300 of 1972 for revoking the certificate granted by, the High court as well the,defence pleaded by the appellant to that application.
But from the material averments made by the appellant in its application before the High Court for grant of certificate, it is to be gathered that the prayer was substantially on the ground that the amount or value of the subject matter of the applications before the Payment of Wages Authorities, in the appeals before the Court of Small Causes, in the writ petition before the High Court and still in dispute in the proposed appeal to this Court was Rs. 20,0001/ and upwards.
This prayer will bring the application under article 133(1) (a).
In the alternative, the certificate was prayed for on the ground that the case is fit one for appeal to this Court.
This prayer will come under article 133 (1) (c).
The request of the appellant for grant of certificate on the above basis was opposed by the respondents herein on the ground that the amount or value of the subject matter before all the Authorities, the Court of Small Causes, the High Court and in dispute in the proposed appeal before this Court was far below Rs. 20,000/ and as such the matter does not come under article 133(1) (a).
It was also averred that there was no substantial question of law of any great importance arose for consideration so as to attract article 133 (1) (c).
After giving details regarding the nature of the claims made by the workmen, both as over time wages and weekly off days wages, it was stated that the claim fell far short of the sum of Rs. 20,000/ .
As the High Court had only adjudicated upon that claim in the, writ petition, the respondents pleaded that the judgment of the High Court does not involve directly or indirectly any claim or question respecting property of the value of Rs. 20,000/ or more.
The High Court on October 19, 1967 granted the certificate in the following terms "Certificate to issue under article 133 (1)(b) of the Constitution.
Costs in the Supreme Court appeal.
" 937 From the above it will be seen that the High Court has not given any indication as to how it issued the certificate under article 133(1)(b).
(a) or el.
(c) of article 133(1).
On the basis of the claims made by the workmen as over time wages and weekly off days *ages for the particular periods, the appellant had calculated at the same rate for even subsequent periods till the date of the judgment of the High Court and claimed that the amount or value in dispute in appeal to this Court is over Rs. 26822.09 p.
The appellant had also raised a point in its further affidavit before, the High Court that it will have to meet in future also claims from its workmen and as such it will have to face a recurring liability.
On this basis the appellant has raised a plea that the judgment of the High Court involves directly or indirectly a claim or question respecting property of the value of Rs. 20,000/ and more.
In view of the fact that the High Court has granted the certificate under article 133(1)(b), it has to be presumed that it has accepted the appellant 's plea that a certificate could be granted under the said clause when there is a recurring liability, which, if calculated for subsequent years will be at least Rs. 20,000/ and more.
The question is whether under circumstances the certificate granted under article 1 3 3 (1) (b) by the High Court, is proper and valid.
It is significant to note that in paragraph 7 of the petition of appeal filed in this Court, the, appellant has stated that it is not possible to estimate at a money value the subject ,matter of dispute in the appeal.
Accordingly,, it has paid only a fixed, court fee Rs. 250/ as per the rules.
In the claim statement filed by the appellant before the High Court, if has stated that Rs. 6675.84 is claimed as weekly off wages by the respondents Nos. 80 to 118 and a sum of Rs. 18221.25 is claimed by the respondents Nos. 1, to 80 as over time wages.
These two different claims were not consolidated before th Authorities because the claim for weekly off wages was dealt with by the, Third Additional Authority and the claim for over time wages was dealt with by the Additional Authority.
According to the Union the claim for over time wages does not exceed Rs. 1,0660/ But it is not, necessary for us to go further into this aspect as article 1 33(1)(a) is out of the picture.
The appellant, relying on the calculation filed by it before the High Court has further stated in its affidavit dated February 18, 1972, filed in opposition to the application for revocation, that, on the basis of the claim for weekly off wages in the sum of Rs ' 6675.84 p. for one year, if calculated for the subsequent years Up to February 16, 1967 the, date of the judgment of the High Court, 938 the amount will aggregate nearly Rs. 30,000/ .
Similarly, in respect.
of over time wages, on the basis of the claim made by the workmen, if.
calculated upto February 6, 1967, the amount will exceed the sum of Rs. 20,000/ .
It will be seen that if the claims made, before each of the Authorities for the particular periods alone are taken into account, the total claims will be less than Rs. 20,000/ .
It is really that claim which was the subject of consideration by the High Court in the writ petition.
Is it open to the appellant to add to the original claim made by the workmen, the further amount calculated by it till the date of the judgment of the High Court and establish that as the total amount so arrived at is not less than Rs. 20,000/ , article 133(1)(b) can be invoked on the ground that the judgment of the High Court directly or indirectly involves a claim in respect of property of the value of not less than Rs. 20,000 / ? Even on the basis of the valuation worked out by the appellant, it is seen that the claim for over time wages which was filed before the Additional Authority was valued only at Rs. 18221.25 p. as per the amended claim at 1 1/2 times of wages, though according to the respondents the amount of claim does not exceed Rs. 10660/ .
Similarly, the claim for weekly off wages filed by another set, of workmen before the Third Additional Authority, even as per the appellant 's calculation was only Rs. 6675.84 p.
The claim for over time wages and weekly off wages, each of them takes separately does not exceed Rs. 20,000/ .
Though the appeals against the decision of the two Authorities were filed before the Court of Small Causes, it is to be noted that separate appeals were filed by different workmen and the appellant in respect of these two different categories of claims.
Though the Court of Small Causes disposed of all the appeals by a common judgment, nevertheless the claim in respect of over time wages was dealt with apart and different from the claim for weekly off wages.
Even before the High Court, though one writ petition was filed by all the workmen, the claims under two different heads for over time wages and weekly off wages were dealt with separately by the High Court.
It is not as if that the reasons given by the High Court for upholding the claims for over time wages automatically resulted in the allowing of the claim for _weekly off wages also.
In fact entirely different considerations apply for the two different sets of claims and that has been kept in view by the High Court.
Though, ultimately, the High Court has delivered only a common judgment, nevertheless the decision related to two different sets of claims each having nothing in common with the other.
Therefore, it was not open to the appellant to ask this Court to proceed on the basis that there was only one single and common claim dealt with by the High Court in its judg ment.
Therefore, there was no question of any consolidation Of all the claims before the High Court.
In this view it will be seen 939 that even according to the calculations made by the appellant, the value of the subject matter of the claim with respect to over time wages can only be the same as was before the Additional Authority, namely, Rs. 18221.25 p. which is less than Rs. 20,000/ .
Similarly, the amount or value of the claim which was adjudicated upon by the High Court in respect of weekly off wages was also of the same value as Rs. 6675.84 p. as was the case before the Third Additional Authority, which claim is also less than Rs. 20,000/ .
Therefore, considering the matter from this point of view, it is clear that the value of the subject matter of the claim before the High Court in respect of each of these matters was less than Rs. 20,000/ .
The appellant, as mentioned earlier, has calculated at the same rate as claimed for over time wages and weekly wages, for subsequent years upto the date of the judgment of the High Court and has stated that so calculated the amount or value of the subject matter of the claim relating to weekly off wages exceeds Rs. 30,000/ .
Similarly, the amount or value of the subject matter of the claim of over time wages exceeds Rs. 20,000/ and hence it is stated that the judgment of the High Court involves directly or indirectly a claim or question respecting property of the value of Rs. 20,000/ and more.
Mr. M. C. Bhandare, learned counsel for the respondents, in support of the application filed for revocation of the certificate has urged that before the High Court there was no claim or question arising for consideration excepting the subject matter of overtime wages and weekly off wages claim for a particular period by the workmen.
No claim for any further period has been made by them; nor did it arise for consideration before either the Authorities, the Court of Small Causes or the High Court.
Nor does such a claim arise for consideration in the appeal to this Court.
There fore, he pointed out that the judgment of the High Court does not either directly or indirectly involve any claim apart from what was the subject matter of dispute between the parties.
The High Court not having granted the certificate under article 133(1)(a), it follows that the amount or value of the subject matter of the dispute before it or on appeal to this Court was not Rs. 20,000/ or above.
Clause (c) of article 133(1) also stands excluded as the High Court has not granted the certificate on the ground that the case is a fit one, for appeal to this Court, and as Mr. Sorabji, learned counsel for the appellant, has represented that he is not relying on that clause.
In order to attract article 1 3 3 (1) (b), under which the certificate has been granted, the essential requirement is that there must be involved in the appeal to this Court a, claim or question respecting property of the value of not less than Rs. 20,000/ in addition to or other than the subject matter of the dispute.
In this case this condition is not satisfied.
It is laid down in that decision as follows "The variation in the language used in cls.
(a) and (b) of article 133 pointedly highlights the conditions which attract the application of the two clauses.
Under el.(a) what is decisive is the amount or value of the subject matter in the court of the first instance and "still in dispute" in appeal to the Supreme Court : under el.
If in a proposed appeal there is no claim or question raised respecting property other than the subject matter, el.
(a) will apply; if there is involved in the appeal a claim or question respecting property of an amount or value not less than Rs. 20,000/ in addition to or other than the subject matter of the dispute el.
(b) will apply." From the facts stated in the above decision it is seen that the appellant therein pleaded oil an alternative; basis that the claim in the appeal; exceeded Rs. 20,000/ .
That alternative claim, was on the basis of adding interest at 6% per annum to his original claim as awarded by the trial court whose decree he wanted to be restored in the appeal.
not open to the appellant to plead that the valuation in the appeal exceeds Rs. 20,000/ .
From the decision, cited above, the following principles emerge (1) In order to attract article 133(1)(b) the property respecting which the claim or question arises, must be property in addition to or other than the subject matter of the dispute.
(2) If in the appeal to this Court there is no question or claim raised 'respecting the property other than the subject matter, then cl.(a) of article 133 ( 1) will apply.
941 (3) Adding future interest or possible further claims to the original value of the subject matter till the date of the judgment of the High Court, and which items are not the subject of consideration by the High Court will not enable a party to plead that the claim so calculated exceeds Rs. 20,000/ .
This is not permissible as the addition of interest or calculation of further possible claims are all related only to the original subject matter, which is still in dispute.
In A. V. Subramania Ayyar vs Sellammal(1), under s.110 of the Code of Civil Procedure it was pleaded that though the Subject matter of the dispute in the court of first instance was less, than Rs. 10,000/ , the final decree, of the High Court involved a claim to property of over Rs. 10,000/ in value.
This value at the relevant time was for purposes of appeal to the Judicial Committee of the Privy Council.
The appellant added the mesne profits, which according to him must be considered to have accrued subsequent to the date of the original claim made in the suit.
So adding, the appellant therein pleaded that the decision of the High Court must be considered as involving a claim to property of over Rs. 10,000/ in value.
Though, if the amount of mesne profits was added the value was over Rs. 10,000/ , the High Court rejected the plea on the ground that the claim for mesne profits has not been awarded by the decree, nor was it the subject matter of dispute in, the appeal.
It was further field that the decision of the High Court has not affected the rights of the appellant 'therein in any property other than the one that was the subject matter in dispute.
In this view, it was held that the judgment of the, High Court did not directly or indirectly involve any question to any property other than the subject matter of dispute.
On this grounds certificates was refused.
Mr. Sorabji, learned counsel for the appellant; accepted the principle that to attract article 133(1) (b)the property, referred to therein, must be property in addition to or other than the subject matter of the dispute.
In fact, lie cannot but accept this principle as it has been so laid down by this Court in Chhitarmal V. M/S Sheh Pannalal Chandulal(2).
The counsel did not rely on article, 133 ( i)(a) or (e) for the purpose of this appeal.
He jointed out that as laid down by this Court in the decision, referred to above, the expression "property" in article 133(1)(b) would also take in claims regarding money.
He noticed out that the appellant in this case is prejudiced by the judgment of the High Court as it will have to face recurring liability in future at the hands of its workmen, on the basis of the claims made by them is over time wages and weekly off wages.
It is that liability which the appellant will have to face Madras 843.
(2) ; L1061 Sup CI/72 942 and which has been imposed upon it to its prejudice by the judgment of the High Court, that is sought to be got rid of in the appeal to 'this Court.
As the recurring liability or claim will be more than Rs. 20,000/ the matter squarely falls under article 133(1)(b) and the certificate granted by the High Court is correct.
Clause (b) of article 133(1) will be attracted even if the, judgment indirectly involves a claim in respect of property or money of not thin Rs. 20,000/ .
He referred us to the decision in Meghji Lakhamshi and Brothers vs Furniture Workshop(1) where the Judicial Committee had to construe article 3 (a) of the Eastern African (Appeal to Privy Council) Order in Council.
The latter part of this Article was as follows ". or where the appeal involves directly or indirectly some claim or question to or respecting, property or some civil right amounting to or of the said value or upwards.
It is no doubt true that the value has to be considered from the point of view of the appellant.
The property may also include money.
But it is essential under article 133(1)(b) that the claim must be in respect of property or money which property or money must be different from the subject matter of the litigation.
Therefore, the decision of the Judicial Committee is no, (If much assistance to the appellant.
Mr. Sorabji, then referred us to the decision of the Full Bench of Andhra Pradesh High Court in Smt.
Rajah Kishore vs Bhaskara Gouta Chorani and others(2) Dealing with cls.
(a) and (b) of article 133 (1) the High Court says "In our opinion, clause (b) of article 1 33(1) is intended to meet a situation es sentially different from that arising under clause (a).
Under clause (a) we have to look at the value of the reliefs obtainable in the suit and in the appeal.
Under clause (b) we have to look at the effect of the judgment appealed against from the point of view of the appellant.
A thing, is said to be involved in another when it is a necessary resultant of that other.
(Stroud 's Judicial Dictionary).
The matters adjudicated upon in the judgment appealed from may have far reaching consequences detrimental to the property of the appellant, although they were not comprised in the cause of action (1) [1954] Appeal Cases 80.
(2) A. I. R. 1960 Al.P. 286.943 of the plaintiff and cannot be regarded as being "still in dispute" on appeal.
This decision in fact emphasises quite rightly that to attract cl.(b) of article 133(1) one has to look to the effect of the judgment sought to be appealed against on other properties which are not the subject matter of dispute and are not comprised as such in the litigation.
Similarly, the decision of the Madras High Court in Commissioner of Income tax Madras vs section L. Mathias(1) is also of no assistance to the appellant.
The facts of the said decision show that the High Court was of the view that there is a difference of opinion between the High Courts on the effect of the Proviso 2 to section 4(2) of the Income tax Act, 1922.
The High Court was of the view that "there can be no doubt that +the question involved is a substantial question of law", and on this basis granted a certificate of fitness.
It is clear that the High Court granted the certificate on the ground that there was a substantial question of law involved in the appeal and as such it was a fit one for appeal to the Judicial Committee.
Mr. Sorabji then referred us to the decision of the Madras High Court in G. Appuswamy Chettiar and another, vs R. Sarangapani Chettiar and others ( 2) In that case the suit was for a declaratory relief regarding the invalidity of the adoption of a particular person. 'The certificate was asked for on the ground that the decision of the High Court involves directly or indirectly a claim or question respecting property of the value of Rs. 20.000/ and more.
It was accepted by the High Court that if leave to appeal was not granted to the petitioners therein, they will lose an estate worth more than Rs. 68,000/ though the estate itself was not directly the, subject matter of dispute either in the trial court or the High Court.
The High Court further held that in a suit for a declaration of adoption a claim made by the reversioners to the property cannot be considered to be too remote.
It is on this ground that the certificate was granted.
It is clear from the judgment of there High Court that the final decision of the High Court in that case did affect the right 's of the petitioners therein to properties of the value of more than Rs. 68,000/ .
It is on that basis that the certificate was granted under article 133(1)(b).
In our opinion, the decisions relied on by Mr. Sorabji do not support his contention that the certificate granted by the High (1) A.I.R. 1938 Mad. 352 (2) 944 Court, in the case before us, under article 133(1)(b) is proper and valid.
In fact the said decisions clearly bring out the distinction between cls.
(a) and (b) of article 133 (1) and they lay down that only when the judgment or final order affects property which is not the subject matter of the, litigation that article 133(1)(b) apply.
Those decisions are in conformity with the principles laid down by this Court in Chhitarmat vs M/s Shah Pannalal Chandulal(1).
It is clear that interest, unless granted 'by the decree or the trial court, cannot be notionally added to inflate the value of the claim in the appeal so as to make it appear that on the date of the judgment of the High Court the value is not less than Rs. 20,000/ .
On the same principle, we have already pointed out that mesne profits, which have not been decreed by the trial court, cannot be added to the original claim made in the suit, so as to enable a party to.
plead that the value in the proposed appeal on the date of the judgment of the High Court is more than Rs.20,000/ .
We may refer to the decision of the Judicial Committee in Moti Chand and others vs Ganga Parshad Singh and an other (2) where interest awarded under the decree of the trial court was taken into account for the purpose of considering the value in the appeal before the High Court.
The suit was for recovery of a certain amount together with interest.
By the time the High Court 's decree was made, the amount at issue had reached to Rs. 10636/ with further contingent increment.
The High Court declined to grant the certificate on the round that the amount or value of the subject matter of the suit in the court of first instance was not Rs. 10,000/ as required by the ,aid section though the amount or value of the matter in dispute on appeal to Her Majesty in Council was above Rs. 10,000/.
No doubt, this decision is not on the question 'regarding matters covered by cl.(1) of article 13 '(1).
But we, are only referring to this decision to show that interest can be taken into account for the purpose of considering the value in an appeal, provided the decree itself has awarded interest.
We may also refer to the decision of the Judicial Committee in Surapati Roy & others vs Ram Narayan and Mukherji & others(3).
In that decision the question arose under section 110 of the Code of Civil Procedure 1908 regarding the validity of the certificate granted by the High Court.
Though the rent claimed in the suits was less than Rs. 10,000/ the High Court had granted a certificate of fitness on the ground that the value of the subject matter (1) [1965] 2 S.C.R.751 (2) 29 Indian Appeals 40.
(3) 50 Indian Appeals 155.
945 was over Rs. 10,000/ .
The objection taken before the Judicial Committee regarding the validity of the certificate, on the ground that the subject matter was below the appealable value was rejected as follows : ". .
The certificate in the circumstances is quite in order.
" It is to be noted that the liability which was being denied as due to the landlord, by way of rent from the lands in question was in respect of the properties in question and it was on that basis that the certificate was held to be valid.
Both the above decisions of the Judicial Committee have no application to the facts of the present case on hand. 'The principle that a claim made by one party and resisted by another is ordinarily the subject matter of the dispute in the trial court and continues to be the subject matter in the Appellate Courts.
In the case before us the claims for over time wages and weekly off wages before the Authorities were for a specified period.
The claims for the identical periods were the subject matter in the appeals before the Court of Small Causes.
The High Court had also to consider the correctness of the decision of 'he Court of Small Causes regarding the claims made by the workmen for the particular periods.
The appellant was not entitled to notionally add on to the amount originally claimed by the workmen for particular periods, any further amounts on the ground that they must be considered to have accrued due to the workmen till the date of the judgement of the High Court.
If in the proposed appeal to this Court there is no claim or question raised respecting property, other than the subject matter of dispute, clause (a) of Article 133(1 ) will apply.
That clause has no,, been invoked in this case by the High Court.
It is not possible to accept the contention of Mr. Sorabji that as the appellant will have to face from its workmen in future claims similar to the one recognised by the High Court, there is involved a claim or question in respect of property of the value of not less than Rs. 20,000 / in addition to or other than the (1) [1965] 2 S.C.R.751 946 subject matter of appeal.
In the first place, this contention proceeds on the assumption that the judgment of the High Court directs talk appeal Lo pay in future amounts not less than Rs. 20,000/ .
This assumption is basically erroneous, as there is no such direction given by the High Court.
The payment of wages as for over time or weekly off days will depend upon several circumstances.if over time work is not taken, then no payment need be made.
If over time work is taken for a lesser time, then the amount to be paid will also be less.
In our opinion, this is not a case where the decision of the High Court, apart from clearing with the subject matter in dispute before it, has tthe effect of affecting the rights of the appellant regarding other properties, including money.
We may give an instance where a final judgment may have an impact or affect properties, other than the subject matter in dispute.
In a suit for mandatory injunction directing a defendant to vacate a land, the, subject matter of the suit may be only of the value of Rs. 1500/ but the decree granted by the High Court may result in the defendant therein being obliged to remove buildings worth more than Rs. 20,000/ .
so as to give vacant possession of the land in accordance with the decision of the High Court.
In such a case, though the value of the subject matter in dispute before the High Court may be only Rs. 1500/ , the judgment, can be considered to involve indirectly a claim or question respecting property (in this case the buildings) of the value of no ', less than Rs. 20,000/ .
Such a case may attract article 133(1)(b).
The position before us is entirely different.
The judgment of the High Court has only adjudicated upon the subject neither of the specified claim of the workmen which was, as mentioned earlier, for a particular period.
That judgment does not involve directly or indirectly apart from the subject matter of the writ petition, any claim or using respecting property or money of the value of Rs. 20,000/ and more.
In this view, we are of the opinion that the certificate granted by the High Court under article 133(1)(b) is not valid and proper.
In the view that we take that the certificate ranted by the High Court is not valid and that the appeal brought on such a certificate is not sustainable, we do not express any opinion on the merits, though arguments were heard on the same.
As the certificate issued by ,he High Court under article 133 (1) (b) is not proper and valid, the only course oven to us is to revoke the certificate and set aside the order of the High Court granting the same.
The result is, the appeal has become unsustainable, as it has been, brought to this Court on a certificate which, as, held by us, has not been properly and validly granted.
947 in the result, C.M.P. No. 1300 of 1972 is allowed, and the appeal is held to be not maintainable and as such dismissed.
In C.M.P. N. ).
1300 of 1972 the respondents will be entitled to costs.
, In the appeal there will be no order as to costs.
K.B.N. Appeal dismissed.
| IN-Abs | In order to attract article 133(1)(b) the essential requirement is that there must be involved in the appeal to this Court a claim or question respecting property of the value of not less than Rs. 20,000/ in addition to or other than the subject matter of the dispute; if there is no question or claim raised respecting property other than the subject matter, then, clause (a) of article 133 will apply.
Adding future interest or possible further claims to the original value of the subject matter till the date of the judgment of the High Court and which items are not the subject of consideration by the High Court will not enable a party to plead that the claim so calculated exceeds Rs. 20,000.
[94O G] The respondent had filed applications under the Payment of Wages Act 1948, claiming overtime wages for the period 1957 to 1958 and wages for weekly off days for the period 1962 to 1963.
Against the judgment of the High Court setting aside the order of the appellate authority holding the claim as time barred, the appellants filled appeal to this Court on the basis of a certificate issued by the High Court under article 133(1)(b).
In its application before the High Court the appellant had prayed for the grant of a ' certificate that the amount or value of the subject matter before all the authorities, in the appeals, as well as in the High Court and still in dispute in the proposed appeal to this Court was Rs. 20,000/ and upwards, and, in the alternative on the ground that the case was fit one for appeal to this Court.
On the basis of the claims made by the workmen as overtime wages and weakly off days wages for the particular periods, the appellant had calculated at the same rate for subsequent periods till the judgment of the High Court and claimed that the amount or value in dispute in appeal to this Court was over Rs. 20,000/ .
The appellant bad also urged that it would have to meet in future also claims from its workmen and, as such, it will have to face a recurring liability.
On this basis the appellant had raised the plea that the judgment of the High Court involved directly or in, directly a claim or a question in respect of property of the value of Rs. 20,000/ and more.
The respondents moved this Court for revocation of the Certificate.
They urged that what weighed with the High Court 'for granting a certificate under article 133(1)(b) was the circumstance that the nature of the demands by the workmen were such as they were recurring claim arising in the future also and as such the final" judgment and order of the High Court involved directly or indirectly a claim respecting property of the value not less than Rs. 20,000/ and that thisview of the High Court was erroneous '.
HELD :that the certificate issued by the High Court under article 13,3(1)(b) was not proper and valid and hence the appeal was unsustainable.
930 (i) The High Court has not given any indication as to how it issued the certificate under article133(1)(b); it is clear that it did not grant the certificate on the claim made by the appellant, under clause (a) or clause (c) of article 133(1).
[937 A] (ii) In view of the fact that the High Court granted the certificate under article 133(1)(b), it has to he presumed that it has accepted the appellant 's plea that a certificate could be granted under the clause when there is a recurring liability, which, if calculated for subsequent years, will be Rs. 20,000/ or more.
[937 C D] (iii) But, the present case is not one where the decision of the High Court, apart from dealing with the subject matter in dispute before it, has the effect of affecting the rights of the appellant regarding other properties, including money.
The judgment of the High Court has only adjudicated upon the subject matter of the specified claim of the work men which was for a particular period.
The judgment does not involve directly or indirectly, apart from/the subject matter of the writ petition, any claim or question respecting property or money of the value of Rs. 2O,000/ and more.
The appellant was not entitled to notionally add, to the amount originally claimed by the workmen for particular periods any further amounts on the ground that they must be considered to have accrued due to the workmen till the date of the judgment of the High Court.
[945 E, 946 E] Chaitarmal vs M/s. Pannalal Chandulal, ; , applied.
A. V. Subramania Ayyar vs Sellammal, I.L.R. 39 Madras 843, Meghji Lakhamshi and Brothers vs Furniture Workshop, [1954] Appeals Cases 80; Smt.
Rajah Kishore Devigaru vs Bhaskara Gouta Chorani and others, A.I.R. 1960, A.P. 286, Commissioner of Income tax, Madras vs section L. Mathias, A.I.R. ; G. Appuswamy Chettiar and another vs R. Sarangapani Chettiar and others, Moti Chand and others vs Ganga Parshad Singh and another, 29 Indian Appeals 40 and Surapati Roy and others vs Ram Narayan Mukherji and others, 50 I.A. 155, referred to.
|
Appeal No. 1171 of 1970.
Appeal by special leave from the judgment and order dated February 18, 1970 of the Labour Court, Delhi in L.C.A. No. 709 of 1968.
O. P. Malhotra, N. section Das Bahl, P. section Mahindru and Sat Pal, for the appellant.
L. D. A dlakha, Promod Swarup and section section Khanduja, for respondent No. 1.
The Judgment of the Court was delivered by Dua, J.
Facts necessary for understanding the short but im portant point arising for decision in this appeal by special leave are these : The appellant is a company incorporated under the with its registered office in New Delhi.
Its entire share capital has been subscribed by the Central Government.
Pritam Singh Gill, respondent No. 1, in this appeal was employed by the 1208Sup CI/72 42 appellant as Junior Engineer at its Bhopal office with effect from the 9th November, 1962 at Rs. 280/ p.m. as basic salary with other allowances.
On October 5, 1964 he was suspended and this order, of suspension remained in force till September 18, 1967.
He was dismissed from service on September 19, 1967.
During the period of suspension, on October 7, 1965, the respondent was trans ferred to Delhi.
On June 15, 1968 the respondent applied to the Labour Court at Delhi under section 33C(2) of the (hereinafter called the Act) for computing the benefits and amount he was entitled to receive alleging that the appellant had not paid to him such amounts and benefits.
The appellant contested the respondent 's claim on various grounds.
The, Labour Court framed the following four issues : 1.
Whether the application is not legally maintainable ? 2.
Whether this court has no jurisdiction to entertain this petition ? 3.
Whether the petitioner has been dismissed with effect from 19 9 1967, if so its effect ? 4.
Whether the applicant is entitled to.
any of the benefits claimed ?" and decided all of them in favour of the respondent who was held entitled to Rs. 5,195/ as balance of salary at the rate of Rs. 1501p.m.
for the period of suspension and also other allowances, the total amount computed being Rs. 10,259.98.
Before us the appellant only questioned the jurisdiction of the Labour Court to entertain the respondent 's application under section 33C(2) of the Act because, according to the submission, the respondent, having already been dismissed, had ceased to be a workman on the date of the application.
After his dismissal, argued Shri Malhotra learned counsel for the appellant, the respondent ceased to be a workman and had, therefore, no locus standi to approach the Labour Court under section 33C(2) and the Labour Court had no jurisdiction to entertain the respondent 's application.
The date of the application under section 33C(2) of the Act, contended the counsel, is the crucial point of time, when it is to be seen whether or not the applicant is a workman.
The respondent on the other hand emphasised that if the period, in respect of which the benefits and amount are claimed under section 33C(2) of the Act, was during the course of his employment prior to his dismissal, then, the mere fact, that he was dismissed by his employer before he could apply to the Labour Court under section 33C(2), would not deprive him of his right to claim relief under that section.
The sole question we are thus called upon to decide is, whether section 33C(2) can be invoked by a dismissed workman in respect of benefits and salary due, to 43 him for the period prior to the date of his dismissal.
It may be stated that the appellant did not contend that a workman under suspension is disentitled to seek relief under section 33C(2) and indeed, it was specifically conceded that a suspended workman could invoke this section for relief because by suspension he does not cease to be a workman as defined in the Act.
The question posed is a pure question of law depending on the construction of the relevant statutory provisions.
The Act was brought on the statute book for making provision for the investigation and settlement of industrial disputes and for certain other purposes.
Section 2(s) defines "workman ' to mean ,,any person (including in apprentice) 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 proceeding under this Act in relation to an industrial dispute, include ; any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence 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 ad ministrative 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.
" It is noteworthy that section 2 by its opening words expressly includes the operation of this section in case of repugnancy in the subject or context.
Section 33C provides for recovery of money due from ail employer and sub section
(2) of this section reads as under: "(2) Where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made under this Act, be decided by such Labour Court as may be specified in this behalf by the appropriate Government.
" 44 According to the appellants submission, under section 33C(2) the applicant cannot claim that his dismissal is unlawful and that he should, therefore, be deemed to be in service and on that basis entitled to receive salary or wages under the pre existing contract.
Now, if challenge to his dismissal is not open under this provision of law then the respondent must be considered to be a dismissed workman, and. therefore, outside the purview of "workman" as defined in s.2(s).
A dismissed workman, the argument proceeded, is to be considered as a workman under this provision only for the purposes of that proceeding under the Act in relation to an industrial dispute, which has either arisen out of, or resulted in or is connected with, his dismissal.
In support of this submission he relied on the Central Bank of India vs P. section Rajagopalan(1).
At p. 156 of the report it was observed there that "If an employee is dismissed or demoted and it is his case that the dismissal or demotion is wrongful, it would not be open to him to make a claim for the recovery of his salary or wages under section 33C(2).
His demotion or dismissal may give rise to an industrial dispute which may be appropriately tried, but once it is shown that the employer has dismissed or demoted him, a claim that the dismissal or demotion is unlawful and, therefore, the employee continues to be the workman of the employer and is entitled to the benefits due to him under a pre existing contract, cannot be made under section 33C(2)" Reference was also made on behalf of the appellants to Messrs Kesoram Cotton Mills Ltd. vs Gangadhar & ors.
(2) where it is observed at p. 823 : "Ordinarily, the law is that a workman may be suspended pending enquiry and disciplinary action.
If after the enquiry the misconduct is proved the workman is dismissed and is not entitled to any wages for the suspension period; but if the inquiry results in the reinstatement of the workman he is entitled to full wages for the suspension period also along with reinstatement unless the employer instead of dismissing the employee can give him a lesser punishment by way of withholding of part of the wages for the suspension period.
" These observations were made in an entirely different context and have nothing to do with the narrow point on which alone the appellant based his challenge to the judgment impugned in this appeal.
The case cited has not the remotest connection with section 33C of the Act.
The decision in the Central Bank of India vs Rajagopalan (1) ; (2) 45 (supra) also in our opinion, does not assist us in deciding the question requiring determination because the respondent before us claims relief with respect to the period of suspension prior to his dismissal and the jurisdiction of the Labour Court is not questioned by the appellant on the ground that the only relief available to the respondent is to raise an industrial dispute with regard to his dismissal.
The respondent in the present case is not seeking relief against his dismissal as indeed consistently with the order of dismissal his claim is confined to the benefits and amount which.
he was entitled to receive for the period prior to his dismissal.
However, the decision in Central Bank of India vs Rajagopalan (supra) does trace the legislative history of Chapter VA and section 33C of the Act and after doing, so.
the Court observed "In our opinion, on a fair and reasonable construction of sub section
(2) it is clear that if a workman 's right to receive the benefit is dispute, that may have to be determined by the Labour Court.
Before proceeding to compute the benefit in terms of money the Labour Court inevitably has to deal with the question as to whether the workman has a, right to receive that benefit.
If the said right is not disputed, nothing more needs to be done and the Labour Court can proceed to compute the value of the benefit in terms of money; but if the said right is disputed, the Labour Court must deal with that question and decide whether the workman has the right to receive the benefit as alleged by him and it is only if the Labour Court answers this point in favour of the workman that the next question of making necessary computation can arise." And again, "Besides, it seems to us that if the appellant 's construction is accepted, it would necessarily mean that it would be at the option of the employer to allow the work man to avail himself of the remedy provided by sub s.(2) because he has merely to raise an objection on the ground that the right claimed by the workman is not admitted to oust the jurisdiction of the Labour Court to entertain the workman 's application.
The claim unders.33C(2)clearly postulates that the determination of the question about computing the benefit in terms of money may, in some cases, have to be preceded by an enquiry into the existence of the right and such an enquiry must be held to be incidental to the main determination which has been assigned to the Labour Court by sub section
" Section 33C of the Act has been the subject matter of several judicial pronouncements.
This Court has also dealt with this section in several decisions.
In Chief Mining Engineer, East India 46 Coal Co. Ltd. vs Rameswar & ors.
(1) this Court deduced from three of its earlier decisions the following propositions: "(1) The legislative history indicates that the legislature, after providing broadly for the investigation and settlement of disputes on the basis of collective bargaining, recognised the need of individual workmen of a speedy remedy to enforce their existing individual rights and therefore inserted section 33A in 1950 and section 33C in 1956.
These two sections illustrate cases in which individual workmen can enforce their rights without having to take recourse to section 10(1) and without having to depend on their union to espouse their case.
(2) In view of this history two considerations are relevant while construing the scope of section 33C.
Where industrial disputes arise between workmen acting collec tively and their employers such disputes must be adjudicated upon in the manner prescribed by the Act, as for instance under section 10(1).
But having regard to the legislative policy to provide a speedy remedy to individual workmen for enforcing their existing rights, it would not be reasonable to exclude their existing rights sought to be implemented by individual workmen.
Therefore though in determining the scope of section 33C care should be taken not to exclude cases which legitimately fall within its purview, cases which fall, for instance, under section 10(1), cannot be brought under section 33C; (3) Section 33C which is in terms similar to those in section 20 of the Industrial Disputes (Appellate Tribunal) ,Act, 1950 is a provision in the nature of an executing provision; (4) Section 33C(1) applies to cases where money is due to a workman under an award or settlement or under Chapter VA of the Act already calculated and ascertained and therefore there is no dispute about its computation.
But sub section 2 applies both to non monetary as well as monetary benefits.
In the case of monetary benefit it applies where such benefit though due is not calculated and there is a dispute about its calculation; (5) Section 33C(2) takes within its purview cases of workmen who claim that the benefit to which they ire entitled should be computed in terms of money even though the right to the benefit on which their claim is (1) [1968] 1 S.C.R. 140.
47 based is disputed by their employers.
It is, open to the Labour Court to interpret the award or settlement on which the workmen 's rights rests.
(6) The fact that the words of limitation used in section 20(2) of the Industrial Disputes (Appellate Tribunal) Act, 1950 are omitted in section 33C(2) shows that the scope of section 33C(2) is wider than that of section 33C(1).
Therefore, whereas sub section I is confined to claims arising under an award or settlement or Chapter VA, claims which can be entertained under subsection 2 are not so confined to those under an award, settlement or Chapter VA.
(7) Though the court did not indicate which cases other than those under sub section 1 would fall under sub section 2 it pointed out illustrative cases which would not fall under sub section 2 viz. cases which would appropriately be adjudicated under section 10(1) or claims which have already been the subject matter of settlement to which sections 18 and 19 would apply.
(8) Since proceedings under section 33C(2) are analogous to execution proceedings and the Labour Court called upon to compute in terms of money the benefit claimed by a workman is in such cases in the position of an executing court, the Labour Court like, the executing court in execution proceedings _governed by the Code of Civil Procedure, is competent under section 33C(2) to interpret the award or settlement where the benefit is claimed under such award or settlement and it would be open to it to consider the plea of nullity where the award is made without jurisdiction.
In U.P. Electric Supply Co. vs R. K. Shukla(1) this Court approvingly referred to a passage from the judgment in Chief Mining Engineer, East India Coal Co. Ltd. (supra), already reproduced by us, in which, inter alia, it was emphasised that Labour Court had jurisdiction to entertain a claim in respect of an existing right arising from the relationship of an industrial workman and his employer.
Again in R. B. Bansilal Abhirchand Mills Co. (P) Ltd. vs The Labour Court, Nagpur(2) this Court, after a review of its previous decisions, upheld the jurisdiction of the Labour Court to entertain application for lay off compensation wider section 33C observing that such jurisdiction could not be ousted by a mere plea denying the workman 's claim to computation of the benefit in terms of money, adding that the Labour Court had to go into the question and determine whether on the facts it had jurisdiction to make the computation.
(1) ; (2) ; 48 We now turn to some decisions of the High Courts which directly deal with this point.
In Tiruchi Srirangam Transport Co., (P) Ltd. vs Labour Court, Madurai(1) Ramachandra Ayyar J., repelled a similar contention as was raised before us by Shri Malhotra on behalf of the appellant.
In the case.
cited one Iswaran was employed as a traffic supervisor in Tiruchi Srirangam Transport Co., (P) Ltd. His services were terminated in December, 1956 under a scheme of retrenchment.
Later, disputes were raised between the management and other workers regarding bonus for the years 1955 56 and 1956 57 and a settlement was reached in April, 1958 pursuant to which the management declared additional bonus and one month 's wage for each of the two years.
Iswaran having not been paid anything by way of bonus though he had worked during those two years applied to the Labour Court for necessary relief under section 33C(2) of the Act.
The Labour Court having granted the relief claimed.
the management approached the High Court under article 226 of the Constitution questioning the jurisdiction of the Labour Court to entertain Iswaran 's claim.
The High Court repelled this challenge though on an other point relating to the claimant 's right to benefit under the settlement, the case was remitted back to the Labour Court for a fresh decision.
It was observed in that decision that while enacting section 33C(2), the Legislature did not intend merely to provide a remedy for the limited class of persons who are in actual employment on the date of the application under that section.
The words "any workman" in section 33C(2), according to that decision, would mean a workman who would be entitled to benefits conferred under the Act and would necessarily include a discharged workman as well.
In Manicka Mudaliar (M) vs Labour Court, Madras(1) a Division Bench of the Madras High Court, while hearing a writ appeal, from the decision of a learned single Judge of that Court also upheld the competency of a petition under section 33C(2) of the Act for arrears of salary and one month 's salary in lieu of notice, although at the time of the application the applicant was no longer in service of the employer.
Following these Madras decisions a learned single Judge of the Punjab & Haryana High Court in Bachittar Singh vs Central Labour Court, Jullundur(3), a Division Bench of the Mysore High Court in The Management of Government Soap Factory, Bangalore vs The Presiding Officer, Labour Court Bangalore(4) and the Allahabad High Court in U.P. Electric Supply Co. Ltd., vs Assistant Labour Commissioner, Allahabad(5) took the same view.
In the Allahabad case, however, the provision which directly came up for construction was section 6H of the U.P. Industrial (1) (3) A.I.R. 1969 Punjab 187.
(5) [1966] It I.L.J. 715.
(2) (4) A.I.R. 1970 Mys.
49 Disputes Act, the language of which was considered to be identical with that of section 33C of the Act.
Incidentally it may be pointed out that section 6H of the U.P. has been held to be identical with section 33C of the Act even by this Court.
Shri Malhotra, learned counsel for the appellant, contended that all these decisions require reconsideration because they ignore a vital point in construing section 2(s) which defines "workman".
This definition has already been reproduced.
According to the appellant 's submission these decisions have ignored the vital point that the definition of "workman" specifically includes within its fold, only for the purpose of a proceeding under the Act in relation to an industrial dispute, persons who have, been dismissed, discharged or retrenched in connection with or as a consequence of that, dispute or, whose dismissal, discharge or retrenchment has led to that dispute.
Since certain categories of persons are also expressly stated not to be included in this definition the Legislature must, according to the argument, be considered to have intended to define this word with exactitude and precision and its scope, therefore, cannot be extended to the dismissed, discharged or retrenched persons except strictly for the purposes of the proceedings expressly mentioned in the inclusive clause.
The fact that the definition also specifically excludes from its purview four categories of persons employed in an industry who would have otherwise been within the periphery of the definition shows that the legislature intended to be meticulously precise leaving no scope for any intendment extending the literal meaning of the language used to dismissed employees for purposes of other proceedings not specified in section 33C(2) of the Act.
The definition.
said Shri Malhotra, is exhaustive renderings, its extension impermissible.
The counsel also commented on the recent decision of this Court in R. B. Bansilal Abhirchand Mills Co. Ltd. vs The Labour Court, Nagpur (supra).
According to Shri Malhotra this decision does not touch the question whether a dismissed employee can be considered as a workman for the purpose of approaching the Labour Court under section 33C(2) of the Act and he emphasised that this case should be considered to be confined to its own facts.
The further contention pressed by Shri Malhotra was that the respon dent 's claim raises an industrial dispute and, therefore, it would be more appropriate for him to claim a reference under section to, of the Act.
This contention being based only on the appellant 's denial of the claim cannot exclude the applicability of section 33C(2).
He also made a reference to the decision of this Court in Bennet Coleman & Co., (P) Ltd. vs Punya Priya Das Gupta(1) which was concerned with the Working Journalists (Conditions of Ser vice) and Miscellaneous Provisions Act, 45 of 1955 and contended that in that decision the definitions in section 2(c) and (f) of that (1) ; 50 Act took within their fold persons who were no longer in the employment of their erstwhile employer against whom their claim was made, provided the claim related to a period when they were in his employment.
Shri Malhotra pointed out that in the reported case there was no clause in the statutory definition including therein for limited purposes certain persons otherwise not within the definition and excluding therefrom certain other categories of persons who would otherwise fall within the definition.
This is how that case was sought to be distinguished from the present.
The crucial point which requires consideration on the appellant 's argument is thus confined to the precise scope and meaning of the word "workman" used in section 33C(2) in the background of the definition of this word as contained in section 2(s).
Now, it is noteworthy that section 2 of the Act, which is the de finition section begins, as is usual with most of the definition sections, with the clause, "unless there is anything repugnant in the subject or context".
This clearly indicates that it is always a matter for argument whether or not this statutory definition is to apply to, the word "workman" as used in the particular clause of the Act which is under consideration, for this word may both be restricted or expanded by its subject matter.
The. context and the subject matter in connection with which the word "workman" is used are accordingly important factors having a bearing on the question.
The propriety or necessity of thus construing the word "workman" is obvious because all parts of the Act have to be in harmony with the statutory intent.
Keeping this in mind we may turn to the purpose and object of section 33C of the Act.
This section was enacted for the purpose of enabling individual workmen to implement, enforce or execute their existing individual rights against their employers without being compelled to have recourse to section 10 by raising disputes:and securing a reference which is obvi ously a lengthy process.
Section 33C of the Act has accordingly been described as a provision which clothes the Labour Court with the powers similar to those of an executing court so that the workman concerned receives speedy relief in respect of his existing individual rights.
The primary purpose of the section being to provide the aggrieved workman with a form similar to the executing courts, it calls for a broad and beneficial construction consistently with other provisions of the Act, which should serve to advance the remedy and to suppress the mischief.
It may appropriately be pointed out that the mischief which section 33C was designed to suppress was the difficulties faced by individual workmen in getting relief in respect of their existing rights without having resort to section 10 of the Act.
To accept the argument of the appellant, it would always be open to an unfair, unsympathetic and unscrupulous employer to terminate the services of his employee in order to deprive him of the benefit conferred by section 33C and compel 51 him to have resort to the lengthy procedure by way of reference under section 10 of the Act thereby defeating the very purpose and object of enacting this provision This, in our view, quite clearly brings out the repugnancy visualised in the opening part of section 2 of the Act and such a position could hardly have been contemplated by the legislature.
In order to remove this repugnancy section 33C(2) must be so construed as to take within its fold a workman, who was employed during the period in respect of which he claims relief, even though he is no longer employed at the time of the application.
In other words the term "workman" as used in section 33C(2) includes all persons whose claim, requiring computation under this sub section, is in respect of an existing right arising from his relationship as an industrial workman with his employer.
By adopting this construction alone can we advance the remedy and suppress the mischief in accordance with the purpose and object of inserting section 33C in the Act.
We are, therefore, inclined to agree with the view taken by the Madras decisions and we approve of their approach.
According to Shri Malhotra, in cases where there is no dispute about the employee 's right which is not denied, he will be entitled to file a suit.
Whether or not the right of suit can be claimed by the employee, we are not persuaded on the basis of this argument, to accept the construction canvassed on behalf of the appellant and deny to a dismissed employee the benefit of speedy remedy under section 33C(2) of the Act.
We are aware of a conflict of decisions in some High Courts, on the interpretation of section 20 read with section 2(i) of the Minimum Wage, , Act, .12 of 1948.
This aspect was not canvassed before us and, therefore, we should not be deemed to express any opinion on the correctness or otherwise of either view.
We are referring to this aspect only to make it clear that our decision must be) confined to the construction of the provisions of the Act and we must not be understood to have expressed any opinion on the construction of the Minimum Wages Act.
In the Madras High Court two single Judges have taken divergent views and tile Kerala High Court agreed with the view that the employees under the Minimum Wages Act need not be, in the employment at the time of their applications under section 20 of the Minimum Wages Act whereas the Punjab High Court on the other hand agreed with the contrary view of the Madras High Court.
The language of section 20 of the Minimum Wages 52 Act is not completely identical with that of section 33C(2)of the Act and the relevant clauses of the definition sections in the two statutes are also somewhat differently worded.
Without any further discussion on this aspect we are content to observe that this judgment should not be considered as an expression of opinion on the interpretation of the relevant provisions of the Minimum Wages Act.
As a result of the foregoing discussion, this appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.
| IN-Abs | The respondent, an employee of the appellant was suspended and 'the suspension remained in force till the date of his dismissal.
He applied to the Labour Court under section 33C(2) of the , for computation of the benefits and amounts he was entitled to receive during the period of suspension, and the Labour Court decided in his favour.
On the question whether the section can be invoked by a dismissed workman in respect of, benefits and salary due to him for the period prior to the date of dismissal, HELD: The sub section provides that where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the amount due, then the question may be decided by the appropriate 'Labour Court.
The definition of 'workman ' in section 2(s) of the Act includes within its fold, only for the purpose of a proceeding under the Act in relation to an industrial dispute, persons who have been dismissed, ,discharged or retrenched in connection with or as consequence of that dispute or whose dismissal, discharge or retrenchment has led to that dispute.
The definition specifically excludes from its purview four categories of persons employed in an industry, who would have otherwise been within the periphery of the definition.
But, because the definition includes only specified types of dismissed, discharged or retrenched workmen for limited purposes and expressly excludes certain categories of persons, it cannot, on that account, be contended that the definition is precise and exact and cannot be extended to other dismissed, discharged or retrenched workmen, whose claim requiring computation is in respect of an existing right arising out of his relationship as an industrial workman of his employer.
[50B E, 51A C] The definition section begins with the clause, 'unless there is anything repugnant in the subject or context. ' The context and the subject matter are accordingly important factors, because, all parts of the Act have to be in harmony with the statutory intent.
The object of enacting the section was to enable individual workmen to implement, enforce or execute their existing individual rights against their employers without being compelled to have recourse to section 10 by raising disputes and securing a reference which is obviously a lengthy process.
It clothes the Labour Court with powers similar to those of an executing court so that the concerned workman gets speedy relief.
It therefore calls for a broad and beneficial construction, consistent with the other provisions of the Act, which should serve to advance the remedy and to suppress the mischief.
The mischief which the section was designed to suppress was the difficulty faced by individual workmen in getting relief in respect of their existing 41 rights without, having, resort to section 10 of the Act.
Therefore, the term workman ' as used in the sub section must include all persons whose claim, requiring compuation under the sub section, is in respect of an existing right arising from his relationship as an industrial workman with his employer.
Otherwise, it would always be open to an unfair, unsympathetic and unscrupulous employer to terminate the services of his employee in order to deprive him of the benefit conferred by the section and compel him to have resort to the lengthy procedure by way of reference under section 10, thereby defeating the very purpose and object of enacting the provision.
[5lE A, 52 A E] Chief Mining Engineer, East India Coal Co. Ltd. vs
Rameshwar & Ors.
[1968] 1 S.C.R. 140, U.P. Electric Supply Co. vs R. K. Shukla; , , R. B. Bansilal Abhirchand Mills Co. (P) Ltd. vs The Labour Court, Nagpur, ; and Bennet Coleman & Co. (P) Ltd. vs Punya Priya Das Gupta, , referred to.
Central Bank of Indict vs P. section Rajagopalan, [1964] 3 S.C.R. 140 and Kesoram Cotton Mills vs Gangadhar, [1964] 2 S.C.R. 809, disting Tiruchi Srirangam Transport Co., (P) Ltd. vs Labour Court, Madurai, , Manicka Mudaliar (M) vs Labour Court, Madras, [1961] I L. L. J. 592, Bachittar Singh vs Central Labour Court, Jullunder, A.I.R. 1969 Punjab 187, Management of Government Soap Factory, Bangalore vs The Presiding Officer, Labour Court, Bangalore, A.I.R. 1970 Mys.
225 and U.P. Electric Supply Co. Lod.
vs Assistant Labour commissioner, Allahabad, approved.
This judgment should not be considered as an expression of opinion on the interpretation of sections 20 read with section 2(1) of the .
|
minal Appeal No. 138 of 1968.
Appeal by special leave from the judgment and order dated the June 10, 1968, of the Bombay High Court in Criminal Appeal No. 667 of 1967.
V. section Desai, P. section Nadkarni and Vineet Kumar, for the appellants.
section K. Dholakia and B. D. Sharma, for the respondent.
The Judgment of the Court was delivered by Ray, J.
This is an appeal by special leave from judgment dated 10 June, 1968 of the High Court at Bombay setting aside the order of acquittal of the appellants and convicting them under section 325 read with section 34 of the Indian Penal Code for having assaulted and injured Choharjasing and sentencing each of the appellants to four years rigorous imprisonment and a fine of Rs. 1000 each and six months rigorous imprisonment in default of payment of fine and further convicting the appellants under section 323 read with section 34 of the Indian Penal Code for having assaulted and injured Ramkeshwarsing and sentencing each of the appellant 's to three months rigorous imprisonment.
The sentences were to run concurrently.
The appellants and another accused were charged under sec tions 143, 147, 307 read with section 149 of the Indian Penal Code.
The four appellants were also charged under section 148 of the Indian Penal Code.
In the alternative the appellants were charged under section 307 read with section 34 of the Indian Penal Code.
The appellants and the other accused were further charged under section 326 read with section 149 of the Indian Penal Code.
In the alternative they were charged under section 324 read with section 34 of the Indian Penal Code.
The appellants and the other accused were further charged under section 324 read with section 149 of the Indian Penal Code.
In the alter native they were charged under section 324 read with section 34 of the Indian Penal Code.
The complainant Choharjasing and Nandlal are brothers.
They resided in room No. 5 of Vidya Bhuvan Kurla along with their cousin Ramkeshwarsing and Gayitrising brother in law of Choharjasing.
Chollarjasing.
Nandlal and Ramkeshwarsing were employed at Premier Automobiles at Kurla.
The, prosecution witness Awadh Narayan who resided at Moturam Chawl was also employed at Premier Automobiles.
Another prosecution witness 624 Dinanath was a shopkeeper residing at Halav Pool, Kurla.
The first appellant dealt in milk and resided at Maulana Chawl, Halav Pool, Kurla.
Appellant No. 2 is the brother of appellant No. 1 and resided at a nearby Chawl at Halav Pool and was employed at Premier Automobiles at Kurla.
Appellant No. 3 also resided at Halav Pool Chawl, Kurla and was employed at Premier Automobiles, Kurla.
Appellant No. 4 resided at another Chawl at Kurla and was also employed at Premier Automobiles, Kurla.
Accused No. 5 worked as a Mehtaji of one Jairaj Pandye and resided at Bhagwat Bhuvan, Halav Pool, Kurla.
The prosecution case was this.
The relation between Cho harjasing and his brother Nandlal on the one hand and appellants No. 1 and 2 on the other were strained for some time.
On the morning of 15 October, 1964 Nandlal brought a truck load of earth and spread the same in front on their room.
On that account there was some altercation between him and appellants No. 1, 2 and 3.
On the morning of 16 October, 1964 Choharjasing left his room and went to Podar Hospital at Worli for undergoing an operation for fistula.
He returned to his room at about 11 or 12 noon.
On his return he was told by his brother Nandlal about the quarrel and that the appellants and another accused had given a threat and enquired as to where Choharjasing was.
Nandlal further told Choharjasing that the appellants and the other accused had threatened that they would break Choharjasing 's hands .and feet.
Choharjasing went to the Police Station and filed a non cognizable complaint.
The police directed Choharjasing to approach the proper criminal court.
Choharjasing went to prosecution witness Dinanath and told him about the threats.
Choharjasing then returned to his room and launched with his brother Nandlal, cousin Ramkeshwarsing and brother in law Gaitrising.
Choharjasing was not feeling comfortable after the ,operation.
He sat on a charpoy (cot) outside his room.
Nandlal was with Choharjasing.
Ramkeshwarsing was inside the room.
At about 5 or 5.30 p.m. the appellants came there.
Appellant No. 1 was armed with a lathi.
Appellants No. 2, 3 and 4 had also lathis or something like iron bars.
Accused No. 5 was standing at some distance.
Accused No. 5 instigated the appellants by shouting the words 'Dekhte kya ho, Mar Dalo ' (what are you looking at, assault them).
Appellant No. 1 also shouted to assault.
The appellants surrounded Choharjasing and Nandlal and started assaulting them with weapons.
Appellants No. 1 and 4 hit Choharjasing.
Appellants No. 2 and 3 hit Nandlal.
Choharjasing fell down.
The assault continued.
Appellant No. 2 thrust his stick in the mouth of Choharjasing and he lost four of his teeth.
Choharjasing and Nandlal both fell unconscious.
Ramkeshwar sing received a blow on left hand.
625 The Sub Inspector of Police, on getting a telephone message came to the spot.
On the way the Sub Inspector met appellants No. 1 and 4 each of whom had injuries on their person.
They were put in the police van.
The van was taken to the place of incident.
Choharjasing and Nandlal were lying unconscious.
Witnesses Awadh Narayan and Dinanath were present there.
Choharjsing.
and Nandlal were put into the van and removed to the hospital.
At the time of admission to the hospital Choharjasing had 12 injuries.
Nandlal had 5 injuries.
Appellant No. 4 had 3 injuries.
Choharjasing and Nandlal were detained in the hospital as indoor patients from 16 October 1964 to 12 November, 1964.
Appellant No. 4 in spite of medical advice left the hospital on 17 October, 1964.
The trial Court acquitted all the 5 accused.
The trial Court gave these reasons.
Choharjasing and Ramkeshwarsing, did not mention accused No. 5.
Witness Award Narayan did not mention accused No. 5.
Ramkeshwarsing did not mention accused No. 2, 3 and 5.
Witness Awadh Narayan did not mention accused No. 3.
Choharjasing and Nandlal were all thin and of weak build.
The accused were hefty in build.
It is difficult to say why so many persons would engage in the assault on two weak persons, particularly when Choharjasing had just returned after operation from the hospital.
The injuries on appellants No. 1 and 4 were not satisfactorily explained.
The possibility of persons from the crowd feeling enraged at the assault on accused No. 1 to 5 who were holding important offices in the local Congress organisation and then rushing forward and inflicting injuries on the assaulters of Choharjasing and Nandlal two well known persons of the locality cannot be ruled out as contended for by the defence.
Iron bars and sticks were not recovered.
Ramkeshwarsing had failed to go to the police station of his own accord.
He and Choharjasing did not implicate accused No. 5 in their earlier statements.
The presence of accused No. 2 and 3 is not free from doubt.
Ramkeshwarsing and Awadh Narayan did not mention accused No. 2 in their earlier statements.
Ramkeshwarsing did ;not mention the name of accused No. in his statement to the police.
Choharjasing and Nandlal could not explain how accused No. 1 and 4 came to receive the injuries.
Though the injuries on Choharjasing and Nandlal are no doubt serious, the evidence does not satisfactorily establish that they were caused by the accused in furtherance of their common intention and that they formed an unlawful assembly and used force or violence and they rioted with deadly weapons in prosecution of their common intention.
The defence that accused No. 1 was assaulted and seeing 626 this accused No. 4 came there and he was assaulted cannot in the circumstances be overlooked.
With these reasons the trial Court acquitted all the five accused.
The High Court set aside the order of acquittal.
The High Court arrived at these conclusions.
The evidence established that the grievous injury inflicted on Choharjasing and Nandlal and the simple injury inflicted on Ramkeshwarsing were inflicted by the appellants.
The trouble arose on account of dispute over the open space adjoining the room of Choharjasing.
The appellants could not be convicted under section 307 of the Indian Penal Code The appellants were guilty of causing grievous hurt.
The High Court, therefore, convicted the appellants for injuries sustained by Choharjasing, Nandlal and Ramkeshwarsing.
Counsel for the appellants made these submissions.
The High Court interfered with the acquittal without giving any reasons The first information report about the cognizance of the offence was wrongly admitted in evidence.
The incident on the morning of 16 October, 1964 could not be believed and therefore the entire prosecution would fail.
As to the incident on the morning of 16 October, 1964 the trial Court said that the time of recording the complaint on 16 October, 1964 was 11.05 am.
where as the complainant 's version in court was that he returned from the hospital at about 11 a.m. or 12 noon, when he received information from Nandlal.
Further in the complaint Choharjasing did not mention about any of the accused and Nandlal also did not mention accused No. 5.
The land on which earth was spread belonged to one Khot and therefore appellant No. 1 could not have interest in that land.
Or these grounds the trial Court did not accept the version that there was any occurrence on the morning of 16 October, 1964.
The High Court, however, accepted the version that there was an incident on the morning of 16 October, 1964 and said that Chohajasing would not have taken the trouble of going to the police and lodging a complaint.
The High Court gave two broad reasons for accepting the prosecution version about the incident on the morning of 16 October, 1964.
First, there was the complaint by Choharjasing.
Secondly, Choharjasing had gone to the hospital on the morning of 16 October, 1964 and on his return from the hospital he went to lodge the complaint.
Choharjasing would not have done so, if there had been no incident in the morning.
The High Court referred to the first information report about the commission of the offence and said that once the statement was admitted in evidence it afforded a very strong corroboration 627 to the testimony of Choharjasing so far as the complicity of accused No. 1 to 4 in the crime was concerned and the first information report was admissible under section 157 of the Evidence Act.
The first information report is not substantive evidence.
It can be used for one of the limited purposes of corroborating or contradicting the makers thereof.
Another purpose for which the first information report can be used is to show the implication of the accused to be not an afterthought or that the information is a piece of evidence res gestao.
In certain cases, the first infor mation report can be used under section 32(1) of the Evidence Act or under section 8 of the Evidence Act as to the cause of the informant 's death or as part of the informer 's conduct.
The High Court was wrong in holding that the first information report would be admissible under section 157 of the Evidence Act.
When the maker of the first information report was examined in court the report was not tendered by the prosecution in accordance with the provisions of the Evidence Act.
The appellants were denied the opportunity of cross examination on the first information report.
The first information report was therefore wrongly relied upon in evidence for the purposes suggested by the High Court.
It is therefore to @ seen as to whether the High Court was justified in convicting the appellants on the evidence and the grounds mentioned in the judgment.
The evidence of the complainant is that in the afternoon of 16 October, 1964 all the appellants came armed with lathis or something like iron bars and all the four appellants assaulted Choharjasing and Nandlal with what the appellants had in their hands.
The further evidence is that appellant No. 2 thrust the lathi into Choharjasing 's mouth and be lost four of his teeth as a result of that.
Nandlal in his evidence stated that appellant No. 2 gave a blow with a stick on his head.
Nandlal and Choharjasing were attempting to run away when appellant No. 3 assaulted Nandlal on his head with what looked like an iron bar and appellant ,No. 4 also assaulted him with what he was holding and which also looked like an iron bar.
Nandlal further said that appellant No. 2 assaulted him before he fell down and after he bad fallen down all the appellants assaulted him.
Witness Ramkeshwarsing said that he saw all the appellants and when Choharjasing and Nandlal had fallen on the ground they were assaulted by all the appellants with sticks and iron bars.
Ramkeshwarsing further said that in the statement to the police he mentioned that he saw appellant No. 1, 2 and two others.
628 Witness Awadh Narayan said that he knew all the appellants and he saw sticks in their hands.
He corroborated Nandlal 's evidence that appellant No. 2 assaulted with a stick Choharjasing on the mouth.
He also said that all the appellants continued assaulting Choharjasing and Nandlal.
He said that in his statement to the police he mentioned the names of appellants No. 1 and 2.
Witness Dinanath said that he knew Choharjasing and Nandlal for a few years and he also know the appellants.
He said that appellant No. 2 had a stick in his hand and appellant No. 2 assaulted Nandlal on his head.
His further evidence was that appellant No. 2 gave a straight and perpendicular blow with a stick on the mouth of Choharjasing.
The Sessions Court was wrong in holding that Ramkeshwarsing did not mention the name of appellant No. 2.
He not only stated in his oral evidence that he had mentioned the name of appellant No. 2 to the police but this was also not challenged in cross examination.
The other witnesses Choharjasing, Nandlal, Awadh Narayan and Dinanath all spoke about the appellants who assaulted Choharjasing and Nandlal.
As to appellant No. 3 Choharjasing said that appellants No. 3 and 4 carried something like iron bars of a black colour.
As far as appellant No. 3 is concerned there is no contradictory police statement on the part of Choharjasing.
The oral evidence of Nandlal in relation to appellant No. 3 was that he assaulted Nandlal.
Nandlal in his statement to the police also mentioned about appellant No. 3.
There is no contradictory police statement on the part of Nandlal as far as appellant No. 3 was concerned.
Nor was any such contradiction put to Nandlal.
The medical evidence about the injuries to Choharjasing was that the injuries could be caused by hard and blunt substance like iron bars and lathis and were likely to cause death if not medically attended to.
The medical evidence about the injuries to Nandlal was that those injuries could be caused by coining in contact with hard and blunt substance such as lathi, bamboo, stones, iron bars etc.
and were serious injuries and were likely to cause death if not medically attended to.
Ramkeshwarsing 'in his oral evidence said that the appellants assaulted Choharjasing and Nandlal, He said that he did not mention appellants No. 3 and 4 in the police statement because he did not know them.
There is no contradictory police statement as far as witness Ramkeshwarsing is concerned in relation to appellant No. 3.
In his police statement he mentioned appellants No., 1 and 2 and he said that two others assaulted Choharjasing and Nandlal.
Ramakeshwarsing thus spoke of four persons 629 assaulting Chohajasing and Nandlal.
That was not challenged in cross examination.
Witness Awadh Narayan spoke of appel lant No. 3.
There is no contradictory police statement of Awadh Narayan in relation to appellant No. 3.
Witness Dinanath spoke about appellant No. 3 assaulting Choharjasing and Nandlal.
There is no cross examination of Dinanath that appellant No. 3 gave a blow with a stick to Nandlal.
On behalf of the appellants it was contended that appellants, No. 2 and 3 did not receive any injuries and therefore it was improbable that they would be involved in the assault.
That contention is unacceptable because of the clear and convincing evidence of several witnesses about appellants No. 2 and 3 assaulting Choharjasing and Nandlal.
The trial Court was wrong in holding that the names of appellants No. 2 and 3 were not mentioned by the witnesses to the police.
The names of appellants No. 2 and 3 were mentioned by the witnesses to the police.
The oral evidence of the witnesses was to that effect.
That evidence was not challenged.
The High Court was therefore justified in coming to the con clusion that the acquittal of appellants No. 2 and 3 by the trial Court was to be set aside.
The evidence of the several witnesses that appellants No. 2 and 3 assaulted Choharjasing and Nandlal cannot be discarded on the statement that the appellants No. 2 and 3 did not receive injuries.
It does not follow that appellants ,No. 2 and 3 were not at the scene of occurrence and did not commit the acts of assault just because there was no injury on them.
As far as appellants No. 1 and 4 are concerned the High Court was correct in holding that they were wrongly acquitted by the trial Court.
12 injuries on Choharjasing and 5 injuries on Nandlal were all serious in nature.
The oral evidence was rightly accepted by the High Court that all the appellants were guilty of assaulting Choharjasing, Nandlal and Ramkeshwarsing.
Counsel for the appellants relied on the decisions of this Court in Harbans Singh and Anr.
vs State of Punjab [1962]Suppl.
(1) S.C.R. 1041 and Khedu Mohton & Ors.
vs State of Bihar ; in support of the proposition that the High Court should not have interfered with the acquittal by the trial Court and if on the ruling of this Court in Khedu Mohton & Ors.
vs State of Bihar (supra) two reasonable conclusions can be reached on the basis of the evidence on record then the acquittal of the accused should be preferred.
The observations in Khedu Mohton 's case mean this: If two conclusions can be reached with a plausible appearance of reason the court should can in favour of that which leads to acquittal and not to that 630 which leads to t conviction.
Two views and conclusions cannot both be right and one must be preferred over the other because our criminal jurisdiction demands that the benefit of doubt must prevail.
As to powers of the appellate court this Court in Sanwat Singh & Ors.
vs State of Rajasthan ; laid down three principles.
First, the appellate court had power to review the evidence upon which the order of acquittal is founded.
Second, the principles laid down by the Judicial Committee in Sheo Swarup vs King Emperor 61 I.A. 398 are a correct guide for the approach by an appellate court.
These principles are that the views of the trial Judge as to the credibility of the witnesses, the presumption of innocence in favour of the accused, the right of the accused to the benefit of doubt and the slowness ,of an appellate court in disturbing the finding of fact arrived at by a Judge who had the advantage, of seeing the witnesses are the 'rules and principles ' in the administration of justice.
Thirdly, the appellate court in coming to its own conclusion should not only consider every matter on record having a hearing on the questions of fact and the reasons given by the trial court in support of the order of acquittal, but should also express reasons to hold that the acquittal was not justified.
in the light of the rulings of this Court to which reference has been made, we are satisfied that the High Court kept in view the rules and principles of appreciation of evidence and the right of the accused to the benefit of doubt and the, High Court gave reasons as to why the occurrence on the morning of 16 October, 1964 was proved and also why the appellants were found on the evidence on record to be guilty of having committed an offence.
Benefit of doubt was not sustainable in the present case inasmuch as the materials on record.
did not exclude the guilt of the appellants.
This Court in Khedu Mohton & Ors.
vs State of Bihar (supra) set aside the judgment of the High Court and restored that of the Sessions Judge by acquitting the appellants because the High ,Court did not deal with finding of the first appellate court that it was unsafe to place reliance on the evidence of four prosecution witnesses who were interested witnesses.
Another feature which vitiated the approach of the High Court in that case was that there was a delay of 8 days in filing the complaint and the first appellate, court said that it threw a great deal of doubt on the prosecution story.
The High Court made reference to some information lead before the Police and did not properly assess the delay in the filing of the complaint.
This Court found there that the information before the police prior to the complaint was 631 an application that there was an apprehension of breach of peace.
It is in this context of facts that this Court said that the High Court was wrong in setting aside the acquittal.
Once the appellate court came to the conclusion that the view of the trial court was unreasonable that itself would provide a reason for interference.
Again if it was found that the High Court applied the correct principles in setting aside the order of acquittal this Court would not ordinarily interfere with the order of conviction passed by the High Court in an appeal against acquittal or review the entire evidence where the High Court was right in its view of evidence.
Therefore, if the High Court has kept in view the rules and principles of appreciation of the entire evidence and has given reasons for setting aside the order of acquittal this Court would not interfere with the order of the High Court [See Harbans Singh vs State of Punjab (supra).
This Court in Nihal Singh & Ors.
vs State of Punjab ; said that there were two ways of dealing with an appeal by this Court from an order of conviction setting aside an acquittal.
One of the modes was to go through the evidence and find out whether the High Court had infringed the principles laid down in Sanwat Singh vs State of Rajasthan (supra) or whether the appeal was an exceptional one within the ruling of this Court in State of Bombay vs Rusy Mistry A.I.R. 1960 S.C. 391 where the finding was such that 'it shocks the conscience of the court or that it disregarded the forms of legal process or substantial and grave injustice had been done.
In dealing with an appeal against an acquittal the High Court can go into the questions of law and fact and reach its own conclusion on evidence provided it pays due regard to the fact that the matter had been before the Court of Sessions and the Sessions Judge had the chance and opportunity of seeing the witnesses depose to the facts See Laxman Kalu Nikalie vs The State of Maharashtra (1968) 3 S.C.R. [685].
The High Court was correct in setting aside the order of acquittal and convicting the appellants.
The appeal therefore fails and is dismissed.
If the appellants are on bail their bail bonds are cancelled.
They will surrender and serve out the sentence.
V.P.S. Appeal dismissed.
| IN-Abs | The High Court set aside an order of acquittal of the appellants on various charges and convicted them.
One of the items of evidence on which the High Court relied was the first information report.
Though it was not proved through its maker when be gave evidence in the trial court.
the High Court held it to be admissible under section 157 of the Evidence Act.
in appeal to this Court, HELD : (1) The High Court was wrong in holding that the First Information Report would be admissible under section 157 of the Evidence Act.
Under that section.
it could not be used as substantive evidence but only to corroborate its maker.
The appellants were also denied the opportunity of cross examination on the First Information Report.
[627 A D] (2) The High Court, however, was correct in setting aside the order of acquittal and convicting the appellants on the other evidence.
[1639 D G] In dealing with an appeal against acquittal the High Court can go into questions of law and fact and reach its own conclusion on evidence provided it pays due regard to the principles for such review.
These principles are giving due regard to, the views of the trial Judge as to the credibi lity of the witnesses, the presumption of innocence in favour of the accused, the right of the accused to any benefit of doubt and the slowness of an appellate court in disturbing the finding of fact arrived at by a Judge who had the advantage of seeing the witnesses.
The appellate court ill coming to its own conclusion should not only consider every matter oil record having a bearing on questions of fact and the reasons given by the trial court in support of the order of acquittal but should also express reasons for holding that the acquittal was not justified.
If two conclusions can be reached with a plausible appearance of reason the court should lean in favour of that which leads to acquittal and not to that which lead, to conviction.
But once the appellate court comes to the conclusion that the view of the trial court was unreasonable that itself would provide a reason for interference.
[629 H; 630 A E. 631 B D] In the present case, the High Court bid kept in view the rules and principles of appreciation of evidence in setting aside the order of quitting.
In such a case.
this Court would not ordinarily interfere with the order of conviction by the High Court in an appeal against an acquittal, or review the evidence.
[630 E; 631 B D] Harbans Singh and Anr.
vs State of Punjab, [1962] Supp. 1 S.C.R. 104, Senwat Singh & Ors.
vs State of Rajasthan, ; Nihal Singh & Ors.
vs State of Punjab, ; , State of Bombay vs Rusy Mistry, A.T.R. and Laxman Kalu Nikalje State of Maharashtra. , followed.
623 Khedu Mohton & Ors.
vs State of Bihar, ; and Sheo Swarup vs, King Emperor, 61 I.A. 398, referred to.
|
Appeal No. 1709 of 1969.
Appeal by Special Leave from the judgment and Decree dated April 10, 1969 of the Punjab & Haryana High Court in Letters Patent Appeal No. 70 of 1964.
J. C. Talwar and R. C. Kohil, for the appellant.
V. C. Mahajan, for the respondent.
The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, by special leave, is directed against the judgment and order dated April 10, 1969 of the Full Bench of the Punjab & Haryana High Court in Letters Patent Appeal No. 70 of 1964, dismissing Civil Writ Petition No. ' 22 of 1963 filed by the appellant to quash the order of the respondent dated September 1 1, 1962.
94 The circumstances that led to the filing of the Civil Writ Petition No. 22 of 1963 may be briefly stated : In the elections held in October, 1959, the appellant was elected as a Member of the Municipal Committee, Phagwara.
On June 20, 1960, a meeting was held for the election of the President and Vice President of the Committee.
The meeting was presided over by the Sub Divisional Officer (Civil).
According to the Appellant the Presiding Officer conducted the elections of the President and the Vice President in an irregular and illegal manner and was favouring the, party led by another committee member Bhag Ram.
When the appellant and another member Om Prakash Agnihotri protested against this conduct of the Sub Divisional Officer (Civil), the group led by Bhag Ram brought into the Town Hall some unruly elements from outside who created panic and confusion and manhandled Om Prakash Agnihotri, who was also a candidate for the presidential office.
It may be stated at this stage that according to the respondent, Om Prakash Agnihotri created a scene in the meeting and the appellant who was a staunch supporter of Om Prakash Agnihotri brought into the Town Hall, a number of outsiders with a view to cause chaos and confusion in the meeting and that the appellant did not maintain decorum and did_not care to obey the directions of the Chairman.
Ultimately, Bhag Ram was elected as the President.
The appellant and certain other members of the Committee filed Writ Petition No. 1095 of 1960 in the High Court challenging the election of Bhag Ram as the President.
But the said writ petition was dismissed on the ground that the disputed facts involved therein could not be gone into by the High Court in proceedings under article 226 of the Constitution.
While the writ petition No. 1095 of 1960 was pending in the High Court, the respondent State on December 5, 1960 served a notice on the appellant under the proviso to section 16(1) of the Punjab Municipal Act, 1911 (Punjab Act III of 1911) (hereinafter to be referred as the Act) calling upon,him to show cause within 21 days why he should not be removed from the membership of the Committee under section 16 (1 ) (e) of the Act.
The said notice charged the appellant of having brought outsiders into the Town Hall on June 20, 1960 to cause disturbance to the meeting that was being then held and, that he did not maintain decorum nor did he care to obey the rulings of the Chairman.
In consequence the appellant was charged of having flagrantly abused his position as a member of the Committee.
The appellant sent a reply on December 12, 1960 controvert ing the allegations made in the notice.
In turn he averred that the, 95 Sub Divisional Officer (Civil) who presided over the meeting, was actively helping the party led by Bhag Rain and it was the latter who brought in outsiders to create confusion and disorder.
He denied having brought any outsiders into the hall as alleged in the notice.
He further stated that the crowd that was ' brought into the hall by Bhag, Ram manhandled Om Prakash Agnihotri.
He .further denied the allegation that he did not maintain decorum and that he did not obey the Chair.
On the other hand, he stated that he was quite obedient to the Chair and that he was not responsible for the confusion that prevailed at the meeting.
Finally he stated that even if all the allegations made in the show cause notice were true, they will not bring the matter under section 16(1) (e) of the Act justifying action being taken against him by way of removing him from the Committee.
On September 11, 1962 the Governor of Punjab passed an order section 16 ( 1 ) (e) read with proviso to section 1 6 (1 ) of the Act removing the appellant from the membership of the Municipal Committee, Phagwara.
By the same order the appellant was also disqualified for a period of three years under sub section
(2) of section 16 of the Act.
The appellant challenged the above order of the State Government before the High Court in Civil Writ No. 22 of 1963.
The main plea that was taken in the writ petition appears to be that even if all the allegations contained in the show cause notice of December 5, 1960 are true, the appellant cannot be considered to have "flagrantly abused his position as a member of the Committee" so as to attract the penal consequences under section 16 ( 1 ) (e) of the Act.
According to the appellant the allegations made against him regarding his conduct at the meeting of the Committee held on June 20, 1960 have, no relevancy for invoking the powers conferred on the State Government under section 16(1) (e).
In consequence he alleged that the order dated September 11, 1962 removing him from the membership of the Committee and disqualifying him was null and void and was an abuse of the power vested in the Government under section 16 of the Act.
The State contested the writ petition on the ground that when it was found at the Committee meeting that Om Prakash Agnihotri could not secure support for being elected as the President, the appellant who was his ardent supporter went out and deliberately brought some hooligans into the Town Hall and created trouble at the meeting.
Further the appellant behaved in a very disorderly manner and did not obey the rulings given by the Sub Divisional Officer (Civil) who was then presiding over the meeting for the purpose of conducting the election of the President and the Vice President.
As the appellants conduct Was such as to attract the penal provisions of section 16 (1 ) (e) of the Act, the show cause notice 96 was issued under the proviso to the said section for which the appellant sent a very elaborate reply.
As the explanation sent by the appellant was not found to be acceptable the state went passed the order dated September 11, 1962 and it was well within its powers.
The learned Single Judge who dealt with the writ petition was of the view that the allegations made against the appellant in the show cause notice, even if true, will not attract section 16 (1) (e) of the Act.
According to the learned Judge it is only when a member of the Committee has shown favour or indulged in self aggrandisement by virtue of his position as a member that the said provision Will apply.
On this reasoning, the learned Judge held that the grounds which led to the making of the order dated September 11, 1962 were neither germane nor relevant for the purpose of attracting section 16(i) (e).
However, deplorable the conduct of the appellant as alleged may have been at the meeting held on June 20, 1960, that by itself will not enable the State Government to take action under section 16 (1) (e) of the Act.
Ultimately, by his judgment dated September 18, 1963, the learned Judge quashed the order of the Government dated September 11, 1962 as being illegal and void.
The State carried the matter in Letters Patent Appeal No. 70 of 1964.
The said appeal was heard, in the first instance, by a Division Bench.
The Division Bench was not inclined to agree with the views of the learned Single Judge regarding the interpretation placed on section 16 ( 1 ) (e) of the Act.
The view of the Division Bench is that the conduct of the appellant, as alleged in the show cause notice amount to his having "flagrantly abused his position as a member of the Committee ' so as to attract the penal provisions of section 16 (1) (e) of the Act.
Another point appears to have been taken before the Division Bench, namely, that the order dated September 11, 1962 suffers from the vice of not giving reasons for the action taken by the State Government and on that ground it has to be struck down.
The Division Bench felt that this aspect of the matter is a fairly important one and as such it required consideration by a larger bench.
In the end by order dated August 7, 1968 the Division Bench referred the appeal to a Full Bench for consideration of all aspects.
The appeal came up before the Full Bench of three Judges.
The Full Bench agreed with the view of the Division Bench regarding the applicability of section 16 (1) (e) of the Act and held that the conduct of the Appellant amounted to "flagrantly abusing, his position as, a member of the Committee".
Regarding the question whether the order dated September 11, 1962 has to be 97 struck down on the ground that it does not give any reasons, the Full Bench felt that the said question should be considered by a larger bench of five Judges.
Accordingly by its order dated February 20, 1969, the Full Bench directed the appeal to be heard before a Full Bench of five Judges.
The Letters Patent appeal in consequence was heard by a bench of five Judges.
Three questions were posed for consideration: (a) Whether the decision and order of the State removing the appellant herein from his membership of the Committee under section 16(1 ) (e) of the Act are quasi judicial; (b) If they are quasi judicial, whether the State was required by law to state reasons for its decision; and (c) if the State was bound to give reasons, whether as a fact reasons have been, given for its decision by the State in the order dated September 11, 1962.
After a fairly elaborate consideration of the matter the learned Judges held on points Nos.
(a) and (b) that the order of the State removing a Municipal.
Committee member under section 16 (1) (e) of the Act is a quasi judicial order and as such the State was bound to give its reasons for arriving at a decision.
Regarding point No. (c) the learned Judges, after a thorough examination of the note file produced before them by the State, ultimately held that the State had considered the explanation offered by the appellant and after applying its mind to, the materials: before, it was justified in passing the order removing the appellant from his membership of the Committee and also disqualifying him for a period of three years.
In the result, the Full Bench of five Judges by its order dated April 10, 1969 allowed Letters Patent appeal filed by the State and set aside the order of the learned Single Judge.
The result was that the writ petition filed by the appellant herein was dismissed.
Before we advert to the contentions urged before us by the learned counsel, it is necessary to refer to the relevant provisions of the Act as well as the show cause notice issued by the State as also the final order passed by it.
We will of course refer also to the substance of the reply sent by the appellant to the show cause notice.
98 The relevant provision is section 16 (1 ) (e), its proviso and sub section
(2) of section 16.
They are as follows: "16(1) The State Government may, by notifica tion, remove any member of committee.
(e) if, in the opinion of the State Government he has flagrantly abused his position as a member of the committee or has through negligence or misconduct been responsible for the loss, or misapplication of any money or property of the committee.
Provided that before the State Government notifies the removal of a member under this section, the reasons for his proposed removal shall be communicated to the member concerned, and he shall be given an opportunity of tendering an explanation in writing.
(2) A person removed under this section or whose election or appointment has been deemed to be invalid under the provisions of sub section (2) of section 24, or whose election has been declared void for corrupt practices or intimidation under the provisions of section 255, or whose election the State Government or the Deputy Commissioner has under section 24 refused to notify, shall be disqualified for election for a period not exceeding five years Provided that a person whose election or appointment has been deemed to be invalid under the provisions of sub section (2) of section 24, shall not be disqualified for election or appointment for a period exceeding two years from the date of, disqualification." No rules framed under the Act, having any bearing on the manner in which the Government has to deal with the matter have been brought to our notice.
The show cause notice issued by the State on December 5, 1960 was as follows : "It has been brought to the notice of the Government that on the 20th June, 1960 the Sub Divisional Officer (Civil) Phagwara, convened a meeting of the newly elected members of the Municipal 'Committee, Phagwara, after the election of the Committee, held on 17 10 1959 in order to administer oath of allegiance 99 and to conduct the election of the President of the Committee to enable the new Committee to take over the charge, you also attended that meeting at the time of election of the office of the President.
You were sup porter of the group headed by Shri Om Parkash Agnihotri, member of the Committee whose candidature was proposed for this office.
During the course of the meeting when Shri Om Parkash Agnihotri became unruly and began to tear his clothes, beat his chest and create a row you managed to bring some outsiders in the Town Hall to cause disturbance at the meeting.
More over you did not maintain decorum or care to obey the chair.
By your aforesaid action you have flagrantly abused your position as a member of the Committee within the meaning of section 16(1) (e) of the Punjab Municipal Act 1911.
I am directed to call upon you to show cause under proviso to section 16(1) ibid why you should not be removed from the membership of the Committee under section 16(1) (e) ibid.
You should tender your explanation to the Deputy Commissioner Kapurthala with an advance copy to, Government together with copy (copies) of documents, if any, so as to reach there within a period of twenty days from the date of despatch of this letter.
In case no explanation is submitted by you within the stipulated period, it will be considered that you have no explanation to offer and government may proceed ahead to notify your removal.
" The appellant sent a reply on December 16, 1960.
No copy of the reply sent by the appellant has been placed in the record available before us.
But the nature of the reply can be gathered in the summary given by the High Court.
In his reply the appellant had denied the allegations made against him in the show cause notice.
On the other hand, he averred that the Sub Divisional Officer (Civil) who was presiding over the meeting was taking sides with Bhag Ram and it was the latter who brought hooligans in the Town Hall and created chaos and confusion.
He also denied the allegation that he did not obey the rulings given by the Chair and that he behaved in a disorderly manner.
He further averred that the hooligans who were.
brought into the Town Hall by hag Ram manhandled Om Parkash Agnihotri and created confusion at the meeting.
He further averred that even assuming that all the allegations made against him in the show cause notice are true, section 16 (1 ) (e) of the Act was not attracted as he has not "flagrantly abused his position as a member of the Committee".
The order of the State dated September 11, 1962 was a , follows: 100 "Whereas the Governor of Punjab after giving an opportunity to Shri Bhagat Ram Patanga member Municipal Committee Phagwara of tendering an explanation under the proviso to section 16 of the Punjab Municipal Art 1911 is satisfied that the said Shri Bhagat Ram Patanga has flagrantly abused his position as a member of the aforesaid committee, now, therefore, in exercise of the powers vested in him under clause (e) of, sub section 1 of section 16 ibid, the Governor of Punjab is pleased to remove the said Shri Bhagat Ram Patanga from the membership of the Municipal Committee Phagwara from the date of Publication of this notification in the official Gazette and is further pleased.
to disqualify the said Shri Bhagat Ram Patanga for a period of three years from the aforementioned date under Sub section (2) of Section 16 ibid.
" It will be seen that section 16(1) of the Act gives power to the State Government to remove any member of a committee if he is guilty of one or other of the acts mentioned in cls.
(a) to (g).
In particular we are, concerned with cl.
To attract that provision the State Government must form an opinion that the appellant has "flagrantly abused his.
position as a member of the Committee".
We are not concerned with the other grounds mentioned in cl.
(e) for which also the removal of a member can be ,ordered.
But before notifying the removal of a member from the ,Committee, there is an obligation on the State Government by virtue of the proviso to section 16(1) to communicate to the member concerned the reasons for his proposed removal.
There is also a further obligation to give the concerned member an opportunity of tendering an explanation in writing.
Sub section (2) gives power to the authority concerned when removing a member to disqualify him for election for a period not exceeding five years.
In view of the proviso to section 16(1) the show cause notice was issued ' on December 5, 1960.
The grounds for the action proposed to, be taken were also indicated therein as coming within section 16(1) (e) of the Act.
The appellant was given an opportunity of tendering his explanation in writing.
As mentioned earlier, he also availed himself of the said opportunity.
But the point to be noted is that in order to attract section 16 (1) (e) of the Act, the appellant should be found to have flagrantly abused his position as a member of the committee.
In the case before us the State Government has coming to a finding that the conduct attributed to the appellant at, the meeting held on June 20 ' 1960 amounted to having "flagrantly abused his position as a member of the Committee" and it was on this basis that he was removed from the committee This conclusion arrived at by the Government, though ,not approved by the learned Single Judge, has been accepted as 101 correct by the Division Bench in its order dated August 7, 1968 in the Letters Patent appeal.
The view of the Division Bench has been approved by the Full Bench of three Judges as also of five Judges.
On behalf of the appellant Mr. J. C. Talwar, learned counsel, raised two contentions : (1) The allegations made against the appellant in the show cause notice dated December 5, 1960, even if true, are not such as to attract section 16 ( 1 ) (e) on the ground that the appellant has "flagrantly abused his position as a member of the committee"; and (2) The larger bench of five Judges having held that the proceedings, initiated by the State against the appellant are, quasi judicial and that the State was bound to give reasons, erred in holding that the files produced before it disclosed that there has been a consideration of the appellant 's explanation by the State.
This view of the High Court is erroneous.
Mr. V. C. Mahajan, learned counsel for the State, has not challenged the finding of the High Court in the Letters Patent appeal regarding the proceedings initiated against the appellant being of a quasi judicial nature and the State being bound to give reasons for the order.
But the counsel urged that the appellant has no where raised the contention that there has been no consideration by the State Government of the explanation offered by him before the order dated September 11, 1962 was passed.
He also pointed out that there has been district compliance of the provisions of the statute by the State Government before passing the order dated September 11, 1962.
The counsel further urged that the conduct of the appellant as disclosed by the. events 'that took place at the meeting of June 20, 1960 constitute a flagrant abuse by the appellant of his position as a member of the committee so as to, attract section 16 (1) (e) of the Act.
We are not inclined to accept the contention of Mr. Talwar that the allegations made against the appellant regarding his conduct at the meeting of June 20, 1960 do not amount to his having flagrantly abused his position as a member of the committee .Mr.
Talwar 's contention appears to be that it is only when a abuses his position as a member of the committee and shows favour to others or gains undue, advantage to him that he, can be considered to have flagrantly abused his position as a member of the committee.
No doubt, such a contention has found favour at the hands of the learned Single Judge.
But, in our opinion, the Division Bench was right when it differed from this view of the learned Single Judge.
The nature of the allegations made against the appellant is self evident from averments contained in the show cause notice, extracted above.
The allegations clearly show that the appellant had brought in outside elements in order 102 to create confusion and chaos at the meeting.
The expression "flagrantly" means glaringly, notoriously, scandalously.
A position is said to be abused when it is put to a bad use or for wrong purpose.
No doubt it may vary with the circumstances.
When a meeting of the members of the committee was being held, the appellant had no doubt a right to participate in the proceedings as a member of the committee.
But he had no business, as a member participating in the meeting of the committee, to go outside and bring in hooligans for the purpose of creating confusion and chaos.
This behaviour of the appellant was to, say the least scandulous.
If he had not been a member of the committee, he would not be entitled to be present inside the Town Hall.
at the time of the meeting.
The appellant did flagrantly abuse his position as a member of the Committee while participating in the meeting of the committee, when he brought in rowdies for creating disturbance so that the Committee meeting may not be held peacefully and properly.
Therefore, the State Government was perfectly Justified in coming to the conclusion that action has to be taken 'against the appellant under section 16(1) (e) of the Act.
Therefore the first contention of the learned counsel for the appellant will have to be rejected.
Coming to the second contention, it has to be noted that the appellant does not appear to have raised this contention before the learned Single Judge, nor even in his writ petition.
It was only when the State went up in appeal, that the appellant raised the 'Contention that the proceedings initiated against him are quasi judicial and as such the State was bound to give reasons in its order.
To this limited extent the Full Bench has agreed with the appellant.
The appellant raised in consequence the further contention that the order dated September 11, 1962 has to be struck, down inasmuch as it does not give any reasons.
far as this last aspect is concerned, we have already referred to the fact that the Fall Bench of five Judges went through the file produced before it by the State and has come to the conclusion that there is a clear indication that the representations of the appellant were taken into account and considered by the Government before the order dated September 11, 1962 was passed.
At this stage we may say that inasmuch as very severe penal consequences: result by removing a person from the membership of a committee, to which he: has, been duly elected and as no appeal is provided ' under the statute against an order so, removing him, it is not only desirable but also essential that the State Government should indicate its reasons for forming the opinion as required under section 16 (1 ) (e) of the Act.
When such an order is challenged, the State must place before the Court the necessary materials which were avail able before it and which were taken into consideration for forming ,an opinion to remove the person concerned as a member of the 103 committee.
In this case, it is not possible for us to, know whether the State referred in its counter affidavit in the writ petitioN to the various matters contained in the relevant file, as the, appellant has not Placed before us either a copy of his writ petition or the counter affidavit of the State.
Therefore it is not possible for us to know the actual avertments made by the appellant and the answers given by the State in the writ petition.
The facts given by us, in the earlier part of the judgment regarding the plea of the appellant and the defence raised by the State were all gathered by us from the judgments of the learned Single Judge and of the Letters Patent Bench.
When once the Letters Patent Bench has held that the order passed by the State Government is of a quasi judicial nature, it is obligatory on the part of the State Government to make available to the member concerned the materials available before it and on the basis of which the show cause notice is issued.
Even if those materials are not referred to in the show cause notice in any great detail, it is open to the member concerned to request the State Government to furnish him the materials on which the show cause notice has been issued so that he may give an effective answer not only to the averments, contained in the show cause notice but also to the materials, on the basis of which the show cause notice has been issued.
For instance, in the case before us, the High Court has referred to the information contained in the relevant file before it that there was the report of the Sub Divisional Officer, who presided over the meeting held on June 20, 1960, giving his version of the part played by the appellant.
In his answer to the show cause notice the appellant had denied that he ever brought any outsider into the Town Hall and that, on the other hand, it was Bhag Rain, who had brought outsiders in the Town Hall and created the confusion.
This raises a disputed question of fact on which the Government is not entitled to take view rejecting the plea of the appellant without having disclosed to him the actual allegations made in the report.
But it is unnecessary for us t pursue this aspect further because the appellant has not made a grievance either before the High Court or before us that the proceedings initiated against him suffer from the infirmity of not having made available to him the materials that were before the Government when it passed the order removing him from the membership of the committee.
As pointed out earlier, the only other contention in this regard raised by him and that too at the stage of Letters Patent Appeal was that the order of the Government does not show that his representations have been taken into account by the State.
Again there is also the possibility that the term of the office of the appellant, who was elected to the committee, as early as 1959 may have expired long ago.
If disputed questions of fact arise for consideration by the Government, there 104 is, no provision, so far as we could see, in the Act as to how the State is to deal with the matter.
Further no Rules also have been brought to our notice laying down the Procedure to be a by the, state under such circumstances.
These are all matters of considerable importance which should attract the attention of the State Government, so that suitable provisions may be made either in the Act or in the Rules made by virtue of the rule making power.
In the particular circumstances of this case, we are in agreement with the High Court that the, file produced by the, Government does disclose that the State has considered the appellants representations as also the other relevant materials before it when passing the order dated September 11, 1962.
The 'various reports that were before the State Government, notes made by the concerned department on the basis of the said reports and on the explanation furnished by the appellant as well as the jottings made from time to time by the Minister concerned, have all been very elaborately dealt with by the Full Bench of five Judges.
We do not think it necessary to cover the ground over again.
The learned Judges after a consideration of all those materials contained in the file, produced before them, have recorded a finding that the State Government was justified in rejecting the explanation offered by the appellant and passing the order under attack accepting the reports of the officers concerned. 'We are in entire agreement with the views expressed in this regard by the learned Judges in the Letters Patent Appeal.
From what is stated above, it is clear that there has been a proper consideration of the explanation furnished by the appellant and that there has been no violation of the principles of natural Justice.
The second contention of the learned counsel for the appellant also fails.
In the result, the judgment and order of the High Court in the Letters Patent Appeal are confirmed and the appeal dismissed.
However, there wilt be no order as to costs.
V.P.S. Appeal dismissed.
| IN-Abs | The respondent State served a notice on the appellant, who was a member of the Municipal Committee, under the proviso to section 16(1) of the Punjab Municipal Act, 1911 calling upon him to show cause why he should not be removed from the membership of the committee under section 16(1)(e).
The notice charged the appellant with having brought outsiders into the ball where a meeting was being held for the election of the President and Vice President of the Committee and caused disturbance to the meeting that he did not maintain decorum, and t hat he did not obey the rulings of the Chairman of the meeting.
The appellant denied the allegations and averred that it was the Chairman who was actively helping the opposite party and that it was he who brought in outsiders to create confusion and disorder.
The Governor of Punjab passed an order under section 16(1) (e) read with the proviso, removing the appellant from the membership of the Committee and also disqualifying him for a period of three years under section 16(2).
The appellant challenged the order before the High Court and the trial judge held that the allegations against the appellant in the show cause notice, even if true, would not attract section 16(1)(e) of the Act, and, therefore, quashed the order.
The appellate Court, held, after examining the note file produced by the State that the State had considered the explanation offered by the appellant and the other materials before it, and that the State was justified in passing the order.
Dismissing the appeal to this Court, HELD : (1) Section 16(1) of the Act gives power to the State Government to remove any member of the Committee if he is guilty of one or other of the acts mentioned in clauses(a) to (g).
To attract clause (e), the State Government must form an opinion that the appellant had "flagrantly abused his position as a member of the Committee".
The evression 'flagrantly ' means glaringly, notoriously, scandalously; and a position is said to be abused when it is put to a bad use or for a wrong purpose depending upon the circumstances of the case.
When a meeting of the membership of the Committee was being held the appellant had a right to participate in the proceedings as a member of the Committee.
if he had not been a member of the committee he would not be entitled to be present at the time of the meeting.
But he had no business to go outside and bring in hooligans for the purpose of creating confusion and chaos.
The appellant thus flagrantly abused his position as a member of the Committee while participating in the meeting of the Committee, and therefore the State Government was, justified in passing the order.
[100D H] 93 (2) The High Court was justified in holdingthat the State Government had considered the appellant 's representations as also the other relevant materials before it passed the impugned Order.
since there had been a proper consideration of the explanation furnished by the appellant there was no violation of theprinciples of natural justice.
[1104C F] (3) In as much as very severe penal consequences result by removing a person from the membership of a committee and appeal is provided under the Act it is not only desirable but essential that the State Government should indicate its reasons for forming the opinion as required under section 16(1)(e) of the Act.
It is obligatory on the part of the ' State Government to make available to the member concerned the materials available before it and on the basis of which the show cause notice is issued, and it is open to the member concerned, to request the State Government to furish him the materials, so, that, be may love an effective answer to the averments contained in the show cause notice and to the materials on the basis of which it had, been issued.
When such an order is challenged the State must place before the Court the.
necessary materials which were available before it and which were taken info consideration for forming the opinion to, remove the person concerned from membership of 'the committee.
in the present case, however, the appellant had not made a grievance either before the High Court or before this Court that the proceedings initiated against him suffered from the infirmity of not having been made available to him the materials that were before the Government when it passed, the order removing him from the membership of the Committee.
[102F H; 103A E; 104,B C] The averments of the appellant and the Chairman of the meeting raised a disputed question of fact on which Government was not entitled to take a view rejecting the plea of the appellant without having disclosed to him the alleg ations made in the report.
If disputed questions ' of fact arise for the consideration of the Government there is no provision as to how the State has to deal with the matter.
Therefore, suitable provision may be made either in the Act or in the Rules for dealing with such disputed question of fact.
[1O4A B]
|
No. 1704 and 1937 of 1967.
Appeals by special leave from the judgment and order dated ,August 19, 1966 of the Bombay High Court, Nagpur Bench in Special Civil Applications No. 853 and 941 of 1965 respectively.
H. W. Dhabe and A. G. Ratnaparkhi, for the appellants (in both the appeals).
W. section Barlingay and P. C. Bhartari, for respondent No. 2 (in both the appeals).
The Judgment of the Court was delivered by Dua, J.
These two appeals by special leave (C.
As Nos. 1704 and 1937 of 1967) are directed against the, judgment of a Division Bench of the Bombay High Court dated August 19, 1966 ,dismissing four applications under article 227 of the Constitution arising out of orders made by the Authority under the Minimum Wages Act 11 of 1948 (hereinafter called the Act) in respect of claims made by employees of 'the 'City of Nagpur Corporation ' (hereinafter called the Corporation) working in various Departments of the Corporation.
On July 13, 1964 Sitaram Madhorao, Chaukidar and 9 other employees of the Octroi Department of the Corporation filed an application under section 20 of the Act in the Court of Small Causes at Nagpur, which was the Authority.
appointed under the .Act.
The application was presented through the General Secretary of the Nagpur Corporation Employees ' Association which was a registered trade union.
The application is brief and, therefore, we consider it proper to reproduce its material parts in its own words "The applicants above named beg to submit as under (1) That the applicants are employees working in non applicant No. 1, Nagpur Corporation in Department of School & ors.
The Minimum wages notification has been issued in respect of this industry by Government on 21 2 1951 and the minimum rates of wages are fixed 1 12 per day for eight hours.
(2) That the applicants have not been paid overtime wages, for this period though they are entitled to get double the wages as they are required to work beyond prescribed hours and holidays.
163 (3) That the applicants have been required to work overtime for 30, 65, 8 and 51 hours every week during the period from 1 1 1964 to 30 6 1964 and total claim are shown in the annexure.
The total amount claimed is Rs. 8670.18.
(4) That the applicants estimate the value of the relief sought by them of the sum of Rs. 8670.18.
(5) Applicants pray that a direction may be issued under section 3 of the Section 29 for (a) payment of the difference between the wages due according to mini mum rate of wages fixed by job and wages actually paid amount overtime wages Rs. 8670.18.
(B) Compensation amounts to Rs. 100.00.
(6) That demand has been made for this overseer claim from 1 1 1964 to 30 6 1964.
" Earlier on June 26, 1964 T. R. Khante, Time keeper and 13 other employees of the Water Works Department of the Corporation had similarly applied under section 20 of the Act through B. M. Mahale, General Secretary of the Nagpur Corporation Employees ' Association.
This application reads : "The applicants above named bee., to submit as under (1) That the applicants are employees working in non applicant No. 1, Nagpur Corporation in Department of Water Works.
The minimum wages notification has been issued in respect of this industry by Government on 21 2 1951 and the minimum rates of wages are fixed 1 12 per day for eight hours.
(2) That the applicants have not been paid overtime wages for this period though they are entitled to to get double the wages as they are required to work beyond prescribed hours and holidays.
(3) That the applicants have been required to work overtime for 8 hours every week during the period from 1 8 63 to 31 1 64 and the total claim are shown in the annexure.
The total amount claimed is Rs. 1987.48.
(4) That the applicants estimate the value of the relief sought by them of the sum of Rs. 1047.48.
(5) Applicants pray that direction may be issued under section (3) of the section 29 for (a) payment of 164 the difference between the wages due according to the minimum rate of wages fixed by the job and wages actually paid amount overtime wages Rs. 1047.48.
(6) That compensation amounts to Rs. 140.00.
(7) That demand has been made for this claim from 1 8 63 to 31 8 64.
" On November 10, 1964 some preliminary objections raised by the Corporation were disallowed by the Authority and the applications were directed to be tried on the merits.
On February 17, 1965 the Authority made an order on the following four issues which arose out of the claims made by the employees : "1.
Whether the applicants employed as a time keeper, wireman and lineman belong to the category of unskilled workers ? 2.
Whether the applicants who belong to the category of skilled or semi skilled labour can apply under section 20 of the Minimum Wages Act ? 3.
Whether the applicants have worked on weekly days of rest (Sundays) ? (a) If so, whether they are entitled to wages for work done on the weekly days of rest ? 4.
Whether the Chowkidars and Motor drivers have worked in excess of the number of hours constituting a normal working day ? (a) If so, to what wages for overtime work are they entitled?" Under issue No. 1 the wireman was held to be a skilled worker and the time keeper and lineman, semi skilled, disagreeing with their contentions that they were unskilled workers.
Under issue No. 2 the Authority held that the second notification of 1956 only provided for the minimum rates of wages of unskilled labour including casual labour in.
the employment of the City of Nagpur Corporation.
The applicants mentioned in issue No. 2 who had worked on weekly days of rest i.e., Sundays were accordingly held disentitled to claim wages for work done on those days in the absence of any provision made by the State Government under section 13 (1) (c) of the Act.
Rule 25 of the M.P. Minimum Wages Rules was held not to provide for payment for work on a day of rest envisaged by section 13 (1 ) (c) of the Act.
Though in view of this decision under issue No. 2 issue No. 3 was held not to survive, still a decision on issue No. 3 was also recorded, the details of which, 165 are not necessary to mention.
Under issue No. 3 (a), in the absence of a provision by the State Government under section 1 3 (1) (c) of the .Act for payment for work done on weekly days of rest the applicants were held disentiled to claim payment under the Act.
Issue No. 4 and 4(a) were decided against the chowkidars and the motor driver concerned.
All the four applications were accordingly dismissed with costs.
Feeling aggrieved by the order of the Authority four special civil applications were presented in the Bombay High Court, Nagpur Bench, under article 227 of the Constitution.
The High Court disagreed with the view of the Authority on the interpretation of the second notification and held that the second notification was intended to, apply to all employees and was not confined only to unskilled workmen as was the case with the notification of 1951.
It, however, upheld the view of the Authority that ordinary rate of wages contemplated by r. 25 means ordinary minimum rate of wages, considering this view to be in accordance with the view taken by the Bombay High Court in the Union of India vs B. D. Rathi(1).
On behalf of the appellants the only point.canvassed in these two appeals arises out of the rejection of their claim with regard to overtime work done by them and work done by them on weekly rest days.
On behalf of the respondents, however, it was contended that the High Court was wrong in the construction placed by it, on the notification of 1956.
Minimum Wages were fixed by the Government by means of a notification under section 5 of the Act on February 21, 1951.
According to this notification the Government fixed "minimum rates of wages for unskilled labour including casual labour in respect of scheduled employments" mentioned in the schedule in that notification.
The item which concerns us is item No. 2 which reads as "employment under any Local Authority".
Various rates were fixed for certain categories of employees against this item.
This notification so far as relevant reads : "Nagpur, the 21st February, 1951.
No. 848 1758 XXIII of 1950 In exercise of the powers conferred by sub section (2) of section 5 of the (XI of 1948) the State Government are pleased to fix the following minimum rates of wages for unskilled labour including casual labour in respect of the scheduled employments as mentioned in the schedule below, the same having been previously published as inquired by clause (b) of sub section (1) of (1) A.I.R. 1963 Bom.
166 the said section and further to direct that they shall come, into force at once: Schedule of the Minimum rates of Wages Serial No. and name of Schedule employment : Minimum rates of wages for unskilled labour (including casual labour) 2.
Employment under any local authority Re. 12/ per day for adult female labour at all other centres.
Re. 1 / Per day for adult male at Nagpur town and in Bhandara and Balaghat Districts. Re. /14/ in Wardha, Buildara, Akola, Nimar, Hoshangabad and Nagpur districts (including Nagpur town).
/13/ in Jabalpur, Katni, and Sagar towns and places within 10 miles radius of these towns. ' Re. /12/ in Amravati, Yeotamal, Betul and chanda Districts.
In this notification minimum wages in respect of some other categories of employees.
which do not concern us were also fixed.
On February 23, 1956 the Government issued the following notification fixing, revised minimum rates of wages in supersession of those fixed under the notification of 1951 : "No. 566 451 XXIII.
In exercise of the powers conferred by clause (b) of subsection (1) of section 3 read with sub section (2) of section 10 of the (?(I of 1948) and after consulting the Advisory Committee and the Advisory Board as required by sub section (1) of section 5 thereof, the State Government are pleased to revise the minimum rates of wages in respect of the scheduled employment as mentioned in schedule below in supersession of those fixed under this department notification No. 484 1758 XXIII of 1950 dated the 21st February, 1951 and to further direct that the minimum rates of wages so revised shall come into force at once SCHEDULE Name (if scheduled employment: (Employment under any local authority).
Minimum rates of wages : Re.
1/2/ per day for adult male and Rs. /12/ for adult female labour at Nagpur, Jabalpur and Akola.
/14/ per day for adult male and Re.
/9/ for adult female labour in all other centres.
167 The above rates are inclusive of dearness allowance or compensatory cost of living allowance and are subject to reduction on account of concessions in respect of supplies of essential commodities at concession rates supplied by the employer when so authorised under section II of the said Act.
" As observed earlier, the respondents raised the question that.
second notification did not supersede the earlier notification as to take within its fold all employees as held by the High, Court but it was only confined to unskilled labour including casual labour the minimum rates of whose wages were determined under the earlier notification of 1951.
To this aspect we will revert later.
The point strenuously canvassed on behalf of the appellants.
relates to the construction to be placed on r. 25 of the M. P. Minimum Wages Rules, 1951 made under section 30 of the Act.
That, rule provides for extra wages for overtime and reads : "25.
Extra wages for overtime : When a worker works in an employment for more than nine hours on any day or for more than fifty four hours in an week, he: shall, in respect of overtime work, be entitled to wages (a) in the case of employment in agriculture, at one and a half time the ordinary rate of wages ,, (b) in the case of any other scheduled employment, at double the ordinary rate of wages.
Explanation.
The expression 'ordinary rate of wages ' means the basic wage plus such allowances including the cash equivalent of the advantages accruing through the concessional sale to the person employed of food grains and other articles as the person employed is for the time being entitled to but does not include bonus.
(2) A resister showing overtime payments shall be kept in Form IV.
(3) Nothing in this rule shall be deemed to affect the provisions of the .
" It is common ground between the parties that ' Sunday has been declared to be a day of rest and the normal working hours per day are 9 hours a day or 54 hours a week.
According to Shri Dhabe the appellants ' learned counsel the words "at double the ordinary rate of wages" used in cl.
(b) of r. 25 mean double the rate of wages which are actually being paid to the employees concerned and not double the rate of wages fixed under the Act as minimum wages, whereas according to Dr. Barlingay, learned counsel for the respondent, the Act is only concerned with providing 168 for minimum wages and if an employee is being paid more, than minimum wages so provided, the Act does not operate and the employer cannot be compelled to pay higher wages.
The em ployees of the corporation are already being paid much higher wages than those fixed under the Act as minimum wages and, therefore, so contended Dr. Barlingay, there is no legal obligation on the employer to pay higher wages.
The provision requiring payment at double the ordinary rate of wages contained in r. 25, must, according to the respondent 's argument, be read as "the ordinary rate of minimum wages fixed.
" Let us first deal with this question.
The Act which was enacted, in 1948 has its roots in the recommendation adopted by the International Labour Conference in 1928.
The object of the Act as stated in the preamble is to provide for fixing minimum rates of wages in certain employments and this seems to us to be, clearly directed against exploitation of the ignorant, less organised and less privileged members of the society by the capitalist class.
This anxiety on the part of the society for improving the general economic condition of some of its less favoured members appears to be in supersession of the old principle of absolute freedom of 'contract and the doctrine of laissez faire and in recognition of the new principles of social welfare and common good.
Prior to our Constitution this principle was advocated by the movement for liberal employment in civilised countries and the Act which is a pre Constitution measure was the offspring of that movement.
Under our present Constitution the State is now expressly directed to endeavour to secure to all workers (whether agricultural, industrial or otherwise) not only bare physical subsistence but a living wage and conditions of work ensuring a decent standard of life and full enjoyment of leisure.
This Directive Principle of State Policy being conducive to the general interest of the public and, therefore, to the healthy progress of the nation as a whole, merely lays down the foundation for appropriate, social structure in which the labour will find its place of dignity, legitimately due to it in lieu of its contribution to the progress of national economic prosperity.
The Act has since its enactment been amended on several occasions apparently to make it more and more effective in achieving its object which has since secured more firm support from the Constitution.
The present rules under section 30, it may be pointed out, were made in October, 1950 when the State was under a duty to apply the Directive Principles in making laws.
No doubt the Act, according to its preamble, was enacted to provide for fixing minimum rates of wages, but that does not necessarily mean that the language of r. 25 should not be construed according to its ordinary, plain meaning, provided of course, such construction is not inconsistent with the provisions of the Act and there is no other compelling reason for adopting a different construction.
A preamble though a key to open the mind of the Legislature, cannot be 169 used to control or qualify the precise and unambiguous language of the enactment.
It is only in case of doubt or ambiguity that recourse may be had to the, preamble to, ascertain the reason for the enactment in order to discover the true legislative intendment.
By using the phrase "double the ordinary rate of wages" the rule making authority seems to us to have intended that the worker should be the recipient of double the remuneration which he, in fact, ordinarily receives and not double the rate of minimum wages fixed for him under the Act.
Had it been intended to provide for merely double the minimum rate of wages fixed under the Act the rulemaking authority could have so expressed its intention in clear and explicit words like "double the minimum rate of wages fixed under the Act".
This intendment would certainly have been stated in the explanation added to r. 25 (1 ) in which the expression "ordinary rate of wages" has been explained.
The word "ordinary" used in r. 25 reflects the actuality rather than the worker 's minimum entitlement under the Act.
To accept Dr. Barlingay 's suggestion would virtually amount to recasting this phrase in r. 25 for which we find no justification.
This rule calls for practical construction which should.
ensure to the worker an actual increase in the wages which come into his hands for his use and not increase calculated in terms of the amount assured to him as a minimum wage under the Act.
The interpretation suggested on behalf of the respondents would have the effect of depriving most of the workers who are actually getting more than the minimum wages fixed under the Act of the full benefit of the plain language of r. 25 and in case those workers are actually getting more than or equal to double the minimum wages fixed, this provision would be of no benefit at all.
This construction not only creates a mere illusory benefit but would also deprive the workers of all inducement to willingly undertake overtime work with the result that it would to that extent fail to advance and promote the, cause of increased production.
We are, therefore, clearly of the view that r. 25 contemplates for overtime work double the rate of wages which the worker actually receives, including the casual requisites and other advantages mentioned in the explanation.
This rate, in our opinion, is intended to be the minimum rate for wages for overtime work.
The extra strain on the health of the worker for doing overtime work may well have weighed with the rule making authority to assure to the worker as minimum wages double the ordinary wage received by him so as to enable him to maintain proper standard of health and stamina.
Nothing rational or convincing was said at the bar why fixing the minimum wages for overtime work at double the rate of wages actually, received by the workmen should be considered to be outside the purpose and object of the Act.
Keeping in view the overall purpose and object of the Act and viewing it harmoniously with the general scheme of industrial legislation in the country in the background.
of the Directive Principles contained in our.
1208SupCI/72 170 Constitution the minimum rates of wages for overtime work need not as a matter of law be confined to double the minmium wages fixed but may justly be fixed at double the wages ordinarily received by that workmen as a fact.
The Bombay High Court has no doubt held in Union of India vs B. D. Rathi(1) that "or dinary rate of wages" in r. 25 means the minimum rate for normal work fixed under the Act.
The learned Judges sought support for this view from section 14 of the Act and r. 5 of the Railway Servants (Hours of Employment) Rules, 1951.
The workers there were employees of the Central Railway.
With all respect we are unable to agree with the approach of the Bombay High Court.
Section 14 of the Act merely lays down that when the employee, whose minimum rate of wages is fixed by a prescribed wage period, works in excess of that period the employer shall pay him for the period so worked in excess at the overtime rate fixed under the Act.
This section does not militate against the view taken by us.
Nor does a provision like r. 5 of the Railway Rules which merely provides for 54 hours employment in a week on the average in any month go against our view.
The question is not so much of minimum rate as contrasted with the contract rate of wages as it is of how much actual benefit in the form of receipt of wages has been intended to be assured to the workman for doing overtime work so as to provide adequate inducement to them willingly to do overtime work for increasing production in a peaceful atmosphere in the industry.
The problem demands a liberal and rational approach rather than a doctrinaire or technical legalistic approach.
The contract rate is not being touched by holding that r. 25 contemplates double the rate of wages which actually come into the workman 's hands any more than it is touched by fixing the minimum rate of wages under sections 3, 4 and 5 of the Act.
The decision of the Mysore High Court in Municipal Borough, BiJapur vs Gundawan (M.N.) & ors.(2) and of the Madras High Court in Chairman of the Madras Port Trust vs Claims Authority & ors.
(3) also take the same view as the Bombay High Court does.
We need not, therefore, deal with them separately.
Coming now to the notifications, in our view the notification dated February 23, 1956 has to be read in the background of the notification dated February 21, 1951 with the result that the later notification must also be held to be confined to unskilled labour.
It is no doubt true that the notification of 1951 dealt with several categories of employees.
But that in our opinion does not militate against the construction that the.
second notification has only to be adjusted with and fitted into the first notification in so far as it varies or revises some of the rates fixed in the earlier notification without extending its operational boundaries by deleting the word "unskilled" from the expression "unskilled labour".
The (1) A.I.R. 1963 Bom.
(2) A.I.R. 1965 Mys. 317.
(3) A.I.R. 1957 Mad 69 171 High Court was, therefore, not right in holding the second notification to be applicable to all categories of labour.
The result, therefore, is that both the appeals are allowed and the case is sent back to the Authority under the for a fresh decision in accordance with law and in the light of the observations made above.
Dr. Barlingay undoubtedly desired us to go into various claims of the employees but in our view it would be more in the interest of justice that the matter is remitted back to the Authority, for a fresh decision.
The appellants would get their costs in this Court.
S.N. Appeals allowed.
| IN-Abs | Nine employees of the octroi department, 13 employees of the water works.
department and a time keeper of Nagpur Corporation applied under section 20 of the Minimum Wages Act to the Small Causes Court of Nagpur for overtime wages at the rate of double the wages for the period they worked beyond prescribed hours and holidays.
The authority raised several issues but they were decided against the applicants and their applications were dismissed.
Being aggrieved the said decision, four applications were presented before the High Court under article 227 of the Constitution and the High Court also upheld the view of the authority.
It was contended by the appellants that under Rule 25 of M.P. Minimum Wages Rules, 1,1951, they were entitled to overtime wages at double the ordinary rate of wages for the period they worked beyond prescribed hours and holidays.
For their claims they relied on 2 minimum wages notification one dated 21 2 51 and the other dated 23 2 56.
On behalf of the appellants the only point canvassed before this Court was the rejection of their claim with regard to overtime work done by them and work done on weekly rest days.
The respondent contended that as the employees of the Corporation were paid higher wages than those fixed under the Act as minimum wages, the Act did not operate, and the employer could not be compelled to pay higher wages.
Secondly, the second notification did not supersede the first notification which only applied to unskilled labour as to, cover all employees skilled or unskilled.
Further, the provision inquiring payment at double the ordinary rate of wages contained in Rule 25 must be read as the ordinary rate of minimum wages fixed.
Allowing the appeal, HELD : (i) Rule 25 contemplates overtime work at double the rate of wages, which the worker actually receives, including the casual requisite and other advantages mentioned in the explanation.
By using the phrase "double the ordinary rate of wages", the rule making authority intended that the worker should be the recipient of double the remuneration which he, in fact, ordinarily receives, and not double the rate of minimum wages fixed for him under the Act.
Had it been intended to provide for merely double the minimum rate of wages fixed under the Act, the rule making authority could have so expressed its intention in clear and explicit words.
The word "Ordinary" used in rule 25 reflects the actuality rather than the workers ' minimum entitlement under the Act.
169A D] (ii) The second notification was not applicable to all categories of labour as wrongly held by the High Court.
The second notification has to be read in the background of the first notification with the result that 162 the later notification must also to, be held to be confined to unskilled labour in so far as it varies revises some of the rates fixed in the earlier notification without extending its operational boundaries by deleting the word "unskilled" from the explanation "unskilled labour".
[170G] Union of India v B. D. Rathi, A,.
I. R .
1963, Bom,. 54, referred to and distinguished.
|
Appeal No. 855 of 1968.
Appeal by Special Leave from the Award dated October 26, 1967 of the National Industrial Tribunal, Calcutta in Reference No. NIT 3 of 1967.
D. N. Mukherjee, for the appellant.
P. section Khera and section K. Nandy, for respondents Nos. 1 and 3.
The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, by special leave, is directed against the Award dated October 26, 1967 of the National In dustrial Tribunal, Calcutta in Reference No. NIT 3 of 1967, holding that for the accounting year 1965 66, the quantum of bonus payable by the appellant to its workmen is 20% of the effective salaries or wages with a further direction to set on a sum of Rs. 1,46,252.
The appellant, Indian Cable Company Ltd. (hereinafter to be referred as the Company) occupies a very prominent position in the Cable Industry of India having its Head Office at Calcutta and its factory at Jamshedpur.
It has, branches in Bombay, Madras, New Delhi, Kanpur, Ahmedabad, and Bangalore.
(In addition to insulated cables, the Company manufactures Aluminium Rods, Radio Aerials, Fuse Wires and other products.).
Its paid up capital is Rs. 2,48,65,450.
It employed workmen numberingover 5000.
The gross effective salaries and wages of its employees for the relevant accounting year amounts to Rs. 1,05,32,880.
Its accounting year is from 1st April to 31st March of the succeeding year.
For the accounting year 1964 65, the Company declared and paid bonus at 20% to all employes in accordance with the provisions of the (hereinafter to be referred as the Act).
For the year in question 1965 66, it calculated a sum of Rs. 23,68,785 as available surplus.
This amount was arrived at by the Company after calculating direct tax without deducting the provision for payment of bonus payable to its workmen.
A sum of Rs. 14,21,271 being 60% of the said available surplus was declared as bonus for the year 1965 66.
This amount represented 13 51% of the wage bill.
The workmen were dissatisfied with this offer of bonus at 13.51% and demanded payment of bonus at the maximum rate of 20% as provided in the Act.
In consequence they raised a dispute with the Company.
In view of the agreement dated November 24, 1966 between the parties to refer the claim for additional bonus for adjudication to a Tribunal, the workmen received the bonus at 108 the rate of 13.51% offered by the Company.
The Central Government by order dated June 23 1967 referred for adjudication to the National Industrial Tribunal, Calcutta, the following dispute "What should be the quantum of bonus payable to the Workmen of the Indian Cable Company Limited Calcutta for the accounting year 1965 66" The Unions contended before the Tribunal that the computa tion of allocable surplus by the Company has not been properly made in accordance with the Act and that several items shown in the profit and loss account as expenditure have to be added back to arrive at the actual gross profits.
The Unions further alleged that the Company has spent large amounts for payment of liability for future years with a view to reduce the available and allocable surplus, which in consequence has resulted in, the reduction of percentage of bonus.
The Company on the other hand maintained that it has kept proper accounts which have been audited by a reputed firm of auditors Messrs Lovelock & Lewes and that the computation of allocable surplus has been properly arrived at having due regard to the provisions of the Act.
The Com pany denied the allegations of the Unions that enormous expenditure has been shown with a view to reduce the quantum of bonus.
On the other hand, the Company pleaded that all items of expenditure were justified and those items are deductable in considering, the claim for bonus.
At this stage it may be mentioned that the Unions served interrogatories requiring information on various matters and there is no controversy that the Company furnished all the informations that were 'Called for.
Before the Tribunal the Company required various deductions to be made from the net profits shown in its profit and loss account.
On the other hand, the Unions required various items to be added back.
The Tribunal accepted the contentions of both the parties with regard to certain items.
We will in due course refer to the items which are in dispute before us at the instance of both the Company and the Unions.
The Tribunal computed the, available surplus at Rs. 37,54,713, 60% of this amount being Rs. 22,52,828 was fixed as allocable surplus.
The Tribunal held that a sum of Rs. 21,06,576 being bonus at 20% of the gross effective salaries and wages was payable for the year in question and it directed the surplus amount of Rs. 1,46,252 to be set on.
As the bonus at the rate of 13.51% had already been declared and paid by the Company, the Tribunal directed the payment of the balance 6.49% within the period mentioned 109 in the Award.
One aspect which has to be acted is that (in calculating the available surplus, the Tribunal before calculating the notional direct tax, deducted the bonus payable for the accounting year in question.
The grievance of the Company, as placed before us by its learned counsel Mr. D. N. Mukherjee, relates to three items (1) the method of computation of notional direct tax; (2) disallowance of the deduction from gross profits of the sum of Rs. 2.65 lakhs made as ex gratia payment for the accounting year 1964 65 to employees drawing emoluments exceeding Rs. 750 per mensem; and (3) disallowance of the claim for re 'turn on provision for doubtful debts.
The first contention relates to the principle to be adopted for calculating direct tax when computing the available and allocable surplus for payment of bonus under the Act.
According to the Tribunal, under sections 6 and 7 of the Act, the bonus payable for ,the relevant accounting year has to be deducted from the grossprofits for calculation of direct tax or alternatively rebate for bonus found payable has to be calculated and 60% of the rebate has to be added back as allocable surplus.
The Tribunal took notice of the fact that the Income tax Authorities did not object to deduction of the provision made by the Company for payment of bonus for the accounting year 1965 66.
On this reasoning the Tribunal added back to the gross profits as per the profit and loss account the provision made for payment of bonus.
For coming to this view the Tribunal followed its previous decision in Indian Oxygen Ltd. vs Their Workmen (N.I.T. 1 of 1966).
The Tribunal has also noted that its Award in the Indian Oxygen Ltd. was pending appeal in this Court.
According to Mr. D. N. Mukherjee, this method of calculation of direct tax under the Act, adopted by the Tribunal is contrary to the decisions of this Court.
We are in entire agreement with this contention of Mr. Mukherjee.
In view of the decisions of this Court, to which we will immediately refer, Mr. P. section Khera, learned counsel for the Unions was unable to support the reasoning of the Tribunal on this aspect.
The question of calculation of direct tax under the Act was considered for the first time by this Court in Metal Box Co. of India Ltd. vs Their Workmen.(1) It was held therein that the nationalc tax liability is to be worked out by first working out the gross profits and deducting therefrom the prior charges under section 6, but not the bonus payable to the employees.
Therefore, it is clear from this decision that an employer is entitled to deduct (1) ; 110 his tax liability without deducting first the amount of bonus he would be liable to pay from and out of the amount computed under sections 4 and 6 of the Act.
The same principle, has been reiterated in The Workmen of William Jacks and Company Ltd. Madras vs Management of William Jacks and Co., Madras,(1) Delhi Cloth and General Mills Co. Ltd. vs Workmen(2) and Indian Oxygen Ltd. etc.
vs Their Workmen.
(3) In fact the last decision overruled the decision of the National Industrial Tribunal in Reference No. NIT 1 of 1966, which has been followed by the present Tribunal.
We may also state that after the first decision of this Court, referred to above, the Act was amended in 1969.
The last three decisions of this Court considered the question whether the amendments effected to the Act had made ' any change in the principle laid down by this Court in the first decision.
It was uniformly held in all the three decisions that the amendment has not effected any change in the principle laid down in the earliest decision that the tax liability under the Act is to be worked out first by working out the gross profits and deducting therefrom bonus payable to the employees.
Therefore, it follows that the Tribunal committed an error in law in corrupting, direct tax after deducting bonus.
Therefore, this point will have to be held in favour of the appellant.
The second item relates to the disallowance of Rs. 2.65 lakhs which represented the ex gratia payment made by the Company to certain employees drawing, emoluments exceeding Rs. 750 per mensem for the year 1964 65.
The Company claimed that this amount should be deducted from the gross profits whereas the Unions contended that the same has to be added back to the gross profits shown in the profit and loss account.
The factual position relating to this claim is as follows: From the letter dated February 4, 1966, Ext. 1, written by the Company to one of its officers Mr. section N. Banerjee, it is seen that the Company in appreciation of the officer 's services during the year 1964 65 made an ex gratia payment of Rs. 90.
Mr. Banerjee has given evidence on behalf of the Unions.
He has deposed to the fact that he was drawing about Rs. 1,000 per mensem and that he received the letter Ext.
I as well as the sum of Rs. 90 mentioned therein.
He has further stated that over and above this sum of Rs. 90 he has also, received the bonus payable to him under the Act for the year 1964 65.
He has also deposed to the effect that the ex gratia payment of Rs.( 90 was paid to him in lieu of bonus calculated on the difference in emoluments drawn by him and the ceiling of Rs. 750 per mensem fixed by the Act.
It was (1) ; (2) ; (3) ; 111 the practice of the Company to pay bonus to all the members of its staff without application of any ceiling.
In view of the fact that a ceiling had been fixed under the Act, to make up for the lesser amount that the employees like Mr. Banerjee will get under the Act, this amount of Rs. 2.65 lakhs was paid to all such officers.
The Tribunal accepted the evidence of Mr. Banerjee that the ex gratia amount was paid to keep up the old practice of the Company of paying all the members of the staff without the application of any ceiling.
The Tribunal held that such a payment was not an item which could be deducted from the gross profits under the Act as claimed by the management.
Accordingly, it added back the sum of Rs. 2.65 lakhs to the gross profits shown in the profit and loss account.
Mr. Mukherjee urged that the Company was justified in claiming the above amount by way of deduction.
He referred us to the definition of "employee" in section 2(13) of the Act as also to the employees declared eligible for bonus under section 8.
He also relied on sections 10 and 11 which make it obligatory on an employer to pay the minimum bonus and also the maximum bonus upto 20% respectively.
We are not inclined to agree with the contention of Mr. Mukherjee that the Tribunal committed an error when it added back the sum of Rs. 2.65 lakhs.
From the evidence of Mr. Banerjee, which has been accepted by the Tribunal, read along with the letter Ext.
1, it is clear that Mr. Banerjee received not only bonus due to him under the Act, but also the extra amount of Rs. 90.
Mr. Banerjee was admittedly drawing a salary of Rs. 1000 per mensem.
For a person to be an "employee" under section 2(13), among other things, he is a person drawing a salary or wage not exceeding Rs. 1600 per mensem.
Under section 8, it is provided that every employee is entitled to be paid in an accounting year bonus as per the Act provided he has worked in the establishment for not less than thirty working days in that year.
Section 10, provides for payment of minimum bonus to every employee.
Similarly section 11 provides for payment of bonus to every employee subject to a maximum of 20% of his salary or wage.
According to Mr. Mukherjee there is no prohibition in the Act from paying bonus to officers like Mr. Banerjee, upto a maximum of 20%.
Therefore, when the payment as in Ext.
1, has been made to officers like Mr. Banerjee and others, such amounts have to be computed as an item of expenditure, under the Second Schedule of the Act.
It is no doubt true that an officer drawing a salary not exceeding, Rs. 1600 per mensem is an employee under section 2(13) and he will also be eligible for payment of bonus under section 8 read with sections 10 and 11 of the Act.
But ,the point that is missed by the learned counsel is the limitation 112 contained in section 12.
Though officers drawing salary upto Rs. 1600 per mensem are employees under section 2 (13) and eligible for bonus, still for purposes of calculation of bonus payable under sections 10 and 11, such officers, whose salary exceeds Rs. 750 per mensem, for calculating bonus, the, salary or wages per month will be taken at the maximum of Rs. 750 per mensem.
That is, if an officer is getting, Rs. 1500, per mensem.
he will be eligible for onus; nevertheless for calculating bonus payable to him he will be treated as drawing a salary of only Rs. 750 per mensem.
Therefore, Mr. Banerjee, in the case before.
, us, has admittedly to be paid bonus, which is due to him under the Act for the year 1964 65 on the, basis that his salary is only Rs. 750 per mensem.
What the Company has done was to pay him not only the bonus as calculated under the Act, but also an additional amount.
Such additional amount paid to all such officers totalling Rs. 2.65 lakhs cannot be considered to be an expenditure debited directly to Reserves.
The Tribunal was justified in adding back this amount to the gross profits.
The third item relates to return on provision for doubtful debts.
The Company had calculated return of Share capital and Reserves.
It further claimed a return at 6% on Rs. 2.5 lakhs, which according to it was a revision for doubtful debts.
The amount claimed as return under this head was Rs. 15,000 and the Company claimed to deduct this amount from the gross profits as an item of expenditure.
The Tribunal has rejected this claim of the Company.
It is not necessary for us to dwell on this point at any great length in view of the decision of this Court in Indian Oxygen Ltd. etc.
vs Their Workmen(1), where the decision of the Tribunal directing such an amount to be added back in computing the gross profits has been approved.
The legal position has been dealt with in the said _judgment.
Accordingly, we hold that the Tribunal was justified in adding back the said amount to gross profits.
Mr. P. section Khera, learned counsel for the Unions has contended that the Tribunal was not justified in allowing deduction of certain items from the gross profits for purposes of computing the available and allocable surplus.
The Unions no doubt have not filed any appeal.
In fact in the particular circumstances of this case the could not have filed an appeal because they have been awarded the maximum 20% allowable under the Act.
But, according to Mr. Khera, if the items on which he has relied on had been added back, the Award of the Tribunal can be maintained even on the basis that the principle adopted by the Tribunal in respect of direct tax is found to be erroneous by this Court.
(1) ; 113 The right of parties like the respondents before us even in labour adjudication to support the decision of the Tribunal on grounds which were not accepted by the Tribunal or on other grounds which may not have been taken note of by the Tribunal, has been recognised by this Court in Management of Northern Railway Co operative Society Ltd. vs Industrial Tribunal, Rajasthan etc.
(" ') In fact this decision had to deal with an appeal filed a Co operative Society against the Award of the Tribunal setting aside the order passed by the Society removing from its service an employee.
This Court permitted the Union concerned, which was respondent in the appeal, to support the Award of the Tribunal, directing reinstatement of the employee on grounds which had not been accepted by the Tribunal and also on ground which had not been taken notice of by the Tribunal.
Similarly, in J. K. Synthetics Limited vs J. K. Synthetics Mazdoor Union(1), this Court permitted the Union, which was the respondent in the appeal, to support the decision of the Industrial Tribunal on a method of computation regarding bonus which was not adopted by the Tribunal.
Though 'the management appellant therein challenged the right of the Union to support the award on other grounds without filing an appeal, that contention was rejected by this Court as follows : "On behalf of the management the right of the union to challenge the multiplier and divisor, in the absence of an appeal by it, is strenuously contested but in our view there is little force in this objection.
The appeal by the employer is against the grant of bonus to, the employees which implies that the method of computation of the gross profits, as well as of the available surplus and the rate at which the bonus is granted can subjected to scrutiny.
It is needless to recount the several priorities that have to be deducted and the items in respect of which amounts have to be added, before arriving at the available surplus.
In an appeal, the sevetat steps which have to be taken for computation of the available surplus, either in respect of the actual amounts or the method adopted, can be challenged.
If so, the union, even where it has not appealed against ,the award, can support it on a method of computation, which may not have been adopted by the Tribunal but nonetheless is recognised by the Full Bench formula of this Court so longing in the final result the amount awarded is not exceeded.
We are supported in this view by a decision of this Court in Management of Northern Railway Cooperative Society Ltd. vs Industrial Tribunal, Rajasthan, (1) ; (2) 114 Jaipur and another(1), where it was held that the respondents were entitled to support the decision of the Tribunal even on grounds which were not accepted by the Tribunal or on other grounds which may not have been taken notice of by the Tribunal while they were patent on the face of the record.
" In the said decision this Court also found support for the above view in the decision of Ramanbhai Ashabhai Patel vs Dabhi Ajitkumar Fulsinji and others(1), though the latter decision related to an election appeal.
We will now deal with the items, which, according to ( 'the Unions should not have been allowed to be deducted from the gross profits.
The first item relates to a sum of Rs. 18,24,047 paid by the Company to retired workmen at Jamshedpur Workshop under a Voluntary Retirement Scheme.
This Scheme is exhibit G. and it was framed on August 9, 1965.
The Scheme states that the Company has been suffering, from an acute shortage of imported raw materials in view of the difficulty in getting foreign exchange and as such production could not be maintained for some, considerable time.
In view of these difficulties it is stated that the Company has found it necessary substantially to reduce the number of workers in the Workshop.
The Scheme offered substantial benefits to workmen who choose to retire voluntarily, namely, ex gratia payment equal to retrenchment compensation under section 25 of the Industrial Disputes Act, and gratuity admissible to the workmen.
There is evidence on the side of the Company that about 450 workmen availed themselves of the Voluntary Retirement Scheme and a sum of Rs. 18,24,047 was paid.
This item has been included in the profit and loss account under the heading "Salary, Wages, Bonus and Retirement gratuities.
" The Company gave a break ,up of these items in answer to the interrogatories furnished to it by the workmen.
The contention on behalf of the Unions is that under the Re tirement Gratuity Scheme, which is in force, a workman retires at the age of 60 and normally during the year 1965 66, the payment of gratuity to persons so retired would have come to Rs. 1.21 lakhs.
Therefore, it was argued that the payment of Rs. 18.24 lakhs and odd paid as lumpsum under the Voluntary Retirement Scheme during the year 1965 66 was not proper as that amount would have in the ordinary course been spread over eight or ten years.
The Tribunal has rejected this claim of the Unions, and in ,,our opinion, quite rightly.
If there had been a retrenchment and compensation had been paid to all these workmen, ;the Unions cannot raise any objection in law to the payment of such amount.
(1) ; (2) [1965]1 S.C.R. 712.
115 If retrenchment had been restored, the junior most men under the principle "last come first go" would have been sent out of service.
On the other hand, the Voluntary Retirement Scheme enabled the younger workmen to continue in service while it offered a temptation for the older employees to retire from service.
The Voluntary Retirement Scheme has not been challenged, as mala fides by the Unions.
We are in agreement with the view of the Tribunal that the payment of compensation to induce the workmen to retire prematurely was an item of expenditure incurred by the Company on the ground of commercial expense in order to facilitate carrying on of the business and it was an expenditure allowable under section 37(1) of the Income tax Act.
It was not an expenditure of a capital nature.
The Tribunal was justified in declining to add back this item of expenditure to the gross profits.
The second item, which according to the Unions should have been added back is the sum of Rs. 65,764 which was claimed as extra shift allowance of plants and machinery added during the year.
The consideration of this claim was postponed by the Income tax Officer on the ground that the Company had not furnished the requisite particulars.
The Company claimed a sum of Rs. 36,10,594 as depreciation allowable under section 32(1) of the Income tax Act.
According to the Unions, as the sum of Rs. 65,764 has not been accepted by the Income tax Officer, the Company can claim depreciation only in the sum of Rs. 35,44,830.
The Tribunal did not accept this contention of the Unions on the ground that the amount of Rs. 65,764 has not been disallowed by the Income tax Officer.
It is now stated in an affidavit filed in this Court on March 23, 1972 by the Chief Financial Accountant of the Company that the Company has filed an appeal against the order of the Income tax Officer refusing to allow Rs. 65,764 as extra shift allowance for the year 1965 66.
In our opinion, the rejection of the Unions ' contention in this regard by the Tribunal is justified.
It is seen that the Company has produced figures for depreciation and that has not been subjected to any serious challenge by the Unions.
Hence the objection regarding extra shift allowance has also to be rejected in view of the decision of this Court, in Jabalpur Bijlighar Karamchari Panchayat vs The Jabalpur Electric Supply Co. Ltd. and another.
(1) The third item objected to by the Unions related to the ex penditure shown by the Company for repairs and renewals.
According to the Unions the expenses shown are very heavy and large and that the Company was not justified in incurring 'the same.
In our opinion, this contention also has been properly rejected by the Tribunal.
Apart from the fact that the Unions (1) A.I.R. 1972 S.C.70 116 are not technically entitled to raise this objection, as they have not pleaded the same in their statement of case filed before this Court, this contention can be rejected even on merits.
The Unions had furnished interrogatories requiring the Company to furnish certain particulars.
Mr. R. N. Gupta, the Chief Financial Accountant of the Company filed an affidavit before the Tribunal giving answers to the interrogatories.
He had categorically given details as to how the amount of Rs. 12.94 lakhs has been incurred as expenses for repairs and renewal.
Mr. Gupta had also given evidence about this matter.
In cross examination he had stated that all the vouchers for repairs and renewal were scrutinised by the auditors and this evidence has been accepted by the Tribunal.
Therefore, the Tribunal was justified in rejecting this claim of the Unions.
The last item relates to the claim made by the Unions that after distribution of bonus at 20% for the year 1964 65, there must have been a surplus and it.
should have been set on for the next year, namely, 1965 66.
This amount so set on should be taken into account for computing bonus for the year 1965 66.
This assertion made on behalf of the Unions was controverted by the Company on the ground that there was no surplus left after paying, the maximum 20% bonus for the accounting year 1964 65.
In fact the evidence of Mr. Gupta shows that apart from there not having been any surplus, the Company Raid 20% bonus merely because they had already announced that they will pay the same.
It is clear from his evidence that bon us at 20% could not have been declared for the year 1964 65 and in order to honour the declaration made by the Company, bonus was paid at that percentage.
This evidence of Mr. Gupta has been, in our opinion, rightly accepted by the Tribunal.
No evidence contra has been adduced by the Unions.
Once the evidence of Mr. Gupta is accepted, it is: clear that there was no surplus after paying bonus for 1964 65.
Therefore, the question of set on does not arise.
This plea of the Unions also has to be rejected.
From what is stated above, it is seen that the only aspect in respect of which the Award of the Tribunal requires modification is in respect of the principle to, be adopted for calculating direct tax.
As we have accepted the contention of the Company in that regard, it follows that recomputation of the available and allocable surplus will have to be made after making a calculation of direct tax without deducting bonus payable for the year 1965 66.
In the original calculation filed by the Company, it calculated tax only in the sum of Rs. 98,10,893.
It has later on corrected this figure by adding a sum of Rs. 1,34, 921 being surtax.
Therefore, the total direct tax will be Rs. 99,45,814.
Here again Mr. 117 Gupta in his affidavit dated March 23, 1972 has given the correct figures.
Therefore the recomputation of the available surplus, allocable surplus and the percentage of bonus for The accounting year 1965 66 on the basis of our judgment will be as follows Rs. Rs. Gross Profit as pier Award 216,16,195 of National Tribunal Less (1) Depreciation admissible under section 32 (1) of I.T. Act. 36,10,594 (2) Development Rebate admissible 6,76,22442,86,818 1,73,29,377 Less: Direct Tax as Per cl. 6 (c) including Di vidend Tax 99,45,814 73,83,563 Less Statutory Deductions Share Capital Rs. 248,65,45021,13,56349,22,387 @ 8 .5%.
Reserves Rs. 46,81,37,73928,08,824 @ 6% (without tak ing into account 6 % of Rs. 250,000/ be ing provision for Doubtful debts) Available Surplus. 24,61,176 Allocable Surplus60% of above 14,76,706 Effective Gross salary 105,32,880 Bonus paid @ 13.51% 14,22,992 Balance .51% 53,714 14.02% 14,76,706 From the above, it will be seen that the workmen will be entitled to bonus at 14.02% of their total salary or wages and the amount will be Rs. 14,76,706 and not Rs. 20% as awarded by the Tribunal.
From this it follows that the further direction in the Award of the Tribunal regarding set on cannot be accepted.
Admittedly, the Company has already declared and paid Rs. 14,22,922 representing 13.51% of the total wages or salary.
Therefore, the balance additional amount that the Company will have to pay by way of bonus to make up the 14.02%, as stated above, is Rs. 53,714.
This amount will be paid by the Company within a period not exceeding two months from today.
The Award of the Industrial Tribunal is accordingly modified and the appeal allowed in part.
Parties will bear their own costs.
G.C Appeal allowed in part.
| IN-Abs | The appellant company declared bonus for the year 1955 56 at 13.51% The workmen demanded bonus at the rate of 20%, the maximum provided in the Payment.of Bonus Act, 1965.
The dispute about the rate of bonus and calculation of the available surplus was referred to the Industrial Tribunal.
The Tribunal held that a sum of Rs. 21,06,576 being bonus at 20% of the gross effective salaries and wages was payable for the year in question and it directed the surplus amount of Rs. 1,46,252/ to be set on As the bonus at the rate of 13.51 % had already been declared and paid by the Company, the Tribunal directed the payment of the balance 6.49% within a prescribed period.
In appeal to this Court against the Tribunal 's award the appellant company contended : (i) that the Tribunal erred in holding that under sections 6 and 7 of the the bonus payable for the relevant accounting year has to be deducted from the gross profits for the calculation of direct tax, (ii) that the Tribunal erred in refusing to deduct from the gross profits the ex gratia payment made to employees in respect of salary above the ceiling of Rs. 750 fixed by the Act.
(iii) that the Tribunal wrongly refused to deduct the reserve for doubtful debts from the gross profits.
On behalf of the respondent workmen it was urged that the Tribunal was not justified in allowing deduction of certain items from the gross profits for purposes of computing the available and allocable surplus.
HELD : (i) In the case of Metal Box Co., it was held by this Court that the notional tax liability is to be worked out by first working out the gross profits and deducting therefrom the prior charges under section 6, but not the bonus payable to the employees.
It is clear from the above decision that an employer is entitled to deduct his tax liability without deducting first the amount of bonus he would be liable to pay from and out of the amount computed under sections 4 & 6 of the Act.
This principle has been upheld by the Court in later cases.
This Court has also held that the amendment of the Act in 1969 has not effected any change in the earlier decision that the tax liability under the Act is to be workedout firstby working out the gross profits and deducting therefrom bonuspayableto the employees.
It followed that the Tribunal committed anerror inlaw in computing direct tax after deducting bonus.
[109H 110D] Metal Box Co. of India Ltd. vs Their Workmen, [1969]1 S.C.R. 750, The Workmen of William Jacks, and Company Ltd. Madras vs Management of William Jacks and Co. Ltd., Madras, A.I.R. 1971 S.C. 08SupCI/72 106 1821, Delhi Cloth and General Mills Co. Ltd. vs Workmen ; and Indian Oxygen Ltd. etc.
vs Their Workmen; , applied.
(ii) Though officers drawing salary upto Rs. 1600 per mensem are employees under section 2(13) of the Act and eligible for bonus, the salary or wages per month will be taken at the maximum of Rs. 750/ permensem.
What the company had done was to pay such men not only the bonus as calculated under the Act, but also in additional amount representing bonus on the emoluments above the ceiling of Rs. 750/ .
Such additional amount paid to all such officers totalling Rs. 2.5 lakhs could not be considered to be an expenditure debited directly to Reserves.
The Tribunal was justified in adding back this amount to the gross profits.
[12A C] (iii) In view of the decision of this Court in Indian Oxygen Ltd. the Tribunal 's decision adding back the deduction claimed by the appellant on account of return on the provision for doubtful debts must be upheld.
[112E F] (iv) The respondents were entitled to support the decision of the Tribunal even on grounds which were not accepted by the Tribunal or on other grounds which may not have taken notice of by the Tribunal while they were patent on the face of the record.
[113A, 114A B] Management, of Northern Railway Co operative Society Ltd. vs Industrial Tribunal, Rajasthan et. ; ; J. K. Synthetics Limited vs J.K. Synthetics Mazdoor Union, and Ramanbhai Ashabhai Patel vs Dabhi Ajitkumar Fulsinji and others; , , followed.
(v) The Voluntary Retirement Scheme had not been challenged as mala fide by the Unions.
The payment of Compensation.
to induce the workmen to retire prematurely was an item of expenditure incurred by the company on the ground of commercial expense in order to facilitate carying on of the business and it was an expenditure allowable under section 37(i) of the Income tax Act.
It was not an expenditure of a capital nature.
The Tribunal was justified in declining to add back this item of expenditure to the gross profits.
[115B C] (vi) The Company had filed an appeal against the order of the Income tax officer postponing consideration of the company 's claim for extra shift allowance.
The Company had produced figures of depreciation and that had not been subjected to any serious challenge by the Unions.
In the circumstances the Tribunal rightly refused to add back the amount claimed by the Company as extra shift allowance.
[1 15F G] Jabalpur Bijlighar Karamchari Panchayat vs
The Jabalpur Electric Supply Co. Ltd. and another, A.I.R. 1972 S.C.70 applied.
(vii) The amount claimed by the Companyin respect of repairs and renewals was supported by evidence and had been accepted by the auditors.
The contention of the Unions that the Company was not justified in incurring the said expenditure had been rightly rejected by the Tribunal.
[1 15A] (viii) Since from the evidence produced on behalf of the company it was clear that there was no surplus after paying bonus for 1964 65 the question of set on for the next year did not arise.
The plea of the Unions in this regard had to be rejected.
[116F] [After working out the available and allocable surplus on the basis of the above findings the Court fixed the bonus payable at 14.02%].
|
o. 189 of 1971.
Appeal under Section 116 A of the Representation of the People Act, 1951 from the judgment and order dated January 8, 1971 of the Madras High Court in Election Petition No. 1 of 1970.
V. P. Raman and Vineet Kumar, for the appellant.
Jagdish Swarup, Socilitor General of India, B. D. Sharma and section P. Nayar, for the Election Commission of India.
B. Sen and Sobhag Mal Jain, for the Supreme Court Bar Association.
The Judgment of the Court was delivered by Beg, J.
This is an appeal under Section 116 A of the Repre sentation of People Act, 1951.
The appellant 's election, held on 11 4 1970, to the Madras Legislative Council from the Madras District Graduates ' Constituency was set aside by a learned Judge of the Madras High Court who decided all the issues except one in favour of the appellant.
The only issue decided against the appellant, which is now before us, was framed as follows : "Whether the first Respondent was not qualified to stand for election to the Graduates Constituency on all or any of the grounds set out by the petitioner in paragraph 7 to 9 of the election Petition" ? Paragraphs 7 to 9 of the election petition against the appellant are lengthy, prolix, and argumentative.
The case and the contentions of the Respondent G. Panneerselvam, the petitioner before the High Court, which were accepted by the High Court, may be summarised as follows Firstly, the whole purpose of Article 171 of the Constitution was to confer a right of "functional representation" upon persons possessing certain educational or other qualifications so that the Appellant Narayanaswami, who had only passed the High School Leaving Examination and was not a Graduate, could not be elected 175 at all to the Legislative Council from the Graduates ' Constituency; secondly, it would be absurd and destructive of the very concept of representation of especially qualified persons that an individual who does not possess the essential or basic qualification of the electors should be a representative of those who are to be represented because of this special qualification of theirs; and, thirdly, the Constitution, being an organic instrument for the governance of the land, must be interpreted in a particularly broad and liberal manner so as to give effect to the underlying principles and purposes of the system of representation sought to be set up by it and not in such a way as to defeat them.
Hence, the educational qualification of the electors should be read into the system of represen tation set up by the Constitution for Legislative, Councils as a necessary qualification of candidates in such constituencies.
Authorities are certainly not wanting which indicate that Courts should interpret in a broad and generous spirit the document which contains the fundamental law of the land or the basic principles of its Government.
Nevertheless, the rule of "plain meaning or "literal" interpretation, described in Maxwell 's Interpretation of Statutes as "the primary rule", could not be altogether abandoned today in interpreting any document.
Indeed, we find Lord Evershed, M.R., saying: "The length and detail of modern legislation, has undoubtedly reinforced the claim of literal construction as the only safe rule".
(See : Maxwell on "Interpretation of Statutes" 12th Edition p. 28).
It may be that the great mass of modem legislation, a large part of which consists of statutory rules, makes some departure from the literal rule of interpretation more easily justifiable today than it was in the past, But, the object of interpretation and of "construction" (which may be broader than "interpretation") is to discover the intention of the law makers in every case (See: Crawford on "Statutory Construction" 1940 Ed. para 157, p. 240 242).
This object can, obviously, be best achieved by first looking at the language used in the relevant provisions.
Other methods of extracting the meaning can be resorted to only if the language used is contradictory, ambiguous, or leads really to absurd results.
This is an elementary and basic rule of interpretation as well as of construction processes which, from the point of view of principles applied, coalesce and converge towards the common purpose of both which is to get at the real sense and meaning, so far as it may be reasonably possible to do this, of what is found laid down.
The provisions whose meaning is under consideration have, therefore, to he examined before applying any method of construction at all.
To these provisions we may now turn.
Article 168 of our Constitution shows that the State Legis latures in nine States in India, including Madras, were to consist of two Houses : the Legislative Assembly and the Legislative, Coun 176 cil.
Article 170 lays down that the Legislative Assembly of each State "shall consist of members chosen by direct election from territorial constituencies in the State, in such a manner as the Parliament may by law determine".
After that, comes Article 171 which may be reproduced in toto here: "1.71(1) The total number of members in the Legislative Council of a State having such a Council shall not exceed one third of the total number of members in the Legislative Assembly of that State,: Provided that the total number of members in the Legislative Council of a State shall in no case be less than forty.
(2) Until Parliament by law otherwise provides, the composition of the Legislative Council of a State shall be as provided in clause (3).
(3) of the total number of members of the Legislative Council of a State (a) as nearly as may be, one third shall be elected by electorates consisting of members of municipalities, district boards and such other local authorities in the State as Parliament may by law specify; (b) as nearly as may be, one twelfth shalt be elected by electorates consisting of persons residing in the State who have been for at least three years graduates of any university in the territory of India or have been for at least three years in possession of qualifications prescribed by or under any law made by Parliament as equivalent to that of a graduate of any such university; (c) as nearly as may be.
one twelfth shall be, elected by electorates consisting of persons who have been for at least three years engaged in teaching in such educational institutions within the State, not lower in standard than that of a secondary school, as may be prescribed by or under any law made by Parliament; (d) as nearly as may be, one third shall be elected by the members of the Legislative Assembly of the State from amongst persons who are not members of the Assembly.
(e) the remainder shall be nominated by the Governor in accordance with the provisions of clause (5).
(4) The members to be elected under sub clauses(a), (b) and (c) of clause (3) shall be chosen in such territorial constituencies as may be prescribed by or under any law made by Parliament,, and the elections under 177 the said sub clauses and under sub clause (d) of the said clause shall be held in accordance with the system of pro portional representation by means of the single transferable vote.
(5) The members to be nominated by the Governor under sub clause (2) of clause (3) shall consist of persons having special knowledge or practical experience in respect of such matters as the following namely: Literature, Science, article cooperative movement and social service.
" The term "electorate", used in Article 171(3) (a)(b) & (c) has neither been defined by the Constitution nor in any enactment by Parliament.
2(1)(e) of the Representation of People Act 43 of 1951, however, says : " 'elector, ' in relation to a constituency means a person whose name is entered in the electoral roll of that constituency for the time being in force and who is not subject to any of the disqualifications mentioned in Sec.
16 of the Representation of the People Act, 1950".
The plain and ordinary meaning of the term " electorate" is confined to the body of persons who elect.
It does not contain, within its ambit, the extended notion of a body of persons electing representatives "from amongst themselves".
Thus, the use of the term "electorale" in Article 171(3) of our Constitution, could not, by itself, impose a limit upon the field of choice of members of the electorate by requiring that the person to be chosen must also be a member of the electorate.
The qualifications of the electors constituting the "electorate" and of those who can represent each " electorate", contemplated by the constitution and then supplemented by Parliament, are separately set out for each house.
We may glance at the provisions relating to Legislative Assemblies first.
Section 16 of the Representation of People Act 43 of 1950 lays down the qualifications of an elector negatively by prescribing who shall be disqualified for registration in an electoral roll.
A disqualified person is one who : (a) is not a citizen of India; or (b) is of unsound mind and stands so declared by a competent court; _or (c) is for the time being disqualified from voting under the provisions of any law relating to corrupt practices and other offences in connection with elections".
Section 19 lays down the two conditions for registration on the electoral roll of a constituency.
The person to be registered must not be less than 21 years of age on the qualifying date and must 178 be ordinarily resident in the constituency.
The persons so registered, whose names appear on the electoral roll, constitute the electorato for the legislative Assembly of each State.
Section 5 of the Representation of People Act, 43 of 1.951 enacts : "5.
Qualifications for membership of a Legislative Assembly: A person shall not be qualified to be chosen to fill a seat in the Legislative Assembly of a State unless (a) in the case of a seat reserved for the Scheduled Castes or for the Scheduled Tribes of that State, he is a member of any of those castes or of those tribes, as the case may be, and is an elector for any Assembly consti tuency in that State; (b) in the case of a seat reserved for an autonomous district of Assam, other than a seat the constituency for which comprises the cantonment and municipality of Shillong, he is a member of a Scheduled Tribe of any autonomous district and is an elector for the Assembly constituency in which such seat or any other seat is reserved for that district; and (c) in the case of any other seat, he is an elector for any Assembly constituency in that State"; Coming to the Legislative Council, we find that the qualifications for the four "electorates" are indicated by article 171(3)(a)(b)(c) & (d).
And, the qualifications of candidates for seats in a Legislative Council are given in Section 6 of the Representation of People Act 43 of 1951 which lays down: "6.
Qualifications for membership of a Legislative Council. (1) A person shall not be qualified to be chosen to fill a seat in the Legislative Council of a State to be filled by election unless he is an elector for any Assembly con stituency in that State.
(2) A person shall not be qualified to be chosen to fill a seat in the Legislative Council of a State to be filled by nomination by the Governor unless he is ordinarily resident in the State".
A look at Article 171(2), set out above, indicates that the composition of the Legislative Council of a State was a matter to be also provided for by law made by Parliament.
It is evident that the constitution makers had directed their attention specifically towards the methods of election and composition of the legislature 179 of each State.
They themselves prescribed same qualifications to be possessed by members of each House of the Legislature.
Article 173 lays down : "173.
A person shall not be qualified to be chosen to fill a seat in the Legislature of a State unless he (a) is a citizen of India, and makes and subscribes before some person authorised in that behalf by the Election Commission an oath or affirmation according to the form set out for the purpose in the Third Schedule; (b) is, in the case of a seat in the Legislative Assembly, not less than twenty five years of age and, in the case of a seat in the Legislative Council, not less than thirty years of age; and (c) possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament".
An important and very noticeable difference between, quali fications prescribed by Parliament for the membership of a Legislative Assembly by Section 5 of the Representation of People Act of 1951 and those for the membership of a Legislative Council by Section 6 of that Act is that, so far as a member of the Legislative Assembly is concerned, he or she has to be an Elector in the Constituency from which he or she stands, but a member of a Legislative Council in a State is not, similarly, required to be a member of the electorate.
All that Parliament says, in Section 6 of the Representation of People Act, 1951, is that the, person to be chosen as a member of the Legislative Council has to be "an elector for any Assembly constituency" in the State to whose legislative Council he was to be chosen.
He has to be "ordinarily resident" in the State to qualify for nomination.
No other qualifications, apart from those found in Article 173 of the Constitution and Section 6 of the Representation of People Act of 1951, are to be found laid down anywhere.
But, an additional qualification was found, by the judgment under appeal before us, to exist by resort ' ing to a presumed legislative intent and then.
practically adding it to those expressly laid down.
It may be possible to look for legislative intention in materials outside the four corners of a statute where its language is really ambiguous or conflicting.
But, where no such difficulty arises, the mere fact that the intentions of the law makers, sought to be demonstrated by what was said by some of them or by those advising them when the Constitution was on the anvil, were really different from the result which clearly follows from language used in the Legislative provisions under consideration, could not authorise the use of such an exceptional mode of construction.
"It is well accepted", said Lord Morris (See: Davies Jankins & 180 Co. vs Davies) ', "that the beliefs and assumptions of those who frame Acts of Parliament cannot make the law".
The judgment under appeal, after discussing the manner in which Article 171 of the Constitution was framed and the different views expressed about the nature of the Second Chambers to be set up by it in our States, says : "The system of functional, which is also called occupational representation, as distinguished from territorial representation, was borrowed from the Irish Constitution and that is the underlying principle in Article 171.
The opinion of political thinkers and statement on the wisdom of such representation may not be unanimous.
Whatever be the divergent views, the accomplished fact in the Constitution is that such a representation has been given recognition and it has to be implemented.
In making the Legislative Council as a representative body, the framers of the Constitution have not made it exclusively one of elected representatives according to their occupations.
It is intended to be a hetergenous and more broad based body consisting of persons of different walks of life, some elected and some nominated, each with the experience in his own field of activity".
The learned Judge concluded; "It is with these objects that clauses (a),, (b), and (c) of Article 171(3) have been conceived so that persons in those walks of life could make their contribution to the Legislative functions of the State.
Article 1.71 in fixing the composition of the Legislative Council as a functional chamber.
has also indirectly laid down certain qualifications and also disqualifications of members to be elected thereunder".
Whatever may have been the opinions of Constitution makers or of their advisers, whose views are cited in the judgment under appeal, it is not possible to.
say, on a perusal of Article 171 of the Constitution, that the Second Chambers set up in nine States in India were meant to incorporate the principle of what is known as "functional" or "vocational" representation which has been advocated by Guild Socialist and Syndicalist Schools of political thought.
, Some of the observations quoted above, in the judgment under appeal itself, militate with the conclusions reached there.
All that we can infer from our Constitutional provisions is that additional representation or weightage was given to persons possessing special type of knowledge and experience by enabling them to elect their special representatives also for Legislative Councils.
The concept of such representation does not carry with it, as a necessary consequence, the further notion that the representative must also possess the very qualifications of those he represents.
In the case of the Graduates ' constituency, it is provided in Article 171(3)(b) that the electors must have held their degrees (1) 1967 2 W.L.R. p. 11 39 @ 11 56.
181 for at least three years before they become qualified an electors.
Thus,. in laying down the test of competence of voters of such a constituency, more possession of degrees by them was not considered sufficient.
Moreover, graduates are not an occupational or vocational group but merely a body of persons with an educational qualification.
It would, therefore, not be correct to describe the additional representation sought to be given to them as an attempt to introduce the "functional" or "vocational" principle.
On the face of it, Article 171 appears to be designed only to give a right to choose their representatives to those who have certain types of presumably valuable knowledge and education.
If the presumption of their better competence to elect a suitable representative in there, as we think that there must be, it would be for the members of such a constituency themselves to decide whether a person who stands for election from their constituency possesses the right type of knowledge, experience, and wisdom which satisfy certain standards.
It may well be that the constitution makers, acting upon such a presumption, had intentionally left the educational qualifications of a candidate for election from the graduates constituency unspecified.
A test laid down by Blackburn J. in R. vs Cleworth(1), to determine what the correct presumption, arising from an omission in a statute should be, was whether what was omitted but sought to be brought within the legislative intention was "known" to the law makers, and could, therefore, be "supposed to have been omitted intentionally".
"It makes no difference", says Craies 'in "Statute Law"(2) "that the omission on the part of the legislature was a mere oversight, and that without doubt the Act would have been drawn otherwise had the attention of the legislature been directed to the oversight at the time the Act was under discussion".
In the case before us, it could not possibly be said that the question to be dealt with was not "known" to the, legislators.
It could not even be said that qualifications of the electors/ as well as of those to be elected were not matters to which the attention of the law makers, both in the Constituent Assembly and in Parliament, was not specially directed at all or that the omission must be by mere oversight.
The provisions discussed above demonstrate amply how legislative attention was paid to the qualifications, of the electors 'as well as of the elected in every case.
Hence, the correct presumption, in such a case, would be that the omission was deliberate.
A glance at the legislative history lying behind Article 171 also enables us to reach the conclusion that the omission by the Constitution makers or by Parliament to prescribe graduation as (1) [1864] 4 BSS 927, 934 (2) Crains on Statute Law 5th En.
182 must be deliberate.
Sections 60 and 61 of the Government of India Act, 1935, deal with composition of Provincial legislatures and of the two Chambers of such legislatures.
The Upper Chambers in the Provincial Legislatures were to be composed of members retiring every third year in accordance with provisions of the Fifth Schedule to the Act.
Rule 10 of this Schedule lays down: "In a Province in which any seats are to be filled by representatives of backward areas or backward tribes, representatives of commerce, industry, mining and planting, representatives of landholders, representatives of universities or representatives of labour, persons to fill those seats. . . shall be chosen in such manner as may be prescribed".
On 30th April, 1936, the Government of India (Provincial Legislative Assemblies) Order of 1936 was issued by His Majesty in Council.
It prescribed the qualifications of persons to be chosen from the "special constituencies" set up for representation in the Legislative Councils, A glance at the provisions relating to these qualifications, including those for the University seats, indicates that it was invariably expressly provided, where it was so intended, that a necessary qualification of a candidate for a seat was that he or she should be "entitled to vote for the choice of a member to fill it".
Hence, legislative history on the subject would also indicate.
that, whenever any qualification of the candidate was intended to be imposed, this was expressly done and not left to mere implications.
We think that the view contained in the Judgment under appeal, necessarily results in writing some words into or adding them to the relevant statutory provisions to the effect that the candidates from graduates ' constituencies of Legislative Councils must also possess the qualification of having graduated.
This contravenes the rule of "Plain meaning" or "literal" construction which must ordinarily prevail.
A logical corollary of that rule is that "a statute may not be extended to meet a case for which provision has clearly and undoubtedly not been made" (See: Craies on Statute Law 6th Edn.
p. 70).
An application of the rule necessarily involves that addition to or modification of words used in statutory provisions is not generally permissible (see e.g. Sri Ram Narain Medhi & Ors.
vs The State of Bombay(1), British India General Insurance Co. Ltd. vs Captain Itbar Singh & Ors.
(2), R. G. Jacob vs Union of India(3).
Courts may deppart from this rule only to avoid a patent absurdity (see e.g. State 'of Madhya Pradesh vs M/s. Azad Bharat Finance Co. & Anr.(4).
In Hira Devi vs District Board, Shahiahanpur(5), this Court observed (1) ; (2) (3) ; (4) A.T.R. (5) A.T.R. 365.
183 "No doubt it is the duty of the Court to try and harmonise the various provisions of an Act passed by the Legislature.
But it is certainly not the duty of the Court to stretch the words used by the Legislature to fill in gaps or omissions in the provisions of an Act".
Cases in, which defects in statutory provisions may or may not be supplied by Courts have been indicated in well known works such as Sutherland 's "Statutory Construction" (3rd Edn.(Vol. 2) (Paragraph 4924 at pages 455 558) and in Crawford 's "Construction of statutes" (1940 Edn.).
Only one passage from the last mentioned work need be cited here: (p. 269) : "Where the statutes meaning is clear and explicit, words cannot be interpolated.
In the first place, in such a case, they are not needed.
If they should be interpolated, the statute would more than likely fail to express the legislative intent, as the thought intended to be conveyed might be altered by the addition of new words.
They should not be interpolated even though the remedy of the statute would thereby be advanced, or a more desirable or just result would occur.
Even where the meaning of the statute is clear and sensible, either with or without the omitted word, interpolation is improper, since the primary source of the legislative intent is in the language of the statute".
We think that the language as well as the legislative history of Articles 171 and 173 of the Constitution and Section 6 of the Representation of People Act, 1951, enable us to presume a deliberate omission of the qualification that the representative of the Graduates should also be a graduate.
In our opinion, no absurdity results if we presume such an intention.
We cannot infer, as the learned Judge of the Madras High Court had done, from the mere fact of such an omission and opinions about a supposed scheme "functional representation" underlying Article 171 of our Constitution, that the omission was either unintentional or that it led to absurd results.
We think that, by adding a deemed to be necessary or implied qualification of a representative of the Graduates which the Constitution makers, or, in any event, the Parliament, could have easily imposed, the learned Judge had really invaded the Legislative sphere.
The defect, if.
any, in the law could be removed only by law made by Parliament.
We conclude, after considering all the relevant constitutional and statutory provisions relating to the qualifications of a candidate for election from the Graduates ' constituency of the Legislative Council of the Madras State, that the appellant possesses all the qualifications laid down for such a candidate.
184 Therefore, we allow this appeal, set aside the Judgment and order of the Madras High Court, and dismiss the, Respondent 's election petition.
The appellant is entitled to his costs throughout.
V.P.S. Appeal allowed.
| IN-Abs | The respondent challenged the appellant selection to the Madras Legislative, Council from the Madras District Graduates ' Constituency on the grounds, (1) that, the purpose of article 171 of the Constitution was to confer a right of functional representation upon persons possessing certain educational or other qualifications so that the appellant who was not a graduate could not be elected to the Legislative Council from the Graduates ' Constituency; (2) that, it would be absurd and destructive of the concept of representation that an individual, who did not possess the essential or basic qualification of the electors, should be their representative, and (3), that, the Constitution, being an organic instrument, must be interpreted in a broad and liberal manner so as to give effect to the underlying principles and purposes of the system of representation sought to be embodied in it.
The High Court set aside the election.
Allowing the appeal to this Court, HELD: (1) (a) Graduates are not an occupational or vocational group, but merely a body of persons with particular educational qualifications.
It would, therefore, not be correct to describe the additional representation sought to be given to them in the Legislative Council as an attempt to introduce functional or vocational representation.
[181B] (b) The qualifications of the elector constituting the electorate, and of those who can represent each electorate, contemplated by the Constitution and supplemented by Parliament, are separately set out for each House.
As regards the Legislative Council, the qualifications for the four electorates are indicated in article 171 (3) (a), (b), (c) and (d).
The plain and ordinary meaning of the term "electorate is that it is the body of persons who elect.
It does not take in the extended notion of a body of persons electing representatives from amongst themselves.
It does not impose a requirement that the person to be chosen must also be a member of the electorate.
[177D F] (c) The qualifications of candidates for seats in the Council are given in section 6 of the Representation of the People Act, 1951.
While a member of the Legislative Assembly should also be an elector in the constituency from which he stands, the member of the Legislative Council is not so required to be a member of the electorate.
All that is required is that the person to be chosen as a member of the Legislative Council should be an elector for an Assembly constituency in the State to whose Legislative Council he is chosen.
[179E] (d) Whatever may have been the opinions of the Constitution makes or their advisors it is not possible to say, on a perusal of article 171, that the Second Chamber found here were meant to provide for functional 173 or vocational representation.
AR that can be inferred is that additional representation or weightage was given to persons possessing special types of knowledge and experience by enabling them to elect their special representatives.
The concept of such representation does not carry with it the further notion that, the representative must also possess the very qualifications of those he represents.
The High Court erroneously travelled outside the four corners of the statutory provisions when there was no ambiguity at all in the language, and by resorting to a presumed legislative intent, it added a qualification to those expressly laid down in the Constitution and other statutory provisions.
[1 80F] Davies Jankins & Co. vs Davies, 1967 (2) W.L.R. p. 1139 (a_) 1156, inferred to.
2(a) Article 171 is designed only to give a right to choose their representatives to those who have certain types of presumably valuable knowledge and education.
If the presumption of their better competence to elect a suitable representative is there, it would be for the members of such a constituency themselves to decide whether a person who stands for election from their constituency possesses the right type of knowledge , experience and wisdom.
The Constitution makers, acting on such a presumption, may have intentionally left the educational qualifications of candidate for election from the Graduates Constituency unspecified.
[181C] (b) It could not possibly be said that the question to be dealt with was not known to the legislators.
The provisions of law show that the qualifications of the electors as well as of those to be elected were matters to which the attention of the law makers, both in the Constituent Assem bly and in Parliament, was specifically directed.
Hence, the omission must have been deliberate.
[181G] R. vs Cleworth, (1864) 4 BSS 927 and Craies on Statute Law6th Edn.
1963 72, referred to.
(c) The legislative history of the Article also shows that the omission by the Constitution makers or by Parliament, to prescribe graduation as a qualification of the candidate from the Graduates ' constituency, was deliberate.
The provisions of the Government of India (Provincial Legislative Assemblies) Order, 1936, prescribing the qualifications of persons to be chosen from special constituencies set up for representation in the Legislative Councils under the Government of India Act, 1935, indicate that it was invariably expressly provided where it was so intended, that a necessary qualification of a candidate for a seat was that he should be entitled to vote for the choice of a member to fill it.
Such a qualification was not left to mere implication.
[181H 182E] (3) It is true that a constitution should be interpreted in a broad and generous spirit, but the rule of "plain meaning" or "literal" interpretation could not altogether be abandoned.
The object of interpretation is to discover the intention of the law makers, and this object can obviously be best achieved by first looking at the language used in the relevant provisions.
A logical corollary of the rule of literal interpretation is that a statute may not be extended to meet a case for which provision has clearly and undoubtedly not been made; and an application of this rule necessarily involves that addition to, or modification of, words used in statutory provisions is not generally permissible.
Courts may depart from this rule only to avoid a patent absurdity.
[175D] Sri Ram Narain Medhi & Ors.
vs The State of Bombay, A.I.R. ; British India General Insurance Co. Ltd. vs
Captain 174 itbar Singh & Ors., ; R. C. Jacob vs Union of India; , ; State of Madhya Pradesh vs M/s. Azad Bharat Finance Co. & Anr.
A.I.R. 1967 S.C. 276; Hira Devi vs District Board, Shabiahanpur, ; & 365, referred to.
From the language as well as the legislative history of articles 171 and 173 of the Constitution and section 6 of the Representation of the People Act, 1951, it could be presumed that the omission of the qualification that the representative of graduate should also be a graduate was deliberate.
By presuming such an intention of the law makers, no absurdity results.
By adding 'deemed to be necessary ' or 'implied ' qualification of a representative of the graduates, which the Constitution makers or Parliament could easily have imposed, the Court would be invading the legislative sphere.
[183F]
|
Appeals Nos. 2 and 4 of 1955.
Appeal by Special Leave from the Order dated the 18th day of November 1954 of the Labour Appel 1243 late Tribunal of India, Bombay in Application (Misc.) Bombay No. 773 of 1954.
H. M. Seervai, J. B. Dadachanji and Rajinder Narain, for the appellant in Civil Appeal No. 2 of 1955 and respondent in Civil Appeal No. 4 of 1955.
D. H. Buch and I. N. Shroff, for the respondents in Civil Appeal No. 2 of 1955 and appellants in Civil Appeal No. 4 of 1955.
M. C. Setalvad, Attorney General for India (G. N. Joshi and P. C. Gokhale with him), for the Intervener (Union of India).
February 3.
The Judgment of the Court was delivered by DAS J.
This is an appeal by special leave from the order of the Labour Appellate Tribunal, Bombay Bench, dated the 18th November 1954 which was made on an application made by the appellant company on the 6th September 1954 under section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950 (Act XLVIII of 1950) which is hereinafter referred to as the 1950 Act.
The appellant company carries on business as assemblers of motor vehicles from "completely knocked down" assemblies imported into India.
There was some appeal pending before the Labour Appellate Tribunal arising out of disputes between the appellant company and its workmen.
It is alleged that the name of the appellant company had been removed by the Government of India from the list of approved manufacturers maintained by them and that, in the result, it had been unable to secure further import licenses for the import of completely knocked down assemblies of motor vehicles and that consequently on and from the 1st November 1953 the company had to lay off a number of its workmen, for it had to operate the various departments of its factory at greatly reduced strength.
As the appellant company saw no prospect of any increase in the scope of its present operation which would provide employment for the workmen who had been laid off, it had become necess 1244 sary to retrench the workmen named in Annexure A to the application.
As those workmen were concerned with the appeal pending before the Labour Appellate Tribunal the company applied to the Appellate Tribunal under section 22 of the 1950 Act for permission to retrench them.
The respondents through their Union, the Automobile Manufacturers ' Employees ' Association, Bombay, filed a written statement on the 1st November 1954 making diverse allegations against the company and contending that the company bad itself to blame for having brought about the lay off.
It was contended that there was no immediate cause for making the application, that the company was motivated by ulterior motives to deprive the workmen of their dues which even according to the company would become due and payable to the workmen on the expiry of the one year of the said lay off period.
It was further alleged that in or about April 1954 the company recalled some of the workmen out of those who had been laid off since November 1953 violating all principles on which a recall should have been made and that by such arbitrary and unscientific recall the company had imposed disproportionate work loads on the recalled workmen, thereby altering their conditions of service to their prejudice.
The respondents maintained that the application was not maintainable in law, was mala fide and should be dismissed.
In the penultimate paragraph of the written statement it was submitted that in the event of the Labour Appellate Tribunal granting the permission in whole or in part such permission should be granted subject to the following conditions: (1) Payment of full wages with dearness allowance for the entire period of lay off; (2) Payment of one month 's notice pay and retrenchment compensation at the rate of one month 's wages including dearness allowance for every completed year of service and part thereof in addition to the gratuity as per the scheme in force in the company; (3) Alternatively to (2) above and in cage the Labour Appellate Tribunal took the view that the 1245 lay off was governed by section 25 C of the , payment of compensation at 50 per cent.
of their wages plus dearness allowance for the entire period of lay off to the date of discharge in addition to the notice pay and gratuity as claimed in (2) above; and (4)Payment of leave wages as per existing rules, taking the entire period of lay off as service.
A number of documents were filed in support of the respective contentions.
The Labour Appellate Tribunal at the very outset of its judgment under appeal states its finding on the merits of the action proposed to be taken by the company as follows: "There can be little doubt that the retrenchment has been occasioned by the failure of the concern to secure sufficient work owing to absence of licenses from Government and, therefore, retrenchment must be regarded as inevitable and the application before us bona fide.
Permission to retrench cannot be refused but for the reasons that we shall state hereafter we make that permission conditional upon the fulfilment of certain terms by the concern".
The company contended before the Labour Appellate Tribunal that its function, while dealing with an application under section 22 of the 1950 Act, was only to give or withhold permission.
This contention was rejected by the Appellate Tribunal with the following observation: "That view is quite untenable as has been repeatedly held by this Tribunal.
We are the authority to whom an application has to be made for permission to retrench, and when such an application is made we must of necessity exercise our judgment and discretion and satisfy ourselves that when the company retrenches it does justice by its employees".
The Labour Appellate Tribunal was clearly influenced by the consideration which, stated in its own words, was as follows: "We do not think that we will be advancing the interest of the employees or of the concern by refusing 1246 retrenchment because the case for retrenchment has been established, and the sooner the workmen are allowed to leave and find for themselves other employment the better for them.
But in order to assure ourselves that on retrenchment the employees receive what in justice they should have, we have decided to give permission to retrench subject to cer tain conditions which in our view are inherent under the Act.
, and which apart from the Act we consider to be just and equitable in the particular circumstances of this case".
In this view of the matter the Labour Appellate Tribunal definitely declined "to leave over the question of compensation for lay off as a legacy of the present troubles; the employees to be retrenched have enough to worry them without having to make claims and have them decided after contest before a Tribunal".
In the result, the Labour Appellate Tribunal gave the appellant company permission to retrench "subject to the terms and conditions of Act XLIII of 1953, provided that each workman is paid at the rate of half basic wages and dearness allowance for the whole period from the date of lay off up to the date of retrenchment (less sums already received as lay off compensation)".
Liberty was given to the company to set off the lay off compensation protanto against the retrenchment relief given by the Act.
Aggrieved by this decision the appellant company applied for and obtained from this Court special leave to appeal against this order.
The respondents subsequently filed an application for special leave to appeal against this decision in so far as the Labour Appellate Tribunal had not allowed their full claim as surmmarised above and in so far as the names of 17 persons had been struck off on the allegation of the company that they were not workmen.
This application of the respondents was also acceded to and the two appeals have been heard together.
The Union of India asked for leave to intervene as important questions of construction of the provisions of the (hereinafter referred to as the 1947 Act) and the 1950 Act were involved.
Such 1247 leave was granted.
and we have heard learned counsel for the Union of India along with learned counsel for the parties.
The question as to the propriety of permitting the names of 17 workmen to be struck off from the application has not been seriously pressed before us.
Only two questions have been canvassed at some length before us, namely . (1)Whether under section 22 of the 1950 Act the Tribunal has jurisdiction to impose conditions when granting the permission asked for; and (2)Whether the conditions imposed in this case are in conformity with law.
It is plain, however, that in case the first question is answered in the negative, the second question will not call for any decision on the present occasion.
In order to correctly answer the questions it will be necessary to bear in mind the general scheme of the two Acts.
The purpose of the 1947 Act is, inter alia, to make provision for the investigation and settlement of industrial disputes.
In order to achieve this avowed object different authorities have been constituted under this Act.
Thus section 3 provides for the constitution of Works Committee whose duty is to promote measures for securing and preserving amity and good relations between the employers and workmen.
The appropriate Government is authorised by section 4 to appoint conciliation officers charged with the duty of mediating in and promoting the settlement of industrial disputes and by section 5 to constitute a Board of Conciliation for promoting the settlement of industrial disputes.
Section 6 empowers the appropriate Government to constitute a Court of Inquiry for enquiring into any matter appearing to be connected with or relevant to an industrial dispute.
Finally, section 7 provides for the constitution of Industrial Tribunals for the adjudication of industrial disputes in accordance with the provisions of the Act.
Section 10 of this Act provides for reference of disputes to a Board, Court or Tribunal.
It will be noticed that under this section it is the appropriate 160 1248 Government which alone can make the reference and set the authority in motion.
The procedure, powers and duties of conciliation officers, Boards, Courts and Tribunals are elaborately prescribed and defined in sections I 1 to 15.
It is to be noted that the conciliation officer, Board, and Court are required to make a report to the appropriate Government while the Tribunal is enjoined to submit its award to the appropriate Government.
The report of a Board or Court and the award of a Tribunal are under section 17 to be published by the appropriate Government within a month from the date of their receipt.
Section 17 A provides that the award of a Tribunal shall become enforceable on the expiry of 30 days from the date of its publication and, subject to the provisions of sub section (1) shall come into operation from such date as may be specified therein and if no date is so specified from the date when the award becomes enforceable as aforesaid.
Section 19 prescribes the period of operation of settlements and awards.
Chapter deals with strikes and lock outs.
Sections 26 to 31 which are grouped together under the heading "Penalties" prescribe punishments.
Section 31 (I) provides that any employer who contravenes the provisions of section 33 shall be punishable with imprisonment for a term which may extend to 6 months or with fine which may extend to Rs. 1,000 or with both.
Section 33, a contravention of which is made punishable by section 31, as it stood before 1950, forbade an employer, during the pendency of any conciliation proceedings or proceedings before a Tribunal, to alter, to the prejudice of the workmen concerned in the dispute, the conditions of service applicable to them immediately before such proceedings, nor, save with the express permission of the conciliation officer, Board or Tribunal, as the case may be, to discharge, dismiss or otherwise punish during the pendency of the proceedings any workman, except for misconduct not connected with the dispute.
It may be noted that under this section the ban on the alteration of the conditions of service was absolute and that permission was necessary only in case of discharge or dismissal or 1249 punishment and even in such case no permission was necessary when the workman was guilty of misconduct not concerned with the pending dispute.
The Only deterrent against a contravention by an employer of the provisions of section 33 was the prosecution of the employer under section 31.
This was hardly any consolation for the workmen, for if an employer took the risk of a prosecution and acted in contra vention of section 33 the workmen could only raise an industrial dispute and ask the appropriate Government to refer the same to a Tribunal but if the Government declined to accede to their prayer the workmen were without any remedy.
This was the position under the 1947 Act before it was amended in 1950.
The 1950 Act was enacted for establishing an Appellate Tribunal in relation to industrial disputes.
Chapter II of the Act deals with the constitution, composition and functions of the appellate tribunal.
Section 7 formulates the jurisdiction of the appellate tribunal.
Section 9 confers on the appellate tribunal all the powers which are vested in a Civil Court when hearing an appeal under the Code of Civil Procedure, 1908.
Section 10 prescribes the period of limitation within which appeals are to be brought before the appellate tribunal.
Under section 15 the decision of the appellate tribunal becomes enforceable on the expiry of 30 days from the date of its pronouncement, provided that where the appropriate Government is of opinion that it would be inexpedient, on public grounds, to give effect to the whole or any part of the decision the appropriate Government may, before the expiry of the said period of 30 days, by order in the Official Gazette either reject the decision or modify it.
Section 22 of this Act provides: "22.
During the period of thirty days allowed for the filing of an appeal under section 10 or during the pendency of any appeal under this Act, no employer sball (a) alter, to the prejudice of the workmen concerned in such appeal, the conditions of service applicable to them immediately before the filing of such appeal, or 1250 (b)discharge or punish, whether by dismissal or otherwise, any workmen concerned in such appeal, save with the express permission in writing of the Appellate Tribunal".
Section 23 on which reliance is placed by learned counsel for the respondents and for the intervener, reads as follows: "23.
Where an employer contravenes the provisions of section 22 during the pendency of proceedings before the Appellate Tribunal, any employee aggrieved by such contravention, may make a complaint in writing, in the prescribed manner to such Appellate Tribunal and on receipt of such complaint, the Appellate Tribunal shall decide the complaint as if it were an appeal pending before it, in accordance with the provisions of this Act and shall pronounce its decision thereon and the provisions of this Act shall apply accordingly". ' Section 29 of this Act provides for penalty for con travention of the provisions of section 22, namely, imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
From what has been stated so far four things are to be noted, namely, (i) that the ordinary and primary jurisdiction of the appellate tribunal is appellate, (ii) that section 22 of this Act confers on the appellate tribunal a special jurisdiction which is in the nature of original jurisdiction, (iii) that section 23 also vests in the tribunal an additional jurisdiction to decide the complaint as if it were an appeal pending before it; and (iv) that section 23 confers on the workmen an additional remedy which they did not have under the 1947 Act.
To fill up the lacuna in the 1947 Act section 34 of the 1950 Act provided for certain amendments of the 1947 Act.
Amongst other things, it substituted a new section for the old section 33 of the 1947 Act.
The new section 33 runs as follows "33.
During the pendency of any conciliation proceedings or proceedings before a Tribunal in respect of any industrial dispute, no employer shall 1251 (a)alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceedings; or (b)discharge or punish, whether by dismissal or otherwise, any workman concerned in such dispute, save with the express permission in writing of the conciliation officer, Board or Tribunal, as the case may be".
It will be noticed that this section has made several changes.
Thus under this section provision is made for obtaining permission as a condition precedent both for altering the conditions of service and for discharging or punishing the workmen and no exception is made for a case of misconduct unconnected with the pending dispute.
Besides this, the following new section was added to the 1947 Act as section 33 A: "33 A. Where an employer contravenes the provisions of section 33 during the pendency of proceedings before a Tribunal, any employee aggrieved by such contravention, may make a complaint in writing, in the prescribed manner to such Tribunal and on receipt of such complaint that Tribunal shall adjudicate upon the complaint as if it were a dispute referred to or pending before it, in accordance with the provisions of this Act and shall submit its award to the appropriate Government and the provisions of this Act shall apply accordingly".
It may be pointed out that the new sections 33 and 33 A thus inserted into the 1947 Act confer distinct benefits on the workmen and give some additional jurisdiction and power to the authorities mentioned therein.
Section 33 A enjoins the Tribunal to decide the complaint "as if it were a dispute referred to or pending before it" and to submit its award to the appropriate Government and provides that the provisions of the Act shall apply to the award.
It is quite clear that the provisions of these two new sections 33 and 33 A of the 1947 Act correspond to and are in pari materia with the provisions of sections 22 and 23 of the 1950 Act and are more or less in similar terms.
The question for our conside 1252 ration is: What are the meaning, scope and effect of these sections.
A cursory perusal of section 33 A of the 1947 Act as well as section 23 of the 1950 Act will at once show that it is the contravention by the employer of the provisions of section 33 in the first case and of section 22 in the second case that gives rise to a cause of action in favour of the workmen to approach and move the respective authority named in the section and this contravention is the condition precedent to the exercise by the authority concerned of the additional jurisdiction and powers conferred on it by the sections.
The authority referred to in the sections is, as we have seen, a Court of limited jurisdiction and must accordingly be strictly confined to the exercise of the functions and powers actually conferred on it by the Act which constituted it.
What, then, are the scope and ambit of the functions and powers with which it has been vested by these sections? When an employer contravenes the provisions of section 33 of the 1947 Act or of section 22 of the 1950 Act the workmen affected thereby obviously have a grievance.
That grievance is two fold.
In the first place it is that the employer has taken a prejudicial action against them without the express permission in writing of the authority concerned and thereby deprived them of the salutary safeguard which the legislature has provided for their protection against victimisation.
In the second place, and apart from the first grievance which may be called the statutory grievance, the workmen may also have a grievance on merits which may be of much more seriousness and gravity for them, namely, that in point of fact they have been unfairly dealt with in that their interest has actually been prejudicially affected by the highhanded act of the employer.
These sections give the workmen the right to move the authority by lodging a complaint before it.
This is a distinct benefit given to them, for, as we have seen, apart from these sections, the workmen have no right to refer any dispute for adjudication.
This complaint is required to be made in the prescribed manner.
Form DD prescribed by rule 51 A of the Industrial 1253 Disputes (Central) Rules, 1947, framed under section 38 of the 1947 Act, like Form E prescribed under section 35 of the 1950 Act, requires the complaining workmen to show in their petition of complaint not only the manner in which the alleged contravention has taken place but also the grounds on which the order or the act of the management is challenged.
This clearly indicates that the authority to whom the complaint is made is to decide both the issues, namely (1) the fact of contravention and (2) the merits of the act or order of the employer.
It is also clear that under section 33 A of the 1947 Act the authority is to adjudicate upon the complaint "as if it were a dispute referred to or pending before it" and under section 23 of the 1950 Act the authority is to decide the complaint "as if it were an appeal pending before it".
These provisions quite clearly indicate that the jurisdiction of the authority is not only to decide whether there has been a failure on the part of the employer to obtain the permission of the authority before taking action but also to go into the merits of the complaint and grant appropriate reliefs.
The extreme contention that under section 33 A of the 1947 Act, on a finding that there has been a contravention of the provisions of section 33, the Tribunal 's duty is only to make a declaration to that effect, leaving the workmen to take such steps under the Act as they may be advised to do, has been negatived by the Labour Appellate Tribunal in Serampore Belting Mazdoor Union vs Serampore Belting Co., Ltd.(1) and by the Bombay High Court in Batuk K. Vyas vs Surat Borough Municipality(1).
The same principle has been accepted and applied by a Full Bench of the Labour Appellate Tribunal to a case under section 23 of the 1950 Act in Raj Narain vs Employers ' Association of Northern India(1).
We find ourselves in agreement with the construction placed upon section 33 A of the 1947 Act and section 23 of the 1950 Act by these decisions.
In our view the scope and ambit of the jurisdiction conferred on the authority named in those (1) (2) (3) , 1254 sections is wider than that conferred on the Criminal Court by section 31 of the 1947 Act and section 29 of the 1950 Act.
The Criminal Court under the two last mentioned sections is only concerned with the first issue herein before mentioned, namely, yea or nay whether there has been a contravention of the respective provisions of the sections mentioned therein, but the authority exercising jurisdiction under section 33 A of the 1947 Act and section 23 of the 1950 Act is to adjudicate upon or decide the complaint "as if it were a dispute referred to or pending before it" in the first case or "as if it were an appeal pending before it" in the second case.
The authority is, therefore, enjoined to go into the merits of the act complained of under section 33 A of the 1947 Act and section 23 of the 1950 Act.
In this sense the jurisdiction of the authority named in these two sections is certainly wider than that of the Criminal Court exercising jurisdiction under the penal sections referred to above.
Having regard to the scope of the enquiry under section 33 A of the 1947 Act and section 23 of the 1950 Act it must follow that the power of the authority to grant relief must be co extensive with its power to grant relief on a reference made to it or on an appeal brought before it, as the case may be.
The provision that the authority concerned must submit its award to the appropriate Government and that the provisions of the respective Acts would be applicable thereto also support the view that the decision of the authority is to partake of the nature of a decision on the merits of an industrial dispute which when published by the appropriate Government will become enforceable under the respective Acts.
It follows, therefore, that the authority referred to in these sections must have jurisdiction to do complete justice between the parties relating to the matters in dispute and must have power to give such relief as the nature of the case may require and as is also indicated by the prayer clause mentioned in the two Forms DD and E referred to above.
In short, these two sections give to the workmen a direct right to approach the Tribunal or Appellate Tribunal for the 1255 redress of their grievance without the intervention of the appropriate Government which they did not possess before 1950 and they provide for speedy determination of disputes and avoid multiplicity of proceedings by giving complete relief to the workmen in relation to their grievances arising out of the action taken by the employer in contravention of the provisions of the relevant sections.
It is significant that this jurisdiction or power has been vested in the Tribunal or Appellate Tribunal whose normal duty is to decide or adjudicate upon industrial disputes and not on any conciliation officer or Board who are normally charged with the duty of bringing about settlement of dis putes.
it is submitted by learned counsel for the Respondents and of the intervener that the scope of section 33 of the 1947 Act and of section 22 of the 1950 Act is precisely the same as that of section 33 A of the 1947 Act and section 23 of the 1950 Act.
The argument is that the two last mentioned sections were enacted only in order to afford an opportunity to the workmen to do what they had been prevented from doing at the earlier stage by reason of the employer taking the law into his own hands and taking action against them without previously obtaining the sanction of the appropriate authority to do so.
If the law permits the workmen to ventilate their grievances at a later stage under section 33 A of the 1947 Act and section 23 of the 1950 Act there can be no logical reason why the law should not permit them to do so at the earlier stage under section 33 of the 1947 Act and section 22 of the 1950 Act.
It is submitted that the purpose of labour legislation being to maintain industrial peace and restore amity and goodwill between the employer and his workmen, it should be the attempt of the Tribunal or the Appellate Tribunal at every stage to try to resolve all disputes which are connected with the matter which is brought before it.
Finally, it is urged that whenever an authority is vested with the power to do or not to do an act it must be regarded as having a discretion and 161 1256 that in exercise of such discretion the authority must be presumed to be vested with power to impose suitable conditions.
Reliance is placed on the decision in The Queen vs County Council of West Riding of Yorkshire(1).
The argument is that the authority concerned may under section 33 of the 1947 Act and section 22 of the 1950 Act grant by way of imposing conditions the same relief which it can grant to the workmen under section 33 A of the 1947 Act and section 23 of the 1950 Act.
We are unable to accept this contention as correct for reasons which we now proceed to state.
The object of section 22 of the 1950 Act like that of section 33 of the 1947 Act as amended is to protect the workmen concerned in disputes which form the subject matter of pending proceedings against victimisation by the employer on account of their having raised industrial disputes or their continuing the pending proceedings.
It is further the object of the two sections to ensure that proceedings in connection with industrial disputes already pending should be brought to a termination in a peaceful atmosphere and that no employer should during the pendency of those pro ceedings take any action of the kind mentioned in the sections which may give rise to fresh disputes likely to further exacerbate the already strained relation between the employer and the workmen.
To achieve this object a ban has been imposed upon the ordinary right which the employer has under the ordinary law governing a contract of employment.
Section 22 of the 1950 Act and section 33 of the 1947 Act which impose the ban also provide for the removal of that ban by the granting of express permission in writing in appropriate cases by the authority mentioned therein.
The purpose of these two sections being to determine whether the ban should be removed or not, all that is required of the authority exercising jurisdiction under these sections is to accord or withhold permission.
And so it has been held we think rightly by the Labour Appellate Tribunal in Carlsbad Mineral Works Co. Ltd. vs Their (1) [1S96] 2, Q.B. 386. 1257 Workmen(1) which was a case under section 33 of the 1947 Act.
Even a cursory persual of section 33 of the 1947 Act will make it clear that the purpose of that section was not to confer any general power of adjudication of disputes.
It will be noticed that under section 33 of the 1947 Act the authority invested with the power of granting or withholding permission is the conciliation officer, Board or Tribunal.
The conciliation officer or the Board normally has no power, under the 1947 Act, to decide any industrial dispute but is only charged with the duty of bringing about a settlement of dispute.
It is only the Tribunal which can by its award decide a dispute referred to it. 'Section 33 by the same language confers jurisdiction and power on all the three authorities.
Power being thus conferred by one and the same section, it cannot mean one thing in relation to the conciliation officer or the Board and a different and larger thing in relation to the Tribunal.
There is no reason to think that the legislature, by a side wind as it were, vested in the conciliation officer and the Board the jurisdiction and power of adjudicating upon disputes which they normally do not possess and which they may not be competent or qualified to exercise.
Further, if the purpose of the section was to invest all the authorities named therein with power to decide industrial disputes one would have expected some provision enabling them to make and submit an award to which the provisions of the Act would apply such as is provided in section 33 A of the 1947 Act or section 23 of the 1950 Act.
There is no machinery provided in section 33 of the 1947 Act or section 23 of the 1950 Act for enforcing the decision of the authority named in those sections.
This also indicates that those sections only impose a ban on the right of the employer and the only thing that the authority is called upon to do is to grant or withhold the permission, i.e. to lift or maintain the ban.
And so it has been held by this Court in Atherton West & Co., Ltd. vs Suti Mill Mazdoor Union(1) which was a case under clause 23 of the U. P. Government Notification quoted on p. 785.
(1) (2) ; , 786 7, 1258 Section 22 of the 1950 Act is in pari materia with section 33 of the 1947 Act and the above clause 23 of the U. P. Government Notification and most of the considerations noted above in connection with these provisions apply mutatis mutandis to section 22 of the 1950 Act.
Imposition of conditions is wholly collateral to this purpose and the authority cannot impose any condition.
And it has been so held we think correctly in G. C. Bhattacharji vs Parry & Co., Ltd., Calcutta(1).
In view of the scheme of these Act summarised above and the language of these sections the general principle laid down in the case of The Queen vs
The County Council of West Riding supra can have no application to a case governed by these sections.
In our judgment the Labour Appellate Tribunal was in error in holding that it had jurisdiction to impose conditions as a prerequisite for granting permission to the company to retrench its workmen and the first question must be answered in the negative.
In the view we have taken on the first question we do not consider it necessary on this occasion to express any opinion on the other question canvassed before us.
The result, therefore, is that this appeal is allowed and the decision of the Labour Appellate Tribunal is set aside and the matter is remanded to the Labour Appellate Tribunal to deal with the application of the company and make the appropriate order according to law.
In the circumstances of this case we make no order as to costs.
Appeal No. 4 of 1955 is dismissed also without costs.
| IN-Abs | Held, (i) that the ordinary and primary jurisdiction of the Labour Appellate Tribunal constituted under the Industrial Disputes (Appellate Tribunal) Act, 1950 is appellate; (ii) that section 22 of the Act confers on the appellate tribunal a special jurisdiction which is in the nature of original jurisdiction; (iii) that section 23 also vests in the tribunal an additional jurisdiction to decide the complaint as if it were an appeal pending before it; and (iv) that section 23 confers on the 1242 workmen an additional remedy which they did not have under the .
The two now sections 33 and 33 A inserted in the Industrial Di putes Act 1947 (XIV of 1947) by Act XLVIII of 1950 confer distinct benefits on the workmen and give some additional jurisdiction and power to the authorities mentioned therein.
Section 33 A enjoins the Tribunal to decide the complaint "as if it were a dispute referred to or pending before it" and to submit its award to the appropriate Government and provides that the provisions of the Act shall apply to the award.
The provisions of these two new sections 33 and 33 A of the 1947 Act correspond to and are in pari materia with the provisions of sections 22 and 23 of the 1950 Act and are more or less in similar terms.
A ban has been put by section 22 of 1950 Act and section 33 of the 1947 Act upon the ordinary right, which the employer has under the ordinary law governing a contract of employment with a view to protect the workmen against victimisation by the employer and to ensure the termination.of the proceedings in connection with industrial disputes in a peaceful atmosphere and the only thing that the authority is called upon to do is to grant or withhold the permission i.e. to lift or maintain the ban.
These sections do not confer any power on the authorities to adjudicate upon any other dispute.
Under section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950 (XLVIII of 1950) the Labour Appellate Tribunal has no jurisdiction to impose conditions as a pre requisite for granting permission to the employer to retrench its workmen.
Under section 33 A of the and section 23 of the 1950 Act the jurisdiction of the authority is not only to decide whether there has been a failure on the part of the employer to obtain the permission of the authority before taking action but also to give a decision on the merits of an industrial dispute and grant appropriate relief which when published by the appropriate Government will become enforceable under the respective Acts.
Serampore Belting Mazdoor Union vs Serampore Belting Co., Ltd. ([1951] , Batuk K. Vyas vs Surat Borough Municipality ([1952] , Raj Narain vs Employer s ' Association of Northern India ([1952] 1 Lab.
L.J. 381), The Queen vs County Council of West Riding of Yorkshire ([1896] 1 Q.B. 386), Carlsbad Mineral Works Co., Ltd. vs Their Workmen ([1953] , Atherton West & Co., Ltd. vs Suti Mill Mazdoor Union ([1953] S.C.R. 780) and Bhattacharji vs Parry & Co., Ltd., Calcutta ([1954] , referred to.
|
o. 15 of 1972.
Appeal by Special Leave from the, _judgment and order dated December 16, 1971 of the Assam and Nagaland High Court in Civil Rule No. 431 of 1970.
C. K. Daphtary and D. N. Mukherjee, for the appellant.
section N. Chowdhury, for respondent Nos. 1 to 4.
M. C. Setalvad and K. P. Gupta, for respondent No. 5.
The Judgment of the Court was delivered by Hegde, J.
In this appeal by special leave the appellant challenges the decision of the High Court of Assam and Nagaland in refusing to set aside the order of the Assam Government dated June 16, 1970 granting a contract to Respondent No. 5 for wholesale supply of country spirit to Tinsukia and North Lakhimpur warehouses for three years from July 1, 1970 to June 30, 1973.
The appellant is a Public Limited Company.
Under a contract entered into between it and the Government of Assam, it had the exclusive privilege of supplying country spirit to the two warehouses in the District of Lakhimpur for the period from July 1, 1967 to March 3, 1970.
Sometime before that contract came to an end, the Commissioner of Excise, Assam invited tenders in sealed covers for the privilege of supplying the, country spirit to, retail vendors in the Upper Assam area comprising of the District of Lakhimpur and Sibsagar including Mikir Sub Division of the United Mikir and North Cachar Hills for the period of three years commencing from April 1, 1970.
In the notification issued by the Commissioner, it was stated that preference will be given to the manufacturers, of the spirit.
In pursuance of the tender notice, )the appellant, the 5th respondent and several others submitted tenders for the grant of the contract in question followed up by necessary licences.
The appellant offered to supply the spirit at 74 P. per London proof litre.
Respondent No. 5 quoted the 203 price at 95 P. per London proof litre.
Another tenderer namely Rampur Distillery and Chemicals Company Ltd. offered the lowest rate of 60 P. per London proof litre.
The tender of Rampur Distillery and Chemicals Co. Ltd., was found to be defective and therefore it was rejected.
The Government was not satisfied with any of the tenders.
Thereafter by a _letter dated February 28, 1970, it called upon all the tenderers to intimate to the Government whether they were willing to reduce their rate and if so, to what extent.
They were required to send their replies by March 10, 1970.
None of the tenderers excepting the 5th respondent was willing to reduce the rate quoted by them.
The Managing Director of Respondent No. 5, by his letter dated March 4, 1970 informed the Government that his concern was willing to reduce the rate and he left it to the Government to fix any rate which it considered reasonable.
He agreed to accept the rate fixed by the Government.
The Government reduced the rate fixed by Respondent No. 5 to 74 P. per London proof litre and accepted its tender.
Aggrieved by this decision, the appellant moved the High Court of Assam and Nagaland under article 226 of the Constitution to quash the Government Order granting the contract to the 5th respondent and for issuing a direction to the concerned respondents not to give effect to the impugned order.
The High Court rejected that application.
Hence this appeal.
At the very outset, it is necessary to mention that no allegation of mala fides is made against the Government.
The only question that we have to consider in this appeal is whether the impugned order was made in violation of any statutory provisions.
It was urged on behalf of the appellant that the impugned order violates Rule 93 of the Rules framed under the Eastern Bengal and Assam Act No. 1 of 1910 (Eastern Bengal and Assam Excise Act, 1910) (to be hereinafter referred to as the Act).
Before reading Rule 93, it is necessary first to refer to the relevant provisions in the Act i.e. section 19.
That section reads : "The Provincial Government may grant to any person, on such conditions and for such period as it may think fit, the exclusive privilege of manufacturing or of supplying to licensed vendors or of manufacturing and supply to licensed vendors any country liquor or intoxi cating drug within any specified local area.
No grantee of any exclusive privilege under this section shall exercise the same until he has received a license in that behalf from the Excise Commissioner.
" The validity of this provision was not challenged before us.
This provision undoubtedly confers on the Government very wide powers in the matter of granting exclusive privilege of manufacturing or of supplying to licensed vendors or of manufacturing 204 and supplying to licensed vendors any country liquor or intoxicating drug within any specified local area.
In the absence of any rule, the Government could have exercised that power in the manner most advantageous to the State so long as it did not infringe any of the constitutional guarantees.
In understanding the nature of the power under Rule 93, we have to bear in mind the fact that rules were framed by the Government itself in the exercise of the powers conferred on it under section 36 of the Act.
Having said that much we may now proceed to consider the rules relating to contract for supplying the country spirit to warehouses.
The rules relevant for our present purpose are Rules 91 to 93.
We may now read those rules.
Tenders for a contract for the exclusive privilege of supplying country spirit from a distillery to licensed vendors within a specified area for a specified period will be called for by the Excise Commissioner 1 8 months before the date from which the contract will take effect.
Provided that the Provincial Government may, if circumstances so require, direct that tenders be called for by the Excise Commissioner within a lesser period than 18 months specified above.
Any person tendering for a license specified in rule 91 shall apply in writing to the Excise Commissioner furnishing the following particulars: (1) The name or names of the person or persons applying, if a firm, the name of every partner of the firm, and, if a company, the registered name thereof (2) The applicant (if he is other than the existing contractor) shall also state in his tender that he is willing to take over under the provisions of rule 102 of these rules the existing vats and other permanent apparatuses in the warehouses within the area to be supplied and shall furnish a list of these in his application.
The Excise Commissioner shall forward the tenders with his recommendations to the Provincial Government which reserves to itself the right to accept any tender.
If none of the tenders are accepted by the Provincial Government on the ground that none of them, on due consideration, appear to be satisfactory, they reserve also the right to grant the licence to any person who has not tendered and is considered suitable in all respects; Provided that when a license is cancelled or suspended during the currency of the license the Provincial Government further reserves the right to grant the license to any one without calling for tenders.
" 205 It was urged on behalf of the appellant that the impugned order cannot be sustained firstly because the Government has nowhere stated that the tenders made were not acceptable to it "on the ground that none of them on due consideration, appear to be satisfactory".
Secondly under Rule 93, they could not have entered into negotiations with any of the tenderers.
Neither of these contentions are sound.
From the facts stated earlier, it is clear that the Government considered the tenders to be unsatisfactory and hence unacceptable.
That is clear from its letter to the tenderers asking them to reduce the price quoted.
It is true that ultimately it granted the contract to the 5th respondent at the very rate quoted by the appellant.
In the very notification calling for tenders, it had been mentioned that preference will be given to the manufacturers.
Prima facie there is nothing wrong in giving preference to the manufacturers.
It must be borne in mind that the Government is the purchaser.
On good grounds, it can prefer one seller to another.
It is true that being a Government, it cannot show any undue favour to any party; but for good reasons it may prefer one party to another.
There was justification in preferring a manufacturer to others.
Evidently the idea was that there should be reasonable guarantee in the matter of supply of country liquor.
It was not said that this preference was given for any collateral reason.
The Govern ment does not require any special power for preferring one class of sellers to others so long as the classification made by it is based on rational grounds.
It is true that no rule confers on the Government power to prefer one set of suppliers to others.
But what is important is that no rule prohibits it.
In the absence of any such rule, section 19 of the Act confers on the Government such a power.
It was next said that Rule 93 prohibits the Government to negotiate with any of the tenderers.
We are unable to read that rule in that way.
That rule does not prohibit any negotiations with the tenderers.
But on the other hand, it authorises the Government to negotiate with persons who have not tendered.
Here again in the absence of any rule prohibiting the Government to negotiate with the tenderers, the Government can fall back on its powers under section 19.
We are unable to find out any rational basis for prohibiting the Government from negotiating with the tenderers.
All that the Government is interested is to get country spirit at the cheapest possible rates and to have regular supplies.
For achieving those purposes, it can negotiate either with the tenderers or with others.
It was faintly argued that before concluding its contract with the 5th respondent, the Government should have given opportunity to the other tenderers to reduce the rates quoted by them.
This contention is clearly a misunderstanding of the principles of natural 206 justice.
No one has a fundamental right to get a Government contract.
The appellant was not deprived of any of its rights.
It was given an adequate opportunity to submit its tender.
Its offer was considered.
The same was not rejected on irrational grounds.
In matters like the one before us, no question of hearing the interested parties arises.
All that is required is fair play.
In the result we are unable to accept any of the contentions advanced on behalf of the appellant.
Hence this appeal fails and the same is dismissed.
But in the circumstances of the case we make no order as to costs.
V.P.S. Appeal dismissed.
| IN-Abs | The respondent invited tenders for supplying country spirit to retail vendors.
In the notification issued by the Commissioner, it was stated that preference will be given to manufacturers of spirit.
Several persons submitted tenders including the appellant and the 5th respondent who was a manufacturer of spirit.
The appellant offered to supply the spirit at 74 P and the 5th respondent at 95 P.
The Government was not satisfied with any of the tenders and the tenderers were called upon to intimate to the Government whether they were willing to reduce their rate.
None of the tenderers was willing to reduce the rate, except the 5th respondent who agreed to accept the rate fixed by tin Government, and the Government, reduced his rate to 74 P and accepted his tender.
The appellant challenged the order granting the contract to the 5th respondent, but the High Court dismissed the petition.
In appeal to this Court, it was contended that : (1) the impugned order could not be sustained because the Government nowhere stated that the tenders were not acceptable, on the ground that none of them, on due considerations, appeared to be satisfactory, as provided in r. 93 of the Rules framed under the Eastern Bengal and Assam Excise Act, 1910; ,and (2) under the rule, Government could not have entered into negotiations with :any of the tenderers.
Dismissing the appeal, HELD : (1) It is clear from the letter to the tenderers asking them to reduce the price quoted that the respondent Government considered the tenders to be unsatisfactory and hence unacceptable.
[205B C] (2) Rule 93 does not prohibit any negotiations with the tenderers.
On the other hand, it authorises Government to negotiate even with persons who have not tendered.
In the absence of any rule prohibiting Government from negotiating with the tenderers, Government can fall back on its powers under section 19.
In order to get country spirit at the cheapest possible rates and to have regular supplies, Government can negotiate with the tenderers or others.
[205F] (3) (a) No one has a fundamental right to get a Government contract.
In matters like this no question of hearing parties arises.
All that is required is fair play.
The appellant bad an opportunity to submit its tender which was considered and rejected on grounds which ate not irrational.
[306A] (b) Section 19 of the Act undoubtedly confers on the Government very wide powers in the matter of granting the exclusive privilege of manufacturing or of supplying to licensed vendors any country liquor or intoxicating drug within any specified local art a.
in the absence of a rule prohibiting Government from preferring one set of sellers to others, LI208 Sup.
CI/72 202 Government could rely on the section for such a power so long as the classification made by it is based on rational grounds.
Therefore, the Government could exercise that power in the manner most advantageous to it provided it did not infringe any Constitutional guarantee.
[205G] (c) It is true that the Government granted the contract to the 5th respondent at the rate quoted by the appellant and thus preferred the 5th respondent.
But the Government, as the purchaser, can prefer 'One seller to another for good reasons, though, it cannot show any undue favour to any one.
(d) In the notification calling for tenders it was mentioned that preference will be given to manufacturers; and there was justification for preferring a manufacturer to others, because, there would be a reasonable guarantee in the matter of supply of country liquor.
[205C]
|
No. 7 of 1972.
Under Article 32 of the Constitution of India for a writ In the, nature of habeas corpus.
H. K. Puri, for the petitioner.
D. N. Mukherjee and G. section Chatterjee, for the respondent.
The Judgment of the Court was delivered by Khanna, J.
This is a petition through _jail for the issuance of ' a writ of habeas corpus by Nishi Kanta Mondal who has been ordered by the District Magistrate, 24 Parganas to be detained under section 3 of the West Bengal (Prevention of Violent Activities) Act, 1970 (President 's Act No. 19 of 1970), hereinafter referred to as the Act.
The order of detention reads as under "GOVERNMENT OF WEST BENGAL OFFICE OF THE DISTRICT MAGISTRATE 24 PARGANAS ORDER No. 352/71 Dated, the 6 7 71 Whereas I am satisfied with respect to the person known as Shri Nishi Kanta Mondal, son of Shri Radhanath Mondal of Daccapara, P. section Bongaon, Dt.
24 Parganas that with a view to preventing him from acting in any manner prejudicial to the maintenance of public order, it is necessary so to do, I therefore in exercise of the powers conferred by sub section (1) read with sub section (3) of section 3 of the West Bengal (Prevention of Violent Activities) Act, 1970 (President 's Act No. 19 of 1970), make this order directing that the said Nishi Kanta Mondal be detained.
Given under my hand and seal of office.
Sd/ DISTRICT MAGISTRATE 24 PARGANAS 6 7 71" In pursuance of the above order, the petitioner was arrested on July 8, 1971 and was served with the order as well as the 226 grounds of detention on the same day.
On July 10, 1971 the District Magistrate sent report to the State Government about his having passed the order for 'the detention of the petitioner.
The grounds of detention and other necessary particulars were also sent along with the report.
The State Government, after considering the report and other particulars, approved the detention order on July 17, 1971.
Representation made by the petitioner against his detention was received by the State Government on July 30, 1971.
The representation was considered by the State Government and rejected on August 5, 1971.
The case of the petitioner was placed before the Advisory Board on August 6, 1971.
The petitioner 's representation was also sent to the Advisory Board.
The Advisory Board, after considering the material placed before it as well as the representation sent by the petitioner and after giving him a hearing in person, submitted its report to the State Government on September 14, 1971.
Opinion was expressed by the Advisory Board that there was sufficient cause for the detention of the petitioner.
The State Government passed an order on October 5, 1971 confirming the order for the ,detention of the petitioner.
The confirmation order was there,after communicated to the petitioner.
The petition has, been resisted by the State of West Bengal and the affidavit of Shri Chandi Charan Bose, Deputy Secretary, Home (Special) Department, Government of West Bengal has been filed in opposition to the petition.
Mr. Puri has addressed arguments amicus curiae on behalf of the petitioner, while the respondent State has been represented by Mr. D. N. Mukherjee.
The first contention which has been advanced by Mr. Puri is that the Act was enacted by the President in exercise of the powers conferred by, section 3 of the West Bengal State Legislature (Delegation of Powers) Act, 1970.
According to section 3 of the last mentioned Act, the power of the Legislature of the State of West Bengal to make laws, which 'had been declared by the Proclamation to be exercisable by or under the authority of Parliament, was conferred on the President.
In the exercise of the said power, the President could, from time to time whether Parliament was or was not in session, enact.
as a President 's Act, a Bill containing such provisions as he considered necessary.
Some other formalities, detailed in section 3, were also required to be complied with by the President, but it is not necessary for the purpose of this case to 'refer to, the.
Section 2 of the aforesaid Act defined "Proclamation" to mean the Proclamation issued on the 19th day of March, 1970, under article 356 of the Constitution by the President, and published with the notification of the Government of India it) the Ministry of Home Affairs No. G.S.R. 490 of the said date, It is urged 227 by Mr. Puri that the above mentioned Proclamation was revoked by the President by another Proclamation in the beginning of this month.
On account of the revocation of the Proclamation, the President 's Act No. 19 of 1970, according to the learned counsel, ceased to have effect.
As such, the petitioner could not be kept in detention in pursuance of the order made under that Act.
There is, in our opinion, no force in the above contention because it is based upon the assumption that the law made by the President ceases to operate immediately upon the revocation of the Proclamation.
This assumption is not correct and runs contrary to clause (2) of article 357 of the Constitution.
According to that clause, "any law made in exercise of the power of the Legislature of the State by Parliament or the President or other authority referred to in sub clause (a) of clause (1) which Parliament or the President or such other authority would not, but for the issue of a Proclamation under article 356, have been com petent to make shall, to the extent of the incompetency, cease to have effect on the expiration of a period of one year after the Proclamation has ceased to operate except as respects thing done or omitted to be done before the expiration of the said period, unless the provisions which shall so cease to have effect are sooner repealed or reenacted with or without modification by Act of the appropriate Legislature".
The above provision makes it plain that the period for which a law made under article 3 5 6 (I remains in force is not co terminous with the duration of the Proclamation.
It has not been disputed that the President was competent under clause (1) of article 356 of the Constitution to enact Act No. 19 of 1970.
The said Act, in view of the provisions of clause (2) of article 357, shall continue to remain in force in spite of the revocation of the Proclamation dated Mach 19, 1970 and would cease to have effect only on the expiry of on, , year after the Proclamation has ceased to operate except as respects things done or omitted to be done before the expiration of the said period, unless the provisions of the Act are sooner repealed or reenacted with or without modification by Act of the appropriate Legislature.
As the aforesaid period of one year has not expired and as the provisions of the Act have not been repealed or re enacted with or without modification by Act of the appropriate Legislature, the impugned Act should be held to be still in force.
In view of our finding that the Act (Act No. 19 of 1970) is still in force, it is not necessary to consider the question as to what would be the legal position in respect of subsisting detentions after the Act ceases to have effect in accordance with article 357(2) of the Constitution.
228 Argument has then been advanced by Mr. Puri that the im pugned detention order was not in conformity with section 10 of the Act as it did not specify the date of detention.
Section 10 reads as under : "10.
In every case where a detention order has been made under this Act, the State Government shall, within thirty days from the date of detention under the order, place before the Advisory Board, constituted by it under section 9, the grounds on which the order has been made and the representation, if any, made by the person affected by the order, and in case where the order has been made by an officer specified in sub section (3) of section 3, also the report made by such officer, under sub section (4) of section 3.
" According to the learned counsel, the words "within thirty days from the date of detention under the order" in the section indicate that it is imperative on the part of the detaining authority to specify the date of detention in the order.
We find ourselves unable to accede 'to this submission.
All that section 10 contemplates is that the State Government should within 30 days from the commencement of the detention place before the Advisory Board the grounds on which the order has been made and the representation, if any, made by the person affected by the order, and in case where an order has been made by an officer specified in sub section (3) of section 3, also the report made by such officer under sub section (4) of section 3.
There is nothing, however, in the section which makes it obligatory on the part of the detaining authority to specify the date of the commencement of detention.
Detention starts from the time a detenu is taken into custody in pursuance of the detention order.
In most of the cases it may be difficult to state in the detention order as to when the detention WOuld commence because the detaining authority cannot be certain at the time of the making of the detention order about the date on which the person ordered to be detained would be taken into custody.
The possibility of the person ordered to be detained avoiding or delaying his apprehension by absconding or concealing himself cannot be ruled out.
In case the contention advanced on behalf of the petitioner were to be accept , the detention order would cease to be enforceable in case the person.
ordered to be detained cannot somehow be apprehended on the date mentioned in the order.
We find it difficult to draw such an inference from the language of section 10 of the Act.
The words "from the date of detention under the order", in our opinion, have reference to the date of the commencement of the detention in pursuance of the detention order.
229 Lastly, it has been argued by Mr. Puri that the grounds of detention are not germane to the objects for which a person can be ordered to be detained under the Act.
In this connection, we find that, according to the grounds of detention which were furnished to the petitioner, he was being detained as he was acting in a manner prejudicial to the maintenance of public order as evidenced by particulars given below : "On 12 2 71 at about 02.00 hrs.
, you and some of your associates being armed with bombs and other lethal weapons attacked Shri K. K. Naskar, I.A.S., S.D.O., Bongaon and his guard by hurling bombs and thereby causing injuries to the guard constable when they came out on hearing sounds of explosion of bombs near the quarters of Shri section C. Sarkar, Magistrate 1st Class, Bongaon, at Amlapara near Bongaon Court.
You, thereby, created a panic in the locality and disturbed the public order.
(2) On 23 2 71 between 10.45 hrs.
and 02.15 hrs Bongaon Police on receipt of a secret information searched a house at Subhaspalli, Bongaon and recovered 3 high explosive bombs and some explosive materials from you and your associates possession." According to section 3 of the Act, the State Government may.
if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to the security of the State or the maintenance of public order it is necessary so to do, make an order directing that such person be detained.
District Magistrates and some other officers under subsection (3) of section 3 of the Act have been empowered, if satisfied as provided in sub section (1), to exercise the powers conferred by the said sub section.
According to clause (d) of sub section (2) of section 3 of the Act, for the purposes of sub section (1) the expression "acting in any manner prejudicial to the security of the State or the maintenance of public order" inter alia means : "committing, or instigating any person to commit, any offence punishable with death or imprisonment for life or imprisonment for a term extending to seven years or more or any offence under the or the , where the com mission of such offence disturbs, or is likely to disturb, public order.
" It is manifest from the above definition that the expression "acting in any manner prejudicial to the maintenance of public order" would include the commission of an offence under the when the commission of such offence disturbs or is likely to disturb public order.
Particulars 230 supplied to the petitioner regarding the incident of February 12, 1971 show that the petitioner and his associates hurled bombs near the quarter of the S.D.O., Bongaon and caused injuries to his guard, as a result of which panic was created in the locality and public order was disturbed.
The particulars regarding the incident of February 12, 1971 clearly bring the case within ambit of clause (d) of sub section (2) of section 3 of the Act.
As regards the second incident of February 23, 1971 we find that the particulars show that three high explosive bombs and explosive materials were recovered from the possession of the petitioner and his associates on search of a house.
The particulars thus show that the petitioner was guilty of an offence under the .
It is also obvious that the use of high explosive bombs was likely to disturb public order.
The fact that the high explosive bombs were, recovered from the petitioner and his associates and taken into possession before they could be used would not take the case out of the purview of clause (d) The earlier incident of February 12, 1971 gives a clear indication of the propensity of the petitioner to use and explode such bombs.
The recovery of the high explosive bombs from the possession of the petitioner prevented him from using and exploding the bombs and disturbing public order.
As the object of detention is to prevent the detenu from acting in any manner prejudicial to the security of the State or the maintenance of public order, the grounds of detention supplied to the petitioner, in our opinion, should be held to be germane to the purpose for which detention order can legally be made under the Act.
In order to detain 1 person with a view to pit vent him from acting in any manner prejudicial to the security of the State or the maintenance of public order, as contemplated by section 3 (2) (d) of the Act, it is sufficient that the detaining authority considers it necessary to detain him in order to preve nt him from doing any of the acts mentioned in clause (d).
If the past conduct and antecedents of the person concerned reveal a tendency to do the acts referred to in clause (d), the order of detention would be upheld, even though because of some supervening cause like prompt action by the police, the public order is not actually disturbed.
We, therefore, find no infirmity in the impugned detention order.
It also cannot be said that the detention of the petitioner is not in accordance with law.
The petition consequently fails and is dismissed.
K.B.N. Petition dismissed.
| IN-Abs | The petitioner was detained under section 3 of the West Bengal (Prevention of Violent Activities) Act, 1970 (President 's Act 19 of 1970) as he was acting in a manner prejudicial to the maintenance of public order.
The particulars supplied to the, petitioner showed that he and his associates hurled bombs as a result of which panic was created in the locality and that high explosive bombs were recovered from the possession of the petitioner and his associates.
In the petition for the issue of a writ of habeas corpus it was contended on behalf of the petitioner that (1) on the revo cation of the Proclamation under article 356 of the Constitution, President 's Act No. 19 of 1970 ceased to have effect and, as such, the petitioner could not be kept in detention in pursuance of the order made under the Act , (ii) the impugned detention order was not in conformity with section 10 of the Act as it did not specify the date of detention and (iii) the ground , of detention were not germane to the objects for which a person can be ordered to be detained under the Act.
Dismissing the petition, HELD : (i) The period for which a law made under article 356 (1) remains in force is not co terminous with the duration of the proclamation.
In view of the provisions of clause (2) article 357, President 's Act 19 of 1970 shall remain in force in spite of the revocation of the proclamation and would cease to have effect only on the expiry of one year after the proclamation has ceased to operate unless the provisions of the Act are sooner repealed or reenacted by Act of the appropriate State Legislature.
[227E] (ii) There is nothing in section 10 which makes it obligatory on the part of the detaining authority to specify the date of the commencement of the detention : The words "from the date of detention tinder the order" have reference to the date of the commencement of the detention in pursuance of the detention order.
[228E F] (iii) According to cl.
(d) of sub section (2) of section 3 the expression "acting in any manner prejudicial to the maintenance of public order" would include commission of an offence under the , or the .
The particulars supplied to the petitioner clearly bring the case within the ambit of clause (d) of subsection (2) of section 3 of the Act.
[229H] In order to detain a person with a view to preventing him from acting in any manner prejudicial to the security of the state or the maintenance of public order, as contemplated by section 3 (2) (d) of the Act, it is sufficient.
225 that the detaining authority considers it necessary to detain him in order to prevent him from doing any of the acts mentioned in clause (d).
If the past conduct and antecedents of the person concerned reveal a tendency to do the acts referred to in clause (d), the order of detention would be upheld, even though because of some supervening cause like prompt action by the police, the public order is not actually disturbed.
[230E G]
|
Appeal No. 684 of 1968.
Y. section Dharmadhikari, Advocate General for the State of Madhya Pradesh and 1.
N. Shroff, for the appellants.
M. C. Setalvad, Rameshwar Nath and section K. Dholakia, for respondent No. 1.
The Judgment of the Court was delivered by Mitter, J.
This is an appeal from a judgment of the Madhya Pradesh High Court quashing the proceedings initiated on the complaint filed by the Divisional Forest Officer, Saugor in the Court of the Magistrate of the First Class Saugor for imposition of a penalty on the respondents.
The matter arises thus.
Chhotahhai Jethabhai Patel, a partnership firm of which the second respondent, Jhaverbhai Bhulabhai Patel is a partner, carried on business on a fairly large scale as manufacturers of bidis at various places in the State of Madhya Pradesh including Saugor.
Being unable to secure sufficient quantities of tendu leaves grown in the forest units in the State, the firm took leases for the collection of such leaves in the States of Bihar Maharashtra.
They actually imported tendu leaves under two railway consignments from Bihar to Saugor.
They informed the Divisional Forest Officer about the same and asked for permission for transport of the leaves and to utilise the said leaves for manufacture of bidis in their factories.
By letter dated July 27, 1965 the said Forest Officer intimated the firm that the imported leaves were not to be moved for bidi manufacture until permission was accorded for so doing.
The respondents ' grievance was that notwithstanding the above communication and in spite of the fact that they had not moved the imported leaves from their godowns, the Sub Divisional Forest Officer Saugor seized two quantities of such leaves of 9007 bags imported from Garwah Road, Bihar and 256 bags of tendu leaves imported from Bindoumaganj, Bihar and followed the same up by filing a complaint alleging contravention of section 5 of the Madhya Pradesh Tendu Patta Wyapar Viniyaman) 84 0 Adhiniyam, 1964, hereinafter referred to as the Act.
The respondents filed a petition under article 226 of the Constitution before the High Court for the issue of a writ of certiorari quashing the complaint.
The contention of the respondents (importers of the leaves) before the High Court was that the Act did not prohibit the import of tendu leaves from places outside the State nor was there any restriction on a manufacturer importing such leaves with the express object of consumption of the same, in his factory for the manufacture of bidis and in any event the Act or the Rules made thereunder did not purport to regulate the transport of tendu leaves imported from places outside the State.
On behalf of the State it was contended that transport of tendu leaves whether grown in the State or outside the State was completely prohibited by section 5(2) of the Act and regulation and control of transport of such imported leaves was necessary for the successful working of the State monopoly in the trade of tendu leaves envisaged by the Act.
Further the Act did not prohibit the import of tendu leaves and was not therefore violative of articles 31, 301 and 304 of the Constitution and the control of movement of tendu leaves after their import from another State was in no way repug nant to articles 301 and 304.
The High Court rejected the contentions of the State.
Hence the appeal.
In order to find out whether the action of the Forest Officer was justified, we have to look into the relevant provisions of the Act and the rules framed thereunder.
The Act as its preamble shows is one to make provision for regulating in the public interest the trade of tendu leaves by creation of State monopoly in such trade.
By section 1(2) it was to extend to the whole of the State and under sub section
(3) of section 1 it was to come into force in such area or areas and on such date or dates as the State Government may, by notification, specify.
The broad scheme of the Act appears to be as follows.
Under section 3 the State Government was empowered to divide every specified area defined in cl.
(h) of section 2 into such number of units as it may deem fit.
section 4 empowered the State Government to appoint agents in respect of different units for the purpose of purchase of and trade in tendu leaves on its behalf.
Under section 5(1); "On the issue of a notification under sub section (3) of section 1 in any area no perso n other than (a) the State Government; (b) an officer of State Government authorised in writing in that behalf; or 841 (c) an agent in respect of the unit in which the leaves have grown; shall purchase or transport tendu leaves.
" The two Explanations to this subsection show that purchase of tendu leaves from the State Government or its officers or agents was not to be deemed to be a purchase in contravention of the Act and a person having no interest in a holding but acquiring the right to collect tendu leaves grown on such holding was to be deemed to have purchased such leaves in contravention of the Act.
Sub section
(2) of the section allowed a grower of tendu leaves to transport them from any place within the unit wherein such leaves had grown to any other place in that unit and tendu leaves purchased from the State Government or any officer or agent of the Government by any person for manufacture of bidis within the State or by any person for sale outside the State could be transported by such person in accordance with the terms and conditions of a permit to be issued in that behalf.
section 7 empowered the State Government to fix prices at which tendu leaves were to be, purchased by it or its agent and under section 9 the State Government or their authorised officer or agent was to be, bound to purchase at the price fixed under section 7 leaves offered for sale at the depot, subject to the right of rejection of such leaves as were not fit for the manufacture of bidis.
Under section 1 1 all manufacturers of bidis and all exporters of tendu leaves had to get themselves registered in such manner as might be prescribed.
section 12 enabled the State Government to sell or dispose of tendu leaves purchased by it or its agent as therein prescribed.
Under section 1 5 any person contravening any of the provisions of the Act or the rules thereunder was liable to punishment, both with imprisonment and fine and tendu leaves in respect of which such contravention took place were liable to forfeiture by Government.
section 19 gave the Government power to make rules to carry out the provisions of the Act.
Rule 4 framed under the Act lays down the kinds of transport permits which may be issued.
They are to be, of four types (i) for transport from collection depot to storage godown; (ii) for transport from one storage godown to another or to distribution centre; (iii) for transport from a distribution centre to Sattedars or Mazdoors ' and (iv) for transport outside the State.
The application for a transport permit is to be under rule 9 in form 'M ' and the permit to be issued is to be in form 'M. Form 'M ' gives the quantity of tendu leaves purchased, the place or places where they were stored, the destination to which they were to be transported and the place or places where transported leaves were to be stored.
Similar particulars are to be contained in a permit in form 'N '.
842 It was contended on behalf of the State that the High Court had gone wrong in taking the view that the object of the Act was confined to trading in tendu leaves grown in the State as disclosed by the above provisions.
It was urged that the embargo on purchase and transport of tendu leaves by section 5 was necessary for creation and preservation of the State monopoly in tendu leaves.
It was submitted that there was nothing in the Act, which on the face of it showed that tendu leaves mentioned in the different provisions were to be confined to leaves grown in the State.
It was further submitted that unless the State had the power to check the purchase of tendu leaves from outside the State and in any event to restrict the transport thereof within the State, the monopoly would not be effective.
It was urged further that transport of goods within the State was so essentially integrated with the trade in the goods that the restriction on transport should be upheld in the interest of the State monopoly.
We find ourselves unable to accept the contentions put forward by counsel on behalf of the State.
All the relevant provisions of the Act and the rules referred to above show that the legislature intended that everybody growing leaves within the State should offer the same to it or its agents in different units for sale and the State was bound to purchase every single lot of tendu leaves unless the same could be said to be unfit for the manufacture of bidis.
Prima facie trade in tendu leaves as was held by this Court in Vrajlal Manilal vs M. P. State(1) would consist of dealing in those leaves i.e. their purchase and sale but "transport of the leaves once purchased or sold would not prima facie be an organic or integral part of dealing in those leaves.
" It was further held in that case: :. a permit system which regulates the movement of leaves purchased by a manufacturer of bidis from the unit where they are purchased to his warehouse, then to the branches and to the sattedars cannot up to that stage be regarded as unreasonable in the light of the object of the Act, the economic conditions prevailing in the State, and the mischief which it seeks to cure.
At the same time to expect the manufacturer to get permits issued to his sattedars for distribution by them to the innumerable mazdoors of comparatively small quantities of these leaves would not only be unreasonable but frustrating.
" In that case there was no question of import of any tendu leaves from outside the State or the issue of any permits in that regard.
What was objected to was the insistence upon transport permits for the leaves to be distributed by the manufacturers to his innumerable sattedars and mazdoors under section 5 of the Act.
It was held that though the section "is couched in apparently wide language, (1) ; at 408.
843 the very object of the Act, as disclosed by its long title, contains inherent limitations against an absolute or as strictly regulated a ban as it would at first reading of the section appear.
" Though the Court there upheld the provisions relating to the creation of the monopoly in the public interest in the matter of sale and purchase of tendu leaves, it was not disposed to uphold the restrictions on movement to the extent it was sought to be enforced by the State in that case.
In coming to the above conclusion the Court relied on the dictum in Akadasi Padhan vs State of Orissa(1) "A law relating to a State monopoly cannot, in the context, include all the provisions contained in the said law whether they have direct relation with the creation of the monopoly or no the said expression should be construed to mean the law relating to the monopoly in its absolutely essential features.
If a law is passed creating a State monopoly, the Court should enquire what are the provisions of the said law which are basically and essentially necessary for creating the State monopoly.
It is only those essential and basic provisions which are protected by the latter part of article 19(6).
If there are other provisions made by the Act which are subsidiary, incidental or helpful to the operation of the monopoly, they do not fall under the said part and their validity must be judged under the first part of article 19(6).
In other words, the effect of the amendment made in article 19(6) is to protect the law relating to the creation of monopoly and that means that it is only the provisions of the law which are integrally and essentially connected with the creation of the monopoly that are protected.
The rest of the provisions which may be incidental do not fall under the, latter part of article 19(6) and would inevitably have to satisfy the test of the first part of article 19(6).
" It is settled law that where two constructions of a legislative provision are possible one consistent with the constitutionality of the measure impugned and the other offending the same, the Court will lean towards the first if it be compatible with the object and purpose of the impugned Act, the mischief which it sought to prevent ascertaining from relevant factors its true scope and meaning.
It was in the light of this principle that the High Court observed : "If section 5 of the Act or any of its provisions were to be construed as prohibiting the import of tendu leaves into (1) [1963] Supp.
2 S.C.R. 691.
844 the State or restricted within the State of imported leaves, then the provision would clearly be invalid as violative of articles 301 and 304 of the Constitution.
" Without expressing our views on the subject we hold that the entire provisions of the Act and the rules are consistent with and aim at the State monopoly in the trade of tendu leaves in case of leaves grown or _produced in the State and the legislature never intended that the monopoly should be operative even to the extent of banning import of tendu leaves from outside or stalling the tendu leaves once they found their way into the State from outside.
The transport of tendu leaves purchased outside but consigned to places within the, State to be used for the manufacture of bidis is not integrally connected with the State monopoly as envisaged in the Act.
It stands to reason that manufacturers of bidis in the State of Madhya Pradesh would not think of importing tendu leaves from distant places like, Bihar and Maharashtra if they could help it and it must be the exigencies of the situation which drives a manufacturer of bidis to such course of action.
In any event, the Act ought not to be construed so as to ban import of tendu leaves from outside the State or restrict their movement once they were within the State unless clear language was used in that behalf.
If and when such express embargo is imposed, a question may arise as to whether it offends the different provisions of Part XIII of the Constitution.
In the result the appeal fails and is dismissed with costs.
S.C. Appeal dismissed.
| IN-Abs | The respondent, a partnership firm of which the second respondent was a partner, carried on business as manufacturers of bidis at various places in the State of Madhya Pradesh.
Being unable to secure sufficient tendu leaves locally, the firm took leases for the collection of such leaves in Bihar & Maharashtra.
They actually imported tendu leaves under two railway consignments from Bihar.
They informed the Divisional Forest Officer about the same and asked permission for transport of the leaves and to utilise them in their factories.
By letter, the D.F.O. informed the respondents that the leaves must not be moved for bidi manufacture until permission is given.
Respondents obeyed the order; but in spite of that, the Sub divisional Forest Officer seized two quantities of such leaves and filed a complaint alleging contravention of section 5 of Madhya Pradesh Tendu Patta (Vyapar Viniyaman) Adhiniyam, 1964.
The respondent filed a petition under article 226 of the Constitution for a writ of certiorari quashing the complaint.
The contention of the respondents was that the Act did not prohibit import of tendu leaves from outside nor was there any restriction on a manufacturer to consume the same for the manufacture of bidis or the Rules made under the Act did not regulate the transport of the tendu leaves imported from outside.
The State however, contended that transport of tendu leaves whether grown locally or imported from outside was completely prohibited under section 5 of the Act, except by a license holder in terms of a permit issued.
S.5(1) provides that no person other than the State Government or an Officer of the State Government etc.
shall purchase or transport tendu leaves.
Further, the Act did not prohibit import of tendu leaves and so the Act is not violative of articles 31, 301 and 304 of the Constitution and the control of movement of tendu leaves after their import was in no way repugnant to articles 301 and 304 of the Constitution.
The State contended that unless the State had the power to check the purchase of tendu leaves from outside the State and to restrict the transport thereof within the State, the monopoly of State trading in tendu leaves would not be effective.
The High Court rejected these contentions of the State and hence the appeal.
Dismissing the appeal, HELD : (1) All the relevant provisions of the Act and the rules made thereunder show that the legislature intended that everybody growing leaves within the State should offer the same to it to its agents in different units for sale and the State was bound to purchase every single lot of usable tendu leaves.
Prima facie trade in tendu leaves could consist of dealing in those leaves, i.e., their purchase and sale but transport 'of the leaves once purchased or sold would not prima facie be an organic or integral part of dealing in those leaves.
[842 D] 839 Vrajlal Manilal vs M.P. State ; , followed.
(ii) In the present case, the transport of tendu leaves purchased outside but consigned to places within the State to be used for the manufacture of bidis is not integrally connected with the State monopoly as envisaged in the Act.
The Act ought not to be construed so as to ban import of tendu leaves from outside the State or restrict their movement once they are within the State unless clear language was used in that behalf.
[844 C] Akadasi Padhan vs State of Orissa, [1963] Supp. 2 S.C.R. 691, referred to.
|
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2152 of 1968.
Appeal by special leave from the _judgment and decree dated July 19, 1968 of the Madras High Court in Second Appeal No. 1173 of 1964.
M. C. Chagla, R. Gapalakrishnan and T. L. Garg, for the appellant.
M. K. Ramamurthi, Ramamurthy and Vineet Kumar, for res pondents Nos. 1 and 6 to 9.
The Judgment of A. N. RAY and M. H. BEG was delivered by BEG J. SIKRI C.J. gave a separate Opinion.
Beg, J. Jayaram Mudaliar, the Appellant before us by Special Leave, purchased some lease hold land for Rs. 10,500/ from Munisami Mudaliar and others under a sale deed of 7 7 1958 (Exhibit B 7) and some other lands shown in a sales certificate dated 15 7 1960, (Exhibit B 51) sold to him for Rs. 6,550/ at a public auction of immovable property held to realise the dues in respect of loans taken by Munisami Mudaliar under the Land Improvement Loans ' Act 19 of 1883.
Both Jayaram and Munisami, mentioned above, were impleaded as co defendants in a 142 Partition suit, in Vellore, Madras,, now before us in appeal, commenced by a pauper application dated 23 6 1958 filed by the plaintiff respondent Ayyaswami Mudaliar so that the suit must be deemed to have been, filed on that date.
The plaintiff respondent before us had challenged, by an amendment of his plaint on 18 9 1961, the validity of the sales of land mentioned above, consisting of items given in schedule 'B ' to the plaint, on the ground, inter alia, that these sales, of joint property in suit, were struck by the doctrine of lis pendens embodied in section 52 of the Indian Transfer of Property Act.
As this is the sole question, on merits, raised by the appellant before us for consideration, we will only mention those facts which are relevant for its decision.
Before, however, dealing with the above mentioned question, a preliminary objection to the hearing of this appeal may be disposed of.
The Trial Court and the Court of first appeal having held that the rule of lis pendens applied to the sales mentioned above, the appellant purchaser had filed a second appeal in the High Court of Madras, which was substantially dismissed by a learned Judge of that Court, on 19 7 1968, after a modification of the decree.
Leave to file a Letters Patent appeal was not asked for in the manner required by Rule 28, Order IV of the Rules of Madras High Court, which runs as follows "28.When an appeal against an appellate decree or order has been heard and disposed of by a single Judge, any application for a certificate that the case is a fit one for further appeal under clause 15 of the Letters Patent shall be made orally and immediately after the judgment has been delivered.
" But, the appellant, after obtaining certified copies of the judgment and decree of the High Court, sent a letter to the Registry that the case be listed again for obtaining, a certificate of fitness to file a Letters ' Patent appeal.
The case was, therefore, listed before the learned Judge and an oral application which was then made for grant of a certificate, was rejected on 6 9 1968 on the ground that it had not been made at the proper time.
It was contended, on behalf of the respondent, that, in the circumstances stated above, the appellant must be deemed to have been satisfied with the Judgment of the High Court as his Counsel did not ask for leave to file a Letters ' Patent appeal as required by Order IV Rule 28 of the Rules of the Madras High Court (that is to say, immediately after the judgment has been delivered).
The following observations of this Court in Penu Balakrishna Iyer & Ors.vs Sri Ariva M. Ramaswami lyer & Ors.(1) were cited to contend that, the appeal before us should be rejected in limine : (1) ; @ 52 53 143 .lm15 "Normally, an application for special leave against a second appellate decision would not be granted unless the remedy of a Letters Patent Appeal has been availd of.
In fact, no appeal against second appellate decisions appears to be contemplated by the Constitution .as is evident from the, fact that article 133(3) expressly provides that normally an appeal will not lie to this Court from the judgment, decree, or final order of one Judge of the High Court.
It is only where an application for special leave against a second appellate judgment raises issues of law of general importance that the Court would grant the application and proceed to deal with the merits of the contentions raised by the appellant.
But even in such cases, it is necessary that the remedy by way of a Letters ' Patent Appeal must resorted to before a party comes to this Court".
In reply to the preliminary objection, Mr. Chagla, appearing for appellant, has assailed the validity of the above mentioned Rule 28 of Order IV itself.
It is submitted that the rule conflicts with the provisions of clause 15 of the Letters ' Patent of the Madras High Court requiring only that the Judge who passed the Judgment should declare that the case is fit one for appeal as a condition for appealing.
It was urged that the period of limitation for filing an appeal should not, in effect, be cut down by a rule such as the one found in Rule 28, Order IV of the Rules of Madras High Court.
It was urged that, before article 117 of the of 1963 introduced a period of thirty days from a decree or order for filing a Letters Patent appeal, the period of limitation for such appeals fell under the residuary article 181 of the old .
As applications for certification fen outside the provisions of the Civil Procedure Code and there was no specific provision for them in the the High Court could frame its own rule prescribing the mode and time for making such applications.
Rule 28 of Order IV of the Madras High Court does not purport to affect the power to give the declaration contemplated by clause 15 of the Letters ' Patent,.
In some High Courts, there is no rule of the Court laying down that the application should be oral and made immediately after the judgment has been delivered.
It is, however, evident that a rule such as Rule 28 of Order IV the Madras High Court is most useful and necessary particularly when a period of thirty days only for filing an appeal has been prescribed in 1963.
The Judge pronouncing the judgment can decide then and there, in the presence of parties or their counsel, whether the case calls for a certificate.
In a suitable case, where a party is able to prove that it was prevented due to some cause beyond its control from asking for leave at the proper time, the Judge concerned may condone non compliance 144 by a party with Rule 28, Order IV, of the Madras High Court, or extend time by applying Section 5 of the .
This salutary rule could not, therefore, be held to be ultra vires or invalid.
There is, however, another answer to the preliminary objec tion.
It was contended that the case before us is covered by what was laid down by this Court in Penu Balakrishna Iyer 's case (Supra) when it said (at page 53) ". we do not think it would be possible to lay down an unqualified rule that leave should not be granted if the party has not moved for leave under the Letters Patent and it cannot be so granted, nor is it possible to lay down an inflexible rule that if in such a case leave has been granted it must always and necessarily be revoked.
Having regard to the wide scope of the powers conferred on this Court under article 136, it is not possible and, indeed, it would not be expedient, to lay down any general rule which would govern all cases.
The question as to whether the jurisdiction of this Court under article 136 should be exercised or not, and if yes, on what terms and conditions, is a matter which this Court has to decide on the facts of each case".
In that particular case, this Court had actually heard and allowed the appeal by Special leave because it held that there was no general inflexible rule that special leave should be refused where the appellant has not exhausted his rights by asking for a certificate of fitness of a case and because that case called for interference.
It is urged before us that the appellant had done whatever he possibly could, in the circumstances of the case, to apply for and obtain a certificate of fitness after going through the judgment of the High Court, so that the rule that alternative modes of redress should be exhausted before coming to this Court had been really complied with case must, we think, be decided upon its own facts.
In the case before us, although the appellant was not shown to have attempted any explanation of failure to apply for the certificate at the proper time, yet, +,he special leave petition having been granted, and the case having passed, without objection, beyond the stage of interim orders and printing of the records, we have heard arguments on merits, also.
The merits may now be considered.
The challenge on the ground of lis pendens, which had been accepted by the Courts in Madras, right up to the High Court, was directed against two kinds of sales : firstly,% there was the ostensibly voluntary sale of 7 7 1958 under a sale deed by the defendant Munisami Mudaliar and his major son Subramanian Mudaliar and three minor sons Jagannathan, Duraisami alias 145 Thanikachalam, and Vijayarangam in favour of the defendant appellant; and, secondly, there was the sale evidenced by the sale certificate (Exhibit B. 51) of 15 7 1960 showing that the auction sale was held in order to realise certain, "arrears under hire purchase system due to Shri O. D. Munisami Mudaliar.
The words "due to" must in the context, be read as "due from" ' because "falsa demostration non nocet".
The deed of the voluntary sale for Rs. 10,5001/ showed that Rs. 7375.11 Ans were to be set off against the money due on a. decree obtained by the purchaser against the sellers in original suit 2/56 of the Vellore Sub Court , Rs. 538.5 Ans.were left to liquidate the amount due for principal and interest due to the purchaser on a bond dated 14 10 1957, by Munisami Mudaliar, Rs. 662.9 Ans.was to be set off to liquidate another amount due to the purchaser from Munisami on account of the principal and, interest on another bond executed by Munisami, Rs. 1250.0.0 was left to pay off and liquidate the balance of a debt due to one Thiruvenkata Pillai from Munisami, Rs. 100.0.0 were meant to settle a liability to the Government in respect of a purchase of cattle and for digging of some well, Rs. 51.13 Ans.were to go, towards settling a similar liability, and only Rs. 521.11 Ans.were paid in cash to the seller after deducting other amounts for meeting liabilities most of which were shown as debts to the purchaser himself.
It may be mentioned here that, on 17 1 1944, Munisami had executed a mortgage of some of the property in Schedule 'B ' of the plaint for Rs. 7,500/ in favour of Kannayiram, and he had executed a second mortgage in respect of one item of property of Schedule 'B ' in favour of Patta Mal, who had assigned his rights to T. Pillai.
A third mortgage of the first item of Schedule 'B ' properties was executed on 27 5 1952 by Munisami, in favour of the appellant Jayaram, was said to be necessitated by the need to pay arrears of Rs. 3,000/ incometax and for discharging a debt and a promote in favour of a man called Mudali.
In 1955, an original suit No. 124/1955 had been filed by T. Pillai who had obtained orders for the sale of the first item of Schedule 'B ' properties shown in the plaint.
The original suit No. 2 of 1956 had been filed for principal and interest due on 27 5 1952 to the appellant who had obtained an attachment on 5 1 1956 of some schedule 'B ' properties.
The appellant had obtained a preliminary decree on 25 1 1956 in his suit and a final decree on 14 9 1957.
All these events had taken Place before the institution of the partition suit on 23 6 1968.
But, the voluntary sale to satisfy decretal amounts was executed after this date.
The second sale was an involuntary sale for realisation of dues under the provisions of section 7 of the Land Improvement Loans Act 19 of 1883 which could be realised as arrears of land revenue.
There was nothing in the sale certificate to show that the due for 146 which properties were sold were of anyone other than Munisami individually.
On the facts stated above, the appellant Jayaram claims that both kinds of sales were outside the purview of the doctrine of lis pendens inasmuch as both the sales were for the discharge of preexisting liabilities of the Hindu joint family of which Munisami was the karta.
The liabilities incurred by Munisami, it was submitted, as karta of the family, had to be met, in any case, out of the properties which were the subject matter of the partition suit.
It was urged that where properties are liable to be sold for, pay ment of such debts as have to be discharged by the whole family, ,only those properties would be available for partition in the pending suit which are left after taking away the properties sold for meeting the pre existing liabilities of the joint family.
In the case of the sale for discharging dues under the Land Improvement Loans Act it was also contended that they obtained priority .,over other claims, and, for this additional reason, fell outside, the scope of the principle of lis pendens.
The defendant respondent Munisami and the defendant appellant Jayaram had both pleaded that the properties in suit were acquired by Munisami with his own funds obtained by separate business in partnership with a stranger and that Ayyaswami, plaintiff, had no share in these properties.
The plaintiff respondent 's case was that although the properties were joint, the liabilities sought to be created and alienations made by Munisami were fraudulent and not for any legal necessity, and, therefore, not binding on the family. ' The Trial Court had found that the properties given in Schedule 'B ' were joint family properties of which the defendant respondent Munisami was the karta in possession.
This finding was affirmed by the first Appellate Court and was not touched in the High Court.
It did not follow from this finding that all dealings of Munisami with joint family properties, on the wrong assumption that he was entitled to alienate them as owner and not as karta, would automatically become binding on the joint family.
A karta is only authorised to make alienations on behalf of the whole family where these are supported by legal necessity.
It was no party 's case that the alienations were made on behalf of, and, therefore, were legally binding on the joint family of which plaintiff respondent Ayyaswami was a member., The Trial Court recorded a finding on which the learned Counsel for the appellant relies strongly : "There is over whelming documentary and oral evidence to show that the sale deed Exhibit B.7 and the revenue sale are all true and supported by consideration and that the 12th Defendant would be entitled to them, if these sales were not affected by the rule of lis pendens 'Within the meaning of Section 52 of the Transfer of Property Act.
" 147 It may be mentioned here that the 12th Defendant is no other than, the appellant Jayaram Mudaliar, the son in law of defendant respondent Munisami Mudaliar, who had purchased the properties covered by both the impugned sales.
The plea of the plaintiff respondent Ayyaswami that the sales in favour of Jayaram, the 12th defendant appellant, were fraudulent and fictitious and the trial Court 's decree for the partition included the, properties covered by the two impugned sales evidenced by exhibit B.7 and B.5 1, yet, the Commissioner who was to divide the properties by metes and bounds, was directed to allot to Munisami 's share, so far as possible, properties which were covered by Exhibit B.7, and B.51.
This implied that the liabilities created by the decrees for whose satisfaction the sale deed dated 7 7 58 (Exhibit B 7) was executed and the revenue sale of 16 3 1960 for loans under an agreement were treated as the separate liabilities of the defendant Munisami and not those of the joint family.
The Trial Court as well as the First Appellate Court had also rejected the plea that the revenue sale of 16 3 1960 to satisfy pre existing liabilities of Munisami had any priority over the rights of the plaintiff respondent may get in the partition suit.
The result was that the partition suit was decreed subject to a direction for the allotment of the Properties covered by Exhibit B. 7 and B. 51 so that the purchaser may retain these properties if they were allotted to Munisami.
The High Court of Madras had described the sale of 7 7 1958 as a "voluntary alienation", and, thereby, placed it on a footing different from an involuntary sale in execution of a decree in a mortgage suit.
The obligations incurred before the sale of 7 7 1958, by reason of the decrees in the mortgaged suits, were not on this view, liabilities which could be equated with either transfers prior to the institution of the partition suit or with sales in execution of mortgage decrees which are involuntary.
So far as the revenue sale was concerned, the High Court, after setting out the terms of Section 7 of the Land Improvement Loans Act 19 of 1883, held that only that land sold was to be excluded from the purview of the principle of lis pendens for the improvement of which some loan was taken.
This meant that only that part of the loan was treated as a liability of the joint family as could be said to be taken for the joint land.
It, therefore, modified the decrees of the Courts below by giving a direction that further evidence should be taken before passing a final decree to show what land could be thus excluded from partition.
The plaintiff appellant has relied upon certain authorities laying down that the doctrine of lis pendens is not to be extended to cover involuntary sales in execution of a decree in a mortgage suit where the mortgage was, prior to the institution of the suit in which 148 the plea of lis pendens is taken, because the rights of the purchaser in execution of a mortgage decree date back to the mortgage itself.
They are: Chinnaswami Paddayachi vs Darmalinga Paddyachi(1) Gulam Rasool Sahib vs Hamida Bibi(2 ) , Baldeo Das Bajoria & Ors.vs Sarojini Dasi & Ors.,(3) Har Prashad Lal vs Dalmardan Singh(4).
Reliance was also placed on the principle laid down in Sityam Lal & Anr vs Sohan Lal & Ors.,(5) to contend that, since Section 52 of the Transfer of Property Act does not protect transferors, a transfer on behalf of the whole joint Hindu family would be outside the purview of the principle in a partition suit.
The contention advanced on the strength of the last mentioned case erroneously assumes that the impugned sales were on behalf of the joint family.
Learned Counsel for the plaintiff respondent has, in reply, drawn our attention to the following observations of Sulaiman, Ag.C.J., expressing the majority opinion in Ram Sanehi Lal & Anr.vs Janki Prasad & Ors.(6) (FB) : "the language of section 52 has been held to be applicable not only to private transfers but also to Court sales held in execution of decrees.
section 2 (d) does not make section 52 inapplicable to Ch. 4, which deals with mortgages.
This is now well settled : vide Radhama 'dhub Holdar vs Manohar Mukerji (A) and Moti Lal vs Kharrabuldin (B) followed in numerous cases out of which mention may be made of Sukhadeo Prasad V. Jamna (C) ".
But, as we have no actual sale in execution of a mortgage decree, this question need not be decided here.
Another decision to which our attention was drawn was : Maulabax vs Sardarmal & Anr.
The suggestion made on behalf of the appellant, that attach ment of some schedule 'B ' property before judgment in the purchaser 's mortgage suit could remove it from the ambit of lis pendens, is quit, , unacceptable.
A contention of this kind was, repelled, in K. N. Lal vs Ganeshi Ram, (8) by this Court as clearly of no avail against the embargo imposed by Section 52 of the Transfer of Property Act.
(1) AIR 1932 Madras 566.
(3) AIR 1929 Calcutta 697.
(5) AIR 1928 All.
(7) AIR 1952 Nag.
341, (2) AIR 1950 Madras 189.
(4) ILR 32 Calcutta 891.
(6) AIR 1931 All.
P. 466 @ 480.
(8) ; at 21 149 The High Court had rightly distinguished cases cited on behalf of the appellant before it by holding that exemption from the scope of As pendens cannot be extended to voluntary sales in any case.
Obviously, its view was that, even where a voluntary sale takes place in order to satisfy the decretal amount in a mortgage suit, the result of such a sale was not the same as that of an involuntary sale in the course of execution proceedings where land is sold to satisfy the decree on the strength of a mortgage which creates an interest in the property mortgaged.
The High Court had observed that, as regards the satisfaction of the mortgage decree in his favour, which was part of the consideration for the sale of 7 7 1958, the appellant purchaser decree holder could get the benefit of Section 14 and still execute his decree if it remained unsatisfied due to failure of consideration.
An examination of the sale deed of 7 7 1958 discloses that it is not confined to the satisfaction of the decretal amounts.
Other items are also found in it.
The sale deed does not purport to be on behalf of the Hindu joint family of which Ayyaswami the plaintiff and Munisami Defendant No. 1 could be said to be members.
It no doubt mentions the sons of Munisami Mudaliar but not Ayyaswami, plaintiff, among the sellers.
As already indicated, Munisami, Defendant Respondent, as well as Jayaram Defendant Appellant, having denied that the, properties in dispute were joint, could not take up the position that the sales were binding on the whole family.
Therefore, we are unable to hold that the assumption of the Madras High Court that the voluntary sale could not bind the whole family, of which Munisami was the karta, was incorrect.
Learned Counsel for the appellant had also relied on Bishan Singh vs Khazan Singh.(1) That was a case in which, before the deposit of money by the pre emptors in a suit to enforce their rights to pre emption, the vendee had sold his rights to the appellant who had an equal right of pre emption.
It was held there that the claim for pre emption could be defeated by such a device which fell outside the purview of the principle of lis pendens.
We think that this decision turns Upon its own facts and on the nature of the right of pre emption which, as was observed there, is a weak right.
This Court had held that this weak right could be defeated by a sale which a vendee is compelled to make for the purpose of defeating the 'night, provided the purchaser 's superior or equal right to Pre emption had not been barred by limitation.
On the question considered there the view of the East Punjab High Court in Wazir Ali Khan vs Zahir Ahmad Khan(2) was preferred ,to the view of the Allahabad High Court in Kundan Lal vs Amar (1) ; (2) A.T.R. 1949 East Punj.150 Singh.(1) The observations made by this Court with regard to the doctrine of lis pendens when a plaintiff is enforcing a right of preemption must, we think, be confined to cases of sales which could defeat preemptors claims.
It has to be remembered that a technical rule of the law of preemption is that the preemptor, to succeed in his suit, must continue to possess the right to preempt until the decree for possession is passed in his favour.
As regards the revenue sale of 16 3 1960 (Exhibit 0.51) we find that the, sale certificate is even less informative than the voluntary sale deed considered above.
Nevertheless, the view taken by: the Madras High Court was that any land for to improvement of which loan is shown to have been taken by Munisami Mudaliar would be excluded from the purview of the doctrine of lis pendens.
It is, however, urged that the High Court had given effect to clause, (c) of Section 7 of the Land improvement Loans Act of 1883, but had overlooked clause (a).
1 Here, the relevant part of Section 7, sub section(1) of this Apt may be, set out.
It reads as follows "7.Recovery of loans. (1) Subject to such rules as may be made under Section 10, all loans granted under this Act, all interest (if any) chargeable thereon, and 'Costs (if any) incurred in making the same shall, when they become be ' recoverable by the, Collector in all or any of the following modes, name (a) from the borrower as if they were arrears of land revenue due by him; (b) from his surety (if any) as if they were arrears of land revenue due by him;, (c) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land; (d) out of the property comprised in the collateral security (if any) according to the procedure for the realization of land revenue by the sale of immovable property other than the land on which that revenue is due : Provided that no proceeding in respect of any land under clause (c) shall affect any interest in that land which existed before the date of the order granting the loan, other than the interest of the borrower, and of mortgages of, or persons having charges on, that interest and where the loan is ' granted under Section 4 with the consent of another person, the interest of that person, and of mortgagees of, or persons having charges on, that interest.
" Reliance was also placed on Sec.42 of the Madras Revenue Recovery Act of 1864 which reads as follows: "All lands brought: to sale on account of arrears of revenue shall be sold free of all incumbrances, and if any balance shall remain after liquidating the arrears with interest and the expences of attachment and sale and other costs due in respect to such arrears, it shall be paid over to the defaulter unless such payment be ' prohibited by the injunction of a Court of competent jurisdiction.
" It will be seen that the assumption that the dues could be realised as arrears of land revenue would only apply to the interest of the borrower so far as clause (7) (1) (a) ls concerned.
The proviso enacts that even recoveries falling under Sec 7 ( 1 ) (c) do not affect prior interests of, persons other than the borrower or of the party which consents to certain loans.
In the case before us, the borrower had himself taken up the case that the loan was taken by him individually for the purpose of purchasing a pumping set installed on the land.
It did not, therefore, follow that this liability was incurred on behalf of the joint family unless it amounted to an unprovement of the joint land.
Every transaction of Munisami or in respect of joint property in his possession could not affect rights of other members.
It was for this reason that Section 7 (1) (a) was not specifically applied by the High Court,.
But, at the same time, the direction that the properties sold should, so far as possible, be allotted to Munisami meant that the purchaser could enforce his rights to them if they came to the share of Munisami.
The question of paramount claims or rights of the Government for the realisation of its taxes or of dues which are equated with taxes was also raised on behalf of the appellant on the strength of Builders Supply Corporation vs The Union of India(1) In that case, the origin of the paramount right of the State to realise taxes due, which could obtain priority over other claims, was traced to the prerogatives of the British crown in India.
Apart of the fact that there is no claim by, the State before us, we may observe that, where a statutory provision is relied upon for recovery of dues, the effect of it must be confined to what the statute en acts.
Even under the English law, the terms of the statute displace any claim based on prerogatives of the Crown (1) 152 vide Attorney General v. De Keyser 's Royal hotel Ltd. (1) And, in no case, can the,claim whatever its basis, justify a sale of that property which doesnot belong to the person against whom the claim exists.
As already observed a claim under Section7(1)(a) of the Land Improvement Loans Act of 1883 could only be made from the borrower.
This meat that, unless it was proved that Munisami, in taking a loan under the Act, was acting as the, karta of the, joint Hindu family of which Ayyaswamy was a member, recovery of arrears could only be made from Munisami 's share in the, 1and.
That this could be done was, in our opinion implied in the direction that the properties sold should, so far as possible, be allotted to the share of Munisami.
As some argument has been advanced on the supposed in applicability of the general doctrine of lis pendem to the impugned sales, the nature, the basis, and the, scope of this doctrine may be ,considered here.
It has been pointed out, in Bennet "On lis pendens", that, even before Sir Francis Bacon framed his ordinances in 1816 " 'for the better and more regular administration of justice in the chancery, to be daily observed" stating the doctrine of lis pendens in the 12th ordinance, the doctrine was already recognized and enforced by Common law Courts.
Bacon 's ordinance on the ,Subject said : "No decree bindeth any that commeth in bona fide, by conveyance from the, defendant before the bill exhibited, and is made no party, neither by bill, nor the order; but, where he comes in pendente life, and, while the suit is in full prosecution.
and without any colour of allowance or privity of the court, there regularly the decree bindeth; but, if there were any intermissions of suit, or the court made acquainted with the conveyance, the court is to give order upon the special matter according to justice.
" The doctrine, however, as would be evident from Bennet 's work mentioned above, is derived from the rules of jus gentium which became embodied in the Roman Law where we find the maxim: "Rem dequa controversia prohibemur in acrum dedicate" (a thing concerning which there is a controversy is prohibited, during the suit from being alienated).
Bell, in his commentaries on the lows of Scotland(1) said that it was grounded on the,maxim: "Pendente lite nibil innovandum".
He observed "It is a general rule which seems to have been recognized in all regular systems of jurisprudence, that during the pendence of an action., of which the object is to (1) ; (2) 2 Bell 's Com. on laws of Scotland, p. 144.153 vest the property or obtain the possession of real estate, a purchaser shall be held to take that estate as it stands in the person of the seller, and to be bound by the claims which shall ultimately be pronounced.
" In the Corpus Juris Secundum (Vol.LIV P. 570), we find the following definition : "Lis pendens literally means a pending suit; and the doctrine of lis pendens has been defined as the jurisdiction, power, or control which a court acquires over property involved in suit, pending the continuance of the action, and until final judgment therein.
" Expositions of the doctrine indicate that the need for it arises from the very nature of the jurisdiction of Courts and their control over the subject matter of litigation so that parties litigating before it may not remove any part of the subject matter outside the power of the court to deal with it and thus make the proceedings infructuous.
It is useful to remember this background of Section 52 of our Transfer of Property Act which lays down : "During the pendency in any Court. of any suit or proceeding which is not collusive and in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made there,in, except under the authority of the Court and on such terms as it may impose.
" It is evident that the doctrine, as stated in Section 52, applies not merely to actual transfers of rights which are subject matter of litigation but to other dealings with it "by any party to the suit or proceeding, so as to affect the right of any other party thereto".
Hence, it could be urged that where it is not a party to the litigation but an outside agency, such as the tax Collecting authorities of the Government, which proceeds against the subject matter of litigation, without anything done by a litigating party, the resulting transaction will not be hit by Section 52.
Again, where all the parties which could be affected by a pending litigation are, themselves parties to a transfer or dealings with property in such a way that they cannot resile from or disown the transaction impugned before the Court dealing with the litigation, the Court may bind them to their own acts.
All these are matters which the Court could have properly considered.
The purpose of Section 52 of the Transfer of Property Act is not to defeat any just and equitable claim but only to subject them to the authority of the Court which is dealing with the property to, which claims are put forward.
11 1208S ipCT/72 154 In the case before US, the Courts had given directions to safeguard such just and equitable claims as the purchaser appellant may have obtained without trespassing on the rights of the plaintiff respondent in the joint Property involved in the partition suit before the Court.
Hence, the doctrine of lis pendens was correctly applied.
For the reasons given above, there is no force in this appeal which is dismissed with costs.
Sikri, C. J.
I have had the advantage of perusing the judg ment prepared by my brother, Beg J., but as I arrive at the same conclusion by a slightly different route I am writing a separate judgment.
I may give a few facts to, make the judgment self sufficient.
The following pedigree may enable us to appreciate the facts Muniappa Mudaliar Doraiswamy Mudaliar ChidambaraGovindaswamy Muda (died on 4 9 1937) Mudaliarliar (died 1940) wife 6th Def.(died pendingAnnammal 10th Def.suit) Muniswami Ayyaswami Def.7 Def8 Def. 9 Mudaliar (1st Def.Mudaliar died pending suit) (Plaintiff) Def./ 2 Def.3 Def. 4 Def. / 5 12th Def.(Jayaram Mudaliar) alinee of Def.No. 1.
On June 23, 1956 Ayyaswami (Plaintiff) filed a pauper petition No. 137/1958.
In the plaint he claimed a partition of B Schedule properties which, according to him belonged to Joint Hindu Family consisting of himself and the defendants.
While this suit was pending, defendant No. 1 Muniswami Mudaliar and four of his sons executed a sale deed (exhibit B7) in respect of some lands in Ozhaiyathur village in favour of Jayaram Mudaliar on July 7, 1958.
These properties comprised items 5, 15 to 19, 24 and 28 of Schedule B.
On July 15, 1960 a certificate of sale (exhibit B51) was issued stating that Jayaram Mudaliar had purchased at public auction immoveable property (described in the certificate) for Rs. 6,500/ .
The property is stated to have been sold for " pumpset arrears under Hire Purchase System due by Muniswami Mudaliar".
Exhibit B 51 covered items 4, 18, 20, 23 to 27 and 155 31.It is common ground that these properties were included in the B Schedule mentioned in the plaint.
It is stated in the judgment of the Trial Court that Jayaram Mudaliar got himself impleaded as 12th defendant.
He filed a written statement inter alia alleging that the Plaint B Schedule properties were the sole and absolute properties of the 1st defendant.
Additional issues were framed in the suit.
It appears that by virtue of order dated September 18, 1961, the plaint was amended and paras 24(a) and 24(b) inserted.
They read : "24(a) The 12th defendant is a close agnate of the son in law of the 1st defendant.
He executed the sham and nominal sale deed dated 7 7 1958 in favour of the 12th defendant to defeat the plaintiff 's rights and to secrete the properties.
It was not acted upon.
It is the 1st defendant that continues to be in possession even now.
The alleged sale deed is not supported by consideration.
The mortgage itself was brought about to defeat any rights.
In any event on the date of the alleged sale deed dated 7 7 1958 the mortgage decree debt was, not subsisting.
The plaint was filed in forma pauperis as O.P. 137 of 1958 on the file of this Hon 'ble Court on 23 6 1958.
Thus in any event the sale is, hit by the rule of lis pendens and the sale deed dated 7 7 1958 cannot and does not confer any rights on the 12th defendant.
24(b) The revenue sale is brought about collusively and fraudulently.
There was no publication.
The 12th defendant never got into possession of any property.
The possession still continues to be with the 1st defendant on behalf of the joint family.
The sale is also hit by the rule of lis pendens.
It also does not and cannot confer any rights on the 12th defendant.
" Following additional issues were raised out of the pleadings of the 12th defendant : (1) Whether the plaint B Schedule properties are joint family properties ? (2) Whether the plaintiff is entitled to question the, alienations in favour of the 12th defendant ? (3) Whether the sale deed dated 7 7 1958 by the 1st defendant in favour of the 12th defendant true, valid and binding on the plaintiff and is affected by LIS PENDENS ? 156 (4) Whether the Revenue sale by the Collector dated 16 3 1960 is liable to be questioned by the plaintiff ? (5) Is the suit without impleading the Government liable to be questioned by the plaintiff ? (6) Is the sale of pump set by the 1st defendant to the 12th defendant true, valid and binding on the plaintiff ? (7) Whether the plaintiff and other members became divided from the 1st defendant after 1939 ? (8) To what equities, if any, is the 12th defendant entitled ? (9) Is the plaintiff estopped from questioning the alienations and claiming any right in the B Schedule properties ? We are only concerned with issues 3 and 4 above.
The Trial Court held that the sale deed, exhibit B7, and the revenue sale "are all true and supported by consideration and that the 12th defendant would be entitled to them, if these sales were not affected by the rule of 'lis pendens ' within the meaning of section 52 of the Transfer of Property Act".
Regarding lis pendens he held that the purchases under both exhibit B7 and exhibit B51 were affected by the rule of lis pendens.
The Trial Court passed a preliminary decree for partition of B Schedule properties (items 2 to 31) into six equal shares.
It protected the interest of the 12th defendant by stating that "as far as possible the Commissioner appointed in the suit for division of the properties will allot to the plaintiff 's share such of the properties which are not covered by Exs.B 7 and B 51".
The District Judge confirmed the decree.
Before the High Court, in appeal by defendant No. 12, the only point considered was that of lis pendens.
The High Court held that exhibit B7 was a case of voluntary alienation and was hit by lis pendens, as the sale was not in execution of a mortgage decree.
Regarding exhibit B51 the High Court, relying on Ponnuswami vs Obul Reddy(1) held that exhibit B51 would not be affected by lis pendens, as the loans were granted under the Land Improvement Loam Act to the extent that the loans were taken for the improvement of the properties.
As it had not been considered whether all the properties which were sold in revenue sale and conveyed under exhibit B51 were, lands for the improvement of which loans were taken, the High Court directed (1) A.I.R. 1939 Mad.157 "In the final decree proceedings, the trial court were to consider what were the properties for the improvement of which the loans under the Land Improvement Loans Act were taken by the first defendant, in respect of those properties alone the doctrine of lis pendens will not apply.
In respect of other properties, the doctrine of lis, pendens will apply.
The trial court take evidence for the purpose of deciding the properties in respect of which the loans under the Land Improvement Loans Act were taken." With this modification the High Court dismissed the appeal.
Defendant No. 12 applied for a certified copy of the Judgment and Decree on July 22, 1968, and these were made ready on August 9, 1968 and delivered on August 12, 1968.
Defendant No. 12 moved the High Court by letter dated August 22, 1968 "requesting the posting of the appeal for being mentioned for the purpose of the issue of the Certificate for leave to appeal under the Letter Patent".
The learned Judge who heard the appeal by his order dated September 6, 1968 refused the leave on the ground that the leave was not asked for immediately on delivery of judgment and that it could not be asked for afterwards.
Rule 28 of Order 4 of the Rules of the High Court of Madras Appellate Side, 1965 under which the leave asked for was refused reads "28. When an appeal against an appellate, decree or order has been heard and disposed of by a single judge, any application for a certificate that the case is a fit one for further appeal under clause 15 of the Letters Patent shall be made orally and immediately after the judgment has been delivered."
This Court granted special leave.
At the outset, Mr. Chagla raised the preliminary objection that the appeal was incompetent as Defendant No. 12 failed to ask for certificate orally and immediately after the judgment was delivered.
The learned counsel for Defendant No. 12 urged that Rule 28 of Order 4 was ultra vires.
Two points thus arise out of the contentions of the parties : (1) Is Rule 28 of Order 4 of the Rules of the High Court of Madras Appellate Side ultra vires ? (2) Are the Sales by exhibit B7 and exhibit B51 hit by the rule of lis pendens ? Clause 15 of the Letters Patent inter alia provides for an appeal to the High Court from a judgment of one judge made in 158 exercise of the appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a court subject to its superintendence, where the Judge who passed the judgment declares that the case is a fit one for appeal.
Clause 37 ,of the Letters Patent confers powers on the High Court to make rules and orders for the purpose of regulating all proceedings in civil cases.
This Court held in The Union of India vs Ram Kanwar(1) that under el.27 of the Letters Patent which is in similar terms as el.
37 mentioned above, the High Court of Judicature at Lahore had the power to make a rule prescribing the period of limitation in respect of appeals from Orders made by that Court in exercise of its original jurisdiction to a Division Bench ,of that Court.
It seems to me that the High Court can equally frame a rule regulating, the 'time at which and the manner in which the application for a certificate shall be made.
Rule 28 of Order 4 does not take away any right conferred by el. 15 of the Letters Patent.
It only regulates the manner of the exercise of that right.
It was said that the rule unduly restricts the right of the litigant to peruse the judgment and make, up his mind whether to appeal or not.
But if the declaration is made immediately by the Judge that the case is fit one for appeal there is nothing to prevent the litigant ;from not filing the appeal if he considers it inadvisable to do so.
I need not discuss the point whether the Judge will have the right to condone a breach of the Rule because no application seems to have been made to condone the breach of the Rule.
But this conclusion does not render the appeal before us incompetent.
Leave was given by this Court after hearing the respondents on October 14, 1968.
On April 22, 1969 the respondents obtained an order from this Court for expediting the hearing.
No application was made at that stage to raise the point of incompetency of appeal.
In the circumstances I consider that the appeal should be disposed of on merits.
Coming to the second point, this Court has considered the 7scope of section 52 of the Transfer of Property Act and the rule of lis pendens in a number of cases.
There is no difficulty in holding that exhibit B7 falls within the provisions of section 52 of the Transfer of Property Act.
But exhibit B51 stands in a different position.
It was held in Samarendra Nath Sinha & Anr.vs Krishna Kumar Nag(1) that the principle of lis pendens applies even to involuntary alienations like court sales.
Shelat J., observed : "The purchaser pendente lite under this doctrine is bound by the result of the litigation on the principle that since the result must bind the party to, it so must it bind the person deriving his right, title and interest from or through him.
This principle is well illustrated in Radhamabhub Holder vs Monohar(1) where the facts were almost similar to those in the instant case.
It is true that section 52 strictly speaking does not apply to involuntary alienations such as court sales.
But it is well established that the principle of lis pendens applies to such alienations.
[See Nilkant vs Suresh Chandra(2) and Motilal vs Karrabuldin (3).] These observations were referred to with approval by this Court in Kedar Nath Lal vs Ganesh Ram(1).
If the principle of lis pendens applies to court auctions there is no reason why it should not apply to revenue sales.
But the effect of the application of the principle ' may vary according to the nature of the provisions under which the revenue sale is held.
The principle of lis pendens does not affect pre existing rights.
If there is a valid charge or mortgage on a property, this does not vanish because the property becomes the subject matter of a partition suit.
In this case according to defendant No. 12 a valid charge subsisted on the lands by virtue of the provisions of the Land Improvement Loans Act.
Under section 7 of the Land Improvement Loans Act loans are recoverable by the Collector in all or any of the following modes, namely: (a) from the borrower as if they were arrears of land revenue due by him; (b). . (c) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land; The proviso to section 7 reads "Provided that no proceeding in respect of any land under clause (c) shall affect any interest in that land which existed before the date of the order granting the loan, other than the interest of the borrower, and of mortgagees of, or persons having charges on, that interest, and where the loan is granted under Section 4 with the consent of another persons, the interest of that person, and of mortgagees of, or persons having charges on, that interest.
" Section 42 of the Madras Revenue Recovery Act provides that all lands brought to sale on account of arrears of revenue shall be sold free of all encumbrances.
The liability of the land to be sold under section 7 (c) of the Act was a pre existing charge and that subsisted as from the date of the loan.
This was not affected by the institution of the suit for partition.
This charge could be enforced by the State, notwithstanding the pendency of the partition suit.
No decree in the Partition suit could have effaced the charge.
Therefore, if the State has sold only the property in respect of which loan was taken, the purchaser defendant No. 12 is not prejudiced by the, principle of lis pendens.
Therefore, the direction of the High Court was right insofar as it directed the Trial Court to separate the properties for the improvement of which the loans under the Land Improvement Loans Act were taken, from the other properties.
In the result the appeal fails and is dismissed.
G C. Appeal dismissed.
| IN-Abs | The plaintiff respondent filed a suit for partition of properties men the first defendant (plaintiff 's brother) was the Karta.
After the filing of the suit the first defendant and his sons made a voluntary sale of some of the properties in suit by sale deed exhibit B7, to the appellant.
Certain other suit properties mentioned in exhibit, B51 were sold at a public auction under the provisions of the Land Improvement Loans Act 19 of 1883 in connection with arrears of a loan taken by the first defendant for the purchase of a pump set.
These properties were also purchased .by the, appellant.
The plaintiff respondent challenged the validity of the sales under exhibit B7 and exhibit B51 relying on the doctrine of lis pendens embodied in section 52 of the Transfer of Property Act.
The .trial court held that the sales were genuine and that the proper ties sold were joint family properties, negativing the claim of the first defendant that they were his individual properties.
The doctrine of his pendens held to be applicable to the properties sold.
In the decree for part however the trial court directed the Commissioner who was to divide the properties by metes and bounds to allot to the share of the first defendant, so far as possible, properties which were covered by exhibit B7 and B51.
The High Court in second appeal held that although the sale under exhibit B7 was made to satisfy the decree in certain mortgage suits it was a voluntary sale and could not be equated with sales in execution of mortgage decrees which are involuntary.
So far as the revenue sale under exhibit B51 was concerned the High Court after setting out the terms of section 7 of Act 19 of 1883 held that only that land sold was to be excluded from the purview of the principle of lis pendens for the improvement of which some loan was taken.
It therefore modified the decrees of the Courts below by giving a direction that further evidence should be taken before ' passing a final decree to show what land could be thus excluded from partition.
The High Court rejected the application of the appellant for leave to appeal to the Division Bench on 'the ground that no oral request immediately after delivery of judgment was made as provided in Rule 28 Order 4 of the Madras High Court Appellate Side Rules 1965.
This Court however allowed special leave to appeal under article 136 of the Constitution.
Apart from the writs the Court had to consider a preliminary objection requiring the appeal to be dismissed in limine.
In this connection the validity of Rule 28 Order 4 also fell for consideration HELD : (i) Per Ray and Beg, JJ.
Rule 28 of Order 4 of the Madras High Court Rules does not purport to affect the power to give the declaration contemplated by clause 15 of the Letters Patent.
It is evident that the rule is most useful and necessary particularly when a period of thirty days only for filing an appeal has been prescribed by the .
The judge pronouncing the judgment can decide then and there, in the presence of the parties or their counsel, whether the case calls for a certificate.
In a suitable case, where a party is able to prove that it 140 was prevented due to some cause beyond its control from asking for leave at the proper time, the judge concerned may condone the delay or extend the time by applying section 5 of the .
This salutary rule could not therefore be held to be ultra vires or invalid.
[143 F H] Penu Balakrishna Iyer & Ors, vs Sri Ariya M. Ramaswami Iyer In the present ease although the appellant was not shown to have attempted any explanation of failure to apply for the certificate at the proper time, yet, the, special leave petition having been granted and the case having passed without objection, beyond the stage of interim orders and printing of records, the Court heard arguments on merits also.
[144 F G] Per Sikri, C.J. (concurring) The High Court can regulate the time at which and the manner in which the application for certificate & WI be made.
Rule 28 Order 4 does not take away any right conferred by cl. 15 of the Letters Patent.
It only regulates the manner of the exercise of that right.
Union of India vs Ram Kanwar, ; , referred to.
(ii) Per Ray & Beg, JJ.
Expositions of the doctrine of lis pendens indicate that the need for it arises from the very nature of the jurisdiction of Courts and their control over the subject matter of litigation so that the parties litigating before them may not remove any part of the subject matter outside the power of courts to deal with it and thus make proceedings infructuous.
[153C] The purpose of section 52 of the Transfer of Property Act is not to defeat any just and equitable claim but only to subject them to the authority of the Court which is dealing with the property to which claims are put forward.
In the present case the Courts had given directions to safeguard such just and equitable claims as the purchaser may have obtained without trespassing on the rights of the plaintiff respondent in the joint property involved in the partition suit before the Court.
Hence, the doctrine of lis pendens was correctly applied. [153H, 154A] In regard to the sale under exhibit B7 the High Court had rightly distinguished cases cited on behalf of the appellant before it by holding that exemption from the scope of lis pendens cannot be extended to voluntary sales in any case.
[149 A] An examination of the sale deed exhibit B7 disclosed that it was not confined to the satisfaction of decretal amounts.
Other items were also found in it.
The sale deed did not purport to be on behalf of the Hindu joint family of which the plaintiff and the first defendant could be said to be members.
The sons of the first defendant were among the sellers but not the plaintiff.
At most it could be a sale binding on the shares of the sellers.
The first defendant as well as the appellant having denied that the properties in dispute were joint, could not take up the position that the sales were binding on the whole family.
Therefore it could not be held that the assumption of the High Court that the voluntary sale could not bind the whole family, of which the first defendant was the Karta, was incorrect.
Bishan Singh vs Khazan Singh, [1959] S.C.R . 878, distinguished.
As regards the revenue sale under exhibit B51 the assumption that the dues could be realised as arrears of land revenue would only apply to the interest of the borrower so, far as clause 7(1)(a) of Act 19 of 1883 is concerned.
The proviso enacts that even recoveries falling under section 7(1) (C) do not affect prior interests of persons other than the borrower or of the party which consents to certain loans.
In the present case the borrower had himself taken up the case that the loan was taken by him individually, for the purpose of purchasing a pumping set installed.
on the 141 land.
It did not therefore follow that this liability was incurred On behalf of the joint family unless it amounted to an improvement of the joint land.
Every transaction of the first defendant or in respect of joint property in his possession could not affect rights of other members.
it was for this reason that section 7(1) (a) was not specifically applied by the High Court.
But at the same time, the direction, that the properties sold should, so far as possible, be allotted to the first defendant meant that the purchaser could enforce his rights to them if they came to the share of the first defendant.
[151D F] Where a statutory provision is relied upon for recovery of dues, the effect of it must be confined to what the statute enacts.
Even under the English law the terms of the statute displace any claim based on the prerogatives of the Crown.
And in no case can the claim whatever its basis, justify a sale of that property which does not belong to the person against whom the claim exists.
[151H] Builders Supply Corporation vs The Union of India, and Attorney General vs Dekerysis Royal Hotel., Ltd., ; , referred to.
Per Sikri C.J. (concurring) Section 42 of the Madras Revenue Recovery Act provides that all lands brought to sale on account of arrears of revenue shall be sold free of all encumbrances.
The liability of the land to be sold under section
|
iminal Appeal No. 67 of 1968.
Appeal by special leave from the judgment 'and order dated January 18, 1968 of the Patna High Court in Criminal Appeal No. 407 of 1966.
208 section C. Agarwala and V. J. Francis, for the appellant.
B. P. Jha, for the respondent.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave from a judgment of the Patna High Court upholding the conviction of the appellant under section 411 of the Indian Penal Code for which a sentence of three years ' rigorous imprisonment was imposed.
According to the case of the prosecution a Sen Raleigh cycle was stolen from the possession of Sheo Charan Lal.
He reported the matter to the Police on March 25, 1965.
It appears that on May 11, 1965 the Station House Officer, Incharge Giridih Police Station A.D.N, Sinha learnt while he was moving about in the town on the Moharram day that a thief was running away with a Sycle.
The alleged thief was apprehended and the cycle in his possession was taken into custody.
The name of that person was Mohnd.
Siddique.
He made, a statement to the police officer which led him to search the premises of the appellant.
As a result of the 'search seven cycles including the Sen Raleigh cycle belonging to Sheo Charan Lal which was stolen on March 24, 1965 and three other cycles were recovered from the house of the appellant, Mohd, Siddique and the appellant were tried, the former under 'section 379 and the latter under section 411 of the Indian Penal Code.
Siddique was convicted and sentenced but he did not file any appeal.
It was not disputed before the High Court that the Sen Raleigh.
cycle was recovered along with nine other cycles as a result of the search of the house of the appellant by A.D.N. Sinha the S.H.O. on May 11, 1965.
It was also proved that that cycle was stolen.
The explanation given by the appellant was that three out of the 10 cycles belonged to the members of his family and the other seven had been pledged with him as he carried on the business of a pawn broker.
The Sen Raleigh cycle had been pledged by Siddique with him and that is how the said cycle was recovered from his possession.
P.W. I Jayantilal and P.W. 2 Shyam Narain, Singh deposed that the appellant as well as his brothers and other members of his family lived in the same house.
It was further stated by them that the appellant and his brothers worked as contractors and they also took things on pawn and advanced money.
According to Shyam Narain Singh he had seen ornaments and utensils being taken on pledge by the appellant and members of his family although he had not seen him taking any cycle on pledge.
The appellant also produced a document Exh.
DA which was scribed by one Baldev Pandit and had been attested by some witnesses.
In this document it was stand that Rs. 80 bad been received by Siddique by way of advance from the appellant and 209 that the cycle in question had been pledged with the latter.
Neither the scribe nor Mahabir Sao or Nanden who were the attesting witnesses gave evidence.
I Ramjit Sao a neighbour deposed that the document Exh.
A had been scribed in his presence and that Rs. 80/ had been paid to Siddique.
Siddique had pawned the cycle by way of security for the advance.
The courts below found that this document had been manufactured for the purpose.
of the case implying thereby that it was not genuine.
The appellant does not appear to have produced any evidence about the pledging of the other cycles which were found in his possession nor did he point to any other article apart from the cycles which had been pledged with him in the course of his business when the, search was made of his house by the S.H.O. A.D. N. Sinha.
The High Court, apart from other facts, took the following matters into consideration while upholding the conviction of the appellant (1) Although two defence witnesses had been examined by the appellant there was nothing to show that he had taken the ordinary precaution of making proper enquiries about the ownership of the cycle before advancing any loan on its security.
(2) It was significant that the document Exh.
A was quite silent as to the source from where Siddique had got that cycle and ' when he had acquired it.
(3) These facts showed that the transaction could not have been a bona fide transaction by the person carrying on bona fide business of advancing loans on pledge.
(4) The Investigating Officer had deposed to the fact that after the recovery of 10 cycles he made a verification from the records of the Police station and found that besides the Sen Raleigh cycle cases had been instituted earlier with respect to four more cycles out of the recovered cycles.
(5) Even if it be assumed that this evidence was not admissible according to the charge as framed with regard to two cycles the same had been recovered from the place of the appellant which had been admitted by Siddique as having been stolen by him.
(6) There could be no doubt that at least two of the 10 cycles recovered from the possession of the appellant were stolen properties.
(7) Considering the above aspect as well as the fact that the conduct of the appellant in connection with the taking possession, of the cycle in question from Siddique was not at all consistent with the conduct of a man of ordinary prudence it was not possible to accept the appellant 's contention that he had taken possession, of the cycle without knowledge or belief that it was stolen.
210 Learned counsel for the appellant has subjected the above reasons given by the High Court for sustaining the conviction to criticism on several grounds.
It has been firstly pointed out that admittedly the trial was confined to the alleged theft of the SenRaleigh cycle and its having been received by the appellant in circumstances which made him guilty of an offence under section 411 ,of the Indian Penal Code; the prosecution relating to the other cycles should not have been taken into account.
It has next been urged that the whole approach with regard to the appellant not having made bona fide enquiry from Siddique before accepting the Sen Raleigh cycle in pledge was unsustainable in law.
We may in this connection refer to a judgment of Lord Widgery C.J. in Atwal vs Massey(1) in which it was laid down that in order to establish an offence under section 22 of the (English) Theft Act 1968 which is similar in terms to section 411 of the Indian Penal Code, it was not sufficient to show that the goods had been received in circumstances which would have put a reasonable man on enquiry; the question was a subjective one; was the appellant aware of the theft or did he believe the goods to be stolen or did he, suspecting the goods to be stolen, deliberately shut his eyes to the circumstances ? The next submission on behalf of the appel lant is that the correct ambit and scope of the presumption which can be drawn under section 114, illustration (a) of the Evidence Act was not considered by the High Court or the courts below.
Section 114 provides that the court may presume the exist ence 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.
Illustration (a) is as follows : that a person 'who is in possession of stolen property soon after the theft is either the thief or has received the goods knowing that to be stolen unless he can account for his possession.
In Otto George Gfeller vs The King ( 2 ) the law as enunciated in Rex vs Abramovitch(3 ) was accepted as representing the correct statement on the subject of the presumption to be drawn in such cases.
That was in the following terms : "Upon the prosecution establishing that the accused were in possession of goods recently stolen they may in the absence of any explanation by the accused of the way in which the goods came into their possession which might reasonably be true find them guilty, but that if an explanation were given which the jury think might reasonably be true, and which is consistent with innocence although they were not convinced of its truth the (1) (3) [1914] 84 L.J. [K.B.] 391.
(2) 211 prisoners were entitled to be acquitted inasmuch as the prosecution would have failed to discharge the duty cast upon it of satisfying the jury beyond reasonable doubt of the guilt of the accused".
It has been urged before us that the appellant had given an explanation of how he came into possession of the Sen Raleigh cycle, his explanation being that it had been pledged with him by Siddique in the ordinary course of business which he was carrying on and that explanation had been sought to be supported by evidence.
The two prosecution witnesses had testified that the appellant and other members of his family were carrying on the business of pawn brokers apart from other avocations which they were following.
It is emphasised that according to the above statement of law even if the courts were not convinced of the truth of the explanation but if the same could be held to be reasonably true the prosecution must be considered to have failed to discharge the duty cast upon it of satisfying the court beyond reasonable doubt of the guilt of the appellant.
The question that the courts, therefore, had to decide was whether the explanation given by the appellant in view of the admission that the Sen Raleigh cycle was stolen property could be held to fall within the above rule, namely, whether it might reasonably be true even though the; courts were not convinced of its truth.
Since the courts below and the, High Court have taken some irrelevant and inadmissible matters into consideration we have examined with care the explanation given by the appellant in the light of the entire facts and we are unable to come, to the conclusion that the explanation could be regarded such as might reasonably be true.
The first and the most important fact is that the appellant had sought to prove the document ext.
DA to support the transaction of pledge.
That document bad rightly been found not to have been proved.
Apart from the Sen Raleigh cycle several other cycles were found in the possession of the appellant which he claimed to have been pledged with him.
No articles of any other kind were either pointed out or claimed to have been pledged with the appellant or with members of his family which would normally have been done if the version given by him that the business of pawn brokers was being carried on had any truth in it.
Pawn brokers are ordinarily and in normal course expected to maintain some books of account or some documents which contain the particulars of the transactions relating to pledge.
There was no indication or suggestion by the appellant that he was maintaining any such books of account or documents.
The above circumstances, in our opinion, were sufficient to show that the court would be justified in holding that the explanation given by the appellant could not reasonably be true.
A 212 presumption, therefore, could immediately be drawn in accordance with section 114, Illustration (a) of the Evidence Act.
There was hardly any evidence worth the name by which it could be said that the presumption had been rebutted by the appellant.
In the result the conviction and the sentence of the appellant are maintained and the appeal is dismissed.
He was released on bail; he shall surrender to the bailbonds.
G.C. Appeal dismissed.
| IN-Abs | A Sen Raleigh cycle which was stolen by one S was recovered from the house of the appellant along with several other cycles.
The appellant 's explanation was that some of the cycles belonged to members of his family and the others were pledged with him in the course of his business. Ext.
DA was produced by the appellant to show that the Sen Raleigh cycle in question had been pledged with him by section The Trial Court did not accept the document as genuine, rejected his explanation as to how the said cycle came into his possession and convicted him under section 411 I.P.C.
The conviction was upheld by the High Court Dismissing the appeal, this Court, HELD,: The appellant had sought to prove the document ext.
DA to support the transaction of pledge.
That document had rightly been found not to have been proved.
Apart from the Sen Raleigh cycle several other cycles were found in the possession of the appellant which he claimed to have been, pledged with him.
No article of any other kind was either pointed out or claimed to have been pledged with the appellant or with members of his family which would normally have been done if the version given by him that the business of pawn brokers was being carried on had any truth in it.
Pawn brokers are ordinarily and in normal course expected to maintain some books of account or some documents which contain the particulars of the transactions relating to pledge.
There was no indication or suggestion by the appellant that he was maintaining any such books of account or documents.
[211F] The above circumstances were sufficient to show that the court would be justified in holding that the explanation given by the appellant could not reasonably be true.
A presumption therefore could immediately be drawn in accordance with section 114.
Illustration (a) of the Evidence Act.
There was hardly any evidence worth the name by which it could be said that the presumption had been rebutted by the appellant.
[211H] The appeal must accordingly be dismissed.
Atwal vs Massay, ; Otto George Gfeller V. The King, and Rex vs Abramoitch, referred to.
|
N: Writ Petition No. 373 of 1970.
Under Article 32 of the Constitution of India for enforcement of the Fundamental Rights with Civil Appeals Nos. 2211 and 2212 of 1970 and 85 to 91 of 1971.
Appeals from the judgment and decree dated October 26, 1970 of the Madras High Court in Writ Petitions Nos. 64, 117, 118, 119, 120, 121, 185, 186 and 220 of 1970 respectively.
M.C. Chagla and K. Jayaram, for the petitioners (in W.P. No. 373 of 1970).
M.Natesan, Sardar Bahadur Saharya, K. Jayaram and Yougin dra Khushalani, for the appellant (in C.A. No. 2211 of 1970).
260 M.C. Setalvad and K. Jayaram, for the appellant (in C.A. No. 2212 of 1970).
K. Jayaram, for the appellants (in C.As.
Nos. 85 to 91 of 1971).
section Govind Swaminathan, Advocate General for the State of Tamil Nadu, section Mohan, A. V. Rangam, A. Subhashini and N. section Sivan, for the respondent (in all the matters).
The Judgment of the Court was delivered by Khanna, J.
The Gudalur Janmam Estates Abolition and Conversion into Ryotwari) Act, 1969 (Act No. 24 of 1969), hereinafter referred to as the Act, received the assent of the President on December 6, 1969, after it had been enacted by the legislature of the State of Tamil Nadu.
It was thereafter published in the gazette on December 17, 1969.
The Act extends to the Gudalur taluk of the Nilgiris district and applies to all janmam estates.
It is to come into force on such date as the State Government may, by notification, appoint.
This Court stayed the issue of the notification and, as such, no notification has so far been issued.
Nine petitions under article 226 of the Constitution of India were filed in the Madras High Court challenging the vires of the Act on the ground that it was violative of articles 14, 19 and 31 of the Constitution.
The case of the petitioners was that their lands in the Gudalur taluk were previously janmam estates but subsequently became ryotwari estates, especially after the resettlement of 1926 and, as such, the provisions of the Act were not applicable to those lands.
The Act, it was stated, did not get the protection of article 31A of the Constitution.
One of the above petitions was filed by O 'Valley Estate Ltd. This petitioner had taken on lease an estate comprising about 2,000 acres of land in the 19th century from the Nilambur Kovilakam who was the proprietor of that land besides some other land.
The Company (O 'Valley Estate Ltd.) has a plantation on the estate and is engaged in cultivation and manufacturing of tea and other plantation products.
The Nilambur Kovilakam was the petitioner in another petition.
The nine petitions were resisted by the State of Tamil Nadu on the ground that the lands in question were janmam estates and had retained that character till the passing of the Act.
The State of Tamil Nadu also invoked the protection of article 31A of the Constitution.
The nine petitions were dismissed by the Madras High Court by a common judgment given in the petition filed by O 'Valley Estate Ltd. It was held that the lands were janmam estates and had not lost that character.
The Act was held to be 261 (Khanna, J.) protected, by article 3 1 A of the Constitution.
Civil appeals Nos.
2211 and 2212 of 1970 and Nos. 85 to 91 of 1971 have been filed against the above judgment of the High Court.
Writ petition No. 373 of 1970 has been filed under article 32 of the Constitution.
by Balmadies Plantations Ltd. and its share holder Dayanand Bansilal Saxena challenging the vires of the Act or.
the ground that it is violative of articles 14, 19 and 31 of the Constitution and is not protected by article 31A.
According to the petitioner, the janmam estates which are now intended to be abolished by the Act had been converted into ryotwari estates.
The purpose of the Act, it is further stated, is not to bring about agrarian reform.
The petitioner company in this case had taken on lease 170.78 hectares from the Nilambur Kovilakam, the appellant in civil appeal No. 2211 of 1970, in the 19th century.
Out of the above area, 143.22 hectares is under coffee plantation, while the rest of the land consists of forests and waste land.
The writ petition has been resisted by the State of Tamil Nadu and the affidavit of Shri A. section Venkataraman, Additional Secretary has been filed in opposition to the petition.
The respondent has controverted the different grounds taken by the petitioner.
Gudalur taluk, it may be stated, comprises 12 villages.
The said taluk was originally part of Malabar district which now forms part of Kerala State.
O 'Valley village was transferred to the Nilgiris in 1873 and the other eleven villages were transferred in 1877.
Originally the janmis in Malabar were absolute proprietors of the land and did not pay land revenue.
After Malabar was annexed by the British in the beginning of the 19th century, the janmis conceded the liability to pay land revenue.
According to the case set up by the petitioner appellants, there was a gradual orision of the rights of janmis in the lands in question and the janmam estates became ryotwari estates after the resettlement of 1926.
As such, the Act, it is submitted, does not apply to the lands in dispute.
Before dealing with this aspect of the matter, it would be pertinent to refer to the different provisions of the Act.
Section 2 of the Act contains the various definitions.
Relevant clauses of that section read as under : "section 2.
In this Act, unless the context otherwise requires, (1) all expressions defined in the Malabar Tenancy Act shall have the same,respective meanings as in that Act with the modifications, if any, made by this Act; (2)"appointed day" means the date appointed by the Government under subsection (4) of section 1; (4) "forest" includes waste or arable land containing trees, shrubs or reeds.
262 Explanation.
A forest shall not cease to be such by reason only of the fact that, in a portion thereof, trees, shrubs or reeds are felled, or lands are cultivated, or rocks, roads, tanks, rivers or the like exist; (6) "jarmiam estate" means any parcel or parcels of land included in the holding of janmi; (7) "janmi" means a person entitled to the absolute proprietorship of land and includes a trustee in respect thereof; (9) "plantation crop" means tea, coffee, rubber, cinchona or cardamom; (11) "tenant" means a verumpattamdar as defined in sub clause (a) of clause (29) of section 3 of the Malabar Tenancy Act;" Section 3 of the Act deals with the vesting of janmam estates in Government, and reads as under : "3.
Vesting of janmam estates, etc., in Government.
With effect on and from the appointed day and save as otherwise expressly provided in this Act (a) the Malabar Tenancy Act, the, Malabar Land Registration Act, 1895 (Tamil Nadu Act III of 1896), the Gudalur Compensation for Tenants Improvements Act, 1931 (Tamil Nadu Act XIII of 1931) and all other enactments applicable to janmam estates as such, shall be deemed to have been repealed in their application to janmam estates; (b) every janmam estate including all communal lands and porambokes, waste lands, pasture lands, forests, mines and minerals, quarries, rivers and streams, tanks and irrigation works, fisheries, and ferries situated within the boundaries thereof shall stand transferred to the Government and vest in them free of all incumbrances, and the Tamil Nadu Revenue Recovery Act, 1864 (Tamil Nadu Act 11 of 1864), the Tamil Nadu Irrigation Cess Act, 1865 (Tamil Nadu Act VII of 1865), the Tamil Nadu Cultivating Tenants Protection Act, 1955 (Tamil Nadu Act XXV of 1955), the Tamil Nadu Cultivating Tenants (Payment of Fair Rent) Act, 1956 (Tamil Nadu Act XXIV of 1956) and, all other enactments applicable to ryotwari lands shall apply to the janmam estate; 263 (Khanna, J.) (c) all rights and interests created by the janmi in or over his jamnam estate before the appointed day shall as against the Government cease and determine; (d) the Government may, after removing any obstruction that may be offered, forthwith take possession of the janmam estate and all accounts, registers, pattas, muchilikas, maps, plans and other documents relating to the janmam estate which the Government may require for the administration thereof; Provided that the Government shall not dispossess any person of any land in the janmam estate in respect of which they consider that he is prima facie entitled to a ryotwari patta pending the decision of the appropriate authority under this Act as to whether such person is entitled to such patta; (e) the janmi and any other person whose rights stand transferred under clause (b) or cease and determine under clause (c) shall be entitled only to such rights and privileges as are recognised or conferred on him by or under this Act; (f) the relationship of janmi and tenant, shall as between them, be extinguished; and (g) any rights and privileges which may have accrued in the janmam estate to any person before the appointed day against the janmi shall cease and determine and shall not be enforceable against the Government or against the janmi and every such person shall be entitled only to such rights and privileges as are recognised or conferred on him by or under this Act.
" According to section 8, the janmi shall with effect on and from the appointed day be entitled to a ryotwari patta in respect of all lands proved to have been cultivated by the janmi himself, or by the members of his tarwad, tavazhi, illom or family or by his own servants or by hired labour with his own or hired stock in the ordinary course of husbandry for a continuous period of three agricultural years immediately before the 1st day of June 1969.
Explanation I to that section defines the word "cultivate" to include the planting and rearing of topes, gardens, orchards and plantation crops.
According to Explanation 11, where any land is cultivated with plantation crops, any land occupied by any building for the purpose of or ancillary to the cultivation of such crops or the preparation of the same for the market and any waste land lying interspersed among or contiguous to the planted area 264 upto a maximum of twenty five per centum of the planted area shall be constituted to be land cultivated by the janmi.
Section 9 deals with lands in ' respect of which a 'tenant is entitled to ryotwari patta.
According to the section, every tenant shall, with effect on and from the appointed day, be entitled to a ryotwari patta in respect of the lands in his occupation.
The right of the tenant to the ryotwari patta is subject to the conditions regarding cultivation mentioned in the Provisos to that section.
Section 10 provides that where no person is entitled to a ryotwari patta in respect of a land in a janmam estate under section 8 or section 9 and the land vests in the Government, a person who had been ' personally cultivating such land for a continuous period of three agricultural years immediately before the 1st day of June 1969, shall be entitled to a ryotwari patta in respect of that land.
This right too is subject to conditions mentioned in that section.
According to section 11, no ryotwari patta shall be granted with respect.
to the following categories situated within the limits of a janmam estate (a) forests; (b) beds and bunds of tanks and of supply, drainage, surplus or irrigation, channels; (c) threshing floor, cattle stands, village sites, carttracks, roads, temple sites and such other lands situated in any janmam estate, as are set apart for the common use of the villagers; (d) rivers, streams and other porambokes.
Section 12 empowers the Settlement Officer to inquire into the claims of any person for a ryotwari patta under the Act in respect of any land in a janmam estate and decide in respect of which land the claim should be allowed.
A right of appeal against the decision of the Settlement Officer to the 'Tribunal appointed under the Act is given by sub Section (3) of section 12.
The Tribunal, according to section 7, shall consist of one Person only who shall be a Judicial Officer not below the rank of Subordinate Judge.
Section 13 fastens liability to Pay land revenue to Government on the person Who becomes entitled to a ryotwari patta under the Act.
As regards a building, section 14 Provides that with effect on and from the appointed day, the same shall vest in the person who Owned it immediately before that day, subject to the conditions mentioned in that section.
Section 15 deals with rights of sons admitted into possession of any land in a janmam estate by any janmi for a non Agricultural purpose while section 16 makes provision for directions to be issued by the Government in respect of a person admitted by a janmi into possession of any land of the 2 65 (Khanna, J.) description specified in section II.
Section 17 relates to the rights of lessees of plantations and reads as under : "section 17.
Rights of lessees of plantations. (1)(a) Where, at any time before the appointed day the janmi has created by way of lease, rights in any lands for purposes of cultivation of plantation crops, the Govern ment may, if in their opinion, it is in the public interest to do so, by notice given to the person concerned terminate the right with effect from such date as may be specified in the notice, not being earlier than three months from the date thereof.
(b) The person whose right has been so terminated 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 period for which the right was created.
(c) Where any such right is not determined under this sub section, the transaction whereby such right was created shall be deemed to, be valid and all rights and obligations arising thereunder, on or after the appointed day, shall be enforceable by or against the Government Provided that the transaction was not void or illegal under any law in force at the time.
(2) The Government may, if in their opinion, it is in the public interest to do so, impose reasonable restrictions on the exercise of any right continued, under this section.
Explanation.
Any rights granted in perpetuity shall cease and determine and be dealt with under section (3) (e) and not under this section.
" Section 18 deals with the rights of certain other lessees.
Chapter TV of the Act, which contains sections 19 and 20, deals with survey and settlement of janmam estates.
Chapter V, which contains sections 21 to 30, makes provision for determination and payment of compensation.
As regards the Nilambur Kovilagam, one of the appellants before us, the explanation to section 22 reads as under "Explanation.
For the purposes of this section, the janmam estate owned by the Nilambur Kovilagam which is partly divided and partly held in common by the several tavazhis shall be construed as a single janmam estate.
" 8 1208SupCI/72 266 Amount of compensation is the subject of section 28, while section 29 relates to the determination of basic annual sum and compensation.
The subject deal with by chapter VI, containing sections 31 to 46, is "Deposit and Apportionment of Compensation.
Sections 47 to 50 contained in chapter VII make provision for recovery of contribution from pattadars.
Chapter VIII contains the miscellaneous provisions.
Section 58 makes final the orders passed by the various authorities under the Act, while section 60 confers powers on the Government to, make rules for carrying out the purposes of the Act.
The rules are required to be published in the gazette and to be placed on the table, of both Houses of Legislature, so that the Houses may, if they so deem proper, make modification in any such rule.
We may at this stage advert to janmam estate.
According to Land Tenures in the Madras Presidency by section Sundararaja Iyengar, Second Edition (p. 49), the exclusive right to, and hereditary possession of the soil in Malabar is denoted by the term jenmam which means birthright and the holder thereof is known as jenmi, jenmakaran or mutalalan.
Until the conquest of Malabar by the Mahomedan princes of Mysore, the jenmis appear to have held their lands free from any liability to make any payment, either in money or in produce, to government and therefore until that period, such an absolute property was vested in them as was not found in any other part of the Presidency.
Sir Charles Turner after noticing the various forms of transactions prevalent in Malabar stated that they pointed to an ownership of the soil as complete as was enjoyed by a freeholder in England.
Subba Rao J. (as he then was), speaking for the Court, in the case of Kavalappara Kottarathil Kochuni and Others vs The State of Madras and Others(1) observed : "A janmam right is the freehold interest in a property situated in Kerala.
Moor in his "Malabar Law and Custom" describes it as a hereditary proprietorship.
A janmam interest may, therefore, be described as "proprietary interest of a landlord in lands", And such a janmam right is described as "estate" in the Constitution.
" It was held that the proprietor called janmi could create many subordinate interests or tenures like lease or mortgage in a janmam estate.
It is not, however, necessary to dilate upon the matter as janmam estate has been defined in clause (6) of section 2 of the Act to mean any parcel or parcels of land included in the holding of a janmi.
Janmi, according to clause (7) of the said section, means a person entitled to the absolute proprietorship of land and includes a trustee in respect thereof.
(1) 267 (Khanna, J.) Ryotwari or kulwar system was first introduced into the British possessions by Col. Read in 1792.
When the Baramahal and Saleem were ceded to the British by Tippu, Lord Cornwall is specially deputed Col. Read for their settlement.
The prevailing system of land revenue settlement at the time was the permanent settlement.
Col. Read, however, deemed it prudent to enter into temporary settlements with the actual cultivators and this gave rise to a new system since designated ryotwari or kulwar system.
The system introduced by Col. Read embraced the survey of every holding in the district and a field assessment based on the productive powers of the soil.
The ryot was not regarded as the proprietor of the soil but only as a cultivating tenant from whom was to be exacted by government all that the he could afford.
Certain objectionable features of the ryotwari system were then noticed, and an effort was made to eliminate those objectionable features.
The ryotwari system in force at present means the division of all arable land, whether cultivated or waste, into blocks, the assessment of each block at a fixed rate for a term of years and the exaction of revenue from each occupant according to the area of land thus assessed.
That area may remain either constant or may be varied from year to year at the occupant 's pleasure by the relinquishment of old blocks or the occupation of new ones.
This distinguishing feature of this system is that the state is brought into direct contact with the occupant of land and collects its revenue through its own servants without the intervention of an intermediate agent such as the Zemindar.
All the income derived from extended cultivation goes to the state.
Ryotwari lands are known as taraf lands in the Tanjore District, and as ayan, sirkar.
koru, or government lands in the other parts of the Presidency (see pages 152 and 153 of Land Tenure in the Madras Presidency, Second Edition, by Sundararaja Iyengar).
According to Land System of British India by Baden Powell, the holders of ryotwari pattas used to hold lands on lease from Government.
The basic idea of ryotwari settlement is that every bit of land is assessed to a certain revenue and assigned a survev number for a period of years, which is usually thirty, and each occupant of such land holds it subject to his paying the land revenue fixed on that land.
But it is open to the occupant to relinquish his land or to take new land which has been relinquished by some other occupant or become otherwise available on payment of assessment.
The above observations were referred to by this Court in the case of Karimbil Kunhikoman vs State of Kerala(1) and it was said : "The ryot is generally called a tenant of Government but he is not a tenant from year to year and cannot be ,ousted as long as he pays the land revenue assessed.
He (1) [1962] 1 Supp.
S.C.R. 847.
268 .lm15 has also the right to sell or mortgage or gift the land or lease it and the transferee becomes liable in his place for the revenue.
Further, the lessee of a ryotwari pattadar has no rights except those conferred under the lease and is generally a sub tenant at will liable to ejectment at the end of each year.
In the Manual of Administration as quoted by Baden Powell, in Vol.
III of Land Systems of British India at p. 129, the ryotwari tenure is summarised as that "of a tenant of the State enjoying a tenant right which can be inherited, sold, or burdened for debt in precisely the same manner as a proprietary right subject always to the payment of the revenue due to the State".
Though therefore the ryotwari pattadar is virtually like a proprietor and has many of the advantages of such a proprietor, he could still relinquish or abandon his, land in favour of the government.
It is because of this position that the ryotwari pattadar was never considered a proprietor of the land under his patta, though he had many of the advantages of a pro prietor." This Court held in the above case that the land held by ryotwari pattadars in the area which came to the State of Kerala by virtue of the States Reorganization Act from the State of Madras were not 'estates ' within the meaning of article 3 1 A (2) of the Constitution.
Subsequent to that decision, clause (2) of article 31A was amended by the Constitution (Seventeenth Amendment) Act, 1964.
As a result of that amendment, 'estate ' would also include any land held under ryotwari settlement.
Let us now go into the question as to whether the janmam rights in the lands in question have been converted into ryotwari estate.
We are concerned in the present case with the settlement of 1886 and resettlement of 1926.
In connection with the settlement of 1886, G.O. 741 Revenue dated August 27, 1886 was issued and its main purpose was to settle the lands which had been escheated to the Government and to collect revenue for the State An attempt was then made to have direct dealing with the cultivators without notice to the janmi.
This act of the State was held to be against law by a Division Bench of the Madras High Court in the case of Secretary of State vs Ashtamurthi(1).
In that case the Collector of Malabar let defendant No. 2 into possession of certain waste land in 1869 under a cowle, and in 1872 granted to him a patta for it.
The cowledar then brought the land under cultivation but subsequently left it uncultivated and failed to pay the assessed revenue.
The land was consequently attached in 1885 for arrears of revenue under the Revenue Recovery Act and sold to defendant No. 3.
The plaintiff.
who was the janmi of the (1) I.L.R. 13 Madras 89.
269 (Khanna, J.) land, had no notice of the grant of either the cowle or the patta.
He asserted his right to janmabhogam in a petition presented to the Collector at the time of the sale, but the sale proceeded without reference to his claim.
Suit was thereafter brought by the plaintiff to set aside the sale.
It was held that the interest of the janmi did not pass by the sale.
Parker, J. in the above context observed : "The evidence shows that the janmis or the proprietors of the soil in Malabar have long been in the habit of leasing out the greater portion of their estates to kanomdars who are thus in the immediate occupancy of the greater part of the soil.
This was the state of things at the time of Hyder 's conquest (exhibit XIV), and the British Government is stated to have continued the practice of the Mysore Government in settling the assessment with these kanomdars.
At the annexation of Malabar in 1799 the Government disclaimed any desire to act as the proprietor of the soil, and directed that rent should be collected from the immediate cultivators, Trimbak Ranu vs Naina Bhavani(1) and Secretary of State vs Vira Rayan (2) thus limiting its claim to revenue.
Further, in their despatch of 17th December 1813 relating to the settlement of Malabar the Directors observed that in Malabar they had no property in the land to confer, with the exception of some forfeited estates.
This may be regarded as an absolute disclaimer by the Government of the day of any proprietary right in the janmis ' estate, and is hardly consistent with the right of letting in a tenant which is certainly an exercise of proprietary right.
" On account of the above decision, the Madras Government reconsidered the matter and in 1896 the Malabar Land Registration Act (Act 3 of 1896) was enacted.
The object of that Act would be clear from its preamble which reads : "WHEREAS Regulation XXVI of 1802 provides that landed property paying revenue to Government shall he registered by the Collector; and whereas such landed property in certain areas in the Nilgiri district has in many cases not been registered in the names of the proprietors thereof; and whereas it is desirable for the security of the public revenue to provide a summary means whereby the Collector may ascertain such proprietors; It is hereby enacted as follows.
" According to section 13 of the above Act, every person registered ,is proprietor of an estate shall be deemed to be the landholder in (1) (2) I.L.R. 270 respect of such estate within the meaning and for the purposes of the Madras Revenue Recovery Act II of 1864.
The janmam rights in the lands in dispute thus remained intact.
The stand taken on behalf of the petitioner appellant, as mentioned earlier, is that the janmam rights in the lands in dispute were converted into ryotwari estate as a result of resettlement of 1926.
Government order No. 1902 Revenue dated November 1, 1926 was issued in this connection.
Para 3 of that order deals with the janmam estates and reads as under : "3.
JANMABHOGAM: Paragraph 11 of the Board 's Proceedings Lands have hitherto been described as (a) Government Janmam, i.e. lands which are held directly from the Government and on which taram assessment and janmabhogam are Paid to the Government and (b) private janmam, i.e. lands which are held directly from the Government and on which taram assessment but not janmabhogam is paid to the Government.
These two classes of land will hereafter be referred to as 'New Holdings ' and 'Old Holdings '.
The Special Settlement Officer proposed (1) to raise the existing rate of janmabhogam of 8 annas an acre on all so called Government janmam land in estates to Re. 1 an acre for highly developed estate crops; (2) to retain the existing rate on lands cultivated with non estate crops; and (3) to reduce it to 4 annas an acre on undeveloped lands.
The Board supported the proposals (1) and (3) but recommended an increase to Re. 1 in the case of proposal (2).
The Government have decided to apply the 18 3/4 per cent limit imposed in G.O. No. 924, Revenue, dated 18th June, 1924, to janmabhogam.
After careful consideration the Government have decided to accept the Board 's proposal to amalgamate the two items of land revenue, i.e., taram assessment and so called 'Janinabhogam ' which are being collected on all so called Government janmam lands, i.e., on new holdings, and in future to collect assessment on these lands at a 271 (Khanna, J.) consolidated rate based upon the total of the rates at which these two items of the land revenue are now being levied.
In all the figures quoted in the Appendix to this order concerning these lands the revised rate given is this consolidated rate.
" It would appear from the above that the effect of the resettlement of 1926 was to retain the janmam estates and not to abolish the same or to convert them into ryotwari estates.
There was merely a change of nomenclature.
Government janmam lands were called the new holdings, while private janmam lands were called the old holdings.
In respect of janmabhogam (Janmi 's share) relating to Government janmam lands, the order further directed that the amount to be paid to the Government should include both the taram assessment and janmabhogam.
It is difficult, in our opinion, to infer from the above that janmam rights in the lands in question were extinguished and converted into ryotwari estates.
The use of the word 'janmabhogam ' on the contrary indicates that the rights of janmis were kept intact.
It has been argued on behalf of the petitioner appellants that the grant of a right of relinquishment to janmis had the effect of obliterating the distinction between janmam estate and ryotwari estate.
The janmam rights, according to the submission, were thus converted into ryotwari estate.
In this connection we find that the Government order No. 1902 dated November 1, 1926 shows that question was raised as to, whether a janmi of private janmam land could claim exemption from assessment by leaving cultivable lands waste.
The Board of Revenue recommended that exemption should not be granted unless the janmi pattadar relinquished his whole right, title and interest.
The Government, however, considered that having regard to the practice of exempting unoccupied janmam lands from assessment the janmi should not be required to pay assessment on lands the cultivation of which was to cease.
In 1896 a system was introduced, according to which a janmi could give notice of relinquishment without giving up his janmam rights over the land and claim remission of assessment on the relinquished land if it was not taken up for cultivation in the following year. '.he
Board of Revenue in proceedings dated October 16, 1897 pointed out that this was in effect a reversion to the old system of charging all cultivation with all its attendant evils of corruption, loss of revenue and unnecessary labour in inspection.
The matter was thereafter further considered and the Board in its proceedings dated June 13, 1916 expressed the opinion that the existing rule relating to relinquishment of private lands was anomalous and proposed that no relinquishment of such lands should be permitted unless the janmi surrendered also his janmam right and that until he relinquished such right, he should be res ponsible to the Government for the payment of the assessment due 272 on such lands.
This proposal was accepted by the Government in 1917 and reiterated in 1919.
It would thus appear that the relinquishment permissible in the case of janmi was of a somewhat peculiar nature inasmuch as there could be no relinquishment of janmam lands unless the janmi surrendered also his janam rights.
The above right of relinquishment, in our opinion, did not have the effect of converting the janmam rights in the lands in dispute into ryotwari estate.
It is not disputed that apart from the lands in question, there are no other janmam estates in the State of Tamil Nadu (Madras).
If the janmam estates in question had been converted into ryotwari estates as a result of the resettlement of 1926, there would have arisen no necessity to mention the janmam right in the State of Madras in clause (2) (a) (i) of article 3 1 A of the Constitution.
The fact that in addition to the janmam right in the State of Kerala, the janmam right in the State of Madras was also mentioned in clause (2) (a) (i) of article 31 A as a result of amend ment, shows that the janmam rights in the lands in question were assumed by the legislature to be in existence.
To hold that the janmam rights in the lands in question ceased to exist after the resettlement of 1926 would have the effect of rendering the, words, wherein there is a reference to janmam right in the State of Madras in clause (2) (a) (i) of article 3 1 A, to be meaningless and without any purpose.
Reference has been made, on behalf of the petitioner appellants to the Full Bench case of Sukapuram Sabhayogam vs State of Kerala(1) wherein it was held that a person would cease to be Proprietor of a soil if he gets a right or is under an obligation to relinquish or abandon the land.
The, above case related to the plains of Malabar, while we are concerned with the hilly tracts of Gudalur taluk.
In the cited case pattas and Adangal registers were Produced in the court and the State accepted the authenticity of those documents.
In the cases before us, no patta was produced by the petitioner appellants either in the High Court or in this Court.
In view of the above, we are of the opinion that the facts of the Full Bench case are distinguishable.
In any case, we are unable to subscribe to the proposition that the right of relinquishment of janmam rights of a janmi would by itself convert janmam rights into ryotwari estate.
Argument has also been advanced on behalf of the petitioner appellants that so far as the forest areas in the janmam lands in question are concerned, they do not constitute estate unless they are held or let for purposes of agriculture or for purposes ancillary thereto, as contemplated by clause (2) (a) (iii) of article 31 A of the Constitution.
This contention, in our opinion, is devoid of 1963 Kerala 101.
(1) A.I.R 1663 Kerala 101 273 (Khanna, J.) force.
Sub clause (a) of clause, (2) of article 31A reads as under "(2) In this article, (a) the expression "estate" shall, in relation to any local area, have the same meaning as that expression or its equivalent has in the existing law relating to land tenures in force in that area and shall also include (i) any jagir, inam or muafi or other similar grant and in the States of Madras and Kerala, any janmam right; (ii) any land held under ryotwari settlement; (iii) any land held or let for purposes of agriculture or for purposes ancillary thereto, including waste land, forest land, land for pasture or sites of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans;" Janmam lands are covered by clause (2) (a) (i) of article 31 A. Forest area, which is part of such janmam land would like the remaining janmam lands, constitute an estate, and it would not be necessary in such a case to show that the forest land is held or let for purposes of agriculture or for purposes ancillary thereto.
All lands which are part of a janmam estate of a janmi in the States of Madras and Kerala would constitute estate as mentioned in clause (2) (a) (i) of article 31A of the Constitution.
As janmam lands fall under clause (2) (a) (i), it is not essential to show that the requirements of clause (2) (a) (iii) too are satisfied for such lands and it would make no difference whether forests are a part of the janmam lands.
The next question which arises for consideration is whether the acquisition of the lands in question is for agrarian reform.
It is well established that in order to invoke the protection of article 3 1 A, it has to be shown that the acquisition of the estate was with a view to implement agrarian reform.
The said article is confined only to agrarian reform and its provisions would apply only to a law made for the acquisition by the, State of any rights therein or for extinguishment or modification of such rights if such acquisition, extinguishment or modification is connected with agrarian reform [see P. Vajravelu Mudaliar vs Special Deputy Collector,, Madras & Anr.(1)].
(1) ; at p. 622. 274 We have referred in the earlier part of this judgment to the various provisions of the Act, and it is manifest from their perusal that the object and general scheme of the Act is to abolish intermediaries between the State and the cultivator and to help the actual cultivator by giving him the status of direct relationship between himself and the State.
The Act, as such, in its broad outlines should be held to be a measure of agrarian reform and would consequently be protected by article 31A of the Constitution.
The said article provides that notwithstanding anything contained in article 13, no law providing for the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such right shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by article 14, article 19 or article 31, provided that where such law is a law made by the Legislature of a State, the provisions of article 31A shall not apply thereto, unless such law, having been reserved for the consideration of the President, has received his assent.
The impugned Act, as stated earlier, received the assent of this President on December 6, 1969.
As the Act is protected by article 31A of the Constitution, it is immune from attack on the ground of being violative of article 14, article 19 or article 31.
This fact would not, however, stand in the way of the court examining the constitutional validity of any particular provision of the Act It has been submitted on behalf of the appellants that whatever might be the position in respect of other janmam lands, so far as forests in janmam estates are concerned, the acquisition of those forests is not in furtherance of the objective of agrarian reform, and as such, is not protected by article 31A.
This submission, in our opinion, is well founded.
According to section 1 1 of the Act, no ryotwari patta would be issued in respect of forests in janmam estates after those estates stand transferred to the Government.
There is nothing in the Act to indicate as to what would be purPose for which the said forests would be used after the transfer of janman land containing forests to the Government.
All that section 16 states is that, except where the Government otherwise directs, no person admitted by a janmi into possession of any such forest shall be entitled to any rights in or remain in possession of such land.
Sub section (2) of that section specifies the directions which the Government may issue while allowing any person to remain in possession of any such land.
In the absence of anything in the Act to show the purpose for which the forests are to be used by the Government, it cannot be said that the acquisition of the forests in janmam land would be for a purpose related to agrarian reform.
The mere fact that the ownership of forests would stand transferred to the State would not show that the object of the transfer is to bring about agrarian reform.
Augmenting the 275 (Khanna,j.) resources of the State by itself and in the absence of anything more regarding the purpose of utilisation of those resources, cannot be held to be a measure of agrarian reform.
There is no material on the record to indicate that the transfer of forests from the janmi to the Government is linked in any way with a scheme of agrarian reform or betterment of village economy.
Learned Advocate General has referred to the case of State of Uttar Pradesh vs Raja Anand Brahma Shah(1).
In that case all the estates in a Pargana, including the forests, were acquired by the State of Uttar Pradesh under the U.P. Zamindari Abolition and Land Reforms Act.
Objection was taken to the acquisition of forests on the ground that it was not for the purpose of agrarian reform.
Repelling the objection, this Court observed : "Mr. A. K. Sen further urges that the acquisition of the estate was not for the purposes of agrarian reforms because hundreds of square miles of forest are sought to be acquired.
But as we, have held that the area in dispute is a grant in the nature of Jagir or inam, its acquisition like the acquisition of all Jagirs, inams, or similar grants, was a necessary step in the implementation of the agrarian reforms and was clearly contemplated in article 31A." It would appear from the above that the Court in that case was dealing with the acquisition of an estate which was in the nature of a Jagir, inam or similar grant, and it was found that the said acquisition was a necessary 'Step in the implementation of agrarian reform.
We are, in the cases before us, not concerned with Jagir, inam or other grant, and so far as the forests in question are concerned, it has already been observed that the acquisition is not in any way related to agrarian reform.
As such, the respondent State, in our view, cannot get much assistance from the cited case.
We, therefore, hold that the acquisition of the forests on the janmam land is not protected by article 31A.
It has not been shown to us that if the protection of article 3 1 A is taken off, the acquisition of forests can otherwise be justified.
We, therefore, are of the view that the provisions of section 3 of the Act in so far as they relate to the transfer of forests in the janmam estates in question are violative of the Constitution.
As such, we strike down those provisions to that extent.
Invalidity of the provisions relating to the transfer of forests would not, however, affect the validity of the other provisions of the Act as the two are distinct and severable.
(1) 62.
276 The last submission which has been made on behalf of the petitioner appellants relates to section 17 of the Act regarding the rights of plantation lessees.
It is stated that it would be open to the Government under the above provision to terminate by notice the right of the lessees.
Such a termination of the lessee rights under the above provision, according to the submission made on ,behalf of the petitioner appellants, would be violative of their rights under articles 14, 19 and 31 of the Constitution.
It is, in our opinion not necessary to deal with this aspect of the matter.
It is admitted that no notice about the termination of the lessee rights has been issued under section 17 of the Act to any of the petitioner appellants.
Indeed, the question of issuing such a notice can only arise after the Act comes into force.
Even after the Act comes into force, the Government would have to apply its mind to the question as to whether in its opinion it is in public interest to terminate the rights of the plantation lessees.
Till such time as such a notice is given, the matter is purely of an academic nature.
In case the Government decides not to terminate the lease of the plantation lessees, any discussion in the matter would be an exercise in futility.
If, on the contrary, action is taken by the Government under section 17 in respect of any lease of land for purposes of the cultivation of plantation crop, the aggrieved party can approach the court for appropriate relief.
As a result of the above, we uphold the vires of the Act, except in one respect.
The provisions of section 3 in so far as they relate to the transfer of forests in janmam estates to the Government are not protected by article 31A and being violative ,of the Constitution are struck down.
The appeals and writ petition are disposed of accordingly.
The parties, in the circumstances, are left to bear their own costs throughout.
| IN-Abs | The appellants and the petitioners challenged the vires of the Gudalur Janmam Estates (Abolition and Conversion into Ryotwari) Act, 1969, on the ground that it was violative of articles 14, 19, and 31 of the Constitution.
Their case was that their lands in the Gudalur Taluk, in the State of Tamil Nadu, were previously Janmam estates, but, subsequently became ryotwari estates, especially after the Resettlement of 1926,and as such, the provisions of the Act were not applicable to these lands; that so far as the forest areas in the Janmam lands in question were concerned they did not constitute "estate"; and that the acquisition of the lands was not for implementing agrarian reforms and, therefore, did not get the protection of article 31A.
HELD : that the provisions of section 3 of the Act in so far as they related to the transfer of forests 'in Janmam estates to the government were not protected by article 31A, and, being violative of the Constitution had to be struck down; and that the vires of the Act in other respects had to be upheld.
(i) The effect of the Resettlement of 1926 was to retain the Janmam estates and not to abolish the same or to convert them into ryotwari estates.
There was merely a change of nomenclature.
Government Janmam lands, were called the new holdings while private Janmam lands were called the old holdings.
In respect of Janmabhogam (Janmi 's share) relating to government Janmam lands, the order further directed that the amount to be paid to the government should include both the taram assessment and Janmabhogam.
It is difficult to infer from these that Janmam rights in the, lands in question were extinguished and converted into ryotwari estates.
The use of the word Janmabhogam, on the contrary, indicates that the rights of Jenmis were kept in tact.
[271B] Kottarathil Kochuni and Others vs The State of Madras and Others, , Karimbil Kunhilkoman vs State of Kerala, [1962] 1 Supp.
S.C.R. 847 and Secretary of State vs Ashtamurthi, I.L.R. 13 Madras 89, referred to.
The grant of a right of relinquishment to a Janmi would not by itself convert janmam rights in the lands into ryotwari estate.
[272A B] 259 (Khanna, J.) Further, apart from the lands in question, there are no janmam estates in the State of Tamil Nadu (Madras).
To hold that the Janmam rights in the lands ceased to exist after the Resettlement of 1926 would have the effect of rendering the words, in clause (2)(a)(i) of article 31A, wherein there is a reference to Janmam rights in the State of Madras meaningless and without any purpose.
[272 D] (ii)As Janmam lands fall under clause (2) (a) (i) of article 31A it is not essential to show that the requirements of clause (2)(a)(iii) too are satisfied for such lands and it would make no difference whether forests are a part of the Janmam lands.
All lands which are part of a Janmam estate of a Janmi in the State of Madras and Kerala would constitute "estate" as mentioned in Clause (2) (a) (i) of Article 31A. [273 E] (iii)The object and general scheme of the Act is to abolish intermediaries between the state and the cultivator and to help the actual cultivator by giving him the status of directs relationship between himself and the State.
The Act, as such, in its broad outlines,, should be held to be a measure of agrarian reform and would consequently be protected by article 31A of the Constitution.
Therefore, it is immune from attack on the ground of being violative of articles 14, 19 or 31.
[274 A] Vajrayelu Madaliar vs Special Deputy Collector, Madras & Anr. ; , referred to.
(iv)But, the acquisition of forests in Janmam estates is not in furtherance of the objective of agrarian reform, and, as such, is not protected by article 31A.
In the absence of anything in the Act to show the purpose for which the forests are to be used by the Government, it cannot be said that the acquisition of the forests in Janmam land would be for a purpose related to agrarian reform.
The mere fact that the ownership of forests would stand transferred, to the State would not show that the object of the transfer is to bring about agrarian reform.
Augmenting the resources of the State by itself, and in the absence of anything more re garding the purpose or utilisation of those resources cannot be held to be a measure.
of agrarian reform.
There is no material on the record to indicate that the transfer of forests from the Janmi to the Government is linked in any way with a scheme of agrarian reform or betterment of village ceremony.
[274 H] State of Uttar Pradesh vs Raja Anand Brahma, [1967] 1 S.C.R. 362, held inapplicable.
|
Appeals Nos.
276 277 of 1972.
Appeals by Special Leave from the Supplementary Award dated the 15th October, 1971 of the Industrial Court, Maharashtra, Bombay in Misc.
Applications (IC) Nos. 1 and 2 of 1970.
section T. Desai and I. N. Shroff, for the appellant (In C.A. No. 276 of 1972).
279 (Mathew, J.) M. C. Setalvad and I. N. Shroff, for the appellant (In C.A. No. 277 of 1972).
section V. Gupte, M. C. Bhandare, Sunanda Bhandare, and P. H. Parekh and Advocates of M/s. Bhandare Parekh and Co., for the respondent (in both the Appeals).
The Judgment of the Court was delivered by Mathew, J.
These two appeals by special leave are directed against a supplementary award dated October 15, 1971, passed by the Industrial Court, Maharashtra, Bombay, in Miscellaneous applications (IC) Nos. 1, 2 and 3 of 1970, filed by the respondent, the Mill Mazdoor Sabha, hereinafter called the 'Sabha '.
By the supplementary award, the Industrial Court has modified an existing award of the Industrial Court, Maharashtra, Bombay, dated April 25, 1962, passed in reference (IC) Nos. 131, 138, 139 and 155 of 1961, and published in the Maharashtra Government Gazette dated June 14, 1962, by directing with retrospective effect from January 1, 1971, that the employees in Silk and Art Silk Industry who were concerned in the dispute shall be granted dearness allowance at the rate of 99 percent neutralization of the rise in the Bombay Consumer Price Index 106 (old series) on the basis of the minimum wage of Rs. 30/ per month of 26 working days.
We will deal with appeal No. 276 of 1972 first.
The Appellant is the Silk and Art Silk Mills ' Association, Ltd., a public company having its registered office in Bombay, hereinafter called 'the Association '.
For the purpose, of Bombay Industrial Relation Act, 1946, the Association was recognised under section 27 read with section 3(23) of that Act as the Association of employers in Silk and Art Silk Textile Industry within the local area of Greater Bombay.
Silk Textile Industry was started in India sometime in 1933 and the Association came into being in 1939 with 16 members having 2,000 looms.
Till 1965, the Association was regis tering as members only mills having 25 or more looms.
Thereafter, it began to register smaller units also as its members.
Such smaller units numbered 308 with 2,326 looms in March, 1969.
The total number of mills within and outside the State of Maharashtra which were members of the Association on March 31, 1969, was 512 with a total of 20,200 looms.
According to the Association, out of the 512 units which were its members, a large number of units numbering about 444 were grey units, which means, that none of these units has its own raw materials and that they have not got any equipment for dyeing, bleaching or otherwise finishing their products.
On February 6, 1970, when Miscellaneous Application (IC) No. 1 was filed, the Association had, as its members, about 325 280 units of employers in the art silk textile industry within the local area of Greater Bombay.
Out of these 325 employer units, 90 employer units alone were concerned with the Miscellaneous Application (IC) No. 1 of 1970, as that application sought modification of the award dated April 25, 1962, in reference Nos.
(IC) 131, 138, 139 and 155 of 1961 which governed only the 90 units of the Art Silk Industry.
In this case, we are directly concerned worth 55 member units only, as the remaining 35 units had one out of business between April 25, 1962 and February 5, 1970.
There were two previous decisions binding on these units regarding dearness allowance.
One was the award passed in reference No. 97 of 1951 which granted neutralization to the extent of 75 per cent rise in the Bombay Consumer Price Index 106 (old series).
The other was a settlement arrived at during the pendency of Miscellaneous Application (IC) No. 3 of 1957 which modified the award in reference No. 97 of 1951 by raising the percentage of neutralization to 80 per cent with effect from June 1, 1957.
The Sabha is recognised under section 30 read with section 3 (32) of the Bombay Industrial Relation Act as the representative Union of employees in the Silk and Art Silk Industry within the local area of Greater Bombay.
The demand of the Sabha in Miscellaneous Application (IC) No. 1 of 1970 was, that "the employees shall be granted with effect from May 1, 1970, dearness allowance at the rate of 100 per cent neutralization of the rise in the Bombay Consumer Price Index 106 (old series) on the basis of the minimum wage in force, at present, namely Rs. 36.50 per month of 26 working days".
As already stated, the application was, in effect, to modify the award passed on April 25, 1962, in reference (IC) Nos. 131, 138, 139 and 155 of 1961; that award provided that the employees covered by the references should be given an adhoc increase of Rs. 5.20 per month of 26 working days over their wages at that time, that the increase should be in force for two years from February 1, 1962, that thereafter, the increase should be Rs. 6.50 per month of 26 working days instead of Rs 5.20 and that this will continue for a further period of 2 years.
The award rejected the prayer for increase rate of dearness allowance.
The grounds on which the Sabha claimed 100 per cent neutralization were, that the total pay packet of the employees in the industry was far lower than the minimum need of the workmen and also less than that of the employees in other industries in the region., that there has been a steep rise in the cost of living since the last revision of basic wages and a greater rise in the cost of living since the decision fixing neutralization at 80 per cent of the basic wage of Rs. 30/ per month for 26 working days, that the employer units 281 (Mathew, J.) have the capacity to bear the additional burden as the art silk ' industry in the region has prospered and established itself as a stable one with good prospects.
The main contentions of the Association were that the total pay ' packet of the workmen in Rayon and Artificial Silk industry in the, local area of Greater Bombay was Rs. 190.12 per month of 26, working days, that dearness allowance to the extent of 80 per cent neutralization was automatically responsive to the rise in the cost of living and, therefore, there was no real fall in the pay packet consequent on the rise in the cost of living, that the workmen had received an ad hoc increase of Rs. 5.20 per month of 26 working days from February 1, 1962, and that this has been further raised to Rs. 6.50 from February 1, 1964, that the base for neutralization which was Rs. 30/ should not and ought not to be changed to Rs. 36.50 as demanded by the Sabha, that the demand was beyond the capacity of most of the 55 units concerned, that the dearness allowance paid in the other industries in the region cannot furnish any relevant criterion as the financial position of these units was quite different, that over the years, the position of the industry has steadily deteriorated, that on account of the paucity of foreign exchange, restrictions on import of the required machinery, the non availability of the necessary types of raw materials, the high cost of yam, the heavy excise duty on indigenous yarn, the industry has been declining, that the import on nylon yarn was canalised through the State Trading Corporation of India and it kept for itself a very high profit margin, that the price of raw materials in the industry has gone up, that prior to March, 1970, the excise duty on processed yarn and artificial silk fabric varied from 9 paise to 30 paise per square metre whereas from March, 1970, onwards, the was a steep rise in the excise, duty per square metre and therefore the industry cannot bear any further burden and that in any event, the demand for 100 per cent neutralization is unwarranted As already stated, the Industrial Court, after evaluating the materials produced by parties, came to the conclusion that the employees in the Silk and Art Silk Industry should be granted dearness allowance at the rate of 99 per cent neutralization of the rise in the Bombay Consumer Price Index 106 (old series) on the basis of the minimum basic wage of Rs. 30/ per month of 26 working days with effect from January 1, 1971.
The Court found that at the time when the wages were raised in 1962, the consumer price index stood at 429, that there has been a steep rise in the cost of living as reflected in the Bombay Consumer Price Index in May 1970 it stood at 799 and on the date of the award it stood at 839, and so, there was a fall in real wages by 39 paise per day of the lowest class of workers.
The Court, 19 1208 Sup CI/72 282 therefore, came to the conclusion that the demand for neutralization of the rise in the cost of living was reasonable.
It further found that exhibit U. 8, which is a comparative Table showing the minimum basic wages and dearness allowance paid in other industries in the region was a relevant document as it indicated the trend in other industries in the region to allow full neutralization on account of the rise in the cost of living.
The Court then proceeded to assess the financial capacity of the employer units with particular reference to their volume of business, the capital invested, tile profits earned, the standing of the industry, the strength of the labour force employed, the position of reserves, the dividend declared and the future prospect of the industry.
The Association, although it represented 55 employer units, produced no data as regards, the financial capacity of 27 units in spite of the clear direction of the Court, and so, the Court, on the basis of the in materials placed before it by the other units, came to the conclusion that the art and art silk industry has prospered and has established itself, that the prospect of the industry was bright and that the financial position of the 28 units which produced their balance sheets and profit and loss accounts or other documents to show their gross profits was such that they could afford to bear the additional burden.
For reaching the conclusion that the industry is prosperous and has a bright future, the Court relied on the speech made by the Chairman of the Silk and Art Silk Mills Association at the 30th Annual General Meeting in 1969, in which he said that the manmade, fibre industry had made remarkable progress during the, last decade, that the production during the year 1969 exceeded the Third Plan target by over 25 per cent, that there was a rise in the, per capita consumption of fabrics, that rapid progress was expected in the production of non cellulosic yarn and that the, total demand in relation to the, year 1969 was likely to increase by 41 per cent by the year 1973 74 and by 110 per cent by the year 1978 79, The Court also relied upon the fact that actual export in 1970 exceeded the export in the previous three years, the fact that production has substantially increased in the first six months of 1970, that it was as much as 525.77 million metres compared to the total production of 892.67 million metres in 1969 and the fact that the, total production of art silk yam had reached the figure 1 4.680 thousand kilograms compared to 106.480 thousand kilograms in 1969.
The Court estimated that export of Rayon fabrics and synthetic textiles will reach Rs. 26.50 crores a year by 1973 74, Although excise duty has been increased, the Court found that it had not adversely affected the industry in any substantial degree its the economic incidence of the burden of the excise duty was passed on to the consumer.
As regards the financial capacity of the units, the Court relied on exhibit U. 9 which is an analysis of ,he profit and loss accounts of the 28 mills and exhibit U. 10, which is a consolidated statement showing the financial condition of these 283 (Mathew, J.) mills and exhibit U. 11.
the statement regarding the bonus paid by the mills which. did not file their balance sheets and profit and loss accounts and Exhibit U. 12, a statement showing the interest paid by some of the units which had filed their balance sheets and Exhibit U. 13, a statement showing the profitability ratio for art silk industry in Bombay and exhibit U. 14, a comparative statement of the profitability ratio in cotton textiles, engineering and chemical industry.
The Court found from exhibit U. 9 that there was an increase in the paid up capital of 44.07 lakhs from 1965, an increase in the reserve amounting to 32.96 lakhs and increase in the gross block amounting to Rs. 285.54 lakhs and an increase in the net block of Rs. 140 63 lakhs from 1965 to 1968.
From the figures given in exhibits in U. 9 and U. 10, the Court found that, after providing for depreciation to the total paid up capital, the profit would work out at 40.02 per cent and that after providing for depreciation to the total paid up capital and reserve, it would work out at 21.10 per cent.
From the large amount of interest paid by some of the units as disclosed in exhibit U. 12, the Court inferred that these units are under capitalised but that, at the same time, they preferred to borrow money at the current rate of interest.
The Court also found from exhibit U. II that 17 mills which did not file their balance sheets or profit and loss accounts were in a position to pay bonus in excess of the 4 per cent which is the statutory minimum under the Payment of Bonus Act and therefore, these units must have been making profits and, as their present financial position was not shown to have become worse, they had the financial capacity to bear the additional burden.
Mr. section T. Desai for the appellant submitted that the Industrial Court drew an adverse inference against the 28 units although they had produced their balance sheets and profit and loss accounts on the ground that the 27 mills did not produce any data to show their financial capacity to bear the additional burden and that that was unjustified.
He argued that so far as the 28 mills which had produced their balance sheets and profits and loss accounts, there should have been an appreciation of the materials placed before the Court on their merit and no adverse inference should have been drawn against them because the other units did not place any relevant materials as regards their financial capacity.
In other words, his argument was that as the 28 mills had produced relevant documents to show their financial capacity, the Court should not have drawn any adverse inference as against them merely from the non production of the relevant documents by the other units.
We lo not think that there is any substance in this argument.
As already stated, the Association represented 55 units of employers and out of the 55 units, only 28 units produced their balance sheet, , and profit and loss accounts.
Statements were filed by 284 17 units (exhibits C. 1 8 5 to 201 ) undertaking that they would abide by the information and the balance sheets and profit and loss accounts supplied by the 28 mills and praying for decision of the dispute on the basis of the information and statement of accounts so supplied.
The remaining 10 mills orally agreed that they would also abide by the statement and balance sheets supplied by the 28 mills and for deciding the dispute on that basis.
Therefore, an adjudication by the Industrial Court as regards the rate of neutralization to be allowed on the basis of the financial capacity of the 28 units as guaged from the balance sheets and profit and loss accounts produced by the 28 mills was quite proper.
To put it differently, the award in so far as it concerned the 28 units, proceeded on the basis of their financial capacity as guaged from the balance sheets and profit and loss accounts produced by them and from the materials in the case.
They can, therefore, have no reason for any complaint, that the Court drew any adverse inference as regards them from the non production of relevant materials in the possession of the other employer units.
And, as regards the 27 employer units which did not supply any materials with respect to their financial capacity, they cannot also have any reason for complaint in view of their undertaking to abide by the decision of the Industrial Court on the basis of materials furnished by the 28 units The only reason why they did not furnish the basic information as regards their financial capacity in spite of the direction of the Court, is that the information, if furnished, would.
go, against them.
We are satisfied that the award was based on the materials produced in the case so far as the 28 units are concerned and not on any adverse inference drawn from the non production of the relevant materials by the 27 units.
Mr. Desai contended that the, position of the industry is not stable and that its prospects are bleak.
He said that the Court did not give due weight to exhibits C. 1 to C. 4 and C. 15 in reaching the conclusion that the position of the industry was stable.
Exhibit C.1 is a statement showing the number of mills and the looms owned by them as on April 1, 1970.
Exhibit C. 2 is a statement showing the number of members of the Association and their looms.
Exhibit C. 3 is a statement showing the looms run by member mills of the Association as on April 1, 1970.
Exhibit C .
4 is a statement showing the number of grey and composite units in the industry and their looms.
Exhibit C. 15 is a statement concerning 25 mills.
It shows the number of looms installed, average number of loom shifts worked per month, average production and average export per month during the 4 years namely 1966 to 1969.
Exhibits C. 1 to C. 4 do not throw much light upon the question in controversy as they only show the all India figures.
Exhibit C. 15 was taken into consideration by the Industrial Court But the Court did not place much reliance upon it as it was of 285 (Mathew, J.) opinion that the data furnished by the balance sheets and profit and loss accounts was more relevant.
Counsel submitted that the number of looms has gone down, that the cost of production has gone up, that export of manufactured silk has dwindled, that Sales have declined and therefore, the profits of the units have gone down from 1965 to 1968.
Counsel in this connection referred to exhibit U. 13, a document produced by the ' Sabha to show the profitability ratio and argued that that document would itself indicate that there was decline in profits from 1965 to 1968 .
Exhibit U. 13 is a statement of the gross profits for the years from 1965 to 1968 of these units from the point of view of total sales, of total capital and of total net Worth.
In Ahmedabad Mill Owners, ' Association, etc.
vs The Textile Labour Association(1) the Court observed "We do not think in considering the financial position of the appellants in the context of the dispute before us, it Would be appropriate to rely unduly on the profitability ratio which has been adopted by the said Bulletin.
Indeed, in appreciating the effect of the several statements produced before the Industrial Court by the, parties in the.
present,proceedings, it would be relevant to remember that some of these single purpose statements are likely to create confusion and should not ordinarily be regarded as decisive.
As Paton has observed : "Different groups for whom financial statements are prepared are interested in varying, degree in particular types of information; and so, it has been held in some quarters that no one form of statement will satisfactorily serve all these purposes, that separate single purpose statements should be prepared for each need or that the statements usually prepared for general.
distribution should be expanded so as ' to include all the detail desired" (Accountant 's Handbook Edited by Paton, p. 13).
Paton cites the comment of Wilcox against these single purpose statements.
Said Wilcox : "The danger in undertaking to furnish singlepurpose financial statements lies in increasing confusion and misunderstanding, and in the possible misuse of such statements for unintended purposes".
Paton has then ' referred to certain methods for determining the financial position of a commercial and industrial concern.
In this 'connection, he refers to the proprietary ratio rate of earnings 'on total capital employed, rate of dividends on common stockholders ' equity and others.
Our purpose In referring to these comments made by (1) [1966] 1 S.C.R.382 at p. 426, 286 Paton is to emphasise the fact that industrial adjudication cannot lean too heavily on such single purpose statements or adopt any one of the tests evolved from such statements, whilst it is attempting the task of deciding the financial capacity of the employer in the context of the wage problem.
While we must no doubt examine the position in detail, ultimately we must base our decision on, a broad view which emerges from a consideration of all the relevant factors".
We think that the Industrial Court hag carefully examined the financial position of the employer units as also the position of the industry and its future prospects.
The Court was fully aware of the nature of the demand and the extent of the burden which the employer units.
will have to bear.
A broad and overall view of the financial position of the employer units was taken into account by the Court and it has tried to reconcile the natural and just claims of the employees for a higher rate of dearness allowance with the capacity of the employer to pay it and in that process it has made allowance for the legitimate desire of the employer to make reasonable profit.
What is really material in assessing the financial capacity of the employer units in this context is the extent of gross profits made by them (see Unichem Laboratories Ltd. vs Their Workmen(1).
On the basis of exhibit U. 9 which is an analysis of the balance sheets and profit and loss accounts of the 28 units, the Court found that the 28 mills have been making good profits and that, on an average, the profit would work out at 40 and odd per cent of the capital.
There was some decline in the profits made during the years 1966, 1967 and 1968 but, the Court found that the industry was rallying round in 1970.
Mr. Desai contended that the Industrial Court did not appreciate the impact on the industry of the enhancement of excise duty upon the manufacture of silk products.
Counsel contended that there has been considerable increase in excise duty on all varieties of silk and that has affected the consumption of manufactured silk products.
No evidence his been adduced to show what exactly has been the effect on the industry of the enhancement in excise duty.
Although the Managers of two units were examined as witnesses No. 2 and 3 in March and April, 1971, they did not give any evidence as regards the adverse effect on the sale of silk products on account of the imposition of enhanced excise duty during the financial year 1970.
We do not think that without further evidence as regards the effect of the enhancement in the excise duty, it is ' possible to draw an inference that the sale of the products has been"adversely affected.
Quite apart from this, we do not (1) Civil Appeals No. 1091 93 of 1971, decided on 24 2 1971, 287 (Mathew, J.) understand how when the economic incidence of the excise duty has been passed on to the consumer, the employer units have to bear any additional burden on account of the levy.
Counsel next contended that the Industrial Court was not justified in relying upon exhibit U. 8 for coming to the conclusion that 99 per cent of neutralization on account of rise in cost of living should be granted to the employees on the basis of the percentage of neutralization in other industries in the region.
Counsel said that granting 99 per cent neutralization has not been countenanced by this Court, that the, basis of fixation of dearness allowance is industry cum region and that the Industrial Court went wrong in taking into account the percentage of neutralization in other industries in the region for fixing the extent of neutralization on account of the rise in cost of living to the employees in question here and relied on the decision of this Court in Bengal Chemical and Pharmaceutical Works Ltd. vs Its Workmen(1).
In that case, Vaidialingam.
J., speaking for the Court, laid down among other things, the following propositions : 1.
Full neutralization is not normally given , except to the very lowest class of employees, 2.
the purpose of dearness allowance being to Tieutralize a portion of the increase in the.
cost of living, it should ordinarily be on a sliding scale and provide for an increase in the rise in the cost of living and decrease on a fall in the cost of living, 3.
the basis of fixation of wages and dearness allowance.
is industry cum region.
We do not think that the Industrial Court went wrong in relying upon exhibit U. 8, or, in granting 99 per cent neutralization on account of the steep rise in the cost of living.
Exhibit U. 8, it may be recalled is a comparative Table showing the minimum basic wages and dearness allowance paid in order industries in the region like the engineering, pharmaceuticals, etc.
The Court relied upon it only to show the trend in the region.
The Court also relied upon the report of the Norms Committee which stated that the trend for the last decade in industrial adjudication as well as in settlement,, and awards, was ' to allow 100 per cent neutralization in the case of lowest paid employees.
The Court was of the view that if go per cent neutralization could be allowed in the industry under tile settlement arrived at in 1957, there was no reason why 100 per cent neutralization should not be granted in view of the steep rise in the cost of living from 1957, to the lowest paid employees.
We can not agree with the contention of the appellant that the Industrial Court went wrong in relying upon exhibit U. 8 or the report of the Norms Committee to find out the trend in the region as to the extent of neutralization to be allowed to the employees concerned.
The question of the extent of neutralization to the workmen in the units (1) ; 288 does not depend solely upon the fact whether neutralization to that extent has been allowed to the employees in comparable concerns in the same industry in the same region.
Much distinction cannot be made in this respect among the lowest paid employees in the region merely because some of them are employed in other industries.
In other words, for finding the trend or the norm in the region as regards the extent of neutralization for the lowest paid employees, the Industrial Court cannot be said to have gone wrong in relying upon either the Norms Committee Report or on exhibit U. 8.
Counsel for the appellant submitted that the Industrial Court did not make any attempt to fix the dearness allowance on the basis of the industry cum region formula, and that that was a fatal blemish in the award.
In French Motor Car Co. Limited vs Workmen(1) this Court observed that the principle of industry cumregion has to be applied by an industrial court, when it proceeds to consider questions like wage structure, dearness allowance and similar conditions of service and in applying that principle indus trials courts have to compare the wage scale or the dearness allowance prevailing in similar concerns in the region with which it is dealing, and generally speaking similar concerns would be those in the same line of business as the concern with respect to which the dispute is under consideration and further, even in the same line of business, it would not be proper to compare a small struggling concern with a large flourishing concern.
In Williamsons (India) Private Ltd. vs The Workmen(2) the Court observed that the extent of business carried an by the concerns.
the capital invested by them, the profits made by them, the nature of the business carried on by them, their standing, the strength of their labour force, the presence or absence and the extent.
of reserves, the dividends declared by them and the prospects about the future of their business and other relevant factors have to be borne in mind for the purpose of comparison.
These observations were made to show how comparison should be made, even in the same line of business and were intended to lay down that a small concern cannot be compared even in the same line of business with a large concern.
In Greaves Cotton and Cc,.
and others vs Their Workmen (3), the main argument was that the Tribunal went wrong in relving more on the region aspect of the industry cum region formula and not on the industry aspect when deali ng with clerical and subordinate staff.
The Court said that it was ordinarily desirable the have as much uniformity as possible in the wage scales of different concerns of the same industry working in the game region, as this puts similar industries more or less on an equal footing in their production struggle.
The Court then referred to, the French (1) [1963] Supp. , at pi).
20 21.
(2) [1962] 1 L.J. 302.
(3) ; ,at pp.
367 369, 289 (Mathew, J.) Motor Co. 's(1) case and observed that in that case this Court held so far as clerical and subordinate staff 'are concerned that it may be possible to take into account even those concerns which are engaged in different, lines of business for the work of clerical and subordinate staff is more or less the same in all kinds of concerns.
The Court further observed that where there are a large number of industrial concerns of the same kind in the same region it would be proper to put greater emphasis on the industry part of the industry cum region principle as that would put all concerns on a more or less equal footing in the matter of production costs and therefore in the matter of competition in the market and this will equally apply to clerical and subordinate staff whose wages and dearness allowance also go into calculation of production costs : but where the number of comparable concerns is small in a particular region and therefore the competition aspect is not of the same importance, the region part of the industry cum region formula assumes greater importance particularly with reference to clerical and subordinate staff and this was what was emphasised in the French Motor Car Cos((1) case where that company was already paying the highest wages in the particular line of business and therefore comparison had to be made with as similar concerns as possible in different lines of business for the purpose of fixing wage scales and dearness allowance.
According to the Court, the principle, therefore, which emerges from these two decisions is that in applying the industry cum region formula for fixing wage scales the Tribunal should lay stress on the industry part of the formula if there are a large number of concerns in the same region carrying on the same industry; in such a case in order that production cost may not be unequal and there may be equal competition, wages should generally be fixed on the basis of the comparable industries, namely, industries of the same kind.
But where the number of industries of the same kind in a particular region is small it is the region part of the industry cum region formula which assumes importance particularly in the case of clerical and subordinate staff, for as pointed out in the French Motor Car Cos case("), there is not much difference in the work of this class of employees in different industries.
If the employer has the financial capacity, would it be just to reject the claim of the lowest paid workmen for an enhancement in dearness allowance to neutralize the rise in cost of living and thus to maintain their subsistence wage at its real level in terms of the purchasing capacity, merely because there is a comparable concern in the industry in the region.
In which workmen are paid dearness allowance at a low rate ? We do not think it necessary to answer this question for the purpose of deciding this case.
(1) [1963] Supp. 2 S.C.R. at 20 21.
290 The Association never wanted the Court to make any compari son with any other units in the same industry in the region.
In the written statement of the Association there was no averment that there were other comparable unit,,,,. .
, the same industry in the region.
Nor did the Association, It the time of argument before the Industrial Court, put forward the contention that there were comparable concerns in the same industry in the region and that the Court should make a comparison of the employer units in question with those concerns to find out the extent of neutralization which could be granted.
The Association had a membership of 325 units in Greater Bombay on February 6, 1970, when the Miscellaneous Application (IC) No. 1 was filed.
It was certainly in a position to tell the Court whether there were any other comparable units in the same industry in the region and the only inference from its conduct is that there were no comparable units in the industry in the region.
We do not think that the award suffers from any infirmity.
At the time of the admission of the Special Leave Petition the Court has ordered that the appellant should pay the cost of the respondent irrespective of the result of the appeal.
We dismiss the appeal and direct the appellant to pay the cost of the respondent.
In Civil Appeal No. 277 (NL) of 1972, the contentions raised on behalf of the appellant are much the same as those raised in Civil Appeal No. 276(NL) of 1972 and for the reasons given in the above judgment, we dismiss that appeal also and direct the appellant to pay the cost of the respondent.
G.C. Appeals dismissed.
L1208SupCI/72 2500 30 8 73 GIPF.
| IN-Abs | The appellant Association was recognised under section 27 read with section 3(23) of the Bombay Industrial Relations Act, 1946 as the Association of employers in Silk and Art Silk Textile Industry within the local area of Greater Bombay.
The respondent Sabha represented the workmen in the Industry.
By a supplementary award dated October 15, 1971 the Industrial Court modified an existing award of the Industrial Court of Maharashtra, Bombay, dated April 25, 1962 by directing with retrospective effect from January 1, 1971 that the employees in Silk and Art Silk Industry who were concerned in the dispute shall be granted dearness, allowance at the rate of 99 per cent neutralization of the rise in the Bombay Consumer Price Index 106 (old series) on the basis of the minimum wage of Rs. 30/ 4 per month of 26 working days.
The appellant Association and one of the Silk Mills appealed.
HELD : The award did not suffer from any infirmity.
(i) The Association represented 55 units of employers and out of these only 28 produced their balance sheets and profit and loss accounts.
The other 27 units did not supply any materials with respect to their financial capacity but agreed to abide by the decision of the Industrial ' Court on the basis of the materials furnished by the 28 units.
The award in so far as it concerned these 28 units proceeded on the basis of their financial capacity as judged from accounts produced by them and the materials in the case.
There is no substance in the complaint that any adverse inference had been drawn against that 28 units on account of non production of materials by others.
[283 H] (ii) The contention that the position of the industry was not stable and that its prospects were bleak could not be accepted.
A broad and ' overall view of the financial position of the employer units was taken into account by the Industrial Court and it had tried to reconcile the natural and just claims of the employees for a higher rate of dearness allowance with the capacity of the employer to pay it and in that process it hadmade allowance for the legitimate desire of the employer to make reasonable profits.
What is really material in assessing the financial capacity of the employer units in this context is the extent of gross profits made by them.
On the basis of exhibit U.9, which was an analysis of the balance sheet, and profit and loss accounts of the 28 units, the Court found 'that the 28 mills had been making good profits and that, on an average, the profit would work out at 40 and odd per cent of the capital.
There was some decline in the profits made during the years 1966, 1967 and 1968 but, the Court found that the industry was rallying round in 1970.
[286 C] 278 Ahmedabad Mill Owners ' Association, etc.
vs The Textile Labour Association; , at p. 426 and Unichem Laboratories Ltd. vs Their Workmen, Civil Appeals No. 1091 93 of 1971, decided on 24 2 1971, referred to.
(iii) No evidence had been adduced to show what exactly had been the ,effect on the industry of the enhancement in excise duty.
Without further evidence it was not possible to draw an inference that the sale of the products had been adversely affected.
Moreover the economic incidence on the excise duty had been passed on to the consumer and the em ployer unit did not have to bear any additional burden on account of the levy.
[286 H] (iv) Exhibit U.8 is a comparative Table showing the minimum basic wages and dearness allowance paid in other industries in the region like the engineering, pharmaceuticals, etc.
The Court relied upon it only to show the trend in the region.
The Court also relied upon the report of the Norms Committee which stated that the trend for the last decade in industrial adjudication as well as in settlements and awards, was to allow 100 per cent neutralization in the case of lowest paid employees.
The Court was of the view that if 80 per cent neutralization could be allowed in the industry under the settlement arrived at in 1957, there was no reason why 100 per cent neutralization should not be granted in view of the steep rise in the cost of living from 1957, to the lowest paid employees.
It is not possible to agree with the contention of the appellant that the Industrial Court went wrong in relying upon exhibit U.8 or the report of the Norms Committee to find out the trend in the region as to the extent of neutralization to be allowed to the employees concerned.
[287 F] Bengal Chemical and Pharmaceutical Works Ltd. vs Its Workmen, referred to.
(v) The Association never wanted the Court to make any comparison with any other units in the same industry in the region.
In the written statement of the Association there was no averment that there were other comparable units in the same industry in the region.
No did the Association, at the time of argument before the Industrial Court, put forward the contention that there were comparable concerns in the same industry in the region and that the Court should make a comparison of the employer units in question with those concerns to find out the extent of neutralization which could be granted.
The Association was certainly in a position to tell the Court whether there were any other comparable units in the same industry in the region and the only inference from its conduct was that there were no comparable units in the industry in the region.
[290 A] French Motor Car Co. Limited vs Workmen, [1963] Supp.
at pp.
20 21.
Williamsons (India) Private Ltd., vs The Workmen, [1962] I L.L.J. 302 and Greaves Cotton and Co. and others vs Their Workmen, ; at pp.
367 369, referred to.
|
Appeal No. 1835 of 1968.
305 Appeal from the judgment and order dated March 21,1968 of the Mysore High Court in Writ Petition No. 2371 of 1967.
Appellant appeared in person.
M. Veerappa, for the respondents.
The Judgment of the Court was delivered by Mitter, J.
The only point involved in this appeal by certi ficate, is whether the order of compulsory retirement dated June 28, 1967 intimating the appellant that it was necessary in the public interest that he should be retired from service with effect from October 15, 1967 in terms of Rule 285 of the Mysore Civil Services Rules read with Note I thereto was inconsistent with the rules of natural justice in that the appellant was not informed of the evidence on which the order was based and no opportunity was given to him of being heard and meeting or explaining away the evidence in support of the order, and as such was liable to be quashed.
The High Court rejected the writ petition of the appellant in which the above and other contentions were raised by him but as the certificate is limited to the one question mentioned above the other points canvassed before the High Court do not fall for consideration.
The facts are as follows.
The petitioner was a Class I Health Officer in the Department of Public Health in Mysore State Service in the year 1967.
But for the order of retirement which was served on him he might have continued in service up to December 31, 1971 when he would have attained the age of 55 years.
In June 1967 when he had passed the age of 50 years he was served with an order the text of which is as follows : "Whereas the Government of Mysore is of opinion that it is necessary in the public interest that you, Dr. N. V. Putta Bhatta, Health Officer Class I working as District Health and Family Planning Officer, Coorg, should be retired from service with effect from the 15th October, 1967.
Now, therefore, as required by Note 1 to Rule 285 of the Mysore Civil Services Rules, you are hereby given three months ' notice that you shall be retired from service with effect from the 15th October, 1967." He filed his writ petition in the High Court of Mysore in September 1967.
The averments in the petition which are relevant for the purpose of this appeal are as follows (a) Paragraph 5 of the petition "This order which vitally affects my right to continue till I attain the age of superannuation, namely, 55 years 306 with the prospect of 'becoming the Head of the Department should have been passed only after giving me an opportunity to show cause against it having regard to the rules of natural justice." (b) Paragraph 18(a) of the petition I was not given any chance or opportunity to know the causes for the impugned order on which I am to be retired prematurely.
In the absence of any such cause, 1 assumed that some confidential report or any cause affection my health may have been considered.
On this assumption I made representation to the first respondent (the State of Mysore) through the second respondent (the Director of Health Services) These representations will show that I was a victim of prejudice of the Directorate of Health Services (c) Paragraph 22 of the petition "After the impugned order was passed I got two confidential reports One of these reports stated that I require guidance, that I had not initiative and not fit to hold any executive post and that I was in the habit of divulging Government information without the permission of the Government.
The second report of 1966 stated that I was a conceited, incompetent and irresponsible officer and that I was slow in disposing of the official matters and that I was not amendable to superior officers These confidential reports were sent to me on 1 9 67 I had to make representation against these false allegations.
" (d) Paragraph 23 of the petition "It will thus be seen that in the background of the confidential report for 1966 that I must be retired or retired from service without any opportunity to me, the impugned order has been passed.
The impugned order therefore is violative of article 31 1 of the Constitution since it is clearly based on the 1966 confidential report I therefore submit that on vague and unsupported charges my career is sought to be blocked which should have been otherwise promising.
" In the counter affidavit of the State it was averred that action was taken by the Government on a consideration of the confidential reports submitted in respect of the petitioner and that it was not based on any prejudice or jealousy against him.
No opportunity for hearing was contemplated under Rule 285 and the impugned order was not violative of article 311 of the Constitution.
307 The relevant part of Rule 285 of the Mysore Civil Services Rules and Note 1 thereto read as follows "A retiring pension is granted to a Government servant who is permitted to retire after completing qualifying service for thirty years or such less time as may, for any special class of Government servants be prescribed.
Note 1.
A Government servant may retire from service any time after completing thirty years ' qualifying service provided that he shall give in this behalf a notice in writing to the appropriate authority, at least three months before the date on which he wishes to retire.
Government may, by order, retire any Government servant after he has completed twenty five years of qualifying service or after he has attained fifty years of age, if such retirement is in their opinion necessary in the public interest, provided that Government servant concerned is given notice of three months before the date of retirement, or in lieu of such notice, a sum equivalent to the amount of his salary for a period of three months.
" The validity of the above rule was attacked in this Court in Shivacharana vs State of Mysore (1).
Upholding the validity thereof it was said by this Court (at p. 281 paragraph 4): "It would thus be clear that though the normal age of retirement under R. 95 (a) is 55 years, under R. 285 it is competent to the Government to retire compulsorily a government servant prematurely if it is thought that such premature retirement is necessary in the public interest.
This power can, however, be exercised only in cases where the Government servant has completed 25 years qualifying service or has attained 50 years of age.
In order words, ordinary retirement by superannuation occurs after attaining 55 years or completing 30 years ' service, while premature retirement can be forced on the government servant if he has either completed 25 years of service, or has attained 50 years of age.
In the case of premature compulsory retirement, the government servant is entitled to pension as indicated in Note 1 to Rule 285.
" In that case the appellant before this Court had urged that his record was free from blemish and Government was not justified in coming to the conclusion that it was in the public interest to retire him.
Turning down the said contention it was stated (1) A.I.R. 965 S.C. 280.
308 "The allegations made by the petitioner in that behalf are very vague and unsatisfactory, and so, it would be idle to contend that if the impugned note is valid, the order terminating the services of the petitioner can still be challenged on the ground that it is not justified on the merits or is illegal or arbitrary.
Whether or not the petitioner 's retirement was in the public interest, is a matter for the State Government to consider, and as to the plea that the order is arbitrary and illegal, it is impossible to hold on the material placed by the petitioner before us that the said order suffers from the vice of mala fides.
" It may be noted that the appellant before us had challenged the order of termination of service on very similar grounds and the only additional point urged by him before us is that as the order of June 1967 has civil consequences it was obligatory on Government to give him notice to show cause against the order proposed before it was made.
In support of this reliance was placed on Orissa vs Binapani Dei(1).
There too the Government of Orissa had served the order of compulsory retirement on the first respondent but the main ground of attack was that whereas according to Government records she was born on 10th April, 1910 and as such would have been due for superannuation on the 10th April 1965, Government had made an enquiry as to her date of birth behind her back and asked her to show cause why a certain date should not be taken as the correct date of birth.
The report of the enquiry officer was not disclosed to her and the first respondent was not given an opportunity to meet the evidence used against her.
This was followed by Government refixing her date of birth and ordering compulsory retirement.
It was observed by this Court (see p. 629) : "The State has undoubtedly authority to compulsorily retire a public servant who is superannuated.
But when that person disputes the claim he must be informed of the case of the State and the evidence in support thereof and he must have a fair opportunity of meeting that case before a decision adverse to him is taken.
" With regard to the enquiry it was said that, it was contrary to the basic concept of justice and cannot have any value.
It was added that although the order was administrative in character it involved civil consequences and must be made, consistently with the rules of natural justice after informing the first respondent of the case of the State, the evidence in support thereof and after giving an opportunity to the first respondent of being heard and meeting or explaining the evidence.
(1) ; 309 It will be noticed at once that the facts of this case are not in pari materia with those of Binapani Dei 'section Here there was no dispute nor any claim by the appellant that he was asked to retire before he had attained the age of 50 years.
All his challenge is directed to the formation of opinion by the Government that it was in the public interest to retire him.
It is difficult to see how the appellant could have explained that it was contrary to public interest to, retire him if his attack on the ground that the order was made arbitrarily or mala fide could not be sustained.
The counter affidavit of the State definitely alleged that in forming the opinion Government had taken note of the adverse remarks in the appellant 's confidential report.
The appellant contends that if Government 's action was moti vated by the adverse remarks in the reports he should have first been given notice thereof and in any event his representation against them should have been disposed of before any retirement order could have been passed on him.
Our attention was drawn to G.S.R. 597 of the General Admi nistration Secretariat notification of the State of Mysore dated 6th July, 1965.
By the said notification the Governor of the State made a set of rules known as the Mysore Civil Services (Confidential Reports) Rules, 1965.
According to r. 3 thereof : "In respect of every Gazetted and non Gazetted officer an Annual Confidential Report shall be recorded assessing as correctly as possible such officer 's physical, mental and moral suitability for his office and for promotion, his ability to apply intelligently the law and procedure prescribed to cases coming before him, his treatment of his subordinates and behaviour to his superiors and colleagues in other departments aid his relations with the public.
" The preparation and transmission of confidential reports are to be made in terms of r. 5 which inter alia directs that a report was to be prepared with the greatest caution and no record or remarks shall be made lightly on the spur of the moment or based on prejudice.
Under r. 8 (1) all adverse remarks whether through an ordinary or special report shall be communicated to the officer concerned, unless the adverse remarks are of such a nature that the communication thereof is unlikely to result in the remedy of the defect or is considered inadvisable for any other reason.
While communicating an adverse remark, the name of the officer recording the adverse remark shall not be communicated to the officer reported upon.
Under r. 9 no appeal lay against adverse remarks made in the annual confidential reports.
Our attention was however drawn to a notification dated 6th February 1970 whereby r. 9 was altered so as to give an officer 310 against whom adverse remarks were made a right to submit a representation on which a decision had to be taken expeditiously and communicated to him.
At the relevant time however the said amended rule was not in operation and consequently it was not open to the appellant to challenge the correctness of the adverse remarks in his confidential reports by way of appeal.
As the ,confidential reports rules stood at the relevant time, the appellant could not have appealed against the adverse remarks and if the opinion of Government to retire him compulsorily was based primarily on the said report he could only challenge the order if he was in a position to show that the remarks 'were arbitrary or male fide.
It is not necessary for us to examine the rules of natural justice in general but we may quote observations from a judgment of this Court in A. K. Kraipak vs Union() to show that the particular circumstances of a case considered in the background of the law ,applicable must be determinative on the point.
There the Court .said : "What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the enquiry is held and the constitution of the Tribunal or body of persons appointed for that purpose.
Whenever a complaint is made before a court that some principle of natural justice had been contravened the court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case.
" In Union of India vs J. N.
Sinha(2) the Court was concerned ,directly with the principle of natural justice in similar circumstances.
There the order of retirement was based on Fundamental Rule 56(J) reading : "Notwithstanding anything contained in this Rule the appropriate authority shall, if it is of the opinion that it is in the public interest so to do have the absolute right to retire any Government servant by giving him notice of not less than three months in writing or three months pay and allowances in lieu of such notice.
" There this Court observed (see p.795): "The right conferred on the appropriate authority is an absolute one.
That power can be exercised subject to the conditions mentioned in the rule, one of which is that the concerned authority must be of the opinion that (1) at 469, (2) [1971] 1 S.C.R. 791. 311 it is in public interest to do so.
If that authority bona fide forms that opinion, the correctness of that opinion cannot be challenged before courts.
It is open to an aggrieved party to contend that the requisite opinion has not been formed or the decision is based on collateral grounds or that it is an arbitrary decision.
The 1st respondent challenged the opinion formedby the Government on the ground of mala fide.
But that ground has failed .
The impugned orderwas not attacked on the ground that the required opinion was not formed or that the opinion formed was an arbitrary one.
One of the conditions of the 1st respondent 's service is that the Government can choose to retire him any time after he completes fifty years if it thinks that it is in public interest to do so.
Because of his compulsory retirement he does not lose any of the rights acquired by him before retirement.
Compulsory retirement involves no civil consequences.
The aforementioned rule 56(j) is not intended fortaking any penal action against the government servants.
That rule merely embodies one of the facets of the pleasure doctrine embodied in article 310 of the Constitution.
Various considerations may weigh with the appropriate authority while exercising the power conferred under the rule.
In some cases, the government may feel that a particular post may be more usefully held in public interest by an officer more competent than the one who is holding.
It may be that the officer who is holding the post is not inefficient but the appropriate authority may prefer to have a more efficient officer.
While a minimum service is guaranteed to the government servant, the government is given power to energise its machinery and make it more efficient by compulsorily retiring those who in its opinion should not be there in public interest.
" The Court further noted that a compulsory retirement was bound to have some adverse effect on the Government servant but such rule of retirement could only be acted upon after the officer had attained the prescribed age and further a compulsorily retired government servant did not lose any of the benefits earned by him till the date of his retirement.
Allthe above observations apply to the facts of the appellant 's case.
But the appellant seeks to distinguish that case because of the useof the expression "absolute rights" in F.R.56(J), rule 285 not being so emphatically worded.
But that in our opinion makes no difference.
Both rules give the Government the same 312 or similar right: so long as the right is not qualified it must be held to be absolute and no distinction can be made between r.285 and F.R.56(J) on that ground.
The last contention of the appellant that in the normal course of things he would have been superannuated at the age of 55 and would have reached the top position in the department the deprivation whereof was a civil consequence of the order, does not bear scrutiny.
If the confidential reports could be acted upon his promotion could be withheld even if he was not made to retire ,compulsorily.
If on the basis of the confidential reports he is asked to retire in compliance with that rule he cannot complain because of loss of position which he might have attained if there were no adverse remarks against him.
In the result the appeal fails but we make no order as to costs.
We however think it appropriate to take note of the skillful way in which the appellant put forward his case and dealt with the points of law with which as a layman he was not expected to be familiar.
| IN-Abs | The appellant was an officer in the Mysore State Service.
In 1967, when he had passed the age of 50 years he was compulsorily retired in terms of r. 285 of the Mysore Civil Service Rules read with Note I thereto, as the Government was of opinion that it was necessary in the public interest to retire him.
He challenged the order on the ground, inter alia, that there was violation of natural justice in that the appellant was not informed of the evidence on which the order was based and no opportunity was Riven to him for explaining, away such evidence.
The respondent stated that the action was taken on a consideration of the confidential reports submitted in respect of the appellant and that it was not based on any prejudice against him.
The High Court dismissed the petition.
Dismissing the appeal to this Court, HELD : (1) As the Confidential Reports Rules stood at the relevant time, the appellant could not have appealed against the adverse remarks, and if the opinion of the Government to retire him compulsorily was based primarily on the reports, he could only challenge the order if he was in a position to show that the remarks were arbitrary or mala fide.
If the Government bona fide.
formed the opinion that it was in the public interest to retire him, the correctness of that opinion could not be challenged.
[310 A C] (2) It is difficult to see bow the appellant could have explained that it was contrary to public interest to retire him if there was no basis for attacking the order on the ground that it was made arbitrarily or mala fide.
[309, B C] Shivacharana vs State of Mysore, A.I.R. 1965 S.C. 280; Union of India vs J. N. Sinha, [1971] 1 S.C.R. 791, followed.
Orissa vs Binapani Dei, , explained.
A. K. Kraipak vs Union, at 469, referred to '.
(3) The fact that r. 285 was not so emphatically worded as F.R. 56 (i) considered in J. N. Sinha 's case makes no difference, because, both the rules give the Government the same or similar right; and so long as the right is not qualified it must be held to be absolute.
[311 H;312 A] (4) If the confidential reports could be acted upon his promotion could be withheld even if he was not made to retire compulsorily.
If on the basis of the confidential reports be was asked to retire in compliance with the rule, the appellant could not complain of loss of position which he might have attained if there were no adverse remarks against him.
[312 B C]
|
o. 1354 of 1968, Appeal from the judgment and order dated February 3, 1967 of the Mysore High Court in T.R.C. No. 1 of 1965.
section T. Desai, section K. Aiyar, R. N. Sachthey and B. D. Sharma, for ,the appellant.
233 C. K. Daphtary, V. Krishnamurthy, V. Srinivasan, section Swarup, B. Datta, P. C. Bhartari, J. B. Dajachanji, O. C. Mathur and Ravinder Narain, for the respondents.
The Judgment of the Court was deliverd by Shelat, J.
This appeal, by certificate, is directed against the judgment of the High Court of Mysore dated February 3, 1967 whereby it answered in the negative the question referred to it under section 64(1) of the , XXXIV of 1953.
The question was : "Whether on the facts and in the circumstances of the case, the entire property held by the deceased valued at Rs. 12,23,794/ was chargeable lo estate.
duty ?" The said property comprised shares and securities of the value of Rs. 25,778/ , and immovable properties at Bangalore and Madras respectively valued at Rs. 5,42,500/ and Rs. 6,10,100/ .
The assessment in question pertained to the estate of Hajee Mahomed Hussain Sailt, the father of the two respondents, who died at Bangalore on March 22, 1955 leaving the said properties.
The said Hajee Mahomed Hussain and the respondents belonged to Cutchi Memon sect amongst the Muslims.
The respondents claimed that Cutchi Memons at one time were Hindus residing in Sind, that some four or five hundred years ago they were converted to Islam like the members of another such sect, the Khojas that they migrated thence to Cutch and from there spread themselves to Bombay, Madras and other places.
Their case was that despite their conversion, the Cutchi Memons retained a large part of Hindu law as their customary law, including its concept& of joint family property, the right of a son by birth in such pro perty and its devolution by survivorship.
Further neither the Cutchi Memons Act, XLVI of 1920, nor the Muslim Personal Law (Shariat) Application Act, XXVI of 1937, nor the Cutchr Memons Act, X of 1938 applied to them.
That being the posi tion, there was no question of the passing of the said properties to them on the death of their father as envisaged by section 3 of the, Act or its being applicable to them or the said properties, the, said properties having come to them under the Hindu Law rule devolution of joint family property by survivorship.
Their case was that only one third of the said properties, that is, the undivided share of their deceased father, could be properly said to have passed to them on his death and to be assessable under the Act.
The Deputy Controller rejected these contentions as also the evidence led by the respondents in support thereof and assessed 10 L120 SupCI/72 234 duty at Rs. 2,05,996.41 P. on the basis that the entire estate valued by him at Rs. 12,23,794/ was assessable.
The respondents filed two separate appeals, both of which were rejected by the Central Board of Revenue by its order dated December 30, 1961, and as aforesaid, at the instance of the respondents referred to the High Court the aforesaid question.
In support of their contentions, the respondents had produced before the Deputy Controller the following documents as evidence of the Hindu law being their customary law : (i) O.P. No. 47 of 1909 A petition before the High Court of Madras and the High Court 's order thereon.
(ii) O.P. 188 of 1927 A petition before the High Court of Madras and the High Court 's order thereon.
(iii) O.P. 79 of 1928 A petition before the High Court of Madras and the High Court 's order thereon.
(iv) O.P. 1 of 1930 A petition before the High Court of Madras and the High Court 's order thereon.
(v) The judgment of the High Court of Madras in Civil 'Revision Petition No. 1727 of 1930.
(vi) The Judgments of the same High Court in Siddick Hajee Aboo Bucker Sait vs Ebrahim Hajee Abuo Bucker Sait(1), and Abdul Sattar Ismail vs Abdul Hamid Sait.
(2) These were produced to show that the rules of Hindu law were consistently acquiesced in and applied to their family and the other Cutchi Memons settled in Madras.
They also relied on the fact that the High Court had issued letters of administration to them although they had paid succession duty only on one third of the said estate.
The Deputy Controller held that neither the said evidence, nor the fact of their having paid succession duty on one third of the said estate only concluded the issue before him, viz., that the rules of Hindu law, including the rules as to joint family property and its devolution by survivorship constituted the customary law of Cutchi Memons in Madras and Bangalore.
He rejected their contention That as they had settled down first in Madras and then in Bangalore sometime between 1928 and 1930, and as a large part of the ,state was situate in Madras, he should prefer the Madras, as against the Bombay view.
namely, that he rules of Hindu law applicable to Cutchi Memons governed matters of succession and inheritance only.
His view was that as there was only one solitary decision of the High Court of (1) A.I.R. 1921 Mad. 571.
(2) A.I.R. 1944 Mad.
235 Madras in favour of the respondents ' contention as against a large number of decision of the Bombay High Court which limited the application of Hindu law to matters of succession and inheritance, the Bombay view was the correct one.
As regards the orders and decisions produced by the respondents, he held that they would not assist the respondents as in none of them the question raised by them was specifically dealt with by the High Court.
In support of their appeals the respondents, in addition to the aforesaid evidence, also produced a partition deed of 1906 between one Hussain Hajece Ouseph Sait and his two sons, which inter alia recited that the said Hajee Hussain Sait and his six brothers had formed a joint family governed by Hindu law.
The different petitions and the orders thereon set out earlier, and ranging from 1909 to 1930 showed, (1) that the respondents ' family was in Madras till about 1930 when its members partly shifted their activities to Bangalore, and (2) that in all these petitions the stand taken by the members of the respondents ' family was that the family properties were treated as joint family properties.
The Board, however, rejected this evidence stating that no weight could be given to it, since a custom followed by one, particular family would not "convert that family into a coparcenary governed by the Hindu law of survivorship", and dismissed the appeals.
As aforesaid, the High Court upheld the respondents ' contentions and answered the question referred to it against the Revenue.
On behalf of the Controller of Estate Duty, the following points were raised : (i) that the concept of joint family did not apply to Cutchi Memons, and that a Cutchi Memon 's son did not acquire any interest by birth in the property inherited by his father from his ancestors, (ii) that in any case there was no scope for raising any such contention after the enactment of 'he Shariat Act of 1937, and thereafter of the .
(iii) that the High Court of Mysore should have preferred the view taken by the Bombay High Court and followed by the old Mysore High Court in Elia Sait vs Dharavva,(1) and (iv) that the findings recorded by the Board were binding on the High Court.
(1) 236 After some argument, Mr. Desai conceded that his contention as to the Shariat Act could not be pressed and gave up that part of his second proposition.
As regards his 4th proposition, the issues before the High Court were questions of law and therefore here was no question of the High Court being bound by the Boaid 's findings.
That leaves proposition 1, part of proposition 2 and proposition 3 of Mr. Desai for our determination.
It is a rule of Mahomedan law, the correctness of which is not capable of any doubt, that it applies not only to persons who are Mahomedan by birth but by religion also.
Accordingly, a person converting to Mahomedanism changes not only his religion but also his personal law.
Mitar Sen Singh vs Maqbul Hasan Khan(1).
Such a rigid rule, however, applies to cases of individual conversions, for, in cases of wholesale conversion of a case or a community, it is recognised that the converts might remain a part of their original personal law according to Their hitherto held habits, traditions and the surroundings.
This principle was laid down in Fidahusein vs Mongbibai(2), where the question arose whether a Khoja of the Shia Ishna Ashari sect could dispose of the whole of his property by testamentary disposition.
Tracing the history and the conversion of Khojas from its previous decisions, the High Court held that the conversion of Khojas to the Shia Imami Ismaili sect was not a case of individual conversions but of a mass or community conversion, and that in such a case it could be properly presumed that such converts might retain a portion of their original personal law according to their social habits and surroundings.
They, therefore, retain their personal law unless they consciously adopt another.
The High Court deduced the following principle (p. 402): "A Hindu convert residing in India is governed by his personal law unless he renounces the old law and accepts the new one, except where a statutory provision is made.
His intention to renounce the old law is to be inferred : (a) if he attaches himself to a class which follows a particular law, or (b) if he observes some family usage or custom derogatory to the old law.
" The question as to which personal law, sects among the Muslims, such as the Khojas and the Memons, would be subject to in matters of property, succession and inheritance arose in Bombay as early as 1847.
In Hirbae vs Sonabae ( 3 ) commonly called the Khoja and Memon cases, the Supreme Court of Bom (1) [1930] 57 I.A. 313.
(2) (3) Perry 's Oriental Cases, 110 (1853).
237 bay was called upon to determine the claim of two sisters in the estate left by their father, who had died intestate without leaving any male issue, The claim was resisted on the ground that in the Khoja community the custom was that females were excluded from any share in their father 's es ate, and were entitled only to maintenance and marriage expenses.
A suit raising precisely the same question was also before the Court between members of Cutchi Memons sect.
Both the suits were tried together and disposed of by Sir Erskine Perry, C.J., by a common judgment in which he held the custom put forward before him as proved.
On that finding he held : "I am, therefore, clearly of the opinion that the effect of the clause in the Charter is not to adopt the text of the Koran as law any further than it has been adopted in the laws and usages of the Muhammadans who came under our sway, and if any class of Muhammadans, Muhammadan dissenters, as they may be called, are found to be in possession of any usage, which is otherwise valid as a legal custom and which does not conflict with any express law of the English government, they are just as much entitled to the protection of this clause as the most orthodox society can come before the Court." The learned Chief Justice held that the Khojas who had settled down in Cutch, Kathiawar and Bombay were converted as a caste to Islam some three or four hundred years ago, but had retained on their conversion the Hindu law as to inheritance and succession.
As to Cutchi Memons also, he held that they had originally settled down in Cutch from where they spread in western India; that originally Lohanas, they too were converted to Islam some three or four hundred years ago.
Though a little more orthodox Muslims than the Khojas and more prosperous, they had yet retained the Hindu law of succession, excluding females from inheritance, who were entitled only to maintenance and marriage expenses.
(pp. 114 115).
A few years hence, Sausse, C.J., following this decision held in Gangbai vs Thavar Mulla(1) that the Khoja caste, "although Muhammadan in religion, has been held to have adopted, and to be governed by Hindu customs and laws of inheritance,".
Three years later, in In the Goods of Mulbai,(2) Couch, C J. observed that the law by which the Khojas were governed was not, properly speaking, "Hindu law, but probably that law modified by their own customs".
In yet another similar case during that year, In the Advocate General of Bombay ex relations Daya (2) (1) 238 Muhammad and other(1), commonly known as the Agha Khan 's case, the question was not as regards the rules of succession and inheritance, but whether the Khojas were to be considered as orthodox Sunnis or Ismailia Shias.
Arnould, J., once again considered the history of their conversion, their religious book called 'Dashavatar ' (the ten incarnations) and came to the conclusion that Khojas represented "the dissidence of dissent" in its most extreme form; the Ismailias being dissenters from the main body of Shias, as these in turn were dissenters from the main body of orthodox Islam".
(Wilson 's Anglo Muhammadan Law, 33 34 (6th ed.).
From these premises, Westropp, C.J., took a step forward in Shivji Hassam vs Datu Mavji Khoja(2) and held that Hindu law applied to the Khojas in all matters relating to property, succession and inheritance, the Khojas having retained that part of their personal law to which till their conversion they were accustomed.
Similarly, In the Goods of Rahimbhai Aloobhai(3), after referring to the previous decisions, Sargeant, J., declared that the Khoias for the last twenty five years at least had been regarded by the court in all questions of inheritance as converted Hindus, who originally retained the Hindu law of inheritance, which had since been modified by special customs, and that a uniform practice had prevailed during 'that period of apply ing Hindu law lo them in all questions of inheritance, save and except when such a special custom had been proved.
The consequence of such a proposition was that the burden of proof lay on the person who set up such a special custom derogatory to the Hindu Law.
In Rahimathai vs Hirbai, ( 4 ) Westropp, C.J., once again declared : "It is a settled rule that in the absence of proof of a special custom to the contrary Hindu law must regulate the succession to property among Khojas", and dealing with a question such as that of maintenance to be awarded to a Khoja widow, he held that in the absence of a special custom to the contrary, that question also must be governed by Hindu law.
In Karamali vs Sherbanoo ( 5 ) , rules of Hindu law were applied as between the widow of a deceased Khoja and his brothers, the Court holding the widow to be entitled to maintenance only and the property of the deceased going to the brothers who had lived jointly with 'heir deceased brother.
Thus, from 1847 to 1905 the Bombay High Court consistently treated the Khojas as being governed by the rules of Hindu law in matters of property, succession and inheritance.
(1)(1866) (2) (3) (4) Bom.
(5) Bom.
85. 239 With regard to the Cutchi Memons, whom Sir Erskine Perry had clubbed together with the Khojas, Westropp, C.J., in In the Matter of Haji Ismail Haji Abdullah(1) held them not to be regarded as Hindus for the purposes of the Hindu Wills Act, XXI of 1870, and added : " We know of no difference between Cutchi Memons and any other Muhammadans except that in one point connected with succession it was proved to Sir Erskine Perry 's satisfaction that they observed a Hindu usage which is not in accordance with Muhammadan Law.
" But in Ashabai vs Haji Tyeb Haji Rahimtulla (2) , where the plaintiffs, the widow and the daughter of the deceased Haji Adam, a Cutchi Memon, sought to recover properties alleging them to be the ancestral properties of Haji Adam, which his father could not dispose of by will, Sargeant, C.J., ruled that there was no partition between Haji Ismail and his son Haji Adam, and that the ancestral property absolutely vested in Haji Ismail on his son 's death.
He further held that the jewels of one of the females of the family were treated as stridhan property to which the Hindu law of succession to such sridhan property would apply.
The same judicial trend also appears in Abdul Cadur Haji Mohamed vs Turner(3) where Cutchi Memons were held to be subject to Hindu law in matters of inheritance.
In Mahomed Siddick vs Haji Ahmed (4 ) the contention expressly raised was that the Mitakshara doctrine of sons acquiring interest by birth in ancestral properties did not apply to Cutchi Memons, and that the earlier decisions limited the Hindu law to govern matter , of inheritance and succession only.
Scott, C.J., dealing with this contention held : "Vested rights, accruing at birth have been acquired by sons under the law hitherto governing the community, and it would not be just to interfere with Those rights on account of this recent change of opinion.
I use the word ' recent ' advisedly, because the community hitherto by their practice have acquiesced in the application of Hindu law " In the next case, which came before the High Court, the High Court.changed its view and reversing the judgment of Jardine.
J., held that the rule of Hindu law applicable to the Khoias applied only to matters of inheritance and succession and that the further rule of 'he sons having a right by birth in the ancestral property and consequently having a right to demand partition of it did not apply.
The High Court, however, noted that such a right did (1)( 1881)I.L.R. Bom.459.
(2) Bom.
115. (3) Bom.
158 (4) Bon.
1 240 prevail in Cutch and Kathiawar from where the Khoias had spread themselves to Bombay.
(see Ahmedbhoy vs Cassum bhoy(1).
But, contrary to what he had held in that case, the same learned Chief Justice (Sargeant, C.J.) in In the Matter of Haroon Mahomed(2), a case of Cutchi Memons, held that in the case of a family trading concern the members of the family would be governed by the Hindu Law and stated the position of Cutch Memons Thus : "The appellant is a Cutchi Memon, and belongs to the same family as the other persons who have been made insolvents.
As Cutchi Memons the rules of Hindu Law and custom apply to them, and the position of the appellant with regard to the family property must be deter mined by the same considerations as would apply in the case of a member of a joint and undivided Hindu family".
Mossa Haji vs Haji Abdul(3) is yet another instance where the High Court held that in the absence of a special custom as to succession the Hindu Law of inheritance would apply to Cutchi Memons, and therefore, when a Cutchi Memon widow dies issueless, her property would be governed by the Hindu Law as to stridhan.
A year later, in Haji Noor Mahomed vs MaCleod ( 4 the rule of devolution of property by survivorship was applied to parties who were Cutchi Memons in the matter of a family firm, save that somewhat contrary to it, the principle of relationship between the manager and the members of the family was held not to apply.
The above analysis shows that barring one or two stray deci sions, the general trend of judicial opinion in Bombay was that both the Khoias and the Cutchi Memons retained, despite their conversion, considerable portion of their personal law and that the rules of Hindu law were accepted by them as customary law in matters of property, inheritance and succession, including rules as to joint family property, the right of a son therein by birth and the devolution thereof by survivorship.
In Jan Mahomed vs Dutta Jaffar(5), Beaman, J., after an elaborate analysis of the previous decisions dealing with both Khoias and Cutchi Memons, struck for the first time a vote of dissent and laid down two propositions : (1) that the invariable and general presumption was that Mahomedans were governed by the (1) 8891 I.L.R. I Bom.
534 (2) Bom.
197 (4) Bom.
(5) Bom.
241 Mahomedan law and usage and that it lay upon a party setting up a custom in derogation of that law to prove it strictly, and (2) that in matters of simple succession and inheritance, it was to be taken as established that these two matters among Khoias and Cutchi Memons were governed by Hindu Law "as ,applied to separate and self acquired property".
He added that he limited his second proposition to separate and self acquired property to take the sting out of the earlier judgments and "effectively prevent its further extension in all directions upon the basis of the Hindu law of the joint family having been established to be the law of the Khojas and Memons".
(p. 511) In an equally out spoken dissent in relation to Cutchi Memons, he deprecated in the Advocate General vs jimbabai(1), after yet another analysis of the earlier judicial trend, the habit of treating the Khoias and Cutchi Memons alike, as if they were on precisely the same footing and urged the necessity of deciding the cases of Cutchi Memons on the customs proved in respect of them rather than the customs prevailing among the Khoias, and observed (p. 190) : " While there are many peculiar features in the sectarianism of the Khoias, strongly marking them off from orthodox Mahomedanism, the Cutchi Memons, except for the historical fact that they were originally Hindoos, and were converted four hundred or five hundred years ago to Mahomedanism, are, at the present day, strict and good Moslems." He dissented from Mahomed Sidick vs Haji Ahmed(2) and held that the pro position there laid down, that not only Hindu law applied to Cutchi Memons in matters of inheritance and succession but that the concept of joint family property also governed them, was open to objection, since such a rule could rest only upon proved customs, that no custom of that kind had ever been proved and that Scott, C.J., had based his conclusion only on the case law.
His conclusion was that the only thing which could be said with certainty was that the Cutchi Memons had acquired by custom the power of disposing of the whole of their properly by will, but that it was not proved before him and never had been proved affirmatively that they had ever adopted as part of their customary law the Hindu law of be joint family as a whole or the distinction in that law between ancestral property as against self accquired property and that the Cutchi Memons were subject by custom to Hindu law of succession and inheritance as it would (1) Bom.
(2) Bom. 1, 242 apply to the case of an intestate separate Hindu possessed of self acquired property and no more.
The dissent of Beaman, J., received approval from another learned single Judge in Mangaldas vs Abdul Razak(1) and finally from the Appellate Bench of the High Court in Haji Oosman vs Haroon Salah Mahomed,(2) and therefore, the law as laid down by Beam, an, J., may be taken as finally settled so far as the Bombay High Court is concerned.
The Appellate Bench of the High Court summed up the position thus : "There was a time when it was assumed that the Hindu law of joint property applied to Cutchi Memons; Ashabai vs Haji Tyeb Haji Rahimtulla(3) and Mahomed Sidick vs Haji Ahmed.(4) But these decisions are now obsolete and the application of Hindu law is now res tricted to cases of succession and inheritance as it would apply in the case of an intestate separate Hindu possessed of self acquired property.
" The Revenue would be correct in the position taken by them, were the view finally settled in Bombay to apply to Cutchi Memmons settled in Madras and elsewhere also.
But the High Court of Madras has adopted a view different from the later trend of opinion in the Bombay High Court.
In section Haji Aboo Bucker Sait vs Ebrahim Hajee Aboo Bucker Sait,(5) Kumaraswamy Sastri, J., after an analysis of the case law in Bombay, came to the conclusion that since the Khojas and the Cutch Memons spread themselves from Cutch and Kathiawar, where they had originally settled down and where they had lived in Hindu Kingdoms with Hindu surroundings and traditions, there was nothing surprising that they retained the rules of Hindu law in general not only in matters of succession and inheritance but also concepts, such as, the joint family property and its devolution by survivorship.
According to him, at the time of their conversion, the Cutchi Memons were Hindu governed by the Mithakshara system of joint and undivided family together with its rule of survivorship.
"I find it difficult", he said, "to assume that the Cutchi Memons on their conversion were so enamoured of the Hindu Law of inheritance that they adopted it, but were so dissatisfied with the laws of the joint family that they discarded the rules as to coparcenary and the son 's interest in the property of his grandfather." Since there were no reported decisions on the position of the Cutchi Memons who had settled down in Madras, the learned Judge had the High Court 's record searched.
As a (1) [1914] 1613om.
L.R. 224.(2) Bom.
(3) Bom.
(4) Bom 1.
(5) A.I.R. 1921 Mad.
243 result of that search, he found several suits filed by and against the Cutchi Memons wherein they were consistently treated as members of an undivided family governed by the rules applicable to the members of the Hindu joint families and decrees had been passed in those suits on that footing.
Even as regards the parties before him, he found that till the filing of the suit, which he was trying, they had regulated their affairs upon the basis that the Hindu law of the joint family applied.
On the premise that the Cutchi Memons in Madras had regulated succession and inheritance according to Hindu law, including its principle of devolution of property by survivorship, he held that the Hindu law of coparcenary and joint family applied to the Cutchi Memons settled in Madras.
In Abdul Satlar Ismail vs Abdul Hamid Sait,(1) Leach, C.J., referred to this decision with approval and the distinction therein made between self acquired property which a Cutchi Memon could dispose of by a will without the restriction of the one third under the Mahommedan Law, on the one hand, and joint family property which he could not so dispose of.
507 to 508).
In Abdul Hameed Sait vs The Provident Investment Company Ltd.
,(2) where a suit was filed by a Cutchi Memon so challenging a court sale in pursuance of a mortgage decree against his father, the parties, presumably on the basis of section Haji Aboo Bucker Sait (3) proceeded on the assumption that the rules of Hindu law governed them.
(P. 942) That this Position continued in Madras even after the Shariat Act, 1937 came into force, except in regard to matters dealt with by section 2 thereof, is clear from Abdurahiman vs Avoomma, (4 ) where a Division Bench of that High Court differed from the sweeping conclusion of Basheer Ahmed Saved Sayeed, J., in Avisumma vs Mavomoothy Umma(5) and held that that Act applied, as its section 2 clearly said, only to property left intestate and which was capable of devolving on the heirs of the deceased and that that Act did not make the Mahomedan Law applicable in all matters relating to Muslims nor did it abrogate the custom and usage in respect of matters other than those specified in section 2 of the Act.
The Act, therefore, would not apply to property except that which was capable of devolution on intestacy to the heirs of the deceased holding such property.
(see also Mariyumnia vs Kunhaisumma(6) and Lakshmanan vs Kamal ( 7 ).
Indeed, no decision of the Madras High Court holding a view contrary to, the one held in section Haji Aboo Bucker Sait 's case (a) was shown to US.
On the contrary, there are, as seen above, decisions referring to that decision with approval.
It may, therefore, be taken for (1) k.
I.R. 1944 Mad.
(2) I.L.R. (3) A.I.R. 1921 Mad. 571.(4) A.I.R. 1956 Mad. 244.
(5) A.I.R. 1953 Mad. 425.(6) 1958 Ker.
Law Times 627 (7) A.I.R. 1959 Kr. 67 (F.B.).
244 the time being that the view prevailing in that Court is the one of Kumaraswamy Sastri, J., in that decision.
The records of past cases and the decisions of the High Court therein found by that learned Judge as also the past proceedings filed in the High Court by the members of the respondents ' family and orders passed thereon would seem to reinforce the reasoning and the conclusion arrived at by the learned Judge, in that, the parties in those proceedings would not have in filing those proceedings assumed that rules of Hindu law applied to them unless there was a pre vailing understanding that that was their customary law.
That it is the law laid down by the High Court of Madras which must apply and govern the Cutchi Memons settled there is clear from Begum Noorbanu vs Deputy Custodian General of Revenue Property(1), where the Khoias settled in the former Hyderabad State were held to 'be governed by the law as laid down by the Privy Council of the then State, of Hyderabad.
As to how surroundings in which a convert settles down affect the customary law to which he is accustomed till then can be seen from two highly illustrative decisions.
The first is in Abdulrahim Haji Ismail Mithu vs Halimabai(2), a case of Memons who had settled down in Mombasa.
Memons, it is stated there, began to migrate to Mombasa in the latter half of the 19th century.
At the date of the suit, from which the appeal went up to the Privy Council, there were about a hundred Memon families settled in Mombasa.
The question which arose in the suit was whether the respondent, the widow of one of them, was entitled, as against the appellant, the eldest son of the deceased by his first wife, lo one eighth share according to Mahomedan law or only to maintenance under Hindu law which applied to the Cutchi Memons in India.
The respondent had led evidence to show that during the ten 'years Preceding 'he suit, there were at least eleven cases in which distribution of estates was according to Mahomedan law. 'The respondent 's contention was that the Cutchi Memons who migrated lo East Africa had settled down among Mahomedans there and bad adopted their customs and traditions, including as a Special custom the rule as to succession according to Mahomedan law, thus, diverting, from the rules of Hindu law, which in Cutch they had retained as their customary law upon conversion to Islam.
The Privy Council held on these facts that : "Where a Hindu family migrate from one part of India to another.
Primsa facie they carry with theme their personal law, and, if they are alleged to have become subject to a new local custom, this new custom must be affirmatively proved to have been adopted, but when such a family emigrate to another country, and being (1) A.I.R. 1965 S.C. 1937.
(2) [1915 1916] L R. 43 1.
A. 35.
245 themselves Mahomedans, settled among Mahomendans, the presumption that they have accepted the law of the people whom they have joined seems to their lordships to be one that should be much more readily made.
All that has to be shown is that they have so acted as to raise the inference that they have cut themselves off from their old environments.
The analogy is that of a change of domicile on settling in a new country rather than the analogy of a change of custom on migration with in India." (p.41).
The second case is that of Khatubai vs Mahomed Haji Abu(1) where the dispute was regarding the estate of a Halai Memon who hailed from Porbandar and had settled down in Bombay.
If succession to his estate was governed by Mahomedan law, the appellant, his daughter would get a share as against the respondent.
Just as the Cutchi Memons came from Sind and settled down in Cutch, retaining, in spite of their conversion, Hindu law as their customary law, Halai Memons also came from Sind and settled down in Halai Prant in the then Kathiawar.
Some of these proceeded to Bombay where they formed a sub sect known as the Bombay Halai Memons, who it was admitted, governed succession to their proper ties according to Mahomedan law.
Therefore if the deceased had been in the proper sense of the word a Bombay Halai Memon, the question of succession lo property left by him would have been governed by Mahomedan law.
But the concurrent findings of the courts here was that he was not a Bombay Halai Memon, but a Porbandar Memon.
The question was, what customary law did Halai Memons follow in regard to succession to their properties ? From the evidence led by the parties, which consisted of judgments of Porbandar courts, and the oral evidence of some of the pleaders from Porbandar it appeared, as the Appellate Bench of the High Court held, that the Halai Memons of Porbandar, settled as they were amongst Hindus there.
followed as their customary law Hindu law as regards succession and inheritance as against the Bombay Halai Memons who settled down amidst their co religionists in Bombay.
Lord Dunedin took the Mombasa case as an illustration, for his dictum that if it was otherwise shown that the Kathiawar Halai Memons practised the Hindu law, excluding females from succession, it was equally easy to infer that the Bombay Memons, finding themselves among other Mahomedans who followed the Mahomedan law in its Purity, renounced the customs of the Hindu law of succession in favour of the orthodox tenets of their own religion.
These two decisions show that the question as to which customary law is applicable turns really on the consideration as to (1) [1922 1922] L.R. 50 I.A. 108.
246 which law a community decides to have for regulating succession to the properties of its members depending upon amongst whom they settled down and the surroundings and traditions they found in that place.
Thus, the Cutchi Memons, who settled down amongst Mahomedans when they went to Mombasa, in spite of their having originally regained Hindu law when they migrated to Cutch from Sind, accepted as their custom rules of Mahomedan law in Mombasa.
Similarly, Halai Memons, although they had followed Hindu law when they migrated to Porbandar accepted Mahomedan law when they proceeded to Bombay and there settled down amongs, their co religionists.
In the light of this reasoning it would appear from the view taken in section Haji Aboo Bucker Sait 's case(,) against which no other Madras view was shown to us, and especially as that view was supported also by the records of several other cases in that High Court, 'hat Cutchi Memons, who had settled down in Madras, had regulated their affairs, since they had settled down amidst Hindus, according to Hindu law not only in matters of succession and inheritance, but also in matters of their property including the Hindu concept of coparcenary and survivorship.
That being the position, there is no question of our having to decide whether the Bombay view, as reflected in the decisions since Beaman, J., threw doubts on the dicta in the earlier decisions and the Madras view, as reflected in section Haji Aboo Bucker Sait 's case(1) or of having to prefer one against the other.
We do not do so not only because it is not necessary but also because were we to do so at this day, it might perhaps have the result of upsetting a number of titles settled on the basis of the decisions of each of the two High Courts and perhaps elsewhere too.
The conclusion, which we arrive at on consideration of the decisions referred to above is that 'he Cutchi Memons who proceeded either from Cutch or from Bombay to Madras and who, it ap pears, settled down amongst Hindus, Hindu surroundings and traditions there, regulated their affairs as regards their property, succession and inheritance according to the Hindu law which they had retained while in Cutch and to which they were already accustomed.
It is true that some of the Cutchi Memons went over to the then State of Mysore either from Cutch or from Western India or Madras.
As aforesaid, the family members of the deceased Haji Mahomed Hussain Sait settled down in Bangalore Civil Station sometime between 1928 and 1930.
On the basis of that fact, reliance was placed on the decision of the then Rich Court of Mysore in Elia Sait vs Dharanavva(2) where the question for consideration was whether the custom of adoption recognised in the (1) A.I.R. (2) 247 Hindu Law prevailed also among the Cutchi Memons there.
The High Court, it appears, had both the Bombay view, and the Madras view as expressed in section Haji Aboo Bucker 's case(1) but preferred the Bombay view as stated in Haji Oosman 's case(2).
The High Court, however, gave no reasoning for that preference nor did it have before it, as appears from the decision itself, any evidence as to the customary law which the Cutchi Memons settled in Bangalore followed.
That being so, that decision cannot be treated as a well considered judgment reflecting the position of the customary law applicable to Cutchi Memons who had set led down in the then Mysore State nor was it consequently binding on the High Court.
The question next is, whether the subsequent legislation on which the Revenue relied changed in any way the position as laid down by Kumaraswamy Sastry, J ? The , XLVI of 1920 was an enabling Act as its long title and preamble indicate.
Its second section provided that any Cutchi Memon, who had attained the age of majority and was at the time a resident in British India, could declare in he prescribed manner and before the prescribed authority that he desired to obtain the benefit of the Act, and thereafter such a declarant, his minor children and their descendants would, in matters of succession and inheritance, be governed by the Mahomedan law.
It is nobody 's case that any such declaration was ever made to get the benefit of the Act.
The Act, therefore, would have no operation upon the respondents.
Then came the , X of 1938, which was passed, inter alia, to facilitate administration of justice by the civil courts under a uniform established Code for all Cutchi Memons in various parts of the country instead of "a wide field of custom and usage" which "has to be traversed for a proper determination of the case".
The Act came into force as from November 1, provided that all Cutchi Memons, subject, however, to the provisions of section 3, shall in matters of succession and inheritance be governed by the Mahomedan law.
Sec. 3, subject to which the foregoing section applied, is a saving provision and provides that nothing in the Act "shall affect any right or liability acquired or incurred before its commencement or any legal proceeding or remedy in respect of any such right or liability; and any such legal proceeding or remedy may be continued or enforced as if this Act had not been passed".
In between the two Acts was enacted the Muslim Personal Law (Shariat) application Act, XXVI of 1937.
We do not have to consider the effect of Ibis Act in view of Mr. Desai having in express terms stated that he was not relying upon it.
(1) A.I.R. 1921.
(2) Bom.
2 48 The , X of 1938 was not extended at first to the Civil Station area in Bangalore where the deceased and the members of his family had settled down and carried on business.
Until 1947, that area was administered by the Viceroy in his capacity as the Crown representative.
A number of Acts passed by the Central Legislature were extended by him to this area with or without modifications but not the .
In 1948, after the said area was retroceded to Mysore, the Mysore Legislature passed the Retroceded (Application of Laws) Act, 1948 extending to the Civil Station area certain laws and enactments in force, in the princely State of Mysore.
One of them was the Mysore , 1 of 1943, which was verbatitm the same as the Central Act, X of 1938, and contained only three sections.
The first section gave the tide of the Act.
The second section provided that subject to section 3, all Cutchi Memons shall in matters of succession and inheritance be governed by the Mahomedan law.
Thus the option of being governed by the Mahomedan law contained in 1920 Act was replaced by a uniform and mandatory provision.
But the third section, which is a saving provision, inter alia, provided that "nothing in this Act shall affect any right or liability acquired or incurred before its commencement or any legal proceeding or remedy in respect of such right or liability and any such proceeding or remedy may be, con tinued or enforced as if this Act had not been passed.
" If the parties as aforesaid were governed in matters of pro perty, succession and inheritance by the rules of Hindu law including the rules as to joint family property, its distribution according to the rule of survivorship and the right of a son in it by birth, the High Court would be right in its view that the accountable persons, having been born lone before 1948, had already acquired a right by birth in the property held by their father, a right expressly saved by section 3 of the Act.
There was, therefore, no question of that interest Passing to them on the death of their father as envisaged by section 3 of the .
In this view, the judgement of the High Court under challenge has to upheld.
The appeal, therefore, fails and is dismissed with costs.
V.P.S. Appeal dismissed.
| IN-Abs | The Cutchi Memons had migrated from Cutch to Bombay, Madras and other places.
They were originally Hindus and were converted to Islam three or four hundred years ago. 'Me family of the respondents originally settled in Madras, and between 1928 and 1930, went over to Mysore and settled down in the Bangalore Civil Station.
The father of the respondents died in 1955 at Bangalore leaving properties which were sought to be charged to estate duty.
The respondents claimed that they were governed by Hindu Law as their customary law including its concepts of joint family property, the right of a son by birth in such property and its devolution by survivorship and that therefore, only one third of the said properties, that is, the undivided share of their deceased father could be property said to have passed to them on his death and be assessable under the .
The Deputy Controller of Estate Duty held that as there was only one solitary decision of the Madras High Court in favour of the respondents ' contentions as against a large number of decisions of the Bombay High Court which limited the application of Hindu Law to matters of succession and inheritance only, the Bombay view was the correct one.
On a reference to the High Court, the High Court upheld the respondents ' contentions.
Dismissing the appeal to this Court, HELD : (1) According to Mohamedan Law a person converting to Mohamedanism changes not only his religion but also his personal law.
This rule, however, applied only to cases of individual conversions and not to wholesale conversions such as Khojas and Cutchi Memons.
In such cases of wholesale conversion of a caste or community the converts might retain a part of their original personal law according to the hitherto held habits, traditions and the surroundings.
[236C] (2) The view finally settled in Bombay is that the application of Hindu Law to Cutchi Memons is now restricted to cases of succession and inheritance as it would apply in the case of an intestate, and separate, Hindu, possessed of self acquired property.
[241H] Haji Cosman vs Haroon Saleh Mahomed, Bom. 369, referred to.
(3) But the Madras view, supported by the records of several cases in the Madras High Court, is that Cutchi Memons, who had settled down in Madras, had regulated their affairs, since they had settled down amidst 232 Hindus, according to Hindu Law not only in matters of succession and inheritance, but also in matters of their property including the Hindu concepts of coparcenary and survivorship.
[246C D] Hajee Aboo Bucker Sait vs Ebrahim Hajee Aboo Bucker Sait, A.I.R. 1921 Mad.
571; Abdul Sattar Ismail vs Abdul Hamid Sait, A.I.R. 1944 Mad. 504; Abdul Hameed Sait vs The Provident Investment Company Ltd., I.L.R. ; Abdurahiman vs Avoomma, A.I.R. 1956 Mad. 244 and Begum Noorbanu vs Deputy Custodian General of Evacuee Property, A.I.R. 1965 S.C. 1937, referred to.
(4) The question as to which customary law is applicable turns really on the consideration as to which law a community decides to have for regulating succession to the properties of its members depending upon amongst whom they had settled down and the surroundings and traditions they found in that place.
That being the position, there is no question of preferring one view to another in the present case as between the Madras and Bombay views, because the Madras view applies to the respondents.
[245H] Abdulrahim Haji Ismail Mithu vs Halimabai, (1915 1916) L.R., 43 I.A. 35 and Khatubai vs Mohamad Haji Abu, (1922 1923) L.R., 50 I.A. 108, applied.
Ella Sait vs Dharanayya, , disapproved.
(5) Moreover, if such preference is expressed by the Court now, it may have the result of upsetting a number of titles settled on the basis of the decisions of each of the two High Courts and perhaps elsewhere.
(6) The Cutchi Memons Act (46 of 1920) does not apply to the respondents, because, the declaration under section 2 of the Act to get its benefit and be governed by Mahomedan Law had not been made by any one concerned.
[247E] (7) The option of being governed by the Mahomedan Law contained in the 1920 Act was replaced by a uniform and mandatory provision, in the Cutchi Memons Act (10, of 19,38), which provided that all Cutchi Memons shall, in matters of succession and inheritance, be governed by the Mahomedan Law.
But the 1938 Act was not extended to the Civil Station area in Bangalore where the deceased and the members of his family had settled down and carried on business.
In 1948, when that area was retroceded to Mysore, the Mysore Legislature passed the Retroceded (Application of Laws) Act, 1948 extending to that area certain laws and enactments in force in the Princely State of Mysore, one of which was the Mysore Cutchi Memons Act, 1943, which was 'identical with 1938 Central Act.
But section 3 of the 1943 Act provided that 'nothing in 'this Act shall affect any right acquired before its commencement etc. ' The respondents having been born.
before 1948 (when the Act was made appli cable to them) had already acquired a right by birth in the property held by their father which right was expressly saved by section 3 of the 1943 Act.
There was, therefore, no question of the passing of the properties to the respondents on the death of their father as envisaged by section 3 of the .
[247H 248F]
|
A. No. 190 and 191 of 1969, and 63 and 64 of 1972.
Appeals by certificate/special leave from the Judgment and Order dated September 9, 1968 of the Gujarat High Court in Criminal Appeals Nos. 486 and 555 of 1966.
Urmila Kapoor, B. D. Sharma for section P. Nayar and Kamlesh Bansal, for the appellant (In all the appeals).
M.V. Goswami, for the respondent (In Cr.
Nos. 190 of 1969 and 63 of 1972).
H.K. Thakur and section K. Dholakia, for the respondent (In Cr.
191 of 1969 and 64 of 1972).
The Judgment of the Court was delivered by Grover, J.
This judgment will dispose of all the four appeals from the judgment of the Gujarat High Court.
Two appeals, i.e. Cr.
No. 190 & 191 of 1969 had been brought by certificate.
The certificates being defective for want of reasons they could not be entertained on that short ground.
However, two petitions for special leave were filed and the same were granted.
Those appeals (Cr.
63 & 64 of 1972) will be dealt with in this judgment.
The facts may be stated.
Manshankar Prabhasbankar Dwivedi was at the material time a Senior Lecturer at the D.K.V. 315 Arts & Science College, Jamnagar which is a Government college.
Vallabhdas Gordhandas Thakkar was a legal practitioner conducting cases before the Income tax and Sales tax Departments.
He was also a resident of Jamnagar.
It was alleged that in April 1964 the Physics practical examination for the first year B.Sc.
was to be held by the Gujarat University.
One of the centres was Surendranagar.
Dwivedi had been appointed as an Examiner for Physics practical.
He, is alleged to have accepted gratification of Rs. 500/ other than legal remuneration for showing favour to a candidate Jayendra Jayantilal Shah by giving him more marks than he deserved in the Physics practical examination.
It is stated that he had obtained that amount through Thakkar.
Dwivedi was charged with commission of offences under section 161, Indian Penal Code and section 5 (2) read with section 5 (1 ) (d) of the Prevention of Corruption Act, 1947, hereinafter called the 'Act.
Thakkar was charged under section 165 A, Indian Penal Code, and section 5(2) of the Act read with section 114 of the Indian Penal Code.
The Special Judge who, tried both these persons found them guilty of the offence with which they were charged.
He imposed a sentence of 2 years ' rigorous imprisonment and a fine of Rs. 1,000/ , (in default further rigorous imprisonment for six months) Oil each of these persons.
Both the convicted persons filed appeals to the High Court '.
The High Court found that the prosecution case had been proved against both Dwivedi and Thakkar on the merits but on the view which the High Court expressed about the ambit and scope of the sections under which the charges were laid they were acquitted, The present appeals have been filed by the State against both these persons who are respondents before us.
It is unnecessary to give the entire prosecution story.
We may only refer to what is the last and final stage of that story.
According, to the prearranged plan it was alleged that Pranlal Mohanlal who was the complainant and who was the brother in law of the student, Jayendra, went to the college, where the examination was to take place, along with a panch witness Shivaji.
Thakkar was in the porch of the college and he demanded the money for being given to Dwivedi Pranlal, however, insisted that the money would be paid after he had talked the matter over with Dwivedi,and the work was done.
Thakkar replied that Dwivedi was busy and would be available after some time.
So they all left.
Thakkar, followed them.
When Pranlal and Shivlal reached the Trolly Station Thakkar came there and asked them to go with him to a place called 'Vikram Lodge ' which they did.
There Thakkar again demanded money but Pranlal gave the same reply which he had given before.
At about 11 A.M. these three persons came back to the college and Went to the first floor where 3 L128SupCI/72 316 the examination hall was situate and stood outside the hall.
There Thakkar brought Dwivedi and Dwivedi said "why are, you delaying.
You are a fool you will spoil the life of the student.
Pay the amount to Thakkar".
Then Pranlal paid Rs. 500/ lo Thakkar in the presence of Dwivedi.
Thakkar counted the money and put it in his pocket.
Dwivedi went back to his room.
Thereafter the signal was given and the raiding party arrived and made the recoveries.
Necessary panchnamas were prepared.
The High Court agreed with the Special Judge that the prosecution case against the present respondents in respect of the demand and acceptance of bribe of Rs. 500/ for the purpose of giving more marks to Jayendra had been proved.
It was, however, argued before the High Court that as regards section 161, Indian Penal Code,, it was necessary that the person committing that offence must be a public servant.
Although Dwivedi was a Senior Lecturer in a Government College the bribe was sought 'to be obtained not in connection with any official act or in connection with the exercise of his official functions as a public servant but in connection with his work as an Examiner of the Gujarat University.
An Examiner of the University did not fall within the definition of a "public servant" as given in section 21 of the Indian Penal Code.
It was maintained on behalf of Dwivedi that although he had abused his position as an Examiner but he had not done so as a government servant in which capacity alone he could be a public servant.
The Special Judge had, however taken the view that even an Examiner was a public servant.
As regards the offence under the Act the Special Judge had held that it was not necessary that the misconduct should be committed in the discharge of the public servant 's duties.
Once it was proved that the payment had been obtained by corrupt or illegal means it was not necessary that the accused should abuse his position as a public servant or that he should have obtained the money while acting as a public servant.
The High Court did not accept the reasoning or the conclusion of the Special Judge on these points.
Section 21 of the Indian Penal Code as it stood at the mate rial time and before the amendments which were made later contained several clauses.
The ninth clause was in the following terms: "Ninth.
Every officer whose duty it is, as such officer to take, receive,, keep or expend any property on behalf of the, Government or to make any survey, assessment or contract on behalf of the Government or to execute any revenue process or to investigate, or to re port on any matter affecting the pecuniary interests of the Government or to make, authenticate or keep any 317 document relating to the pecuniary interests of the Government or to prevent the, infraction of any law for the protection of the pecuniary interests of the Government and every officer in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty".
The first question which has to be resolved is whether respondent Dwivedi was a public servant within the meaning of the Ninth clause of section 21, Indian Penal Code, keeping in view the capacity in which and the nature of the duties which he was Performing as an Examiner of University which, it has been found, had no connection with his being a Government servant.
It is well known that Universities appoint Examiners having the requisite academic qualifications who may or may not be government servants.
, For instance, a person having the requisite academic qualifications who is working in a private institution can and usually is appointed an Examiner by the University.
The question that immediately arises is whether an Examiner of a University as such can be regarded as a public servant within the meaning of ninth clause of section 21, Indian Penal Code.
It will be useful to look at the scheme of section 21.
There could be no difficulty about the second, third and 4th clauses which deal with the commissioned offers in the Armed Forces, judges and officers of the Courts of Justice whose duties are as such officers to do various matters mentioned in those clauses.
The Fifth clause brings within the definition every juryman, assessor or member of,;: a panchayat assisting a Court of Justice or public servant.
Under the sixth clause every arbitrator or other person to whom any cause or matter has been referred for decision or report by any Court of Justice or by any other competent public authority would also fall within the words "public servant".
Seventh and eighth clauses deal with persons who perform mainly policing duties.
The tenth clause covers officers whose duty it is to take receive, keep or expend any property to make any survey or assessment or to levy any rate, or tax etc.
The eleventh clause relates to persons who hold any office by virtue of which they are empowered to prepare, publish etc.
an electoral roll or to conduct an election.
The twelfth clause covers every officer in the service or pay of local authority or corporation engaged in any trade or industry established by the Central, Provincial or State Government or a Government company.
In the illustration given it is stated that a Municipal Commissioner is a public servant.
According to Explanation persons falling, under any.
of the description given in the twelfth clause are public servants whether appointed by the Government or not.
Section 21.
was amended.in 1964.
The ninth clause was retained substantially ,:is it existed previously except that the following words were 318 dropped "and every officer in the service or pay of the Government or remunerated by fee or commission for the purpose of any public duty".
The twelfth clause was recast and the new provision was in these terms : "Twelfth.
Every person (a) in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty by the Government; (b) in the service or pay of a local authority a corporation established by or under a Central, Provincial or State Act or a Government company as defined in section 601 of the ." Thus sub clause, (a) of the 12th clause, after the amendment corresponds substantially to the last part of the old ninth clause with this change that the expression "every officer" has now been substituted by the words "every person" and after the words "performance of any public duty" it has been added "by the Government.
" The argument which has been addressed mainly on behalf (if the State and which Was pressed before the High Court is that the ninth clause, as it stood, when the offences are alleged to have been committed would cover the case of Dwivedi as he, was an officer in the service or pay of the Government or was remunerated by fee or commission for the performance of a public duty.
Acting as an Examiner, it has been suggested, is the performance of a public duty.
If Dwivedi was remunerated by fee or commission by the University for the performance of that public duty he would be covered by the last part of the ninth clause as it stood at the relevant time.
It is admitted on behalf of the State that after the amendment made in 1964 under the twelfth clause it is only a person in the service or pay of the Government or remunerated by fee or commission for the purpose of any public duty by the Government who would fall within the definition of "public servant" within sub clause (a) of the, Twelfth clause.
But it is argued that the position was different under the ' Ninth clause as the words "fly the Government" did not follow the words "performance of any public duty" although at every other appropriate Place the word "Government" was to be found in the Ninth clause.
The omission of these words show that the clause was wider when it came to the case of an officer who was remunerated by fee or commission for the performance of any public duty and it was not necessary that the remuneration by any of fee or commission should be paid by the Government as is now necessary under subclause (a) of the ' Twelfth clause after the amendment.
319 The High Court gave the, following reasons for holding that tile last part of the Ninth clause, as it stood before the amendment, would not cover the case of Dwivedi: (i) The context of the whole of the Ninth clause indicated that the connection with the Government was necessary either in respect of the payment of remuneration or in respect of the performance of public duty.
(ii)The person to be an officer must hold some office.
The holding of office implied charge of a duty attached to that office.
The person who was remunerated by fee or commission must be an officer.
Therefore the use of the word "officer" read in the, context of the words immediately preceding the last part would indicate that the remuneration contemplated was remuneration by the Government.
(iii)The amendment made in 1964 and in particular the addition of the words "by the Government" in subclause (a) of clause Twelfth showed the legislative interpretation of the material portion of clause Ninth as it stood before the amendment under consideration.
(iv)It is well settled that in a statutory provision imposing criminal liability if there is any doubt as to the meaning of a certain expression or words its benefit should be given to the subject.
It has not been shown to us by the learned counsel for the appellant that the reasoning of the High Court on the above point suffers from any infirmity.
Apart from the other reasons given by the High Court reason No. (ii) seems to have a lot of force.
It is supported by the decision in Ram Krishna Dalmia vs Delhi Administration(1).
There, a Chartered Accountant had been appointed as an Investigator by the Central Government under the to investigate into certain matters and he was to get remuneration for the work entrusted to him.
It was held that he did not become an officer as he did not hold any office.
The could not, therefore, become a public servant within the latter part of Ninth Clause of section 21 of the Indian Penal Code.
It is noteworthy that the work of an Investigator was of a nature which could well be regarded as public duty and the remuneration which was to be paid to him was by the Government.
Yet it was hold that he could not be regarded as holding an office.
On that view it is not possible to put the case of a University Examiner in (1) ; 320 a different category.
A University Examiner cannot be consi dered to hold an office in the sense in which that word has been understood and employed in the Ninth Clause.
It is clear from the provisions of the Gujarat University Act 1949 that there is no such condition that only that person can be appointed as Examiner who is the holder of an office.
Section 20(xxii) provides for appointment of Examiners by the Syndicate.
Section 30 empowers the Syndicate to make Ordinances to provide for all or any of the following matters (iii)"conditions governing the appointment and duties of examiners.
" No such Ordinance has been brought to our notice which restricts the appointment of the examiners to persons in the service of the Government or holders of any particular office.
Suppose for instance there is a private individual who is not in the regular employment or service of either the Government or any public body or authority.
He has the requisite academic qualifications and he is appointed an examiner in a particular subject in which he has attained high academic distinction.
He cannot be said to be holding any office when he is appointed for the purpose of examining certain answer books even though that may fall within the performance of a public duty.
There is another difficulty in regarding an examiner as a holder of an office.
Before the amendment made, in section 21 by Act 40 of 1964 a person who is appointed an examiner and who receives remuneration by fee would fall within the term "public servant" if he is holder of an office.
But persons in the regular service of the University would not be covered by the Ninth Clause.
If at all, it would be the Twelfth Clause which would be relevant in their case.
It is, however, a moot point whether the University is a local authority within the meaning of the first part of the Twelfth Clause before the amendment of section 21.
The expression "local authority" has a definite meaning.
It has always been used in a statute with reference to such bodies as are connected with local self Government e.g., Municipalities, Municipal Corporations, Zila Parishads etc.
As a matter of fact s.3 (31 ) of the defines "local authority" to mean a municipal committee, district board, body of port commissioners or other authority legally entitled to, or entrusted by the Government with the control or management of a municipal or local fund.
It could never be intended that only such officers of the University should be public servants who are remunerated by fee or commission and not those who are in the regular service of the University.
We concur with the High Court that a University Examiner cannot be held to he an officer.
Once that conclusion is reached, he cannot be covered by the Ninth Clause of section 21 of the Penal Code.
321 The next point which calls for decision is whether appellant Dwivedi was guilty of an offence under s.5 (1) (d) of the, Corruption Act.
That provision, as it stood at the material time, was as follows : "section 5(1) A public servant is said to commit the offence of criminal misconduct in the discharge of his duty (d)if he, by corrupt or illegal means or by otherwise, abusing his position as public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.
" By the Central Act 40 of 1964 the words "in the discharge of hi,, duty" were omitted.
This Court has, however, taken the view in Dhaneshwar Narain Saxena vs Delhi Administration(1), overruling an earlier decision that in order to constitute an offence under clause (d) of s.5(1) of the Corruption Act it is not necessary that the public servant while misconducting himself should have done so in the discharge of his duty.
Section 2 of this Act provides that for its purposes "public servant" means a public servant as defined in s.21 of the Indian Penal Code.
Dwivedi while.
committing the offence under section 5 (1) (d) had two positions .
(1) he was a lecturer in a Government College and (2) he was ' an examiner appointed by the Gujarat University for doing examination work on remuneration paid by the University.
As a lecturer in Government College he certainly fell within the definition of "Public servant" but the act of corruption attributed to him was in his capacity as, an examiner.
A question at once.
arises is whether s.5(1)(d) will apply to case of a Government servant who commits an act punishable under the said provision even though when the act is committed by him he is holding a different position which is not that of a Government servant and in which capacity alone he could fall within the definition of a "public servant.
" The High Court proceeded on the basis that for the purpose of the opening, Part of s.5 (1 ) of the Corruption Act Dwivedi must be held to be a public servant.
It was held that his case did not fall within the clause (d) as he, did not abuse his Position as a public servant although the means employed, were corrupt and illegal.
The argument on behalf of the State is that even if Dwivedi was not punishable under s.161 of the Indian Penal Code with reference to the work in respect of which he accepted an illegal certification he would nevertheless be liable under s.5(1)(d) of the Corruption Act because the liability of a public servant has been made absolute and it is wholly immaterial in what capacity he has committed the offence under sub clause (d) of s.5(1) of the (1) ; 322 Corruption Act.
He need not have obtained for himself any valuable thing, or pecuniary advantage, as a public servant.
Once he is a Government servant and thus falls within the definition of a public servant and if he uses corrupt or illegal means for obtaining a valuable thing, or pecuniary advantage he commits an offence as contemplated by s.5(1)(d).
It need not further be proved that he abused his position as a public servant.
We may refer to the previous decisions of this, Court relating to the interpretation of s.5(1)(d) of the Corruption Act.
In Dhaneshwar Narain Saxena vs Delhi Administration(1) Saxena, who was an Upper Division Clerk, was approached by one Ram Narain, a fireman serving in the Delhi Fire Brigade, for assistance in obtaining a license for a double barreled shot gun which was, in fact obtained.
Saxena was paid certain amount and promise was made to pay him more.
Ram Narain had made a false declaration with regard to his salary in the application for the license.
His allegation was that he had done so on the advice of Saxena.
As Ram Narain 's license had been cancelled it was alleged thathe again approached Saxena who demanded some amounts for helping him in the matter of restoration of the license.
Ultimately a trap was laid and Saxena was caught while the money was being handed over to him.
The main argument in this case centered on the question whether Saxena had committed any misconduct in the discharge of his duty.
Overruling the earlier decision of this Court in the State of Ajmer vs Shivji Lal(2) it was held that it was not necessary to constitute the offence under clause (d) of section 5 (1) that the public servant must do some thing in connection with his own duty and there by obtain any valuable thing or pecuniary advantage.
It observed that "it was equally wrong to say that if a public servant were to take money from a third person by corrupt or illegal means or otherwise abusing his official Position in order to corrupt some other public servant without there being any question of his misconducting, himself in the discharge of his own duty he has not committed an offence under section 5 (1) (d).
It is also erroneous to hold that the essence of an offence under section 5 (2 ) read with section 5 (1) (d) is that the public servant should do some thing in the discharge of his own duty and thereby obtain valuable thing or pecuniary advantage." No such question was argued or decided in that case whether for the commission of an offence under section 5 (1 ) (d) abuse of position as a public servant was of the essence or the essential ingredient of the offence.
It is noteworthy that the High Court had, on.
the evidence produced by the prosecution, come to the conclusion that Saxena taking advantage of his own position as an employee in the Chief Commissioner 's Office and Ram Narain 's ignorance and anxiety to get the license, had induced him to part with the money on (1) ; (2) [1959] Suppl.
2 S.C.R. 739.
323 the promise that he would get the license restored.
It appears, therefore, that it was in that background that the decision of this Court was given.
The case of M. Narayanan Nambiar vs State of Kerala() was clearly one in which there had been abuse by a Government servant of his.
position as a public servant.
The court referred to the preamble which indicates that the Corruption Act was passed as it was expedient to make more effective provisions for the prevention of bribery and corruption by public servants.
The addition of the word "corruption" showed that the legislation was intended to combat other evils in addition to bribery.
The argument on behalf of the accused in that case proceeded on the basis that clause (d) would take in only the case of direct benefit obtained by a public servant for himself or for any other person from a third party in the manner prescribed (herein and did not cover the case of wrongful loss caused to the government by abuse of his power.
While analysing s.5 (1) (d) it was said "Let us look at the clause "by otherwise abusing the position of a public servant", for the argument mainly turns upon the said clause.
The phraseology is very comprehensive.
It covers acts done "otherwise" than by corrupt or illegal means by an officer abusing his position.
The gist of the offence under this clause is that a public officer abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage.
"Abuse" means misuse i.e. using his position for something for which it is not intended.
That abuse may be by corrupt or illegal means or otherwise than those means.
The word "otherwise" has wide connotation and if no limitation is placed on it, the words "corrupt", "illegal" and "otherwise" mentioned in the clause become surplusage, for on that construction every abuse of position is gathered by the clause.
So some limitation will have to be put on that word and that limitation is that it takes colour from the preceding words along with which it appears in the clause, that is to say something savouring of dishonest act on his part." The court entertained no doubt that every benefit obtained by the public servant for himself or for any other person by abusing his position as a public servant fell within the mischief of the said clause.
Although in the above decision the question whether the words "abusing his position as a public servant" qualify the word "Otherwise" or also the words "corrupt or illegal means" in section 5 (1) (d) (1) [1963] Suppl.
2 S.C.R. 724.
324 was not discussed directly, the observations made seem to indicate that the word "Otherwise" refers to means other than corrupt or illegal by which a public servant may abuse his position.
There are two ways of looking at the clause on is that the words "corrupt or illegal means" stand by themselves and as soon as it is established that a public servant has by such means obtained any valuable thing or pecuniary advantage he will be guilty of the offence.
The other way of reading this clause is by confining the words "by otherwise" to the means employed.
Thus the means employed may be corrupt or illegal or may be of such a nature as would savour of a dishonest act.
But the abuse of position as a public servant would be essential whether the means are corrupt or illegal or are of the nature covered by the word " otherwise".
The analysis of clause (d) made in Narayanan Nambiar 's(1) case by Sabha Rao J. (as he then was) seems to lend support to the view, taken by the High Court that the abuse of position as a public servant is essential.
The reasoning of the High Court proceeds on these lines.
The second part of cl.
(d) relating to the obtaining of the valuable thing etc.
relates to the object of the public servant, namely, the obtaining of a bribe.
The first part concerns the manner of achieving that object.
"The manner is the use of means and use of position.
As to the use of means the clause expressly mentions corrupt or illegal but the legislature does not want to limit itself to these means only and so goes on to use the word "otherwise.
" If the meaning to be given to the word "otherwise" is, as earlier stated, the words "by corrupt or illegal means" or "by otherwise" form a single clause and do not form two clauses.
If that is so the abuse of position as a public servant that is referred to is the abuse by corrupt or illegal means or by otherwise.
" The High Court also relied on the analysis of section 5 (1) (d) contained in Ram Krishna & Another v The State of Delhi (2) , where it was pointed out that the offence created thereby is of four kinds.
Bribery as defined in s.161 of the Indian Penal Code, if it is habitual, falls within clause (a).
Bribery of the kind specified in section 1 65, if it is habitual, is comprised in clause (b) Clause (c) contemplates criminal breach of trust by a public servant.
For that section 405 of the Indian Penal Code has to be looked at.
An argument was advanced in that case that clause (d) seems to create an independent offence distinct from simple bribery.
This is what the court observed: "In one sense, this is no doubt true but it does not follow that there is no overlapping of offences.
We have primarily to look at the language employed and give effect to it.
One class of cases might arise where corrupt or illegal means are adopted or pursued by the public servant to gain for himself a pecuniary advantage .
(1) [1963] Supp, 2 S.C.R. 724.
(2) ; 325 The word "obtains" on which much stress was laid does not eliminate the idea of acceptance of what is given or offered to be given, though it connotes also an element of effort on the part of the receivers One may accept money, that if offered, or solicit payment of a bribe, or extort the bribe by threat or coercion; in each case, lie obtains a pecuniary advantage by abusing his position as a public servant." Thus in clauses (a), (b) and (c) the abuse of position as a public servant is clearly implied.
Clause (e) also carries the same implication.
It would, therefore, be reasonable to put on clause (d) a construction which is consistent with the other clauses of the sub section.
According to the, High Court such a construction would also keep, the offence within the limitation and the object of the Act.
The abuse of the position would be the necessary ingredient of the offence; the abuse being either by corrupt or illegal means or by other means of the nature mentioned in Narayanan Nambiar 's(1) case.
Counsel for the State has.
not been able to satisfy us that the various reasons given by the High Court as also the observations made in the previous judgments of this Court are not sufficient to sustain the construction or interpretation of section 5 (1) (d) which commended itself to the High Court.
As Dwivedi was not a public servant when he was acting as an examiner it could not be said that there had been any abuse by him of his position as a public servant.
It was never the case of the prosecution that he had been guilty of any abuse of his position as a lecturer of the Government College.
If Dwivedi was not guilty, Thakkar could not be held to be guilty of the offences with which he was charged.
We would accordingly uphold the decision of the High Court and dismiss both the appeals.
G.C. Appeals dismissed.
| IN-Abs | D, a Lecturer in a Government College, was appointed as examiner of a physics practical examination held by the Gujarat University.
He allegedly took Rs. 500 from a candidate at the examination for showing him favour .
He was charged with offences under section 161 Indian Penal Code and section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act 1947.
The Sessions Judge held him to be a 'public servant ' within the meaning of cl. 9 of section 21 as it stood before its amendment by Act 40 of 1964, and held him guilty under section 161 of the I.P.C. He was also held guilty under the 1947 Act.
In, appeal the High Court held (1) that in is capacity as examiner of Gujarat University lie was not a public servant and therefore not guilty under, section 161 I.P.C.; (ii) that though a public servant in his capacity as lecturer in a Government College he had not abused his position as such public servant and ' therefore was not guilty under section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act.
The State appealed to this Court.
HELD : (i) As rightly held by the High Court a public servant within the meaning of cl. 9 of section 21 as it stood at the relevant time must be an officer of the Government and the fee or commission must be payable by the Government.
A University Examiner cannot be considered to hold an office in the sense in which that word has been understood and employed in the Ninth Clause even though examining answer books may fall within the performance of a public duty.
A private individual who has no employment may be appointed an examiner because of his high academic qualifications.
He cannot be said to be holding any office.
An examiner who is in the regular service of a University also cannot be said to be a public servant since a University is not a local authority within the meaning of clause 12(b).
Since the appellant was not a public servant under section 21 I.P.C. he was rightly acquitted of the offence under section 161 I.P.C. [319 F 320 H] Ram Krishna Dalmia vs Delhi Administration, [1963] 1 S.C.R. 253, applied.
(ii)It was never the case of the prosecution that D had been guilty of any abuse of his position as a lecturer of the Government College.
As he was not a public servant when he was acting as an examiner it could not be said that there had been any abuse by him of his position as a public servant.
He was therefore rightly acquitted by the High Court of the offence, under section 5 (2) read with section 5 (1) (d) of the Prevention of Corruption Act 1947.
[325 E] 314 There are two ways of looking at clause 5(1)(d).
One is that the words "corrupt or illegal means" stand by themselves and as soon as it is established that a public servant has by such means obtained any valuable thing or pecuniary advantage he is guilty of the offence.
The other way of reading this clause is by confining the words "by otherwise" to the means employed.
Thus the means employed may be corrupt or illegal or may be of such a nature as would savour of a dishonest act.
But the abuse of position as a public servant would be essential whether the means are corrupt or illegal or are of the nature covered by the word "otherwise".
The analysis of clause (d) made in Narayanan Nambiar 's case seems to lend support to the view taken by the High Court that the abuse of position as a public servant is essential.
[324 A D] In clauses (a), (b) and (c) of section 5(1) the abuse of position as a public servant is clearly implied.
Clause (e) also carries the same implication.
It would, therefore, be reasonable to put on clause (d) a construction which is consistent with the other clauses of the sub section.
[325 C] M.Narayanan Nambiar vs State of Nerala, [1963] Suppl.
2 S.C.R. 724 and Rain Krishna & Another vs The State of Delhi, ; , applied.
Dhaneshwar Narain Sexana vs Delhi Administration,[1962] 3 S.C.R. 259, distinguished.
State of Ajmer vs Shivji Lal, [1959] Suppl.
S.C.R. 739, referred to.
|
ppeals from" judgments and decrees of the High Court of Judicature at Calcutta dated 25th August, 1943, in First Appeals Nos. 20 and 173 of 1939 which arose out of a decision of the President of the Calcutta Improvement Tribunal in Case No. 95 of 1935.
Civil Appeals Nos. 95 and 96 of 1949.
Panchanan Ghose (Upendra Chandra Mullick, with him) for the appellant in Civil Appeal No. 95 and respondent in Civil Appeal No. 96.
S.P. Sinha (Nagendra Nath Bose, with him) for respond ents Nos. 1 to 3 in Civil Appeal No. 95 and appellants Nos. 1 to 3 in Civil Appeal No. 96.
S.N. Mukherjee, for respondent No. 4 in Civil Appeal No. 95.
March 14.
The judgment of the Court was delivered by FAZL ALl J.
These appeals are directed against the judgment and decree of the High Court of Judicature at Fort William in West Bengal, confirming a decision of the Presi dent of the Calcutta Improvement Tribunal, which modified an award of the First Land Acquisition Collector of Calcutta, made under the Land Acquisition Act in respect of the acquisition of two premises, which may conveniently be referred to as Nos. 140 and 141, Cotton Street.
In order to understand the points of contest between the various claimants to the compensation awarded in the case, it seems necessary to refer to certain facts showing how they came to be interested in the premises which are the subject matter of the land acquisition proceedings.
These premises belonged at one time to one Sewanarayan Kalia, and afterwards they became the property of a deity, Sree Sree Iswar Gopal Jieu Thakur, installed by Sewanarayan Kalia at Chinsurah in the district of Hoogly.
Sewanarayan, who had three wives, died in 1836, leaving behind him his third wife, Muni Bibi, two daughters by his 334 predeceased wives, these being Jiban Kumari and Amrit Ku mari, and a mistress named Kissen Dasi.
On the 23rd August, 1836, these persons executed a deed of solenama which was in the nature of a family arrangement, by which the remainder of the estate of Sewanarayan (i.e., what was left after excluding the dedicated properties) was divided in the terms of his will, with the result that Muni Bibi got subject to certain conditions, among other properties, the premises described as 140, Cotton Street, and Jiban Kumari got the contiguous premises, No. 141, Cotton Street.
Muni Bibi and Jiban Kumari also became the she baits of the Thakur or deity with power to appoint their successors.
On the 20th January, 1848, Muni Bibi by an arpannama dedicated 140, Cotton Street, to the Thakur.
It is recited in this deed, among other things, that on account of annual droughts and inundation and consequent diminution in the produce of the lands, certain properties dedicated to the sewa of the deity had been sold for arrears of revenue, that "Jiban Kumari had been making advances from her private funds for the expenses of jatra, mahotsob etc.
, of the deity, when the amount fell short, this being against the provisions laid down by her late husband", that the house known as 140, Cotton Street, having been let out, was yielding a rent of Rs. 30 p.m., that after deducting the necessary expenses the surplus income left was Rs. 20 p.m., and that "if this amount was included in the expenses for the sheba etc., of the deity every month, the provision made by her deceased husband may remain in force.
" After reciting these facts, it is stated that the rental of the house "shall be permanently and perpetually included in the expenses of the sheba.
" About 20 years later, on the 30th September, 1869, Muni Bibi created a permanent (maurasi mokrari) lease of the premises bearing No. 140, Cotton Street, in her capacity as a shebait in favour of one Nehal Chand Panday (who was admittedly a benamidar for one Bhairodas Johurry), at a rental of Rs. 25 p.m. (See exhibit L a kabuliyat executed by Nehal Chand in favour of Muni Bibi).
In the same year, on the 8th 335 December, Jiban Kumari granted a permanent lease to Bhairo das Johurry, in respect of the premises known as 141, Cotton Street at a rental of Rs. 90 p.m. (See exhibit K a kabuliy at executed by Johurry in favour of Jiban Kumari).
The main question which has been raised in this case is whether the two ladies were competent to give debutter properties by way of permanent lease to another person.
In 1870, Muni Bibi died, and, on the 15th January, 1872, Jiban Kumari ap pointed Gourimoni Devi a shebait by a registered deed and dedicated the premises known as 141, Cotton Street, to the deity.
Both Jiban Kumari and Gourimoni Debi died shortly afterwards, and Gopal Das, a minor son of Gourimoni, became the shebait of the idol.
During his minority, his father, Raghubar Dayal, became his certificated guardian, and, in that capacity, he executed a usufructuary mortgage deed in respect of the Cotton Street properties to one Lal Behari Dutt, on the 31 August, 1878.
After the death of Raghubar Dayal one Ajodhya Debi and after her one Kalicharan Dutta became the certificated guardian of Gopal Das, and, on the 17th August, 1890, the latter mortgaged some debutter properties including 140and 141, Cotton Street, to Lal Behari Dutt for a sum of Rs. 2,230.
On attaining majority, Gopaldas executed on the 17th January, 1896, a usufructuary mortgage deed in respect of all debutter properties includ ing the Cotton Street houses in favour of Lal Behari Dutt for paying the previous mortgage dues which amounted on that date to Rs. 4,955 and odd.
This deed provided among ' other things that the mortgagee was to collect rents, outgoings, carry on the sheba of the deity, and that whatever balance was left out of the income of the property was to go towards the satisfaction of the mortgage dues.
Gopaldas died in 1900, leaving behind him surviving his widow, Annapuma, who also died in 1905.
By 1918, Lal Behari Dutt also was dead, and his interest in the mortgaged properties, to which reference has been made, was sold to one Naba Kishor Dutt on the 12th December, 1918.
On the 17th November, 1933, Naba Kishor assigned the mortgagee 's 336 interest in the mortgaged properties to two of the Bagarias, respondents 1 and 2 in appeal No. 95, and m the same year the three respondents (1 to 3) also acquired the lessee 's interest in the Cotton Street houses.
The land acquisition proceedings, which have given rise to these appeals, were started about the year 1934 in respect of the premises bearing Nos. 140 and 141, Cotton Street, as well as two adjoining premises with which we are not concerned in this case.
In these proceedings, the following claims were put forward by three sets of persons: 1.
The Bagarias (respondents 1 to 3 in appeal No. 95) at first claimed the entire amount of compensation on the allegation that they were the absolute owners of the prem ises in question, but later on they claimed only as mortga gees and permanent lessees of those premises.
On behalf of the deity, the entire amount of compen sation money was claimed by Deosaran Singh and Ram Lakshman Singh, who alleged themselves to be shebaits, on the basis that the premises in question were debutter properties of the deity, and the Bagarias had acquired no interest therein either by the assignment of the usufructuary mortgage or the alleged purchase of the tenant 's rights in the properties.
Respondent No. 4 claimed compensation as a lessee for 99 years on the basis of a lease alleged to have been given to him by the original landlords.
In the present appeals, we are concerned with the first two claims only, and we shall briefly state how they were dealt with by the Collector and the courts below.
On the 22nd May, 1935, the Collector awarded Rs. 31,740 as compen sation for landlord 's interests, to be shared by the deity as owner and two of the Bagarias, respondents Nos. 1 and 2 in appeal No. 95 in their capacity of usufructuary mortga gee, and awarded a sum of Rs. 1,58,000 to the respondents Nos. 1, 2 and a as compensation for their rights as perma nent tenants of the premises in question.
Subsequently, 3 separate petitions of reference were filed 337 by the a claimants against the Collector 's award and the reference made by the Collector in pursuance thereof was registered as apportionment case No. 95 of 1935 in the Court of the Calcutta Improvement Tribunal.
Meanwhile, Deosaran Singh and Ram Lakshman Singh, who had put in claims as shebaits, retired from the contest, and the President of the Tribunal appointed one Narendra Nath Rudra as the next friend of the deity to represent and protect its interests.
On the 31st August, 1938, the President of the Tribunal gave his decision, by which he substantially upheld the award of the Collector, but modified it in one respect only.
He held that the usufructuary mortgage, on the basis of which re spondents 1 and 2 had put in a claim, had been paid off and therefore they were not entitled to any compensation, and the whole sum of Rs. 31,740 should be paid to the deity.
Respondents 1 to 3 however were held entitled to the sum of Rs. 1,58,000 as permanent tenants, on the ground that leases had been created for legal necessity and therefore were binding on the deity, He also held that the deity was not entitled to question the leases by virtue of article 134 (a) of the Limitation Act.
Regarding costs, he directed that all costs incurred on behalf of the deity should be paid out of the compensation money lying in deposit in court.
Two appeals were thereafter preferred to the High Court by the two main contesting parties and ultimately both these ap peals were dismissed, and the High Court upheld the decision of the Tribunal.
Subsequently, the present appeals were preferred to this Court, the deity having obtained a certif icate granting leave to appeal from the High Court, and the Bagaria respondents having obtained special leave from the Privy Council to prefer a cross appeal.
The main questions which arise in these appeals are : (1) whether the two mourasi mokrari leases, to which reference has been made were justified by legal necessity; and 44 338 (2) whether the mortgages on the basis of which the Bagarias had laid their claim to compensation had been satisfied.
The first question arises in Appeal No. 05, and the second question arises in Appeal No. 96.
So far as the question of legal necessity is concerned, there are concurrent findings of the Tribunal and the High Court against the appellant in appeal No. 95, but we allowed his counsel to argue the question at some length, because it was urged before us that on the facts of the case the point in issue was not a question of fact but one of mixed fact and law, especially as the decision of the High Court turned upon the construction of the leases and the inference drawn from the fact that the permanent nature of the tenancy had remained unquestioned for a very long period.
The tenancy in question came into existence as long ago as 1869, and it is not surprising that no direct evidence bearing on the issue of legal necessity is available now.
We have therefore to fall back upon the recitals in the documents, to ascertain the circumstances under which the documents, exhibits L and K, were executed, because it is well settled that if all the original parties to the trans action and those who could have given evidence on the rele vant points have passed away, a recital consisting of the principal circumstances of the case assumes greater impor tance and cannot be lightly set aside.
[See Banga Chandra Dhar Biswas vs Jagat Kisore Chowdhuri(1) 1 It appears to us that the recitals in the documents afford valuable evidence, because the tenancies were created by two pious ladies who were keenly interested in the sheba of the deity and with regard to whom it was not suggested that they expected to derive any personal advantage from the transactions in question.
It seems to us most unlikely that they would be parties to any untrue recitals merely to support the trans action.
It may be recalled here that in 1848, certain properties belonging to the deity had been sold for arrears of rent, and Jiban Kumari (1) 43 I.A. 249.
339 had been supplementing the income of the residue from her own properties for meeting the expenses of performing cer tain essential services to the deity, such as jatra, mahot sob, etc.
We also find from the arpannama that the value of the property which is the subject matter of the mokrari kabuliyat dated the 30th September, 1869 (exhibit L) was Rs. 2,000 in 1848, that it was not in the khas possession of Muni Bibi but had been let out to a tenant and that its net income was Rs. 20 p.m.
At the time when the arpannama was executed, Muni Bibi clearly thought that the sum of _Rs. 20 p.m., if included in the expenses for the sheba of the deity, would enable the sheba to be carried on without any extraneous help.
From the recitals in exhibit L, it appears that the house bearing No. 140, Cotton Street, was in a dilapidated condition and had collapsed in the rains of 1270 B.S. (1868 A.D.), and Muni Bibi was unable to bear the expenses of constructing a new building at the place.
The problem before her therefore was whether the deity should go without any income from this property, or she should enter into such an arrangement as would secure a permanent income for the expenses of the deity, which should not in any case be less than the income which the property had theretofore yielded.
She decided to choose what must have appeared to her to be the better and more prudent course, with the result that she got a sum of Rs. 500 cash for the deity as the price of the materials which were sold to the lessee, and also secured a regular monthly income of Rs. 25.
There can be no doubt that the transaction was in the best inter ests of the deity and clearly beneficial to it.
A reference to the arpannama shows that the house was in the possession of a, tenant even in 1848, and from the recitals in the document it is clear that what Muni Bibi contemplated was that the house should continue to remain in the possession of a tenant, and the rent of the house should be used for the sheba of the deity.
At that time, she did not contemplate any other mode of using the property she was going to dedicate.
We do not know who was the tenant of the 340 house in 1848 and what were the commitments of Muni Bibi at that time, but, even apart from these facts, it is difficult to believe that a devout person like her, who was not only a shebait but also the widow of the founder of the deity and who had shown such keen interest for the upkeep of the worship of the deity, should have entered into the transac tion in question unless she considered it absolutely neces sary to do so.
The contention put forward before us is that it has not been shown that there was no other course open to Muni Bibi than to.
grant a permanent lease in respect of the property, but it is manifest that at this distance of time no evidence can be available to show the actual pressure or necessity which impelled Muni Bibi to adopt the course she did.
It is now well settled that where the validity of a permanent lease granted by a shebait is called into question a long time after the grant, although it is not possible to ascertainfully what the circumstances were in which it was made, the court should assume that the grant was made for necessity so as to be valid beyond the life of the grantor.
[See Bava Magniram Sitgram vs Kasturbhai Manibhai(1)].
In the present case, the circumstances which can be gathered from the recitals together with the fact that the document has remained unquestioned for more than half a century, seem to us to be quite sufficient to support the conclusion that the grant was made for legal necessity and is binding on the deity.
On the facts narrated, it would appear that there were several shebaits between the death of Muni Bibi and the commencement of the present litigation, but the lease was never impugned as being beyond the power of the shebait who granted it.
On the other hand, we find that the permanent character of the lease was recognized in a deed executed by Gourimoni on the 18th October, 1873 (exhibit Y), and in a mortgage deed executed by Raghubar Dayal, the guardian of Gopaldas, on the 31st August, 1878.
The properties in question were subsequently mortgaged by Kali Charan Dutt and Gopaldas, but neither of these persons nor (1) 41 I. A. 54.
341 the mortgagees ever came forward to question the permanent nature of the tenancy.
The counsel for the appellant relied upon exhibit VI, which is a copy of the judgment of the High Court in a suit instituted by Nabakishore Dutt in 1995 against the Adminis trator General of Bengal for the rent of the house in ques tion.
It appears from this judgment that the tenancy was admitted by the defendant and it was also admitted by him that rent was due, but he claimed that he was entitled to insist upon a receipt specifying the money to have been paid as mourasi mokrari rent.
The learned Judge, who dealt with the case, however, thought that the point raised by the defendant did not strictly speaking arise in a suit for rent, which according to him could not be converted into a suit for declaration of title, and on that basis, he passed a decree in favour of the plaintiff.
The judgment does not say in so many words that Nabakishore resisted the claim as to the tenancy being mourasi mokrari, but, however that may be, assuming that such an assertion was really made by him, it cannot affect the character of a tenancy which had re mained unquestioned for nearly half a century.
The legal position with regard to 141, Cotton Street, is almost identical with that of the adjoining premises with which we have already dealt.
As has been already stated, a mourasi mokrari tenancy was created by Jiban Kumari on the 8th December, 1869, as is evidenced by exhibit K.
This document recites among other things that the house which was the subject of the lease, "stands in need of repairs and for want of such repairs there is chance of some portion thereof breaking down during the year.
" It also recites that whatever income was derived till then from that house was derived by letting it out on rent and that the mourasi tenancy was being created for the purpose of repair ing the house and keeping it in existence.
At the end of the document, it is stated that "the shebait shall keep the kabuliyat and patta in force and shall on taking the sum of Rs. 90 as rent, defray the expenses of the sheba of the deity.
" It is 342 noteworthy that the actual dedication of this property took place on the 15th January, 1872, more than 2 years after the kabuliyat.
On that date, a registered deed of gift was executed by Jiban Kumari in favour of Srimathi Gourimoni Debi and it was recited therein that the income of the house was being dedicated by the former to the sheba of the deity.
There was also a further clause in that deed to the follow ing effect : "In accordance with the terms of the solenama the ex penses of the Iswar seba shall be met from the income of those properties which have been dedicated for the perform ance of the work of the said seba and the amount by which the expenses for the festivals would fall short and the expenses which would be incurred for repairs to house for sheba of the said Thakur shall be met and the Tahailia (attendant) and the Brahman cook and the Brahman priest (now) employed and to be employed hereafter shall get (their) salaries, from the income of the said property." On reading this document along with the solenama and the mok rari lease granted by Jiban Kumari, it appears that she dedicated the property after having created a mokrari lease, that what she purported to dedicate was the income derived by way of rent from the mourasi mokrari tenancy, and that she had dedicated this income for specific purposes with the object of making up the deficit in the income received from other debutter properties.
If it is held that Jiban Kumari was an absolute owner of the property at the time the moura si mokrari lease was granted and afterwards she dedicated only the income of the property then the permanent lease cannot be assailed.
If, on the other hand, it is held on reading the solenama that Jiban Kumari had only a life estate in the house and it was one of the terms of the solenama that after her death the expenses of the deity were to be borne out of the income from the house, then in that case the question may arise as to whether she was entitled to create a lease beyond her lifetime.
Such a question however does not need an elaborate answer, because the same considerations which apply to 140, Cotton Street.
will 343 apply to this house, and the presumption as to necessity which is raised by the long lapse of time, would arise here also.
This presumption is considerably strengthened here as well as in the case of the lease granted by Muni Bibi, by the fact that the grantor of the lease was so devoted to the object of the endowment that it does not seem likely that she would have granted a permanent lease unless she was impelled to do so by absolute necessity.
It seems to us therefore that the view taken by the High Court is substan tially correct and the respondents Nos. 1 and 2 are entitled to compensation as permanent lessees.
In this view, Appeal No. 95 must fail, and it is dismissed.
As to Appeal No. 96, it has been concurrently found by the President of the Tribunal and the High Court that the appellants have failed to prove by proper evidence that there is any money still due to them on the usufructuary mortgage executed by Gopaldas in 1886.
In arriving at this finding, they have dealt with every possible argument that could be urged and was urged on behalf of the appellants to show that the mortgage had not been satisfied.
This court has repeatedly held that it will not generally interfere with concurrent findings on a pure question of fact, and nothing has been shown on behalf of the appellants to induce us to depart from this rule.
In the result Appeal No. 96 also is dismissed.
Having regard to the circumstances of the case, we shall make no order as to costs in either of these appeals.
Appeals dismissed.
Agent for the appellant in Civil Appeal No. 95 and respondent in Civil Appeal No. 96: Sukumar Ghose.
Agent for respondents Nos.
1 to 3 in Civil Appeal No. 95 and appellants Nos.
1 to 3 in Civil Appeal No. 96:S. C. Banerjee.
Agent for respondent No. 4 in Civil Appeal No. 95: P.K. Chatterjee.
| IN-Abs | Where the issue is whether there was legal necessity for a particular transaction, if all the original parties to the transaction and those who could have given evidence on the relevant points have passed away, a recital consisting of the principal circumstances of the case assumes greater importance and cannot be lightly set aside.
Banga Chandra Dhar Biswas vs Jagat Kishore Chowdhuri (43 I.A. 249) referred to.
Where the validity of a permanent lease granted by a shebait has remained unquestioned for a very long time since the grant, although it is not possible to ascertain fully what the circumstances were in which it was made, the Court should assume that the grant was made for necessity so as to be valid beyond the life time of the grantor.
333 Bawa Magniram Sitaram vs Kasturbhai Manibhai (49 I.A. 54) referred to.
|
Subsets and Splits
No saved queries yet
Save your SQL queries to embed, download, and access them later. Queries will appear here once saved.