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s Nos. 39 & 92 of 1969.
Under Article 32 of the Constitution of India for the enforcement of Fundamental rights.
V.M. Tarkunde, G.R. Chopra and C.M. Kohli for the petitioners.
Gobind Das and section K. Nayar, for the respondents (in W.P.No. 39/69) and respondents Nos.
1 4 (in W.P. No. 92/69).
P.K. Chatterjee and G.S. Chatterjee, for respondents Nos.
5 6 (in W. P No. 92/69).
Judgment of the Court was delivered by MATHEW, J. These are petitions filed under article 32 of the Constitution praying for issue of appropriate direction or order for the enforcement of the fundamental right of the petitioners under article 31(1) of the Constitution.
The question raised in the petitions is that we propose to deal with Writ Petition No. 39 of 1969 decision there will govern and dispose of Writ No. 92 of 1969.
The petitioner is a company incorporated under the Indian Companies Act, 1913.
It has its registered office in Calcutta and a branch office at Binani House, Khundi Katra, Mirzapur, U.P.
The petitioner is an importer and a dealer in non ferrous metals like zinc, lead, copper, tin, etc.
and is on the approved list of registered suppliers to the Directorate General of Supplies and Disposals, hereinafter referred to as DGS&D.
It is also a registered dealer in the State of West Bengal under the Bengal Finance Act, 1941 and the .
The petitioner used to procure nonferrous metals from various countries and also from within the country for fulfilling its contracts with the Government of India through _the DGS&D.
The import of non ferrous metals was under Open General Licence till June 30, 1957.
Thereafter, a licensing systems was introduced by the Government of India and the established traders including M 602 Sup CI/74 622 the petitioner were asked to get their quotas fixed on the basis of their past imports.
On April 2, 1958, the Government of India promulgated the Non Ferrous Metals Control Order, 1958 under the Essential Commodities Act, 1951 by virtue of which free sale of copper was banned.
Any import of copper by the established licence holders was to be distributed under the directions of the Controller of Nonferrous Metals.
Under the Non Ferrous Metals Control Order, 1958.
and also under the Import Trade Regulations, the established importers were not free to sell the metals imported by them against their quota licences even to the DGS&D.
The petitioner, in order to effect supplies to the DGS&D had to obtain additional import licence.
Under the Import Trade Control Policy, the established importers including the petitioner obtained quota licences for import of non ferrous metals for the licensing period upto April, 1964 March, 1965, but the imports mentioned here were to be distributed only under the directions of the Controller of Non Ferrous Metals or the Import Trade Control Authority.
On September 14, 1965, the Government of India promulgated the Scarce Industrial Materials Control Order, 1965, under the Defence of India Rules.
Stocks of non ferrous metals including incoming imports were thus frozen.
The Non Ferrous Metals Control Order, 1958, was repealed.
The Scarce Industrial Materials Control Order, 1965 was also repealed on June 6, 1966.
The Government of India, in placing orders with the petitioner used to grant import licences in terms of the contract.
The petitioner had been importing and supplying non ferrous metals to respondents 1, 2 and 3 during the last 19 years.
Respondent No. 2 had agreed to pay and was paying the Central Sales Tax and/or West Bengal Sales Tax whichever was applicable to the petitioner in terms of the contract.
In 1966, this Court held in K.G. Khosla and Co. vs Deputy Commissioner of Commercial Taxes(1) hereinafter.
referred to as the Khosla Case, that the sale by Khosla & Co. to DGS&D in India of axle box bodies manufactured in Belgium by their principal occasioned the movement of goods in course of import and sales tax was not exigible on the transaction in view of section 5(2) of the .
On the basis of this judgment, respondent No. 2 issued an order.
(Annexure P 1) to all the authorities concerned including respondent No. 4, namely, the Pay and Accounts Officer, Ministry of Works, Housing and Supply directing that sales tax should not be allowed in respect of supply of stores which has been specifically imported against licences issued by the Chief Controller of Imports and Exports on the basis of Import Recommendation Certificates issued by the DGS&D or other authorities like the State Trading Corporation for supplies against contracts placed by the DGS&D.
The Pay and Accounts Officer, acting on Annexure P 1 deducted the amounts of sales tax paid by the respondents under all the old contracts from the current bills which were submitted by the petit ioner to him.
Respondent No. 4 actually deducted a sum of Rs. 60,780/ from the bills which were pending payment and also threatened to recover Rs. 2,35,130 01 being the amount paid by respondent No. 2 as sales tax in respect of (1) ; 623 contracts which had, already been executed.
The assessments on the petitioner upto the year ending October, 27, 1962, were completed prior to the date of judgment in Khosla Case and the issue of the order at Annexure P 1.
The petitioner, when it came to know of Annexure P 1 Order, approached the Sales Tax authorities in West Bengal and filed revised returns in the pending assessments and claimed refund of taxes paid on the sales, treating the sales as having been made in the course of import on the basis of the judgment in Khosla Case.
The West Bengal Sales Tax authorities took the view that there were two sales involved in the transactions in question, namely, sale to the petitioner by the foreign sellers and sale by the petitioner to the DGS&D, that there was no privity of contract between the DGS&D and the foreign sellers, that the petitioner, under the import licences granted to it, was entitled to import the goods from any person or country and that the import licences issued as against the contracts with the DGS&D imposed no obligation on the petitioner to supply the goods to the DGS&D after they had been imported.
They, therefore, held that tax was exigible on the sales by the petitioner to the DGS&D.
The questions which arise for consideration are, whether, on the basis of Annexure P 1 Order, respondent No. 4 was entitled to deduct Rs. 60 780/ from the amount due to the petitioner in respect of pending bills and whether the claim of the respondents to recover a further sum of Rs. 2,35,130.01 from the petitioner is justified.
It was contended on behalf of the petitioner that the transactions in question, namely, the sales which the petitioner made to DGS&D were not the sales which occasioned the movement of the goods in the course of import and as those sales were separate and distinct from the contracts of purchase made by the petitioners with the foreign sellers which alone occasioned the movement of goods in the course of import, tax was exigible upon the transactions of sale by the petitioner to DGS&D and, therefore, the decision in Khosla Case has no application to facts here.
Article 286(1)(b) provides: "286.
(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (b) in the course of import of the goods into, or export of the goods out of, the territory of India".
In State of Travancore Cochin & Others vs The Bombay Co. Ltd. (1) Patanjali Sastri, C.J. said that a sale by export involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the country by land or sea and that such a sale cannot be dissociated from the export without which it cannot be effectuated, and the sale and resultant export form parts of a single transaction.
Of these two integrated activities which together (1) ; 624 constitute an expert sale, whichever first occurs can well be regarded as taking place in the course of the other.
In State of Travancore Cochin & Others vs Shanmugha Vilas Cashew Nut Factory and Others (1), it was observed by the same learned Chief Justice that the phrase 'integrated activities ' was used in the previous decision to denote that 'such a sale ' (i.e. a sale which occasions the export)"cannot be dissociated from the export without which it cannot be effectuated ', and the sale and the resultant export form parts of a single transaction" and that it is in that sense that the two activities the sale and the export were said to be integrated.
There was no definition of the expression 'in the course of import ' before the Sixth Amendment of the Constitution.
By that Amendment, Parliament was given power to formulate the principles for construing the expression.
And, in s.5(2) of the , Parliament has given a legislative meaning to the expression "5(2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India.
" In Ben Gorm Nilgiri Plantations Company V. Sales Tax Officer(2), the question was whether the sales of the tea chests at auctions held at Fort Cochin were exempt from levy of sales tax by virtue of article 286(1)(b).
The nature of the transaction was as follows: A manufacture obtains from the Tea Board allotment of export quota, the manufacturer then puts the tea in chests which are sold in public auctions; bids are made by agents or intermediaries of foreign buyers; agents and intermediaries then obtain licences from the Central Government for export.
This Court found nothing in the transaction from which a bond could be said to spring between the sale and the.
intended export linking them as parts of the same transaction.
The sellers had no concern with the export, the sale imposed or involved no obligation to export and there was possibility that the goods might be diverted for internal consumption.
The Court considered the sales as sales for export and not in the course of export.
The Court observed that to occasion export there must exist such a bond between the contract of sale and the actual exportation, that each link is in extricably connected with the one immediately preceding it and that without such a bond, a transaction of sale cannot be called a sale in the course of export of goods out of the 'territory of India.
The Court further said that in general where the sale is effected by the seller, and he is not connected with the export which actually takes place, it is a sale for export and where the export is the result of the sale, the export being inextricably linked up with the sale so that the bond cannot be dissociated without a breach of the obligation arising (1) ; ,63.
(2) ; 625 by statute, contract or mutual understanding between the parties arising from the nature of the transaction, the sale is in the course of export.
In the Khosla Case, the assessee entered into a contract with the DGS&D, New Delhi, for the supply of axle box bodies.
The goods were to be manufactured in Belgium according to specifications and 'the DGISD, London or his representative had to inspect the goods at the works of the manufacturers and issue an inspection certificate.
Another inspection was provided for at Madras.
The assessee was entitled to be paid 90 per cent.
after inspection and delivery of the stores to the consignee and the balance of 10 per cent.
was payable on final acceptance by the consignee.
In the case of deliveries on f.o.r.
basis the assessee was entitled to 90 per cent.
payment after ins pection on proof of despatch and balance of 10 per cent.
after receipt of stores by the consignee in good condition.
The assessee was entirely responsible for the execution of the contract and for the safe arrival of the goods at the destination.
The contract provided that notwithstanding any approval or acceptance given by an Inspector, the consignee was entitled to reject the goods, if it was found that the goods were not in conformity with the terms and conditions of the contract in all respects.
The manufacturers consigned the goods to the assessee by ship under bills of lading and the goods were cleared at the Madras Harbour by the Assessee 's Clearing Agents and despatched for delivery to the Southern Railway in Madras and Mysore.
The question was whether the sales by the assessee to the Government departments were in the course of import and export from taxation under s.5(2) of the .
Sikri, J. (as he then was), delivering the judgment of the Court said after referring to s.5(2) of the that the movement of goods to India was occasioned by the contract of sale between the appellant (Khosla & Co.) and the DGS&D, that if the movement of goods is the result of a covenant or incidental to the contract of sale, it is quite immaterial that the actual sale took place after the import was over.
In Coffee Board vs Joint Commercial Tax Officer (1), hereinafter referred to as Coffee Board Case, the Coffee Board claimed that as certain sales of coffee to registered exporters in March and April, 1963 were sales made 'in the course of export ',it could not be taxed under the Madras General Sales Tax Act, 1959.
The rules framed by the Coffee Board provided that only dealers who had registered themselves as exporters of coffee with the Coffee Board or their agents and who held permits from the Chief Coffee Marketing Officer in that behalf would be permitted to participate in the auction , and after the bidding comes to an end, the payment of price would take place in a particular way.
Condition No.26 he added "export guarantee" provided that it was an essential condition of the auction that the coffee sold thereat shall be exported to the destination stipulated in the Catalog of lots, or to any other foreign country outside.
India as may be approved by the Chief Coffee Marketing Officer, within three (1) ; 626 months from the date of Notice of Tender issued by the Agent and that it shall not under any circumstances be diverted to another destination, sold, or be disposed of, or otherwise released in India.
Condition 30 stated that if the buyer failed or neglected to export the coffee as aforesaid within the prescribed time or within the period of extension, if any granted to him, he shall be liable to pay a penalty calculated a Rs. 50 per 50 kilos which shall be deductible from out of the amount payable to him as per condition 31.
And Condition 31 provided that no default by the buyer to export the coffee aforesaid Within the prescribed time or such extension thereof as may be granted, it shall be lawful for the Chief Coffee Marketing Officer, without reference.
to the buyer, to seize the un exported coffee and take possession of the same and deal with it as if it were part and parcel of Board 's coffee held by them in their Pool stock.
The case of the petitioners before this Court was that the purchases at the export auctions were really sales by the Coffee Board in the course of export of coffee out of the territory of India since the sales themselves occasioned the export of Coffee and that the coffee so sold was not intended for use in India or for sale in the Indian markets.
The case of the Sales Tax Authorities, oil the other hand, was that these sales were not inextricably bound up with the export of coffee and that the sales must therefore be treated as sales taking place within the State of Tamil Nadu liable to sales tax under the Madras General Sales Tax Act.
This Court held that the Board was not entitled to the exemption claimed.
The Court said that the phrase 'sale in the course of export ' comprises three essentials, namely, that there must be a sale, that goods must actually be exported and that the sale must be a part and parcel of the export.
The Court further said that the sale must occasion the export and that the word 'occasion ' is used as a verb and means 'to cause ' or 'to be the immediate cause of '.
The Court was of the view that the sale which is to be regarded as exempt from tax is a sale which causes the export to take place or is the immediate cause of the export, that the introduction of an intermediary between the seller and the importing buyer breaks the link, for, then there are two sales, one to the intermediary and the other to the importer, and that the first sale is not in the course of export, for the export begins from the intermediary and ends with the importer.
According to the Court the test was that there must be a single sale which itself causes the export and that there is no room for two or more sales in the course of export, The Court, therefore, held that though the sales by the Coffee Board were sales for export, they were not sales in the course of export, that there were two independent sales involved in the export programme: the first sale by the Coffee Board to the export promoter, and the second sale by the export promoter to a foreign buyer which occasioned the movement of goods and that the latter sale alone could earn the exemption from sales tax as being a sale the in the course of export.
Khosla Case, it might be recalled that Khosla and Co. entered into.
the contract of sale with the DGS&D for the Supply of axle bodies manufactured by its Principal.
in Belgium and the goods were to be 627 inspected by the buyer in Belgium but under the contract of sale the goods were liable to be rejected after a further inspection by the buyer in India.
It was in pursuance to this contract that the goods were imported into the country and supplied to the buyer at Perambur and Mysore.
From the statement of facts of the case as given in the judgment of the High Court it is not clear that there was a sale by the manufacturers in Belgium to Khosla & Co., their agent in India.
it would seem that the only sale was the sale by Khosla & Co. as agent of the manufacturer in Belgium In the concluding portion of the judgment of this Court it was observed as follows : ".
It seems to us that it is quite clear from the contract that it was incidental to the contract that the axle box bodies would be manufactured in Belgium, inspected there and imported into India for the consignee.
Movement of goods from Belgium to India was in pursuance of the conditions of the contract between the assessee and the Director General of Supplies.
There was no possibility of these goods being diverted by the assessee for any other purpose.
Consequently we hold that the sales took place in the course of import of goods within s.5(2) of the Act, and are, therefore, exempt from taxation.
" As already stated, there was to be an inspection of the goods in Belgium by the representative of the DGS&D but there was no completed sale in Belgium as, under the contract, the DGS&D reserved a further right of inspection of the goods on their arrival in India.
Be that as it may, in the case under consideration we are concerned with the sales made by the petitioner as principal to the DGS&D. No doubt, for effecting these sales, the petitioner had to purchase goods from foreign sellers and it was these purchases from the foreign sellers which occasioned the movement of goods in the course of import.
In other words, the movement of goods was occasioned by the contracts for purchase which the petitioner entered into with the foreign sellers.
No movement of goods in the course of import took place in pursuance to the contracts of sale made by the petitioner with the DGS&D.
The petitioner 's sales to DGS&D were distinct and separate from his purchases from foreign sellers.
To put it differently, the sales by the petitioner to the DGS&D did not occasion the import.
It was purchases made by the petitioner from the foreign sellers which occasioned the import of the goods.
The purchases of the goods and import of the goods in pursuance to the contracts of purchases were, no doubt, for sale to the DGS&D.
But it would not follow that the sales or contracts of sales to DGS&D occasioned the movement of the goods Into this country.
There was no privity of contract between DGS&D and the foreign sellers.
The foreign sellers did not enter into any contract by themselves or through the agency of the petitioner to the DGS&D and the movement of goods from the foreign countries was not occasioned on account of the sales by the petitioner to DGS&D.
It was contended on behalf of the Central Government that the contracts of sale between the petitioner and the DGS&D envisaged 628 the import of goods for fulfilling the contracts and it was for that reason that there was first the recommendation for issue of import licences by DGS&D and then the actual issue of import licences and, as the contracts of sale visualised the import of goods for fulfilling them, the movement of goods in the course of import was occasioned by the contracts of sale to the DGS&D, and, therefore, the sales to the DGS&D were the sales which occasioned the movement of goods in the course of import.
There was no obligation under the contracts on the part of the DGS&D to procure import licences for the petitioner.
On the other hand, the recommendation for import licence made by DGS&D did not carry with it any imperative obligation upon the Chief Controller of Imports and Exports to issue the import licence.
Though under the contract DGS&D undertook to provide all facilities for the import of the goods for fulfilling the contracts including an Import Recommendation Certificate, there was no absolute obligation on the DGS&D to procure these facilities.
And, it was the obligation of the petitioner to obtain the import licence.
Therefore,even if the contracts envisaged the import of goods and their supply to the DGS&D from out of the goods imported, it did not follow that the movement of the goods in the course of import was occasioned by the contracts of sale by the petitioner with DGS&D.
We see no reason in principle to distinguish this case from the decision in the Coffee Board Case though that case was concerned with the question when a sale occasions the movement of goods in the course of export.
In the result, we quash Annexure P 1 order so far as the petitioners are concerned and allow the writ petitions with costs.
S.C. Petitions allowed.
| IN-Abs | In W. P. No. 92 of 1969, the Petitioner Company prayed for issue of appropriate direction or order for the enforcement of its fundamental rights guaranteed under article 31(1) of the Constitution.
The facts are as follows: The petitioner company was a dealer in non ferrous metals and was a registered supplier to the Directorate General of Supplies and Disposals.
The company was also a registered dealer in the State of West Bengal.
The petitioner used to procure non ferrous metals from various countries and also from within the country for fulfilling its contracts with D.G.S. & D.
The import of non ferrous metals was under open General licence till June, 30, 1957.
Thereafter, a licensing system was introduced by the Government of India and the petitioner was asked to get their quotas fixed on the basis of their past imports.
On April 2, 1958, the Government of India promulgated the Non ferrous Metals Control Order, 1958 by virtue of which free sale of copper was banned.
Any import of copper by the licence holders was to be distributed under the directions of the Controller of Non ferrous metals.
Under the Non ferrous Metals Control Order, 1958, and also under the Import Trade Regulations, the established importers were not free to sell the metals imported by them against their quota licences even to D.G.S.& D. The petitioner, in order to effect supplies to D.G.S. & D. had to obtain additional import licence.
The petitioner obtained quota licences for import of non ferrous metals for the licensing periods upto April 1964, March 1965; but the imports were to be distributed only under the directions of the Controller.
On Sept. 14, 1965, the Govt.
of India promulgated the Scarce Industrial Materials Control Order 1965, under the Defence of India Rules.
Stocks of non ferrous metals including incoming imports were thus frozen.
The Non ferrous Metals Control Order 1958 and the Scarce Industrial Materials Control Order 1965 were both repealed.
The Government of India in placing orders with the petitioner used to grant import licences in terms of the contract.
The petitioner had been importing and supplying non ferrous metals to respondents 1,2 and 3 during the last 19 years.
Respondent No. 2 had agreed to pay and was paying the Central Sales Tax and/or West Bengal Sales Tax, whichever was applicable to the petitioners in terms of the contract.
In 1966, the Supreme Court held in K. G. khosla and Co. vs Deputy Commissioner of Commercial tax ; that the sale by Khosla & Co. to DGS & D in India of axle box bodies manufactured in Belgium by their principal, occasioned the movement of goods in the course of import and sales tax was not exigible on the transaction in view of Sec.
5(2) of the , and article 286 of the Constitution.
Thereafter, respondent No. 2 issued an order to respondent No. 4 that Sales Tax should not be allowed in respect of supply of stores which had been specifically 620 imported against contracts placed by D.G.S. & D. Respondent No. 4, acting in terms of the order, deducted Rs. 60,780/ being the Sales Tax already paid from the pending bills of the petitioner and also threatened to recover more than Rs. 2 lakhs being the amount paid by respondent No. 2 as Sales Tax in respect of contracts which had already been executed.
The petitioner, thereafter, approached the Sales Tax Authorities in W. Bengal and filed revised returns in the pending assessments and claimed refund of taxes paid on the sales, treating the sales as having been made in the course of import on the basis of the judgment in Khosla 's case.
The West Bengal Sales Tax Authorities took the view that there were two sales one, to the petitioner by the foreign seller and the other, by the petitioner to D.G.S. & D. and that there was no privity of contract between D.G.S. & D. and the foreign sellers, that the petitioner under the import licences granted to it, was entitled to import the goods from any person or country and that the import licences issued as against the contracts with the Directorate General of Supplies & Disposals imposed ,no obligation on the petitioner to supply the goods to the D.G.S. & D after they had been imported, they therefore, held that tax was exigible on the sales by.
the petitioner to the D.G.S. & D.
The questions which arose for consideration were: (i) whether on the basis of the order, respondent No.4 was entitled to deduct Rs. 60,780 from the amount due to the petitioner and (ii) Whether the claim of the respondent to recover a further sum of more than Rs. 2 lakhs from the petitioner was justified.
The petitioner contended that the sales which the Company made to D.G.S. & D. were not the sales which occasioned movement of any goods in the course of import as those sales were separate and distinct from the contracts of purchase made by the Company with the foreign sellers which alone occasioned the movement of goods in the course of import, tax was exigible upon the sales by the petitioner to D.G.S & D. and therefore, the decision in Khosla 's Case has no application to the facts here.
Allowing the writ petitions, HELD : (i) article 286(1) (b) provided that no law of a State shall impose a tax on the sale or purchase of goods where such sale or purchase takes place in the course of the import or export of the goods in India.
A sale by export involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the country by land or sea and that such a sale cannot be dissociated from the export without which it cannot be effectuated, and the sale or resultant export from parts of a single transaction of these two integrated activities which together constituted an export sale, whichever occurs first can well be regarded as taking place in the course of the other.
[623H] State of Travancore Cochin and Ors.
vs The Bombay Co. Ltd. ; 12, referred to (ii) The words, 'Integrated activities ' were used in the earlier case to denote that such a sale ' (i.e. a sale which occasions the export) ' cannot be dissociated from the export without which it cannot be effectuated, and the sale and the resultant export form parts of a single transaction ', and in that case the sale and the export were said to be integrated.
[624B] per Patanjali Sastri C.J. in State of Travancore Cochin and Ors.
vs Shamugha Vilas Cashew Nut Factory and Ors. ; referred to .
(iii) There was no definition of the expression 'in the course of import ' before the Sixth Amendment of the Constitution.
Later Parliament gave legislative meaning to the expression in section 5(2, of the which provides that a sale or purchase of goods in the course of the import into India, shall be deemed to take place if the sale or purchase either occasions such import or is effected by a transfer of documents of title before the goods have crossed the customs frontiers of India.
[624C] 621 (iv) In the present case, the petitioner as principal made the sale to the D.G.S. & D. 'For effecting the sales, the petitioner had to purchase goods from foreign sellers and it was these purchases from the foreign sellers which occasioned the movement of goods in the course of imports.
In other words, the movement of goods was occasioned by the contracts for the purchase, which the petitioner entered into with the foreign sellers.
No movement of goods in the course of import took place in pursuance to the contracts of sales made by the petitioner with the D.G.S. & D. The petitioner 's sales to D.G.S. & D. were distinct and separate from his purchases from foreign sellers.
There was no privity of contract between the D.G.S. & D. and the foreign sellers.
The foreign sellers did not enter into a contract by themselves or through the agency of the petitioner to the D.G.S.& D. and the movement of goods through foreign countries was not occasioned on account of the sales by the petitioner to D.G.S. & D.
Even if the contracts between the petitioner and the D.G.S. & D. envisaged the import of goods, and their supply to the D.G.S. & D. from out of the goods imported, it did not follow that the movement of the goods in the course of import was occasioned by the contracts of sale by the petitioner with the D.G.S. & D.
The present case, therefore, cannot be distinguished from the decision in the Coffee Board 's case though that case was concerned with the question when a sale occasioned the movement of goods in the course of export.
The order issued by respondent No. 2, was, therefore, quashed.
, [627E 628E]
|
Appeal No. 419 of 1973.
From the Judgement and Order dated the 22nd December 1972 of the Punjab and Haryana High Court at Chandigarh in Election Petition No. 2 of 1972.
Hardyal Hardy, V. P. Chaudhry, Jitendra Sharma and Sharma Chaudhury and Rathi, for the appellant.
M. N. Phadke, Bakhtawar Singh, D. N. Misra, and J. B. Dadachanji, for respondent No. 1.
The Judgment of P. JAGANMOHAN REDDY and P. K. GOSWAMI, JJ. was delivered by Goswami, J. section N. Dwivedi, J. gave a separate Opinion.
GOSWAMI, J.
This appeal under section 116A of the Representation of the People Act, 1951 (briefly the Act, is directed against the judgment and order passed by the High Court of Punjab and Haryana in Election Petition No. 2 of 1972 dismissing it on the preliminary ground that the appellant had failed to comply with the mandatory requirement of section 81(3) of the Act inasmuch as the requisite number of spare copies of the petition for the respondents were not filed along With the petition in the High Court.
It was further held by the High Court that the said defect could not be cured subsequently even within the period of limitation prescribed for filing the election petition.
The High Court further held that the spare copies were actually filed beyond the period of limitation.
The facts may be briefly stated.
In the general election to the Haryana Legislative Assembly held on March 11, 1972, the appellant and the four respondents were the contesting candidates for the Safidon Assembly Constituency No. 30; two candidates having already withdrawn from the contest.
The counting of votes took place on March 12, 1972 and on the following day.
The counting disclosed that the first respondent obtained 19570 votes as against 19462 votes secured by the appellant.
The first respondent was, therefore, declared elected on March 13,1972.
The appellant filed an election petition in the High Court challenging the election of the first respondent on several grounds of corrupt practice within the meaning of section 123 of the Act.
It is not necessary for the purpose of this case even to detail these.
The election petition was presented by Mr. R. section Mittal, Advocate incharge, to the Deputy Registrar (Judicial) of the High Court on April 18, 1972.
The same was ordered to be put up for scrutiny on April 24, 1972.
It is admitted that the application was filed on April 18, 1972, without the requisite spare copies and was, therefore, incomplete on the date of presentation.
No schedules were also filed along with the petition but that point is not pressed before us by the respondent 's counsel.
It is also admitted that the limitation for filing the election petition was up to April 27, 1972.
According to the appellant the spare copies were filed with the Superintendent of the Election Branch in the afternoon of April 24, 1972, well within the period ' of limitation.
22 It may be necessary to briefly note the sequence of events for the purpose of appreciating the controversy raised between the parties as noted earlier, the election petition was presented personally by Mr. Mittal without the spare copies on April 18, 1972, and the Deputy Registrar had ordered it to be put up on April 24, 1972, for scrutiny according to the rules of the High Court.
When the petition came up for scrutiny before the Deputy Registrar on April 24, 1972, Mr. Mittal appeared and requested for time to remove the defects pointed out by the office.
It may be appropriate to extract that particular order : "Present: Shri R. section Mittal, Advocate.
He has requested time to remove the defects pointed out by the office.
Let it be refixed on 28 4 72, after the defects had been removed as agreed to by the counsel.
Sd/. D. D. Khanna 24 4 72" The next order passed by the Deputy Registrar on April 29, 1972, runs as follows: "Shri R. section Mittal has informed me on the phone that he is indisposed and as such the case may not be taken up for scrutiny to day.
Put up tomorrow, the 29th April, 1972 for orders.
Counsel may be informed.
Sd/ D. D. Khanna 28 ' 4 72" .
The High Court has observed that it is common case of both side that by the time the case was placed before the Deputy Registrar on April 29, 1972, the spare copies of the petition had been filed by the petitioner and the other defects had also been removed.
The final order of scrutiny passed by the Deputy Registrar on April 29, 1972, is in the following terms: "Present Shri R. section Mittal.
, Advocate for petitioner.
The petition was filed on 18 4 72 and the result in this case was declared on 13 3 72; hence it is within time.
The petition is accompanied with the security receipt in the sum of Rs. 2,000/ deposited in this Court before filing of the petition under the rules.
The petition was scrutinised and as the defects pointed out on the previous date have been removed, it is now prima facie in order.
Issue notice for scrutiny of service for 22nd May, 1972, and for settlement of issues for 26th May, 1972.
Sd/ D. D. Khanna 29 4 72".
23 The matter ultimately came up for hearing before the learned single Judge to whom this election petition was assigned.
Several preliminary objections were taken by the sole contesting first respondent.
The other respondents did not enter appearance ' We are concerned with only one preliminary objection, namely, that the petition was not in conformity with section 81(3) of the Act inasmuch as the requisite spare copies thereof were not enclosed with the petition when it was originally presented on April 18, 1972, and that the election petition was liable to be dismissed.
The learned counsel for the appellant, Mr. Hardyal Hardy, has made only the following two submissions before us : (1) The requirement under section 81(3) of Representation of the People Act, 1951 that spare copies of an election petition shall accompany the petition, is directory and not mandatory (2) It is substantial compliance with the said directory provision if the spare copies of an election petition, inst ead of accompanying the petition, are filed before the petition is laid before the Judge for orders or even within the time that may be granted by the Judge for the purpose.
Before the High Court both sides examined witnesses.
To establish his case, the appellant examined himself as PW 6, the Election Assistant, Shri O. P. Popli (PW 3), Deputy Registrar, Shri D. D. Khanna (PW 4), Shri R. section Mittal, Advocate (PW 5), Shri Adish Chand Jain, Advocate (PW 7), Shri Jai Singh Dhillon, Advocate (PW 9) and Shri Jaswant Rai, Advocate (PW 10).
All the Advocates except Shri Mittal were from Jind.
Shri Mittal is an Advocate practicing in the High Court.
Although the appellant summoned Shri Harsukh Rai Hantroo, Superintendent of the Election Branch, and was present ' in court on 20th July, 1972, when the first four witnesses were also examined, Shri Mittal, who was conducting the case on behalf of the appellant, made a statement before the court that he gave up Shri Harsukh Rai Hantroo 'as unnecessary '.
The respondent 's counsel, however, submitted that he should be examined as a court witness and the court ordered for his examination on that very day observing that "in the interest of justice that the Superintendent of the Election Branch who was the only other official working between the Deputy Registrar (Judicial) on the one side and P.W. 3 on the other, should also be examined to clarify the matters so far as possible.
" The respondent examined himself and R. W. Ch.
Hari Ram, Senior subordinate Judge cum Chief Judicial Magistrate, Jind.
The appellant sought to establish before the High Court that the spare copies were submitted on April 24, 1972, by relying upon the endorsement of Shri Mittal, "objections removed, R. section Mittal" (Ext PW 5/1) below the order of the Deputy Registrar of April 24, 1972, which we have already set out.
There is no date given by Shri Mittal when her made his endorsement in the order sheet of the Registry.
PW 3, who had initially scrutinised the petition and found the defects, was on leave 24 on April, 24, 1972, and the Superintendent (CW 1) was only present.
According to Shri Mittal, he.
went to the Election Office along with the appellant and his Clerk, Manphool Sharma, and filed these papers at 2 00 P M. on April 24,1972, and made also the above ' endorsement (Ext.
PW 511.) Although, however, Shri Mittal was conscious that the papers had to be filed within time to save the defective petition from being dismissed, curiously enough, he did not take the necessary care to get any official endorsement in the order sheet by the Deputy Registrar or even by the Superintendent of the Election Branch to the effect that the documents were filed and defects were removed on that day, namely, on 24th April, 1972, notwithstanding the further fact that he had earlier at 11.00 A.M. on the same day requested the Deputy Registrar for time to remove the defects and the next date was fixed on April 28, 1972.
In face of the order of the Deputy Registrar of 24th April, Shri Mittal 's responsibility as counsel was greater than he seemed to have thought.
On April 28, 1972, Shri Mittal informed the Deputy Registrar over the phone that he was indisposed and requested for time till the next day which was given.
He deposed that he had even informed the Deputy Registrar that scrutiny could be made in his absence since the defects had already been removed.
On this particular aspect of the matter, the Deputy Registrar was silent in his evidence and although it was Shri Mittal again who personally examined the Deputy Registrar in court, he never put this question to him with regard to his informing him over the phone about removal of defects on 24th April.
Again, from Shri Mittal 's evidence it. appears that, although he was feverish, he actually came to the Election Office on April 28, 1972, in connection with Election case No. 3 of 1972 (Sagar Ram vs Banarsi Das & Ors.) and removed certain defects in that case on that day, namely ' 28th April, 1972 although that case was set down for April, 29, 1972, which date had been fixed by the Deputy Registrar in his presence on April 24, 1972.
There is an endorsement in that case by Shri Mittal, this time, with date 28h April, 1972, below the order of the Deputy Registrar dated April 24, 1972, to the effect "objections removed".
The records of that case were also called for in the High Court and were also shown to us here.
It is pointed out that the endorsement in that case with date and the endorsement in Ext.
PW 5/1 of Shri Mittal are with the same pen and ink as is even admitted by Shri Mittal.
The respondent, therefore attaches great significance on the omission of the date in Ext.
PW 511 and describes the endorsement as a suspicious entry.
it is strenuously submitted by the respondent that the papers were not submitted on April 24, 1972, as alleged.
Since Shri Mittal asserted in his evidence that he along with the appellant filed the spare copies of the petition in the afternoon of April, 24, 1972, the respondent by examining the Subordinate Judge (RW 1) sought to establish that the appellant as advocate actually appeared in his court at Jind on April, 24, 1972, in a contested civil suit (Kati Ram vs Ram Tirath, etc.
Civil Suit No. 422 of 1967 on behalf of the plaintiff where the defendent was cross examined by him.
The appellant denied this and stated that his junior, Shri Jai Singh Dhillon (PW 9) actually conducted the case on that day.
This point, was also sought to be supported by examining two other Advocates appearing 25 on behalf of the defendant in that suit, namely, Adish Chand Jain (PW 7) and Jaswant Rai (PW 10).
It appears that Shri Dhillon even did not file his vakalatnama in that suit and at one stage when he had appeared on behalf of the appellant in that suit, it was recorded in the ,order sheet, as was the practice of that court that he was appearing as proxy for the original counsel.
There was, however, no such entry in the order sheet that he appeared on behalf of the appellant on April 24, 1972.
From the evidence of RW 1, who deposed from the records of the suit produced in the court and gave some convincing reasons, the High Court was reasonably and, in our opinion, rightly satisfied that the appellant appeared in the court of the subordinate Judge, Jind, on April 24, 1972.
The High Court has also rightly held that PWs 7 and 1 0 gave hazy evidence from their memory with regard to the appearance of the appellant in the suit on April 24,1972.
The High Court also found several infirmities and contradictions in the evidence of Shri Mittal.
It is nobody 's case that if the appellant appeared in the suit at Jind on 24th April he could be present in the Election Branch at Chandigarh at2.00 P.M. on that day.
PW3 has correctly deposed that" the words (objections removed ' in the handwriting of Shri R.S. Mittal, Advocate and the signature of Shri R. section Mittal thereunder were not there when he made the endorsement 'informed ' (Ext PW 3/1) on April 28, 1972".
Even the Deputy Registrar has admitted in his evidence that the endorsement "objections removed" in the handwriting of and above the signature of Mr. R. section Mittal was not made in his presence.
He also stated that "I do not recollect having seen this endorsement at the time I passed my order, dated April 28, 1972".
The evidence of the Deputy Registrar consistent with that of PW 3 is rightly preferred by the High Court to the evidence of Shri Mittal, of the appellant and even of the Superintendent of the Election Branch who also deposed from memory.
After again carefully examining the evidence of all the witnesses on this point, we have no reason to differ from the conclusion of the High Court that the requisite spare copies of the election petition were not submitted by the appellant on April 24, 1972.
We will, therefore, have to decide the first submission of the learned counsel for the appellant on the basis that the spare copies were not filed within the period of limitation.
The short question is whether section 81(3) of the Act is mandatory and, if so, whether non compliance with the same will visit the election ' petitioner with the penalty of dismissal of his petition under section 86(1 of the Act.
This question was mooted in Jagat Kishore Prasad Narain Singh vs Rajindra Kumar Poddar and Others(1) but the Court did not find it necessary to decide the same.
Whether a particular provision in a statute is mandatory or directory has to be construed from the scheme and object of the provisions [1971] (1) SCR 821.
26 This Court observed in Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur(1) as follows: "The question whether a particular provision of a statute which on the face of it appears mandatory, inasmuch as it uses 'the word 'shall as in the present case is merely directory cannot be resolved by laying down any general rule and depends upon the facts of each case and for that purpose the object of the statute in making the provision is the determining factor.
The purpose for which the provision has been made and its nature, the intention of the legislature in making the provision, the serious general inconvenience or injustice to persons resulting from whether the provision is read one way or the other, the relation of the particular provision to other provisions dealing with the same subject and other considerations which may arise on the facts of a particular case including the language of the provision, have all to be taken into account in arriving at the conclusion whether a particular provision is mandatory or directory".
The Privy Council also in Montreal Street Railway Company Normandin,(2) observed to the same effect: 'The question whether provisions in a statute are directory or imperative has very frequently arisen in this country but it has been said that no general rule can be laid down, and that in every case the object of the statute must be looked at. .
Now there are two parts in section 81(3).
The first part 'provides that "every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition.
The second part relates to the manner in which "such copy shall be attested by the petitioner under his own signature to be a true copy of the petition".
We are concerned only with the first part in this appeal.
Part VI of the Act deals with disputes regarding election.
Chapter 11 therein provides for presentation of election petitions while chapter III for trial of election petitions.
The right to challenge an election is conferred under the Act which is made in conformity with the provisions of Article 329(B) of the Constitution.
It is well settled that it is a special right conferred under a self contained special law and the court will have to seek answer to the questions raised within the four corners of the Act and the powers of the court are circumscribed by its provisions.
it is not a common law right and an election petition cannot be equated with a plaint in a civil suit.
We may, therefore, immediately read the material sections 80, 81(1) 84(3) and 86(1) which run as follows (1) ; , 975.
(2) ; (quoted in 1965 (1) S.C.R. at pages 975 976.) 27 Section 80 No election shall be called in question except by 'an election petition presented in accordance with the provisions of this Part." Section 81(1)"An election petition calling in question any election may be presented on one or more of the grounds specified in sub section (1) of section 100 and section 101 to the High Court by any candidate at such election or any elector within fortyfive days from, but not later than, the date of election of the returned candidate, or if there are more than one returned candidate at the election and the dates of their election are different, the later of those two date section" Section 81(3)"Every election petition shall be accompanied by as many copies thereof ' as there are respondents mentioned in the petition. , and every such copy shall be attested by the petitioner under his own signature to be a true of the petition".
Section 86(1)"The High Court shall dismiss an election petition which does not comply with the provisions of section 81 or section 82 or section 117.
Explanation : An order of the High Court dismissing an election petition under this sub section shall be deemed to be an order made under clause (a) of section 98".
Section 86 (1) refers to three sections, namely, section 81, section 82, which deals with parties to the petition and section 117 of the Act providing for security for costs.
While dealing with section 117 of the Act this Court spoke through one of us (Reddy, J) in Charan Lal Salhu vs Nandkishore Bhatt and others(1), and held as follows : "The right to challenge an election is a right provided by Article 329(b) of the Constitution of India, which provides that 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 as may be provided for by or under any law made by the appropriate Legislature.
The right conferred being a 'statutory right, the terms of that statute had to be (1) ; ,533.
28 complied with.
There is no question of any common law right to challenge an election.
Any discretion to condone the delay in presentation of the petition or to absolve the petitioner from payment of security for costs can only be provided under the statute governing election disputes.
If no discretion is conferred in respect of any of these matters, none can be exercised under any general law or on any principle of equity.
This court has held that the right to vote or stand as a candidate for election is not a civil right but is a creature of statute or special law 'and must be subject to the limitations imposed by it.
In N. P.Ponnuswami vs Returning Officer Namakkal Constituency and Others (1) it was pointed out that strictly speaking, it is the sole right of the legislature to examine and determine all matters relating to the election of its own members, and if the Legislature takes it out of its own hands and vests in a special tribunal an entirely new and unknown jurisdiction, that special jurisdiction should be exercised in accordance with the law which creates it". 'Similarly in Krishan Chander vs Ram Lal (2) dealing with section 82(b) of the Act and examining the scheme and the object of the pro ' visions this Court again held the same as mandatory.
This Court observed: "The provisions of sec.
82(b) would avoid any such delay as they make obligatory for a person filing an election petition when he makes an allegation of corrupt practice against any candidate to make him a party on pain of the petition being dismissed under section 86(1) if he omits to do. .
This then is the rationale underlying the mandatory requirements of section 82(b)".
It is true in Ch.
Subba Rao vs Member Election Tribunal, Hyderabad(3) reiterating two earlier decisions viz. Kamaraj Nadar vs Kunju Thevar(4) and Murarka vs Roop Sing(5), the Court in ' view of the peculiar facts ,add circumstances of that case and the nature of the defects held ,that section 81(3) was substantially complied with and left open the ,wider question whether section 81(3) or any part thereof is mandatory or directory.
In a later decision in Dr. Anup Singh vs Shri Abdul Ghani and another(6), which followed Subba Rao 's case (supra), ,this Court observed : "An exactly similar matter came to be considered by this Court in Ch.
Subba Rao vs Member, Election Tribunal (3).
In that case also the copies were signed by the petitioner but there was no attestation in the sense that the words "true copy" were omitted above the signature of the petitioner.
This Court held that as the signature in original was there in the copy, the presence of such original signature in the copy was sufficient (1) ; (2) ; ,769.
(3) ; (5) ; ,41. 29 to indicate that the copy was attested as true copy, even though the words "true copy" were not written above the signature in the copies.
This Court further held that there was substantial compliance with section 81(3) of the Act and the petition could not be dismissed under section 90(3)".
Keeping in the forefront the proper functioning of democracy, the principal object of the Act is purity of elections.
When therefore, an election of a returned candidate is challenged under the Act, expeditious trial of the election dispute is sought to be enforced by the legislature making all safeguards against delay.
Trial has to be necessarily expedited to rid the candidate as well as the constituency interested in the result of the election, of any taint or suspicion of corrupt practices which are again clearly enumerated in the Act.
To take, therefore, another important object of the Act, viz., expeditious, disposal of an election petition, by section 86(6) "the trial of an election petition shall, so far as is practicable consistently with the interests of justice in respect of the trial, be continued from day to day until its conclusion, unless the High Court finds the adjournment of the trial beyond the following day to be necessary for reasons, to be recorded".
Again under section 86(7), " every election petition shall be tried as expeditiously as possible and endeavour shall be made to conclude the trial within six months from the date on which the election petition is presented to the High Court for trial".
Further section 87(1) introduces the Civil Procedure Code only subject to the provisions of the Act and of any rules made thereunder.
Section 87(2) makes a deeming provision for application of the Evidence, Act only subject to the Act.
Therefore, there is no scope for free play in the application of the provisions of those two Acts.
The very object of expeditious trial will be defeated if the presentation of ' the election petition should be treated casualty and lightly permitting, all kinds of devices to delay the ultimate trial.
The purpose of enclosing the copies of the election petition for all the respondents is to enable quick despatch of the notice with the contents of the allegations for service on the respondent or respondents so that there is no delay in the trial at this very initial stage when the election petition is presented.
If there is any halt or arrest in progress of the case, the object of the Act will be completely frustrated.
We are, therefore, clearly of opinion that the 1st part of section 81(3) with which we are mainly concerned in this appeal is a peremptory provision and total, non compliance with the same will entail dismissal of the election petition under section 86 of the Act.
We are, therefore, not required to consider the second submission, of the learned counsel for the appellant with regard to substantial compliance made on the basis of the provisions of section 81(3) being, directory.
We may only add here that, in the absence of any provision under the Act or the rules made thereunder, the High Court Rules cannot confer upon the Registrar or the Deputy Registrar any power to permit correction or removal of defects in an election petition presented in the High Court beyond the period of limitation 30 provided for under the Act.
It may be noted that section 169 of the Act provides that the Central Government is the authority to make rules after consulting the Election Commission and in sub section (3) thereof the rules have to be laid before each House of Parliament in the manner provided therein.
The only reference to the High Court Rules is found in section 117 of the Act.
At any rate, we do not feel called upon to pass on the High Court Rules referred to in the judgment of the High Court in this case, In the result we find no reason to interfere with the decision of the High Court dismissing the election petition.
The appeal is dismissed with costs.
DWIVEDI, J.
I agree with my brethren that the requisite copies of the election petition were not filed in Court within the period of limitation by the appellant.
I am constrained also to agree that for this procedural fault his election petition is liable to be dismissed in view of the decision of the Court in Jagat Kishore Prasad Narain Singh vs Rajindra Kumar Poddar and others(1).
In that case Hegde J. said: "The law requires that a true copy of the election petition should be served on the respondents.
That requirement has not been either fully or substantially complied with.
Therefore we have no doubt in our mind that the election petition is liable to be dismissed under s.86 of the Act.
" It makes me sad to read this requiem for this election petition.
Over a century ago a slip in procedure by a litigant meant denial of justice to him.
" Right down to the nineteenth century the choice of the wrong writ involved the loss of the action, even though all the merits were with the plaintiff.
"(2) Gradually, however, courts subordinated procedure to the claims of justice.
In Ma Shwe Mva vs Maung Mo Maung, (3) Lord Buckmaster said : "All rules of court are nothing but provisions intended to secure proper adminis tration of justice.
It is therefore essential that they should be made to serve and be subordinate to that purpose.
Speaking in the same vein, Justice Ameer Ali said : "Rules of procedure are not made for the purpose of hindering justice." (See (Raja) Indrajit Pratap Bahadur Sahi vs Amar Singh) (4) Our decision restores that primacy of procedure over justice.
It makes section 86(1) a tyrannical master.
The rigidity of the rule of precedent ties me to its chains.
My only hope now is that Parliament would make a just choice between the social interest in the supply of copies by the election petitioner along with his election petition and the social interest in the purity of election by excluding section 81(3) from the purview of section 96(1) of the Act.
Appeal dismissed.
V.P.S. (1) [1971] 1 section C. R. 821.
(2) Holdsworth: A History of English Law, 9, 248.
(3) A.I.R. 1922 P. C. 249 at p. 250.
(4) A.I.R. 1923 P. C. 128 at P. 135.
| IN-Abs | The first part of section 81 (3) of the Representation of the People Act, 1951, provider that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition, and section 96 (1) provides that the High Court shall dismiss an election petition which does not comply with the provisions of section 81.
The appellant filed an election petition challenging the respondent 's election to the State Legislative Assembly, but did not file the requisite number of spare copies within the period of limitation.
The High Court dismissed the petition on the ground of non compliance with the mandatory requirement of section 81 (3).
Dismissing the appeal to this Court, HELD: (Per P. Jaganmohan Reddy and P. K.Goswami, JJ.) Whether a particular provision in a statute is mandatory or directory has to be construed from the scheme and object of the provisions.[25H] The right to challenge an election is conferred under the Representation of the people Act, which is made in conformity with the provisions of article 329 (b) of the Constitution.
It is a special right conferred under a self contained special law and the Court will have to seek answers to the questions raised within the four corners of the Act.
The power of the court are circumscribed by the provisions.
it is not a common law right and an election petition cannot be equated with a plaint in a civil suit.
Since the principal object of the Act is purity of elections, when an election is challenged under the Act, expeditious trial of the dispute is sought to be enforced by the Legislature making all safeguards against delay in getting rid of any taint in the result of the election.
But the very object of expeditious trial will be defeated if the presentation of the election petition should be treated casually and lightly, permitting all kinds of devices to delay the trial.
The purpose of enclosing the copies of the election petition for all the respondents is to enable quick dispatch of the notice with the contents of the allegations for service on the respondents.
if there is any halt or arrest in the progress of the case, the object of the Act will be completely.
frustrated.
Therefore, the first part of section 81 (3) is a peremptory provision and total non compliance with it will entail dismissal of the election petition under section 86.
[27H; 99E G] Jagat Kishore Prasad Narain Singh vs Rajindra Kumar Poddar and Others, [1971] 1 S.C.R. 821, Raza Buland Sugar Co. Ltd. V. Municipal Board Rampur , Montreal Street Railway Company vs Normandin, ; Charan Lal Sahu vs Nand Kishore Bhatt and Others, ; , Ch Subba Rao vs Member, Election Tribunal ; and Dr. Anup Singh vs Abdul Ghani ; , referred to.
Per Dwivedi J: The election petition is liable to be dismissed in view of the decision of this Court in Jagat Kishore Prasad Narain Singh vs Rajindra Kullar poddar and others, (19711 1 S.C.R. 821.
But this makes section 86 (1) a tyrannical master giving primacy to procedure over justice.
But it is for Parliament to make a just choice between the social interest in the Supply of copies for expeditious disposal and the social interest in the Purity of election by excluding section 81 (3) from the purview of section 96 (1).
|
minal Appeal, No. 57 of 1973.
Appeal by special leave from the judgment and order dated the 9th February 1973 of the Gujarat High Court at Ahmedabad in Criminal Revision Application No. 86 of 1973.
Y. section Chitaley and section K. Dholakia, for the appellants.
G. Das, section N. Anand and M. N. Shroff, for the respondent.
The Judgment of the Court was delivered by CHANDRACHUD, J.
Appellants 1, 2, 4, 5 and 6 are the directors of Rajnagar Spinning and Weaving Manufacturing Co. Ltd., Ahmedabad, and appellant No. 3 is an officer of the said company.
On March 19, 1969 a complaint was lodged against them by respondent 1, an Inspector appointed under the Employees ' Provident Funds Act, 1952 that they bad failed to pay a sum of Rs. 1,39,419 .50 being the contribution to the Provident Fund for the months of June, July and August.
1968 and that thereby they had contravened the provisions of Paragraph 38(1) of the Employees ' Provident Funds Scheme.
1952, an act punishable under Paragraph 76(a) of the Scheme.
An investigation was made into the affairs of the company under section 15 of the Industries (Development and Regulation) Act, 1951 and on being satisfied that the company was managed in a manner highly detrimental to public interest, the Government of India issued an order dated January 7, 1972 authorising the Gujarat State Textile Corporation to take over the management of the company.
On May 69 1972 the Gujarat Government issued a notification declaring the company to be a "relief undertaking" under section 4(1)(a)(iv) of the Bombay Relief Undertakings (Special Provisions) Act, 1958 ( 'the Act '), and directing that "all rights, privileges, obligations and liabilities accrued or incurred before the undertaking was declared a relief undertaking and any remedy for the enforcement thereof shall be suspended and all the proceedings relative thereto pending before any Court, tribunal, officer or authority shall be stayed with effect from 6th May 1972. .
The appellants filed one application after another asking the court which was seized of the matter to stay the prosecution in view of the notification issued by the Government of Gujarat.
Two of such applications were rejected by the learned City Magistrate, III Court, Ahmeda bad.
Appellants acquiesced in one of the orders, carried the other in revision to the High Court but withdrew that proceeding.
on October 27, 1972 they made yet another application for the same relief which also was rejected by the learned Magistrate.
He took the view, as in the two earlier applications, that the operation of section 4 of the Act is restricted to the statutes mentioned in the Schedule to that Act and that clause (iv) of section 4(1) did not contemplate stay of criminal proceedings.
The High Court of Gujarat rejected summarily the revision application filed by the appellants against the judgment of the learned Magistrate.
This appeal by special leave is directed against the judgment of the High Court.
52 We are concerned in this appeal with the narrow question whether the prosecution pending against the appellants under Paragraph 76(a) of the Employees ' Provident Funds Scheme, 1952 is liable to be stayed by virtue of the notification issued by the Government of Gujarat on May 6, 1972.
That notification was issued in exercise of the power conferred by section 4(1)(a)(iv) of the Act, which reads thus : "4.
(1) Notwithstanding any law, usage, custom, contract, instrument, decree, order, award, submission, settlement, standing order or other provision whatsoever, the State Government may, by notification in the official Gazette, direct that (a) in relation to any relief undertaking and in respect of the period for which the relief undertaking continues as such under sub section (2) of section 3 (iv) any right, privilege, obligation or liability accrued or incurred before the undertaking was declared a relief undertaking and any remedy for the enforcement thereof shall be suspended and all proceedings relative thereto pending before any court, tribunal, officer or authority shall be stayed;" all proceedings relative thereto" patently means all proceedings relating to "any right, privilege, obligation or liability accrued or incurred before the undertaking was declared a relief undertaking".
The obligation or liability which sub clause (iv) speaks of is an obligation or liability incurred by the undertaking before it was declared a relief undertaking.
In other words sub clause (iv) concerns itself with the pre existing obligations and liabilities of the undertaking and not of its directors managers or other officers, The obligation or liability of these persons is not comprehended within the words of ' sub clause (iv).
Clause (a) of section 4(1) shows that the power of the State Government is itself restricted to giving directions referred to in sub clause (iv), "in relation to any relief undertaking".
Obligations and liabilities of the directors or other officers of the undertaking are not in a true sense obligations and liabilities in relation to the relief undertaking.
In plain and simple language they ark, the obligations and liabilities of such persons themselves.
Their obligations and liabilities have to be viewed from a different angle than the, obligations and liabilities of the company itself which only acts impersonally.
The object of section 4(1)(a)(iv) is to declare, so to say, a moratorium on actions against the undertaking during the currency of the.
notification declaring it to be a relief undertaking.
By sub clause (iv), any remedy for the enforcement of an obligation or liability against the relief undertaking is suspended and proceedings which are already commenced are to be stayed during the operation of the notification.
Under section 4(b), on the notification ceasing to have force, such obligations and liabilities revive and become enforceable and the proceedings which are stayed can be continued.
These provisions are 53 aimed at resurrecting and rehabilitating industrial undertakings brought by inefficiency or mismanagement to the brink of dissolution, posing thereby the grave threat of unemployment of industrial workers. 'Relief undertaking ' means under section 2(2) an industrial undertaking in respect of which a declaration under section 3 is in force.
By section 3, power is conferred on the State Government to declare an industrial undertaking as a relief undertaking, "as a measure of preventing unemployment or of unemployment relief". 'Relief undertakings, so long as they continue as such, are given immunity from legal actions so as to render their working smooth and effective.
Such undertakings can be run more effectively as a measure of unemployment relief, if the conduct of their affairs is unhampered by legal proceedings or the threat of such proceedings.
That is the genesis and justification of section 4(1)(a)(iv) of the Act.
Thus neither the language of the statute nor its object would justify the extension of the immunity so as to cover the individual obligations and liabilities of the director and other officers of the undertaking.
If they have incurred such obligations or liabilities, as distinct from the obligations or liabilities of the undertaking, they are liable to be proceeded against for their personal acts of commission and omission.
The remedy in that behalf cannot be suspended nor can a proceeding already commenced against them in their individual capacity be stayed.
Indeed, it would be strange if any such thing was within the contempla tion of law.
Normally, the occasion for declaring an industry as a relief undertaking would arise out of causes connected with defaults on the part of its directors and other officers.
To declare a moratorium on legal actions against persons whose activities have necessitated the issuance of a notification in the interest of unemployment relief is to give to such persons the benefit of their own wrong.
Section 4(i)(a)(iv) therefore advisedly limits the power of the State Government to direct suspension of remedies and stay of proceedings involving the obligations and liabilities in relation to a relief undertaking and which were incurred before the undertaking was declared a relief undertaking.
Paragraph 38(1) of the Employees ' Provident Funds Scheme, 1952 imposes an obligation on 'The employer ' to pay the Provident Fund contribution to the Fund within 15 days of the close of every month.
The Scheme does not define 'Employer ' but Paragraph 2(m) says that words and expressions which are not defined by the Scheme shall have the meaning assigned to them in the Employees ' Provident Funds Act.
Section 2(e)(ii) of that Act defines an 'Employer ', to the extent material, as the person who, or the authority which, has the ultimate control 54 over the affairs of an establishment and where the said affairs are entrusted to a manager, managing director Or managing agent, such manager, managing director or managing agent.
Thus the responsibility to pay the contributions to the Fund was of the appellants and if they have defaulted in paying the amount, they are liable to be prosecuted under Paragraph 76(a) of the Scheme which says that if any person fails to pay any contribution which he is liable to pay under the Scheme, he shall be punishable with six months ' imprisonment or with fine which may extend to one thousand rupees or with both.
Such a personal liability does not fall within the scope of section 4(1)(a)(iv) of the Act.
We therefore dismiss the appeal and direct that the prosecution shall proceed expeditiously.
P.B.R. Appeal dismissed.
| IN-Abs | The appellants, five of whom were directors and one an officer of a company, were prosecuted under the Employees Provident Funds Act, 1952 on the ground that they had failed to pay the contribution to the Provident Fund and thereby committed an offence punishable under paragraph 76(a) of the Employees Provident Fund Scheme, 1952.
Later, an investigation was made into the affairs of the company under section 15.
of the Industries (Development and Regulation) Act, 1951 and an order was issued authorising the Gujarat State Textile Corporation to take over the management of the company.
By a notification the State Government declared the company to be a "relief undertaking" under section 4 (1) (a) (iv) of the Bombay Relief Undertakings (Special Provisions) Act, 1958 and directed that "all rights, privileges, obligations and liabilities accrued or incurred before the undertaking was declared a relief undertaking and any remedy for the enforcement thereto shall be suspended and all the proceedings relevant thereto pending before any court, tribunal, officer or authority shall be stayed" with effect from a certain date.
An application filed by the appellants for stay of the prosecution in view of the notification issued by the Government was rejected by the lower court on the view that .the operation of section 4 of the 1958 Act was restricted to the statutes mentioned in the Schedule to that Act and that clause (iv) of section 4 (1) (a) did not contemplate stay of criminal proceedings.
On appeal the High Court summarily rejected the revision application.
The appellants came in appeal to this Court by special leave.
On the question whether the prosecution pending against the appellants under paragraph 76 (a) of the Employees Provident Funds Scheme 1952 is liable to be stayed by virtue of the notification issued by the State Government.
Dismissing the appeal, HELD : The personal liability of the directors and officers does not fall within the scope of section 4 (1) (a) (iv) of the Act.
The responsibility to pay the contribution to the Fund was of the appellants and if they had defaulted in paying the amount they were liable to be prosecuted under paragraph 76 (a) of the Scheme.
The phrase "all proceedings relative thereto" patently means all proceedings relating to "any right, privilege, obligation or liability accrued or incurred before the undertaking was declared a relief undertaking".
Sub clause (iv) concerns itself with the pre existing obligations and liabilities of the undertaking and not of its directors.
managers or other officers.
Neither the language of the statute nor its object would justify the extension of the immunity so as to cover the individual obligations and liabilities of the directors and other officers of the undertaking.
If they had incurred such obligation or liabilities as distinct from the obligations or liabilities of the undertaking they were liable to be proceeded against for their personal acts of commission and commission.
The remedy in that behalf cannot be suspended nor can a proceeding already commenced against them in their individual capacity be stayed.[52E; 53E] The occasion for declaring an industry as a "relief undertaking" would arise out of causes connected with the defaults on the part of its directors and other officers.
To declare a moratorium on legal actions against persons whose activities have necessitated the issuance of a notification in the interest of unemployment relief is to give such persons the benefit of their own wrong.
Section 4 (1) (a) (iv) advisedly limits the power of the State Government to direct suspension of all remedies and stay of proceedings involving the obligations and liabilities in relation to a relief undertaking and which were incurred before the undertaking was declared a relief undertaking.
[53F] 51
|
l Appeals Nos. 1752 to 1769 of 1970 From the Judgment and Order dated the 24th April, 1970 of the Mardas High Court in Writ Petitions Nos. 239, 346, 999, 1000, 1007, 1030, 1071, 1101, 1102, 1223, 1242, 1270, 1271, 1724, 1725, 1748, 2640 and 3252 of 1969.
Y. section Chitle, V. M. Ganpule, K. R. Choudhury and K. Rajendra Choudhury, for the appellants.
L. N. Sinha, Solicitor General of India, section P. Nayar, and M. N. Shroff, for the respondents.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The core of the contention urged by the appellants in these various appeals filed by certificate under article 133(1)(a) & (c) of the Constitution is that the excise duty on matches sought to be levied on these medium sized manufacturers of Shivakashi wears the mask of equality but in its true face bears the marks of unequal justice violative of article 14 of the Constitution of India.
Shri Chitale, learned counsel for the appellants, has focused his arguments on one grievance only and, we think, with good reason that the discriminatory fiscal treatment of his clients is unconstitutional, the vice being treatment of dissimilar categories similarly.
To compress his whole argument in a single sentence, it is that the appellants, small manufacturers of matches, have been subjected by the impugned notification to excise duty at the same onerus rate as has been applied to larger producers, wilfully indifferent to a historically well recognised classification between the smaller and the larger group of, match manufacturers, and the injury sustained flows from this failure to classify and deal differentially with sets of producers who are unequal in their economic capabilities in the matter of production and marketing a sort of traumatic egality.
In brief, equal treatment of unequal groups may spell invisible yet substantial discrimination with consequences of unconstitutionality.
That dissimilar things Should not be treated similarly in the name of equal justice is of Aristotelian vintage and has been, by implication, enshrined in our Constitution.
The facts which unfold the case of the appellants may now be set out.
The match industry in India has grown over the decades and Shivakashi occupies an important place in the production geography of matches.
From the point of view of manufacturing techniques, the safety match industry in our country comprises two distinct categories the mechanised sector occupied by a few big whales and the non 123 mechanised sector comprising varying sizes of production units ranging from the small fry organised on a cottage industry basis to considerable producers who have developed manufacturing and marketing muscles sufficient to compete with the power using big four the WIMCO, the AMCO, the ESAVI, and the Pioneer.
The Tariff commission, Report on this industry has stated "Unlike units in the mechanised sector which have powerdriven equipment for carrying out all the important operations including manufacture of splints and veneers, frame filling dipping, box making, etc.
, those in categories 'B ' and 'C ' follow almost identical manufacturing process, obtaining their splints and veneers from outside suppliers and getting such important.
operations as box making and frame filling done by outside domestic labour on piece rate basis.
Only such of the processes, as dipping, box filling, banderolling and packing which under Excise or Explosive Act regulations cannot be entrusted to outside labour are carried out in the factory sheds of the units and the workers employed for these also are mostly paid on piece rate basis.
All the operations, whether, undertaken in the factory premises or passed on to outside piece work labour to be carried out in the homes of the latter conjointly with other members of the family, are done by manual process.
The same system is followed by 'D ' category units as well, except those sponsored by K. & V. 1.
C. some of which manufacture their own splints and veneers," Classified on the basis of quantity turn out and other germane factors, a fourfold categorisation into 'A ', 'B ', 'C ' and 'D ' was extent in the industry roughly corresponding to the techniques of production and the use of power adopted by each.
The Tariff Commission explained this aspect and reported on the operation of the differential excise levy system on production and trade practices.
Counsel for the appellants has rested his case of discrimination by subversive equality or rather non discrimination where a deserving differentiation is the desideratum, on the findings of the Tariff Commission report.
We might as well give copious but relevant excerpts from it to discern the foundation.
of the argument.
The Report runs on to state "As indicated in Appendix 11, according to the excise tariff classification units in the match industry now stand grouped into four classes, namely 'X, 'B ', 'C 'and 'D ' not on any tech nological differentiation but on the basis of output 'A ' class comprising factories whose annual output exceeds 4,000 million match sticks, 'B ' class comprising factories whose annual output exceeds 500 million match sticks but does not exceed 4,000 million match sticks, 'C ' class comprising factories whose annual output exceeds 50 million match sticks but does not exceed 500 million match sticks and 'D ' class comprising factories whose arm, all output does not exceed 50 million match sticks.
According to this classification the factories belonging to WIMCO, AMCO and ESAVI fall under category 'A, the rest comprising the units 124 in the non mechanised sector fall under the other three categories, namely 'B ', 'C ', and 'D ', . . . . . . "selling system (iv) Small producers.
The system of selling adopted by these manufacturers varied according to their status and financial resources.
The system almost universally followed by such producers is to make outright sales, without any discount or commission to wholesalers, both out station and local.
The bigger, among such producers belonging to category 'B ' are reported in some case s to sell as well through dealers and sole selling agents.
Many of them have also got their own depots and regular stockists in a limited number of out station centres.
As regards 'C ' and 'B ' class producers, the system of sales covert the following variants according to facilities available to them : (i) outright ,sales to wholesale merchants, local or out station; (ii) sales through joints schemes of depots which stock different brands from several producers; (iii) sales by sending goods in their own vans in bulk to distributors and dealers in nearby states; and (iv) .sales through their own salesman who deliver goods in local markets on the shopkeepers on bicycles (a special feature of 'D ' class units).
From the replies received by us from units in the small scale sector it would appear that those in category 'B ' situated in the Shivakasi/Sattur/Kovilpatti area have over some years in the past established contacts and developed a fairly wide selling system enabling them to cater to the markets in distant States including West Benga l, U.P., Delhi, Gujarat and practically all the States in the South.
The size of their operations has all along ,enabled them to undertake supply in wagon loads at the concessional rates, which is an important consideration for developing distant markets to be served by rail transport." "Although they are not comparable to WIMCO in having a country wide distributive Organisation, these units evinced till recently all the symptoms of a steady and healthy development, some of them having reached the maximum limit (4,000 million sticks) of Category 'D ' with a reputation for their brands in far off markets.
They had the resources to support this progressive development and a few of them have represented that with an improvement of the climate of the trade which has been completely vitiated by the slab system of excise duties (see para graph 11) and given necessary facilities they would be able to reestablish the markets they had assiduously built up and even initiate a scheme of gradual mechanisation of important processes in their factories for the betterment of the quality of their products.
In the present context, it is worth taking note of the fact that the credit for an expanding market for matches produced in the non mechanised sector is attributable largely to the sales endeavours of factories which had grown to be 'B 'class units that had necessary resources for the purpose and were able the maintain quality.
" * * * * 125 "In contrast to the 'B ' class units, the selling system of those in category 'C ' betokens a position of serious weakness.
Except the C ' class units which have been brought into existence by fragmentation of bigger units and still operate under the protecting wing of the sponsor (see paragraph 11), the new comers in this class who have no tradition, functions mostly with meagre financial resources and have no comparable advantage.
Unable to sell their output in wagon loads they are compelled to dispose of it to local financing cum trading agencies at rock bottom prices dictated by the latter for what has now come to be called consignments of "assorted labels".
This, in effect, involves a complete surrender by the 'C ' class producers to the benefit of differential excise rebate allowed to them to the detriment of others as well.
The low purchase prices of the goods enable such agencies to send consignments of mixed brands to distant places in wagon loads and find a market by of fering to the wholesalers there extremely competitive rates vis a vis the usual rates charged by 'B 'class units, the retail selling prices being the same for both.
Our examination of the problem of the small scale units in category 'C ' indicates that basically their problem is not different from other small industries suffering similar exploitation by middlemen.
As in other cases they can best be extricated from the grip of the middlemen by the establishment of suitable sales co operatives.
We draw the attention of the State Governments to this problem for initiating necessary measures for the purpose, particularly of the Government of Madras, as the concentration of such units is in that State where the problem presents itself in the most acute form, but offers favourable prospects for the establishment of several full fledged sales cooperatives with adequate membership." * * * * "There is sufficient evidence to indicate that the effects have been quite widespread and recourse has been taken to fragmentation on a fairly extensive scale." * * * * The Sivakasi Chamber has stated as follows "In the face of such unhealthy competition from 'C ' factories and the disadvantages over 'A ', the 'B ' is unable to market its production resulting in heavy accumulation of stocks.
It is now felt by 'B ' class factories that there is no other salvation for them except to convert 'B ' into 'C ' class factories in benami names, as few have since done.
It may be pointed out that 16 long established 'B ' factories have reduced themselves to 'C ' class with effect from 1st April, 1963 in this Division alone in addition to the numerous factories who have already converted from 'B 'to 'C '."As regards similar fragmentation of the larger units in category 'C ' almost identical views have been expressed by the Tirunelevely Match Association, representing 150 'C ' class match factories,in the following words : "In view of the vast difference of excise duty between.
1st and 3rd slab of excise duty in 'C '.Class there is a tendency and practice among the manufacturers to work in the first slab only and to stop therewith.
In this way starting of small new units with the motive to enjoy rebate in the first slab 126 of excise duty has become common and this has clearly resulted in loss of revenue, as well as working of units in less than the permitted Capacity.
It has been brought to our.
notice that the situation has deteriorated to such an extent as a result of the slab system that some erstwhile 'B ' units have suspended their manufacturing activities altogether and instead found it more profitable to patronise a number of newly established 'C ' class units.
Their taking over the products of the latter in their new role as a trading cum financing agency has been facilitated by their established market connections and resourcefulness.
Instances of 'B ' category units owned by individual proprietors downgrading themselves into category 'C ' and having a number of 'C ' class units set up in the name of near relations have also been noticed by us in the course of our visits to factories in the Sivakasi/Sattur/ Kovilpatti area.
The allegations about extensive fragmentation were not denied by anybody at the public inquiry.
" * * * * * "The volume of evidence, both direct and indirect, that we have received in this connection fully testifies to the fact that 'large scale fragmentation of 'B ' and 'C ' class units has taken place directly as a result of the slab system all motivated by the attraction offered by the large duty differential of 65 np for the lowest slab rate under category 'C" '.
* * * * * "From the evidence received by us "B" and "C" class units 'have to offer their match boxes generally at a discount of Rs. 2 to Rs. 3 per bundle of 5 gross boxes, i.e. at about 40 to 60 nP. per gross less than the price charged by WIMCO.
While the quality of matches produced by 'B ' class manufacturers has the reputation of being generally good and comparable to WIMCO 's matches, the 'C ' class units do not have such reputation in the market.
The 'C ' class manufacturers are handicapped by a further disadvantage on account of the lower scale of their produc tion, inasmuch as they cannot usually offer a wagon load of matches at a time for despatch to the upcountry markets for sale and have generally to bear the central sales tax.
After carefully considering all aspects of the case including estimates of costs of the manufacturers, we are of opinion that a differential of 20 nP. in the rates of excise duty per gross of match boxes between 'A ' and 'B ' class units and a differential of 30 nP. between 'B ' and 'C ' class manufacturers would be quite adequate to safeguard their respective interests.
On similar considerations a differential of 35 nP. between 'C ' and 'D ' class units would also be justified.
For reasons stated in paragraph 11 and as stressed therein, we are definitely against continuance of the slabs introduced in classes 'A ' 'B ' and 'C ' carrying dif ferential rates of excise duty, which have entailed serious repressions on the entire industry.
We, therefore, recommend the following scales of excise duty to be levied for the four classes respectively : 'For 'A ' class. . .
Rs 4.60 per gross boxes 'For 'B ' class. . .
Rs.4.40 per gross boxes For 'C ' class. . . .Rs.4.10 per gross boxes 'For 'D ' class. . .
Rs.3.75 per gross boxes 127 The Tariff Commission recommended the abolition of sub classification for the purposes of excise duty and suggested separate scales of excise duty to be levied for the four classes of units, namely, 'A ', 'B ' ' C ' and 'D '.
Based on these recommendations, the slab system of excise duty was abandoned by Government and the category wise rate was adopted.
The impact on production of the differential duty scheme was a process of splintering of the 'B ' group to inhale the advantages offered to the 'C ' group resulting in a reduction in total production, thanks to the thinning tendency in the 'B ' group.
Indeed, the fiscal misdirection, by showing concessional rates to the 'C ' category as against 'B ' category, generated pseudo 'C ' category producers from out of the erstwhile 'B ' category so that the bona fide small scale manufacturers falling in the C ' category were flooded out.
Moreover, the genuine C ' category manufacturers were exploited by the middlemen who snapped up the margin of tax concession for themselves, defeating the object of concessional duty for the small producer.
This dilemma induced Government to revise its fiscal thinking and led to the impugned notification which withdrew the tax concession to the C ' category and equated it with the 'B ' category.
Section 3 of the Central Excise and salt Act, 1944 empowers the levy and collection of duties on goods produced or manufactured in the State, the rate being set forth in the First schedule to the Act.
Item 38 in the First Schedule relates to matches.
Section 37 contains the rulemaking power and section 37(1) confers power on the Central Government by rules to exempt any goods from the whole or any part of the duty imposed by the Act.
Under this power the Central Government issued a notification adopting a "classification" approach for extending concessional rates.
Originally, a broad classification was made as between matches manufactured by use of machinery and those by other means.
Among the second category a sub classification was made as 'B ', C ' and ID ' for the purposes of concessional rates.
In 1966, a uniform leavy of Rs. 4.15 per gross of match boxes was made doing away with 'B ' to ID ' classes.
In 1967 this position was revised by notification No. 162 of 1967, which is challenged before us.
It reads "In exercise of the powers conferred by sub rule (1) of rule 8 of the Central Excise Rules, 1955, and in supersession of the Notification of the Government of India in the Ministry of Finance (Department of Rev enue and Insurance) No. 115/67 Central Excise, dated the 8th June, 1967, the Central Government hereby exempts matches specified in column (2) of the Table below, falling "under Item No. 38 of the First Schedule to the Central Excise and Salt Act, 1944 (1 of 1944) and cleared by any manufacturer for home consumption, from so much of the duty of excise leviable thereon as is in excess of the rate specified in the corresponding entry in column (3) of the said table: 128 TABLE Category Description of matches Rate (Rs per gross of boxes 50 mat ches each) 1.
Matches in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power . 4 .60 2.
Matches in or in relation to the manufacture of which no process is ordinarily carried on with the aid of power . 4 .30
Provided that (1) Matches referred to in category 2 and cleared for home consumption during the financial year from a factory from which the total clearance of matches during that year is not, as per declaration made by the manufacturer under this notification ' estimated to exceed 75 million matches, shall be allowed to be cleared at the rate of Rs. 3.75 per gross of boxes 5O matches each, upto 75 million matches and the quantity of matches, if any, cleared in excess, and upto 100 million matches shall be allowed to be cleared at the rate of Rs. 4.30 per gross of boxes of 50 matches each; and if the clearance in such factory exceeds 100 million matches during the financial year, the manufacturer shall be required to pay at the rate of Rs. 4 30 per gross of boxes of 50 matches each, on the entire quantity cleared during the financial year. . " The upshot of this system of duty is that 'B ' and 'C ' categories of old will now be treated equally and the grievance of the petitioners, who are 'C ' category manufacturers is that clubbing them together with the far stronger 'B ' type manufacturers is virtually condemning them to gradual extinction.
Treating unequals as equals and compelling both to bear equal burdens is to show the 'C ' type manufacturers the way out.
It is urged that the test of capacity of each group in the industry to bear the levy, recognised in the past and approved in the Tariff Commission Report, is given the go bye now.
The contention, in reply, by the State is that at present the classification of the manufacturers is based on the use of power which in turn has a rational relation to the techniques and processes of production and their ability to bear the burden of the levy.
It is further argued that the Government did give effect to the recommendations of the Tariff Commission regarding the four fold classification but, finding certain evils developing, the Central Excise Re organisation Committee went into the subject and suggested methods to re orient the scale and scope of excise duty.
This Committee 's report led to the current noti fication and the dichotomy between mechanised and non mechanised industry proceeds on a rational differentia which has a substantial relation to the legislative end.
There is no doubt that in the past among the non mechanised manufacturers of matches a further classification based on viability 129 had been made.
It is also true that the financial resources, the capacity to command a market on their own without depending on intermediaries, etc., marked off the 'B ' category from the 'C ' category.
But then experience gathered subsequently disclosed certain evils which the State took note of and endeavoured to set right.
Ulitmately the present notification was issued obliterating the distinction which gave a concessional edge to the 'C ' group over the 'B ' group.
The learned counsel for the appellants persuasively pleaded that this unsocialistic step has left the small producers like his clients in the cold and virtually compelled them to retire from the industry.
May be, there is force in this grievance.
Instead of protecting the tiny manufacturer from the injurious intermediary and inhibiting the larger pro ducer from resorting to the device of self division and other make believe tactics, the State has resorted to a policy of equal levy from both which, according to the counsel, hits the poor and helps the better off.
This is a criticism of legislative judgment, not a ground of judicial review.
We agree that bare equality of treatment regardless of the inequality of realities is neither justice nor homage to the constitutional principle.
Anatole France 's cynical statement comes to our mind in this context "The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.
" The forensic focus turns on unconstitutional non classification of the 'B ' and 'C ' categories and the vice of lugging all non mechanised 'Producers together into one mass.
The Court is being invited to compel the legislative and executive wings to classify, but we feel that from the judicial inspection tower the Court may only search for arbitrary and irrational classification and its obverse, namely, capricious uniformity of treatment where a crying dissimilarity exists in reality.
Right at the threshold we must warn ourselves of the limitations of judicial power in this jurisdiction.
Mr. Justice Stone of the Supreme Court of the United States has delineated these limitations in United States vs Butler(1) thus : "The power of courts to declare a statute unconstitutional is subject to two guiding principles of decision which ought never to be absent from judicial consciousness.
One is that courts are concerned only with the power to enact statutes, not with their wisdom.
The other is that while unconstitutional exercise of power by the executive and legislative branches of the government is subject to judicial restraint, the only check upon our exercise of power is our own sense of self restraint For the removal of unwise laws from the statute books appeal lies not to the courts but to the bellot and to the processes of democratic government.
" In short, unconstitutionality and not unwisdom of a legislation is the narrow area of judicial review.
In the present case unconstitu (1) ; Sup.
Ct.312=80 L. ed.477 (1936)=American Constitutional Law hird edn.
by Tresolini and Shapiro.
130 tionality is alleged as springing from.
lugging together two dissimilar categories of match manufacturers into one compartment for like treatment.
Certain principles which bear upon classification may be mentioned here.
It is true that a State may classify persons and objects for the purpose of legislation and pass laws for the purpose of obtaining revenue or other objects.
Every differentiation is not a discrimination.
But classification can be sustained only if it is founded on pertinent and real differences as distinguished from irrelevent and artificial ones.
The constitutional standard by which the sufficiency of the differentia which form a valid basis for classification may be measured, has been repeatedly stated by the courts.
If it rests on a difference which bears a fair and just relation to the object for which it is proposed, it is constitutional.
To put it differently, the means must have nexus with the ends.
Even So, a. large latitude is allowed to the State for classification upon a reasonable basis and what is reasonable is a question of practical details and a variety of factors which the court will be reluctant and perhaps ill equipped to investigate.
In this imperfect world perfection even in grouping is an ambition hardly ever accomplished.
In this contest, we have to remember the relationship between the legislative and judicial departments of government in the determination of the validity of classification.
Of course, in the last analysis courts possess the power to pronounce on the constitutionality of the acts of the other branches whether a classification is based upon substantial differences or is arbitrary, fanciful and consequently illegal, At the same time, the question of classification is primarily for legislative judgment .and ordinarily does not become a judicial question.
A power to classify being extremely broad and based on diverse considerations of executive pragmatism, the judicature cannot rush in where even the legislature warily treads.
All these operational restraints on judicial power must weigh more emphatically where the subject is taxation.
One facet of the equal protection clause, upheld by the Indian Courts and relevant to the present case, is that while similar things must be treated similarly, dissimilar things should not be treated similarly.
There can be hostile discrimination while maintaining a facede of equality.
Procrustean cruelty cannot be equated with guarantee of constitutional equality, and we have to examine whether such is the lot of the appellants.
This Court has in several rulings highlighted this sensitive under side of equal protection.
Indeed, the complaint of the petitioners is that by abolition of the difference in fiscal burden between categories 'B ' and 'C ' an insidious subversion of equal treatment has been effected.
Another proposition which is equally settled is that merely because there is room for classification it does not follow that legislation without classification is always unconstitutional.
The court cannot strike down a law because it has not made the classification which commends to the court as proper.
Nor can the legislative power be said to have been unconstitutionally exercised because within the class a sub classification was reasonable but has not been made.
131 It is well established that the modern State, in exercising its sovereign power of taxation, has to deal with complex factors relating to the objects to be taxed, the quantum to be levied, the conditions subject to which the levy has to be made, the social and economic policies which the tax is designed to subserve, and what not.
In the famous words of Holmes, J., in Bain Peanut Co. vs Pinson(1) : "We must remember that the machinery of Government would not work if it were not allowed a little play in its joints." In the present case, a pertinent principle of differentiation, which is visibly linked to productive prowess, has been adopted in the broad classification of power users and manual manufacturers.
It is irrational to castigate this basis as unreal.
Indeed, the soundness of this distinction is not denied.
The challenge is founded on the failure to miniclassify between large and small sections of manual match manufacturers.
But ours is not to reason why, that being a policy decision of Government dependent on pragmatic wisdom playing on imponderable forces at work.
Our jurisdiction halts where the constitutional touchstone of a rational differentia having a just relation to the legislative and of revenue raising is satisfied.
Gratuitous judicial advice on the socialistic direction of fiscal policy is de trop.
We desist from that enterprise and leave the petitioners and men of his ilk to seek other democratic remedies in that behalf, it being beyond our area normally to demolish the tax structure because micro classification among a large group has not been done by the State.
Absolute justice to every producer is a self defeating adventure for any administration and genera I direction, not minute classification, is all that can be attempted.
For these reasons we find ourselves in agreement with the High Court in its refusal to strike down the notification under section 3 of the Central Excise and Salt Act, 1944.
Before concluding we may make a passing reference to the few decisions cited by appellants ' counsel.
In K. T. Moopil Nair vs State of Kerala(2), Sinha, C.J., emphasized that article 14 may be violated even though the law may, on the face, be equal if in substance unequal things are treated equally.
In State of Kerala vs Haji K. Haji Kutty Nahia(3), Shah J., observed : "There objects, persons or transactions essentially dissimilar are treated by the imposition of a uniform tax, discrimination may result, for, in our view, refusal to make a rational classification may itself in some cases operate as denial of equality.
A similar view has been taken in Khandige Sham Bhat vs The Agricultural Income Tax Officer (4).
it is sound law that refusal to make rational classification where grossly dissimilar subjects are treated by the law violates the mandate of article 14.
Even so, where the limited classification adopted in the present case is based upon a relevent differentia which has a nexus to the (1) ; ; 501.
(2) ; (3) C.As.
1052 etc.
of 1968; judgment dated August 13, 1968.
(4) ; ,817.
132 legislative and of taxation, the. court cannot strike down the law on the score that there is room for further classification.
Refusal to classify is one thing and it bears on constitutionality, not launching on micro classification to work out perfect justice is left to executive expediency and legislative judgment and not for forensic wisdom.
"The relationship between the legislative and judicial departments of government in the.
determination of the validity of classification is wellsettled. the authorities state with unanimity that the question of classification is primarily for the legislature and that it can never become a judicial question except for the purpose of determining, in any given situation, whether the legislative action is clearly unreasonable.
The legislative classification is subject to judicial revision only to the extent of seeing that it is founded on real distinctions the subjects classified, and not on artificial or irrelevant ones used for the purpose of evading the constitutional prohibition." (American Jurisprudence 2d : vol. 16; para 496).
"In a classification for governmental purposes there cannot be an exact exclusion or inclusion of persons and things.
The constitutional command for a state to afford equal protection of the law sets a goal not attainable by the invention and application of a precise formula.
Classification in law as in the other departments of knowledge or practice, is the grouping of things in speculation or practice because they agree with one another in certain particulars, and differ from other things in those particulars.
It is almost impossible in some matters to foresee and provide for every imaginable and exceptional case, and a legislature ought not to be required to do so at the risk of having its legislation declared void, although appropriate and proper upon the general subject upon which such legislation is to act, so long as there is no substantial and fair ground to say that the statute makes an unreasonable and unfounded general classification, and thereby denies to any person the equal protection of the laws.
Hence, a large latitude is allowed to the states for classification upon any reasonable basis, and what is reasonable is a question of practical details into which fiction cannot enter." (ibid para 504).
We have said enough to delineate the finer frontiers of the jurisdiction of the court and the legislature.
Having sensitive regard to the obligation of the State to bring the law, including the tax law, into pulsing relationship with life, including the life of the country 's economy, we see nothing so grossly unfair as to attract the lethal power of the court to strike down the notification under challenge.
We dismiss the appeals but in the circumstances without costs to the respondents.
| IN-Abs | The match industry in India has grown over the decades.
From the point of view of manufacturing techniques the safety match industry comprises of two distinct categories: the machanised sector occupied by a few big manufacturers and the non mechanised sector comprising varying sizes of production units.
The Government classified the safety match manufacturers into four categories depending on the quantity turn out and other relevant factors.
But the Tariff commission recommended the abolition of sub classification for the purpose of levying excise duty and suggested separate scales of excise duty to be levied for four classes of units, namely, A, D, C and D. Based on these recommendations the slab system of excise duty was abandoned by the Government and the category wise rate was adopted.
As a result of the adoption of the differential duty scheme the advantages offered to the 'C ' group went to the 'B ' group which in turn resulted in fall in production.
It also generated pseudo C category producers from out of the erstwhile B category which ultimately eliminated C category producers.
The Government, therefore, withdrew the tax concession to C category and equated it with B category.
The Government of India had from time to time issued notifications under section 37 of the Central Excise and Salt Act, 1944.
The notification issued in 1967 levied excise duty on the basis of manufacture of matches of which "any process is ordinarily carried on with the aid of power".
As a result of this notification the B and C categories of old were now treated equally.
The change in classification of the manufacturers was based on the use of power which in turn had a rational relation to the techniques and processes of production and their ability to bear the burden of the levy.
This was done on the basis of recommendations of the Central Excise Re organisation Committee.
The High Court refused to strike down the notification.
it was contended in this Court that this unsocialistic step had left the small producers in the cold and virtually compelled them to retire from the industry and is thus discriminatory.
Dismissing the appeals to this Court, HELD This is a criticism of legislative judgment, not a ground of judicial review.
The Court is being invited to compel the legislative and executive wings to classify but from the judicial inspection tower the court may only search for arbitrary and irrational classification and its obverse, namely, capricious uniformity of treatment where a crying dissimilarity exists in reality.
Unconstitutionality and not unwisdom of a legislation is the narrow area of judicial review.
[129 E] The question of classification is primarily for legislative judgment and ordinarily does not become a judicial question.
The power to classify being extremely broad and based on diverse considerations of executive pragmatism the judicature cannot rush in where even the legislature warily treads.
All these operational restraints on judicial power must weigh more emphatically where the subject is taxation.
[130 E] It is equally well settled that merely because there is room for classification it does not follow that legislation without classification is always unconstitutional.
The court cannot strike down a law because it has not made the classification which commends to the court as proper.
Nor can the legislative power be said to have been unconstitutionally exercised because within the class a sub classification was reasonable but has not been made.
[130 H] 122 In the present cage, a pertinent principle of differentiation, which is visibly linked to production prowess, has been adopted in the broad classification of power users .and manual manufacturers.
It is irrational to castigate this basis as unreal.
[131 C] K.T. Moopil Nair vs State of Kerala, ; , State of Kerala vs Haji K. Hail Kutty Naha.
As Nos 1052 etc.
of 1968; judgment dated August 13, 1968 and Khandige Sham Bhat vs The Agricultural Income Tax Officer, ; , 817, followed.
|
n Nos. 1679, 1662 and 1681 of 1973.
(Under Article 32 of the Constitution for issue of a writ in the nature of Habeas Corpus.) R. K. Jain, amicus curiae for the Petitioner.
M. M. Kshatriya and G. section Chatterjee for the Respondent.
The Judgment of the Court was delivered by SARKARIA J.
This judgment will dispose of all the three petitions above mentioned under Article 32 of the Constitution of India.
It will be convenient to first take up Writ Petition No. 1679 of 1973.
The petitioner Shaik Hanif, aged 40 years, was arrested on February 23, 1973 in pursuance of a detention order, dated February 19, 1973, passed by the District Magistrate, West Dinajpur in West Bengal under sub section
(1) read with sub section
(2) of s.3 of the (for short, 'the Act ').
On February 19, 1973, the District Magistrate reported about his detention to the State Govern ment which approved it on March 1, 1973.
The detenu made a representation which was rejected by the State Government on April 5, 1973 and forwarded to the Advisory Board for consideration.
The Board reported to the State Government on April 24.
1973 that there was sufficient cause for the detention.
Thereupon the Government confirmed the order of detention under s.12(1) of the Act and directed that the detention of the petitioner would continue "till the expiration of 12 months from the date of his detention or until the expiry of Defence of India Act of 1971 whichever is later.
" The grounds of detention as conveyed to the detenu under P. 8(1), read as under : 260 "You are being detained in pursuance of a detention order on the ground that you have been acting in a manner prejudicial to the maintenance of supplies and services essential to the community, as evidenced by the particulars given below : On 3 7 72 at dead of night you along with your associates kept concealed 20 bundles, of Telegraph copper wire weighing 2 qutls.
60 kgs.
in your court yard under earth with a view to dispose of the same in opportune moment.
The said Telegraph copper wire were recovered on 3 7 72 on the basis of the confession of your associates.
The police seized those copper wire and arrested your associate but you evaded arrest.
This activity of yours seriously affected one of the essential services to the community by disrupting Telegraph facilities to the public and thus you acted in a manner prejudicial to the maintenance of supplies and services essential to the community.
You are hereby informed that you may make a representation to the State Government against the detention order your case shall be placed before the Advisory Board within thirty days from the ' date of your detention under the order.
You are also informed that under Section 11 (Act 26 of 1971) the Advisory Board, shall if you desire to be heard, hear you in person.
Sd/ K. L. Gupta 19 2 73.
District Magistrate, West Dinajpur, Balurghat".
In answer to the Rule Nisi issued by this Court, Shri Sukuniar Sen, Deputy Secretary, Home (Special) Department, Government of West Bengal filed the counter affidavit, explaining that the district Magistrate who passed the order of detention "is at present not available for affirming the affidavit as he has been transferred from the said District".
In para 4 of the affidavit, it is stated : "It appears from the records that after receiving reliable information relating to the illegal anti social and prejudicial activities of the above named detenu petitioner relating to the maintenance of supplies and services essential to the community, the said District Magistrate of West Dinajpur passed order of detention against him under the provisions of the said Act." In para 7, it is averred "I further state that it appears from the record that the petitioner is a veteran copper wire stealer.
It was found on 3 7 72 that the petitioner and his associates kept concealed about 20 bundles of telegraph cable wire underground in the court yard of his house with a view to dispose the same at opportune moment.
The said removal of copper wire from 261 the telegraph lines resulted in disruption of telegraph service and he was detained under the said Act".
In paragraph 9 of the affidavit it is inter alia stated that the "statements made in paragraphs 3, 4, 5, 6 and 7 are based on information derived from the records kept in the office of the State Government in its Home Department (Special Section), which I verily believe to be true." Mr. R. K. Jain, who assisted the Court as amicus curiae advanced these contentions in support of the petition : (1) After the issue of Rule Nisi by this Court, it was incumbent upon the Respondent State to satisfy the Court about the legality of the detention by producing the affidavit of the District Magistrate who had.
passed the detention order.
The counter affidavit of the Deputy Secretary who did not personally deal with the case at any stage, is no substitute for the affidavit of the District Magistrate on the basis of whose subjective, satisfaction, the detention has been effected.
The omission to file the counter affidavit of the District Magistrate coupled with the other circumstances of the case, shows that the detention order was passed in an utterly casual way, without application of mind and it was therefore, illegal; (2) From the counter affidavit of the Deputy Secretary, it appears that there were "reliable information" and material (other than the solitary ground of detention communicated to the detenu) before the detaining authority on the basis of which it was satisfied that the petitioner was a "veteran copper wire stealer" and had been indulging in "illegal anti social activities prejudicial to the maintenance of supplies and services essential to the community".
Since the, nondisclosure of that information or material lo the detenu is not sought to be justified under clause (6) of Article 22, on the ground of its being facts which the detaining authority considers to be against the public interest to disclose, it was incumbent upon the authority to communicate the detenu that information and material in full.
Since this was not done, the detenu was unable to make an :effective representation.
The detention order was thus violative of the mandate of clause (5) of Article 22, and liable to be struck down on that score; (3) The Act is violative of Articles 19 and 21 of the Constitution because its : (a) Section 3 makes no provision for an objective determination of the truth of the allegations that form the basis of action under that section; (b) Section 8 does not provide for consideration of the representation of the detenu by an impartial body in accordance with the principles of natural justice; (c) Section It enables the Advisory Board to base its report on the material received by the Board from the Officer passing the order of detention without the said report being disclosed to the detenu and without affording him an opportunity to controvert the contents of the said report; 262 (d) Sections 11 and 12 empower the Advisory Board and the State Government, as the.
case may be,.
to take, into consideration materials and information without giving the detenu an opportunity to make his submissions with regard to those materials or to adduce evidence to disprove the allegations levelled against him.
(4) (a) The continuance of Emergency in as much as it suspends Fundamental Rights, indefinitely under an executive fiat is unconstitutional.
What the Parliament cannot destroy in exercise of its amendatory powers under Article 368, a fortiori, the President cannot bury by embalming and encasing the same in a Proclamation of Emergency.
Fundamental Rights guaranteed under Article 19 are essential features of the, Constitution and their indefinite suspension under the cloak of Emergency, amounts to their destruction; (b) In forming in opinion as to the necessity of proclaiming Emergency under Article 352 of the Constitution, the President has to act on certain objective facts open to judicial scrutiny.
The war having ended more than two years ago, there is no justification for continuing the Proclamation of Emergency.
We will take up contentions (1) and (2) together.
As was pointed out by this Court in Natarajan Singh vs State of Madhya Pradesh,(1) where in a habeas corpus petition a Rule Nisi is issued, it is incumbent upon the State to satisfy the Court that the detention of the petitioner was legal and in conformity not only with the mandatory provisions of the Act, but is also in accord with the requirements implicit in clause (5) of Article 22 of the Constitution.
Since the Court is precluded from testing the subjective satisfaction of the detaining authority by objective standards, it is all the more desirable that in response to the Rule Nisi the counter affidavit on behalf of the State should be sworn to by the District Magistrate or the authority on whose subjective satisfaction the detention order under s.3 was passed.
If for sufficient reason shown to the satisfaction of the Court, the affidavit of the person who passed the order of detention under s.3 cannot be furnished, the counter affidavit should be sworn by some responsible officer who personally dealt with or processed the case in the Government Secretariat or submitted it to the Minister or other Officer duly authorised under the rules of business framed by the Governor under Article 166 of the Constitution to pass orders on behalf of the Government in such matters.
In the instant case, the counter affidavit of Shri Sukumar Sen Deputy Secretary, Home, suffers from two infirmities.
Firstly, the deponent does not swear that he had at any relevant time personally dealt with the case of the detenu.
He has verified the correctness of the averments in his affidavit on the basis of facts gathered from tile official records.
Secondly, the explanation given for not furnishing the affidavit of the District Magistrate who had passed the detention order, is that the Magistrate has been transferred from that District.
The explanation is far from being satisfactory.
(1) A. I. R. 263 In Ranjit Dam vs State of West Bengal,(1) the reason given for not ' making the counter affidavit by the Magistrate himself, who had passed the detention order, was that he had since then been appointed as Secretary of the State Electricity Board.
It was held that the reason, given was not satisfactory.
"Shri Sukumar Sen is incharge of a specially created cell in the Government Secretariat of West Bengal, which maintains the records of all persons detained under the Act.
It is true that a similar reason given for not furnishing the affidavit of the Magistrate who passed the impugned order, was accepted by this Court in J. N. Roy vs State of West Bengal,(2) and instead, the counter affidavit of the Secretariat official specially entrusted with detention cases was deemed sufficient.
But that was so because nothing turnedon it.
Nevertheless, the failure to furnish the counter affidavit of theMagistrate who passed the order of detention, is an impropriety.
In most cases, it may not be of much consequence but in a few cases, for instance, where mala fides or extraneous considerations are attributed: to the Magistrate or the detaining authority, it may, taken in conjunction with other circumstances, assume the shape of a serious infirmity, leading the Court to declare the detention illegal.
In the present case, too, the mere omission to file the affidavit of the District Magistrate does not vitiate the detention orders.
But it is a circumstance, among others, in the light of which contention (2) is to be appreciated.
The Act restricts citizens ' personal liberty which is a fundamental ' right under the Constitution.
It has therefore to be construed strictly, as far as possible, in favour of the citizen and in a manner that does not restrict that right to an extent greater than is necessary to effectuate that object.
The provisions of the Act have, therefore, to be applied with watchful care and circumspection.
It is the duty of the.
court tosee that the efficacy of the limited yet crucial, safeguards provided in the law of preventive detention is not lost in mechanical routine, dull casualness and chill indifference on the part of the authorities entrusted with their application.
Let us therefore see, whether there has been sucha careful and strict compliance with the legal procedure in the instant case.
In the counter affidavit, the Deputy Secretary has inter alia, stated that the petitioner is a "veteran copper wire stealer" and there were "reliable informations" before the District Magistrate about his antisocial activities prejudicial to the maintenance of supplies and services essential to the community.
"Veteran copper wire stealer" implies a long course of repetitive thievery of copper wire.
No one is born a knave: it takes time for one to become so.
It is manifest that but forthose "reliable informations" showing that the detenu was repeatedly and habitually stealing copper wire, the District Magistrate, night not have passed the detention order in question.
Those "reliable information" were withheld.
No privilege under clause (6) of Article 22 has been claimed in respect of them.
Even the main ground viz. that the petitioner is a "veteran copper wire stealer" was not, as such,, (1) A. 1.
R. (2) A.I.R. 1972 S.C. 2143. 264 communicated to the detenu.
The ground intimated was that "you have been acting in a manner prejudicial to the Maintenance of Supplies and Services essential to the community".
Only one solitary instance of the recovery of stolen copper wire from the petitioner 's house on 3 7 1972 was conveyed to the detenu.
Learned Counsel for the State has been fair enough to collect and place before us what the Deputy Secretary in his counter affidavit called "reliable information" on the basis of which the District Magistrate ordered the detention.
In this, under the caption "Criminal Biography", is mentioned inter alia, how the petitioner with his associates organised a gang to steal telegraph copper wire systematically.
From what has been said above, it is clear as day light that all material particulars of the ground of detention which were necessary ,to enable the detenu to make an effective representation, were not communicated to him.
The impugned order of detention is thus ,violative of Article 22(5) of the Constitution, and is liable to be quashed on that score alone.
In view of the above finding, it is not necessary to decide the.
.remaining contentions canvassed by Mr. Jain.
Now we take up Writ Petition No. 1662 of 1973.
In this case also, Shri Sukumar Sen, Deputy Secretary in his counter affidavit .averred that the detenu was a "veteran copper wire stealer" and that the District Magistrate, Burdwan, had passed the order of the petitioner 's detention on receipt of reliable information about the illegal, anti .social and prejudicial activities of the petitioner.
Here also, all the 'material information ' showing or even alleging how the petitioner was a "veteran copper wire stealer" was not communicated to him.
Only two instances of theft of electric copper wire which took place on November 6, 1971 and November 25, 1971 were intimated to him.
Learned Counsel for the State has placed for our perusal a copy of History Sheet of the detenu on receiving which, the District Magistrate had passed the impugned order of detention.
Among other facts, it is mentioned therein that on November 3, 1973, also, the petitioner alongwith his two associates had committed theft of, electric copper wire measuring 125 ft. from the electric poles near Hatgarui and a case under section 379, Penal Code was registered in Police Station Asansol on the same date, relating to this theft.
It is further stated that "from his boyhood the petitioner started mixing up with anti social elements, wagon breakers and in course of time, he along with his associates, indulged in thefts of iron materials, copper wire and other forms of crime".
All this matter including that concerning the theft dated November 3, 1973, was admittedly not communicated to the detenu.
Its non to the detenu is not being justified as privileged under Article 22(6).
Thus in this case also, all the material or adequate particulars relatable to the ground intimated, were not conveyed to the detenu.
It is not possible to predicate how far the mind of the ,detaining authority was influenced in passing the order of detention by the uncommunicative material.
By this omission, the petitioner 's 265.
constitutional right of making an effective representation was seriously.
jeopardised.
In the result the detention of the petitioner (Gudma Majhi) must be held to be illegal.
In Writ Petition No. 1681 of 1973, the ground of detention as communicated to the petitioner, Kamal Saha, ran as under : "That on 10 12 1972 at about 19 30 hrs.
you and your associates being armed with daggers put all the passengers to fear of death of a IInd Class Compartment of 162 Dn. train at New Barrackpore R.S. and committed robbery in respect of one bundle of woollen Shawl containing 90 pieces valued at Rs. 9500/ from Golam Kadar Kashmiri of 96 Ripon Street Calcutta 16, you were subsequently arrested.
44 pieces of shawl valued a Rs. 4500/ were recovered later on.
Your action caused panic, confusion and disturbed public order then and there, you have thus acted in a. manner prejudicial to the maintenance of public order".
In Para 7 of counter affidavit, Shri Sukumar Sen, Deputy Secretary, stated "that it appears from the records that the petitioner is a veteran Railway Criminal and was indulging in committing robbery in running sub urban trains.
It appears that on 10 12 1972 at about 19 30 hours the petitioner and his associates armed with daggers, committed robbery in a III class Railway Compartment. " The history sheet communicated by the Superintendent of Police to,, the detaining authority states that "he formed and organised a gang and started committing robbery in Sealdah Bongaon Railway Section.
, This gang is so desperate that nor body of the locality resists them,.
even if they commit robbery and other offences even in their very presence.
They always move with deadly weapons such as pype guns, daggers, bombs etc.
by which they intimidate the local people." Thereafter, instances of two robberies committed by him along with his associates, on January 30, 197Z and August 1, 1972, are, mentioned.
The particulars of any past crime committed by him, which were necessary for showing how he was a veteran railway criminal, were not communicated to the detenu.
In respect of the uncommunicative material, nor privilege under article 22(6) was claimed '.
266 In the absence of those material particulars, the detenu could not ,exercise his constitutional right of making an effective representation.
In other words, the grounds communicated to the petitioner suffered .from vagueness.
For the reasons aforesaid, all the three petitions are allowed and the petitioner in each of them is directed to be set at liberty forthwith.
Nothing in this judgment, however shall preclude, the State Government /District Magistrate, if so advised, from passing fresh orders of the detention of the petitioners or any of them, after full and meticulous 'compliance with the procedure prescribed by law.
S.C. Petitions allowed.
| IN-Abs | Since the matters are similar, the facts of W.P. No. 1679 of 1973 are as follows: The petitioner was arrested section 3, sub section (1) and (2) of the .
The grounds of detention were that the petitioner, on 3 7 72, alongwith his associates kept concealed 20 bundles of Telegraph copper wire in his court yard under ground with a view to dispose the same at an opportune moment.
The said telegraph wire were recovered on 3 7 72 on the basis of the confession made by his associates.
The petitioner was, therefore, arrested because he was acting in a manner prejudicial to the maintenance of supplies and services essential to the community.
The detention order was challenged on various grounds : (i) That the counter affidavit on behalf of the State of West Bengal was sworn by the Deputy Secretary and not by the District Magistrate, on the basis of whose subjective satisfaction the detention order was made and therefore, it was illegal.
(ii)From the counter affidavit, it was clear that there were "reliable informations" and material other than the solitary ground of detention communicated to the detenu and so, the detenu was unable to make an.
effective representation.
Therefore, the detention order was violative of clause (5) of article "I of the Constitution of India etc.
Allowing the petitions, HELD : (1) When a Rule Nisi is issued in a habeas corpus petition, it is incumbent upon the State to satisfy the court that the detention of the petitioner was legal and in conformity not only with the mandatory provisions of .he Act, but is also in accord with the requirements of Cl.
(5) of article 22 of the Constitution.
[262 EJ Niranjan Singh vs State of Madhya Pradesh A.I.R. 1972 S.C. 2215, referred to.
(2)Since the Court is precluded from testing the subjective satisfaction of the detaining authority by objective standards, it is all the more desirable that in response to the Rule Nisi, the counter affidavit on behalf of the State should be sworn to by the District Magistrate or the authority on whose subjective satisfaction the detention order was made.
If for sufficient reason shown to the satisfaction of the Court that the affidavit of the person who passed the detention order could not be furnished, the counter affidavit should be sworn by some responsible officer who personally dealt with the case in the Govt.
Secretariat etc.
[262 E F] In the present case, the deponent did not swear that he had at any relevant time personally dealt with the case of the detenu and secondly, the explanation given for not furnishing the affidavit of the District Magistrate due to his transfer from that District, was far from satisfactory.
Ranjit Dam vs State of West Bengal A.I.R. 1972 S.C. 1753 and J. N. Roy vs State of West Bengal A.I.R. 1972 S.C. 2143 referred to.
259 (3)The failure to furnish the counter affidavit of the Magistrate who passedthe order of detention is an impropriety.
However, in most cases, it mayDot be of much consequence; but in a few cases, for instance.
where mala fides or extraneous considerations are attributed to the detaining authority, it may, taken in conjunction with other circumstances, assume the shape of a serious infirmity.
[263 C] (4)In the counter affidavit, it was mentioned that the detenu was a "veteran copper wire stealer" and there were "reliable information" before the District Magistrate.
Those reliable information were withheld.
The words . veteran copper wire stealer" also implied a long course of repetitive, thievery of copper wire, it is manifest that but for those "reliable information" showing that the detenu was repeatedly and habitually stealing copper wire, the District Magistrate might not have passed the detention order in question.
Further, from the 'Criminal Biography, supplied by the State, it was clear that all material particulars of the ground of detention necessary to enable the detenu to make an effective representation were not communicated to the detenu.
Hence, the impugned order of detention is violative of article 22(5) of the Constitution and therefore, liable to be quashed.
Similarly, the other two petitions were also allowed on the ground that material particulars were not communicated to the detenues and therefore, the detentions were illegal.
[263 G 264 C]
|
Appeal No. 1626 of 1967.
Appeal by Special Leave from the Judgment and Decree dated the 14th October, 1966 of the High Court of Mysore at Bangalore in Misc.
First Appeal No. 124 of 1966.
M. Natesan and Saroja Gopalkrishnan, for the appellant Gobind Das and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by GOSAMI, J.
The appellant and his brother, Srinivasamurthy are partners of a firm carrying on the business of manufacturing and exporting of polished granite memorial stones in the name and style of Messrs Narayanaswami & Sons.
The firm is admittedly a factory both under the Factories Act as well as under the Employees ' State Insurance Act (briefly the Act).
The appellant claims to directly employ about 35 persons in his factory and has been paying contri bution under the Act on their account.
It is stated that adjacent to his own factory there is another factory situated on the appellant 's land leased out by him to two persons, Chidambarchari and Shankarsubbachari (hereinafter referred to as the contractors).
The contractors employ about 50 workers in their factory for purposes of cutting and dressing the granite stones.
The lorry drivers bring granite from the surrounding areas and unload them outside the factory ' The contractors get these to their portion of the leased land for cutting them.
After cutting these are sent back to the appellant 's factory where these are designed and polished and thereafter exported.
The Employees State Insurance Corporation (briefly the Corporation) applied to the Employees ' State Insurance Court at Bangalore (briefly the Court) for recovery of an amount of Rs. 8893/ being the employees ' contribution payable by the appellant for the period commencing from 27 7 1958 to 31 1 1964 on account of the workers employed by the two contractors described as 'immediate employers ' tinder the Act.
The court decided against the Corporation holding .that the contractors were not 'immediate employers ' within the meaning of section 2 (13) of the Act and they were independent con tractors and hence the appellant was not the principal employer in respect of the employees working under the contractors.
The Corporation appealed to the High Court of Mysore against the aforesaid order under section 82(2) of the Act.
The High Court held that the appellant was the principal employer an the contractors were the immediate employers under the Act.
The High Court further held that the workers under the contractors were employees within the meaning of section 2 (9) (ii) of the Act.
The High Court thus accepted the appeal of the Corporation.
Hence this appeal by special leave.
Before the court evidence was given by both sides and the following findings of the court are adverted to by the High Court 144 .lm15 "All that can be said to have been proved by the applicant corporation in this case is that RWs 2 and 3 (the con tractors) work at a place belonging to the respondent and execute part of the work which is necessary to manufacture the final finished product for sale.
All that can be said to have been proved in this case is that the contractors are doing some work which would be the foundation for the work that is finally done by the respondent".
After examining the evidence the High.
Court also found as follows "There is evidence to show that these employees (under ,the contractors) are employed in connection with the work of the respondent facory".
The respondent in the High Court 's judgment refers to the appellant herein.
As stated earlier, the High Court answered both the questions in favour of the Corporation.
The same points are raised for consideration in this appeal and Mr. Natesan on behalf of the appellant submits that the contractors owned a separate factory and are independent contractors and cannot be held to be 'immediate employers ' within the meaning of section 2(13) of the Act and hence the appellant is not liable as principal employer to pay the contribution on account of the persons working under the contractors.
Before we deal with the questions of law raised in this appeal, it will be appropriate to refer to the material provisions of the Act.
The Act, as it appears from the preamble, is passed "to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto".
Section 2 contains the definitions.
By section 2 (4) "contribution" means the sum of money payable to the Cor poration by the principal employer in respect of an employee and includes any amount payable by or on behalf of the employee in accordance with the provisions of this Act.
" By section 2 (9) "employee" means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and (i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of , the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or (ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; * * * * 145 By section 2(12)"factory "means any premises including the precincts thereof whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on.
But does not include a mine subject to the operation of the or a railway running shed".
* * * * * By section 2(13) "immediate employer", in relation to employees employed by or through aim, means a person who has undertaken the execution, on the premises of a factory or an establishment to which this Act, applies or under the supervision of the principal employer or his agent, of the whole or any part of any work which is ordinarily part of the work of the factory or establishment of the principal employer or is preliminary to the work carried on in, or incidental to the purpose of, any such factory or establishment.
, and includes a person by whom the services of an employee who has entered into a contract of service with him are temporarily tent or let on hire to the principal employer".
By section 2(14) "insured person" means a person who is or was an employee in respect of whom contributions are or were payable under this Act and who is, by reason thereof, entitled to any of the benefits provided by this Act".
By section 2(17) "principal employer" means (1) in a factory, the owner or occupier of the factory and includes the managing agent of such owner or occupier, the legal representative of a deceased owner or occupier, and where a person has been named as the manager of the factory under the factories Act, 1948, the person so named".
* * * * * * Chapter IV deals with contributions.
The opening section 38 provides that "subject to.
the provisions of this Act, all employees in factories, or establishments to which this Act applies shall be insured in the manner provided by this Act." * * * * * * By Section 39(1) "the contribution payable under this Act in respect of an employee shall comprise contribution payable by the employer (hereinafter referred to as the employer 's contribution) and contribution payable by the employee (hereinafter referred to as the employee 's contribution) and shall be paid to the Corporation".
By section 40 (1) "the principal employer shall pay in respect of every employee, whether directly employed by him or by or through an immediate employer, both the employer 's contribution and the employee 's contribution".
146 By section 42(2) "Contribution (both the employer 's contribution and the employee 's contribution), shall be payable by the principal employer for each week in respect of the whole or part of which wages are payable to the employee and not otherwise".
Section 43 and section 97 empower the Corporation to make regulations.
Under section 44 every principal and immediate employer has to submit returns, to the Corporation and maintain registers and records.
Section 68 provides for Corporation 's rights where a principal employer fails or neglects to pay any contribution.
By section 72 an employer is barred from reducing wages by reason only of his liability to pay contribution.
Chapter VA provides for certain transitory provisions.
The opening section 73A provides for employer 's special contribution.
Chapter VI deals with adjudication of disputes and claims.
Under section 74 (1) Employee 's Insurance Court is constituted.
Inter alia under section 75 (1) "If any question or dispute arises as to (a) whether any person is an employee within the meaning of this Act or whether he is liable to pay the employees ' contribution, or * * * * * * (d) the person who is or was the principal employer in respect of any employee; * * * * * * such question or dispute. shall be decided by the Employees ' Insurance Court in accordance with the provisions of this Act." Under section 75(1) (g), inter alia, any dispute between a principal employer and an immediate employer shall also be decided by the court.
Under section 75 (2) (b) any claim by principal employer to recover contributions from any immediate employer shall also be decided by the Employees ' Insurance Court.
By section 75 (3) jurisdiction of a civil court is barred regarding, amongst others, any question or dispute as specified in the section.
Section 82 provides for appeals and under sub section (2) thereof an appeal shall lie to the High Court from an order of the Employees ' Insurance Court if it involves a substantial question of law.
Chapter VII provides for different penalties.
Under Chapter VIII (Miscellaneous), section 94 provides, interalia, that contributions due to the Corporation shall have priority over all other debts.
The Act is thus a beneficial piece of social security legislation in the interest of labour in factories at the first instance and with power to extend to other establishments.
Provisions of the Act will have to be construed with that end in view to promote the schemes and avoid 147 the mischief.
From some of the material provisions set out above, the underlying aim of the Act is to insure the employees against various risks to their life, health and well being and the charge is upon the principal employer even though he may get his usual work done through an intermediary, who is described in the Act as 'immediate employer.
Any dispute between the principal employer and the immediate employer is to be settled between themselves, de hors, the employees and the Act charges the principal employer with the liability to pay the contribution not only of its own but also that of the employees subject to his right to deduct the employees ' contribution.
from their wages under section 40 (2) of the Act.
There is a quicker mode of recovery as arrears of land revenue under section 45B and 73D.
Chapter VA provides for transitory provisions and by section 73A every principal employer shall have to pay a special contribution in lieu of the employer 's contribution payable under Chapter IV.
Adjudication of all kinds of specified disputes are also intended to be ex peditiously disposed of by the court constituted under section 74.
Such disputes include a dispute between a principal employer and an immediate employer as noticed earlier.
Civil courts ' jurisdiction is barred in respect of matters specified in the Act.
There is only one special type of appeal to the High Court and that also in a restricted form.
The Act insists on compliance with its provisions on pain of penalties and the contributions due to the corporation have priority over other debts.
Keeping in view the scheme and the principal object of the Act, we will now examine the questions of law raised in this appeal.
The definition of the 'immediate employer ' under section 2 (13), omitting what is not necessary for our purpose, is as follows: " 'immediate employer ', in relation to employees employed by or through him, means a person who his undertaken the execution, on the premises of a factory to which this Act applies of the whole or any part of any work which is ordinarily part of the work of the factory or establishment of the principal employer or is preliminary to the work carried on in, or incidental to the purpose of, any such factory. . . ." That the appellant,, who is the principal employer has a factory where granite memorial stones are manufactured for export is beyond question.
The finished articles are the dressed and polished granite stones.
The raw material is the stone from the quarry brought therefrom, cut to sizes, dressed, polished and then exported.
The other factory of the contractors on the leased land of the principal employer, adjoining the latter 's factory.
is registered under the Fac tories Act in the year 1963.
Although admittedly a factory, there is no evidence on the record that the contractors pay any contribution under the Act or have been even charged separately as principal employers so far as their so called direct employees are concerned.
The principal employer, the appellant, is making a claim which, if correct, will make the contractors also, principal employers liable under the Act.
But it is easy for the appellant to make such 148 a claim to avoid his personal liability which, in all fairness to labour, should have been settled by impleading the contractors as parties in order to make the entire position clear.
It is not necessary for us to examine whether this is a mere device of the principal employer to avoid his liability under the Act.
We agree with the High Court that on the findings of fact the work undertaken by the contractors in the adjoining vicinity, even though their factory may have been subsequently registered under the factories Act, is preliminary or incidental to the work in the principal employer factory turning out the finished product for export.
The work in the two places has an intimate correlation and is a piece of an integrated whole and the said work by the contractors through their labour is ordinarily part of the work of the principal factory undertaken by the contractors.
Their factory is situated in the premises of the appellant 's factory which according to the definition clause includes the precincts thereof.
It, therefore, follows that the two contractors are 'immediate employers ' within the meaning of section 2 (13) and the workers employed for cutting and dressing the granite stones by the immediate employers are employees within section 2 (9) (ii) of the Act, being employed through the immediate employers on the premises of the factory including the precincts thereof.
The fact that in 1963 the contractors ' factory was separately registered under the Factories Act or that, after meeting the prior requirements of the principal employer, work of some other parties was also permissible, does not, in our opinion, militate against the predominant purposes of the work of the contractors being part and parcel of the main work of the principal employer factory for which the contractors mainly work.
A good deal of argument is advanced with regard to the expression on the premises of a factory" in the definition clause of "immediate employer" under section 2 (13).
The word "premises" according to the dictionary means house or building with its ground or other apurtenances.
The premises include under section 2 (13) the precints thereof The word "precincts" means the environs.
This Court in Ardeshir H. Bhiwandiwala vs The State of Bombay(1) dealt with the term "Premises" in the definition of factory under section 2(m) of the Factories Act and after noticing its meaning in various Law Lexicons and dictionaries observed: "The word "premises" has now come to refer to either land or buildings or to both, depending on the context. .
It is therefore clear that the word "premises" is a generic term meaning open land or land with buildings or buildings alone." The contention in that 'case that the word "premises" must be restricted to mean buildings and not taken to cover I open lands as well was repelled.
In the instant case, on an examination of the site plan (Ext.
P 1) and the evidence, it is evident there is a definite environmental as well as functional unity between the two portions, namely, the main (1) 149 factory (Portion A) and the contractors ' factory with the precincts (Portion B) even though separated by a wall in which there was a door which sometimes was closed.
The work undertaken by the contractors and carried on in their portion of the area is surely componental to make it a part of the complex whole.
The principal requirement of the definition, namely, that the work or the construction is undertaken on the premises of the factory and about which both sides join issue, is satisfied in the present case on the evidence on records and we hold accordingly.
We are also satisfied that the workers under the contractors are employees employed by the principal employer through the 'immediate employers ' on the premises of the factory in work which is ordinarily the normal work of the factory or is, at any rate, preliminary to the work or which is certainly incidental to the purpose of the main factory of the appellant.
Mr. Natesan laid great stress upon the requirement of a unity of control of the principal employer over the manufacturing process of the work undertaken by the contractors, but it will be obvious from the facts found and the evidence noted below that the work is done on the premises of the factory.
We need not examine this aspect in detail in view of the uncontradicted evidence of PW 1 as follows: "The work done in the Factory consisted of manufacture of granite stones for export.
I found raw stones lying all over the surrounding area.
I found that raw stones were moved to the premises marked B in exhibit P. 1.
I found that about 50 persons working at the spot.
I learnt from the partners those 50 persons had been employed by two or three con tractors.
Cutting and dressing of the stones were done by those fifty men.
There were (1) sand blasting machine belonging to the partners and (2) Electric blower.
Power was used in these machines.
After the stones are cut and dressed, they are removed to p remises A for designing and polishing.
Final touches are then given to them in the premises B. They are again brought back to premises A for packing and despatching.
The premises A and B belong to the partners.
Only a wall separated the two premises.
There was a connecting door which appeared to have been closed".
Again RW 2 also deposed that "it is since last three years that, I undertook the work of the second party" i.e. the appellant.
R W 1 (partner of the appellant) stated as follows in cross examination: "exhibit P. 4 is the copy of the letter dated 19 3 63 written by P.W. 1 to me for copy of the agreement and plan.
exhibit P. 5 is my interim reply,. . .
By Factory premises in exhibit P. 5, 1 meant both the portions A and B in exhibit p. 1".
Mr. Natesan has referred to a decision of the Bombay High Court in Employees ' State Insurance Corporation, Bombay vs Raman (Chittur Harihar Iyer)(1) but the High Court dealt in that case with the definition of "employee" prior to the amendment of the Act in 1966 and is of no (1) (1957) I L.L.J. 267.
150 aid to counsel.
This case was also distinguished by this Court in Nagpur Electric Light & Power Co. Ltd. vs Regional Director Employees State Corporation, Etc.(1) Counsel also relied upon a decision of the Delhi High Court in Employees ' State Insurance Corporation vs Peter Sewing Machine Co. etc.(2), dealing with the definition of 'factory ' under section 2 (12) of the Act.
The High Court, inter alia, was posing a question in that case as to whether the whole or any part of the work of the contractors there consisted of any work which was ordinarily a part of the work of the factory or establishment of the principal employer and answered it in the negative on the finding of facts in that case "that the contractors, manufacture their goods independently and not as a part of the goods manufactured by the Peter Sewing Machine Company".
On the facts of this case that question does not arise and we express no opinion thereon.
The decision is therefore, of no aid to the appellant in this case.
The learned counsel further draws our attention to M/s Hindustan Construction Co. Ltd. vs Employees ' State Insurance Corporation(3) in which case the High Court remanded the matter to find out "whether the work done at the site can be regarded as a manufacturing process. .
We, however, do not fail to notice that the judgment did not take note of the complete definition of " employee" under section 2 (9), the first part of which is joined by a conjunctive 'and ' with two clauses.
Further the High Court is not correct in thinking that the definition of the word "factory" under the Factories Act "is same" as that of "factory" under the Employees ' State Insurance Act which is of wider amplitude with an expanding horizon of objectives in the latter Act.
It is not necessary, however, to consider.
in this case if these factors may have affected the decision in the above case.
At any rate, the appellant does not derive any aid from this decision.
The next decision in Nagpur Electric Light & Power Co., Ltd. (supra), relied upon by the appellant for the construction of the definition of "employee" under section 2 (9) (i) of the Act is not of assistance to him since we are dealing with a case under section 2(9) (ii).
We, of course, notice that the High Court in this case held as follows at page 20 of the judgment : "From the foregoing, it is clear that the contractors have been executing the work which is ordinarily part of the work of the factory and that within the premises of the respondent factory".
The definition clauses of "immediate employer" [section 2 (13)] and "employee" [section 2 (9) (11)], contain the expression "on the premises of a factory" and not within it.
Even so, as detailed above after examining the evidence ourselves, we are clearly of opinion (1) (2) AIR 1970 Delhi 182.
(3) Assam & Nagaland 87.
151 that the work of the contractors was undertaken by them on the premises of the factory which may not be the same thing as in or within the factory.
We are further of the view that the entire site of the factory is a composite one containing portions A as well as B and there is no doubt that the contractors are the 'immediate employers ' within the meaning of section 2 (13) of the Act and the workers employed by them are "employees" under the Act.
In the result, the appeal fails and is dismissed with costs.
P.B.R. Appeal dismissed.
| IN-Abs | The appellants firm was carrying on the business of manufacturing and exporting polished granite memorial stones.
The firm was a factory both under the Factories Act as well as under the Employees ' State Insurance Act.
Adjacent to this factory was another factory situated on the appellant 's land leased out to two contractors who employed 50 workers in their factory for the purposes of cutting and dressing the granite stones.
The granite stones unloaded outside the factory by the lorries were brought on the portion of the leased land and after cutting them they were sent back to the appellant 's factory where they were designed and polished.
The Employees ' State Insurance Corporation claimed from the appellant a certain sum as the firms contribution on account of the workers employed by the two contractors described as 'immediate employers ' under the Act.
The Employees ' State Insurance Court held that the contractors were not 'immediate employers ' within the meaning of section 2(13) of the Employees ' State Insurance Act and that they were independent contractors.
On appeal the High Court held that the appellant was a principal employer and the contractors were the immediate employers under the Act.
The High Court also held that the workers tinder the contractors were employees within the meaning of section 2(9)(ii) of the Act.
Dismissing the appeal, to this Court, HELD : (1) The underlying aim of the Act is to insure the employees against ,various risks to their life, health and well being and the charge is upon the principal employer even though he may get his usual work done through an intermediary who is described in the Act as 'immediate employer '.
Any dispute between the principal employer and the immediate employer has to be settled between themselves de hors, the employees and the Act charges the principal employer with the liability to pay the contribution not only of its own but also that of the employees subject to his right to deduct the employees ' contribution from their wages under section 40(2) Of the Act.
[147A] (2) On the findings of fact the work undertaken by the contractor 's in the adjoining vicinity is preliminary or incidental to the work in the principal employer factory turning out the finished product for export.
The work in the two places has intimate correlation and is a niece of an integrated whole and the said work by the contractors through their labour is ordinarily part of the work of the principal factory undertaken by the contractors.
Their factory is situated in the premises of the appellant 's factory which, according to the definition clause, includes the precincts thereof.
In the instant case on an examination of the site plan and the evidence it is evident that there is a definite environmental as well as functional unity between the two portions, namely, the main factory and the contractors ' factory with the precincts even though separated by a wall in which there was a door which sometimes was closed.
The work undertaken by the contractors and carried on in their portion of the area is surely componental to make it a part of the complex whole.
The principal requirement of the definition namely, that the work or the ,construction is undertaken on the premises of the factory is satisfied in the present ,case.
It therefore follows that the two contractors are 'immediate employers within the meaning of section 2(13) and the workers employed for cutting and dressing the granite stones by the immediate employers are employees within section 2(9)(ii) of the Act.
[148B] Employees ' State Insurance Corporation.
Bombay vs Raman (Chittur Harihar Iyer),[1957] 1 L.L.J.267,Nagpur Electric Light and Power Co.Ltd.
vs Regional Director Employees State Insurancea Corporation, Etc. , Employees '.
143 State Insurance Corporation, vs Peter Sewing Machine Co. etc.
A.I.R. 1970 Delhi 182, and M/s Hindustan Construction Co. Ltd. vs Employees ' State Insurance Corporation, Assam & Nagaland 87, referred to.
|
Appeal No. 2572 (N) of 1972.
Appeal by certificate from the Judgment and Order dated 4th April 1972 of the Patna High Court in Civil Writ Jurisdiction Case No. 1121 of 1969.
616 B. P. Singh, for the appellant.
Lal Narain Sinha, Solicitor General of India and section P. Nayar, for respondent Nos. 2 and 6. D. Goburdhan, for respondents Nos. 3 5.
The Judgment of the Court was delivered by, JAGANMOHAN REDDY, J.
The appellant was granted a mining lease on August 30, 1969 by the State of Bihar (Respondent 3) with the prior approval of the Central Government (Respondent 2) for winning a mineral known as Apatite over as area of 1999.634 acres.
Respondent 1 filed a writ petition on September 15, 1969 challenging the lease on the ground that he had earlier on March 22, 1965, applied for a mining lease over an area of 280.62 acres in certain villages of Singhbhum District which was included in the lease granted to the appellant, but as no orders were passed by the State Government within the statutory period the application was ,deemed 'to have been rejected.
He thereafter filed a revision petition to the Central Government which called for the comments of the State Government.
The State Government intimated to the Central Government that it wanted to work the area itself and for that reason had in fact rejected all the applications for this area including that of the first respondent.
On receipt of this comment, the Central Government rejected the revision petition of the first respondent.
It appears that the appellant had pursuant to an advertisement in the newspapers applied along with others for the grant of a mining lease for phosphatic rock (Apatite) over an area of 4.1 sq.
miles in village Khajurdari in Singhibhum District.
But all 'the applications were rejected as the State Government had by then decided to work the phosphatic bearing areas in the public sector.
Later, however, as 3rd respondent felt that such a venture could be better undertaken by a private party rather than the State Government in view of the dispersed nature of the deposits, whose concentrated and efficient supervision may not be possible through the public sector, it decided to release the area in question to be worked in the private sector.
Accordingly permission was sought from the Central Government and an advertisement published in the newspapers for the general information of the interested parties who may be willing to set up a benefication plant for upgrading the low grade Apatite to ensure its use for the production of phosphatic fertiliser and who were capable of making an investment to the extent of Rs. 40 to 50 lakhs.
The appellant who is reported to be financially sound submitted a scheme for setting up a benefication plant for upgrading the Apatite.
In view of the financial solvency, of the appellant his application was recommended to the Central Government.
The Central Government accepted this recommendation and directed the grant of the mining lease in the following terms : " The Central Government in the interest of mineral development, in exercise of the powers conferred by subrule (2) of rule 58 of the Mineral Concession Rules, 1960, 61 7 hereby authorise the State Government to grant mining lease for apatite over the area to Dr. Satya Narain Sinha without following the procedure laid down in sub rule (1) of the said Rule 58 of the Mineral Concession Rules, 1960.
Further in exercise of the powers conferred by section 31 of the , the Central Government hereby authorise the State Government to grant mining lease to Dr. Sinha over the area in question which does not form a compact block.
The Central Government also, in exercise of the powers conferred by proviso to section 6(1) of the , authorise the State Government to grant mining lease for apatite over the areas to Dr. Sinha in excess of the limit of 10 square miles prescribed in section 6(1) and (b) of the said Act.
" Immediately on getting to know of the approval given by the Central Government to the grant of the mining lease to the appellant, the first respondent moved the State Government for a stay and though that application was rejected he made several other attempts but without any success.
The last revision application was filed on November 17 1970 under r. 54 of the Mineral Concession Rules hereinafter referred to as 'the Rules ' before the 2nd respondent on which an order dated November 23, 1971 was passed.
This order as disclosed fly the 1st respondent in his supplementary affidavit shows that the Central Government had in exercise of their revisional powers under r. 55 of the Rules, set aside the orders of the State Government and directed it to give further consideration and pass appropriate orders within a period of four months in as much as the State Government had not followed the correct procedure in dealing with the application of the 1st respondent.
At this stage we may point out that in the writ petition filed by the first respondent though the appellant was a party it seems he did not appear and the proceeding was ex parte.
The appellant 's case is that as no notices were served on him, nor was there any proof of service as neither the covers in which the registered notices were sent nor the acknowledgment cards had been returned to the Court, he did not have an opportunity to be heard.
No doubt the State of Bihar and the Central Government had opposed the petition but the High Court came to the conclusion that the conditions required for relaxation of the Rules in special cases under section 31 of the (hereinafter termed the Act) read with rr.
58 & 59 of the Rules, were not complied with while according its approval for the grant of the mining lease to the appellant.
in this view it allowed the petition and quashed the lease in favour of the appellant.
Before us it is contended by the appellant 's learned advocate that the appellant did not have an opportunity of urging before the Court 618 that the writ petition filed by ' the first respondent was not maintain.able, because he is not a person aggrieved as the area for which the ,first respondent had made an application for the grant of mining lease was not included in the area granted to the appellant.
He further ,contends that reasons were given by the State of Bihar while recom mending the grant of the lease to the Central Government, which reasons, at any rate one of them as is evident from the order of the Central Government, were approved.
There is, according to him, no infringement of the provisions of section 31 of the Act read with rr.
58 & .59 of the Rules.
The learned Solicitor General on behalf of the Central Government supports the grant of the mining lease to the appellant on the ground that r. 59 of the Rules is not applicable to the facts of this case inasmuch as the 3rd respondent had not taken any firm decision to reserve the area granted to the appellant, which is a necessary condition of the applicability of that rule.
If that rule did not apply then he submits the procedure prescribed in r. 58 which is referred to therein need not be complied with.
He further submits that even if r. 59 is applicable, reasons have been recorded by the Central Government for relaxing the Rules as required in section 31 of the Act.
In so far as the 3rd respondent the State of Bihar is con cerned, there has been a volte face in its stand before us.
After having called for the applications and recommended the lease in favour of the appellant, and after having placed him in a position where he had to incur huge expense, it now wants to contend that the grant of the lease is invalid.
Even the first respondent, once he found, that the area for which he applied for a lease was not included in the appel lant 's lease, seems to have perferred to remain absent in the case, but the State Government wants to challenge the validity of the lease which it did not do before the High Court.
There is no doubt, as the High Court has pointed out, that where by relaxing the Rules the Central Government intends to authorise in any case the grant, renewal or transfer of any prospecting licence or mining lease, or the working of any mine for the purpose of searching for or winning any mineral, on terms and conditions different from those laid down in the Rules made under section 13 of the Act, it can do 'so for reasons to be recorded in writing.
Whether any such reasons can be said to have been recorded in the order authorising the grant of the lease on terms and conditions different from those laid down in the Rules made under section 13 of the Act need not concern us in this case, because, in our view, as the writ petition has been filed by a person who is not the person aggrieved, it is not maintainable.
As already pointed out it is admitted by respondents 2 and 3 that the application made by the first respondent was not in respect of the area which is granted to, the appellant and consequently the first respondent had no interest in the subject matter of the lease.
Even 619 though this contention was not urged before the High Court, and in the circumstances adverted to by us could not have been urged, as the appellant did not appear, this Court in an appeal can not only determine the soundness of the decision, but has jurisdiction to determine any point raised before it, such as whether the appeal is competent, whether a party has locus standi to present the petition and whether the petition is maintainable etc.
See Ebrahim Aboobakar and Another vs Custodian General of Evacuee Property(1).
In Chiranjit Lal Chowdhuri vs The Union of India(2) it was held by this Court that the legal right that can be enforced under article 32 must ordinarily be the right of the petitioner himself who complains of infraction of such right and approaches the Court for relief.
In respect of the jurisdiction under article 226 of the Constitution it was laid down in The State of Orissa vs Madan Gopal Rungta(3) that the existence of the right is the foundation of the exercise of jurisdiction of the Court under article 226 of the Constitution.
The right to which this Court had adverted as being the foundation for exercising the jurisdiction under article 32 or article 226 of the Constitution, according to The Calcutta Gas Company (Proprietary) Ltd. vs The State of West Bengal and Others(4) is ordinarily the personal or individual right of the petitioner himself, though in the case of some of the writs like habeas corpus or quo warranto this rule may have to be relaxed or modified.
Subba Rao, J., as he then was, observed in that case : "Article 226 confers a very wide power on the High Court to issue directions and writs of the nature mentioned therein for the enforcement of any of the rights conferred by Part III or for any other purpose.
It is, therefore, clear that persons other than those claiming fundamental rights can also approach the court seeking a relief thereunder." After citing the above passage in Godde Venkateswara Rao vs Government of Andhra Pradesh and Others(5) the learned Judge who delivered the judgment in this case also observed at p. 181 : "A personal right need not be in respect of a proprietary interest : it can also relate to an interest of a trustee.
That apart, in exceptional cases, as the expression ,,ordinary" indicates, a person who has been prejudicially affected by an act or omission of an authority can file a writ even though he has no proprietary or even fiduciary interest in the subject matter thereof." In respect of persons who are strangers and who seek to invoke the jurisdiction of the High Court or of this Court, difficulty sometimes arises because of the nature and extent of the right or interest which is said to have been infringed, and whether the infringement in some way affects such persons.
On this aspect there is no clear enunciation of principles on which the Court will exercise its jurisdiction.
(1) ; (2) ; (3) [1952] section C. R. 28.
(4) [1962] Supp. 3 section C. R. 1.
(5) ; 620 In England also the Courts have taken the view that when the, application is made by a party or by a person aggrieved the Court will intervene ex debito justitias, in justice to the applicant, and when it is made by a stranger the Court considers whether the public interest demands its intervention.
In either case it is a matter which rests ultimately in the discretion of the Court : (see R. vs Thames Magistrates ' Court, ex.
p. Greenbaum(1).
In this case, however, the first respondent has not challenged the grant of the lease on the ground of ex debito justitiae but has done so on the ground of a direct infringement of his right to be granted a mining lease over 280.62 acres for which the appellant was given a lease along with other area.
Since it is now found that no such right of the first respondent has been affected, he has no locus standi.
He is neither a party nor a person aggrieved or affected and consequently his writ petition in the High Court is not maintainable.
On this short ground, this appeal will be allowed and the writ petition filed by the first respondent in the High Court dismissed.
The appellant will have his costs only against the State of Bihar.
V.P.S. Appeal allowed.
(1)(1957) in Yardley Source Book of English Administrative Law, 1970, p. 228).
| IN-Abs | The first respondent filed a writ petition in the High Court challenging the grant of a mining lease to the appellant on the ground of a direct.
infringement of his right to be granted a mining lease over an area for which he applied for a mining lease and which, according to him, formed part of the area for which the appellant was given the lease.
But in fact, the first respondent 's application was not in respect of any part of the area for which the appellant was granted a mining lease.
Though the appellant was made party to the proceeding, he did not appear as notices were not served on him.
The High Court allowed the petition in the view that there was a violation: of section 31 of the , and rr. 58 and 59 of the Mineral Concession Rules 1960.
Allowing the appeal to this Court, HELD : The first respondent had no interest in the subject matter of the lease, and the petition was not maintainable.
[618 G H] Though this contention was not urged before the High Court as the appellant did not appear in the High Court, this Court, in appeal, can not only determine the soundness of the decision, but has jurisdiction to determine any point raised before, it, such as, whether the appeal is competent, whether a party has a locus standi to present the petition and whether the petitioner was maintainable.
Ordinarily, the foundation for exercising the jurisdiction under Article 32 or Article 226, is the personal or individual right of the petitioner himself, though in cases of writs of habeas corpus or quo warranto, the rule may be relaxed.
In respect of persons who are not aggrieved and who seek to invoke the jurisdiction of the High Court or this Court, the matter rests ultimately on the discretion of the Court, and depends on the nature and extent of the right or interest said to have been infringed and whether the infringement affects the petitioner in some way.
[619 A B, D, G H] In the present case, the first respondent only alleged direct infringement of his right,but it was found that no right of his had been affected.
He was neither aparty nor a person aggrieved or affected and hence had no locus standi to file the petition.
[620 B C] Ebrahim Aboobakar and Another vs Custodian General of Evacuee Property, ; , Chiranjit Lal Chowdhuri, vs The , Union of India, ; , The State of Orissa vs Madan Gopal Rungta, [1952] S.C.R. 28, The Calcutta Gas Company (Proprietary) Ltd. vs The State of West Bengal and Others [1962] Supp.
3 S.C.R. 1, Godde Venkateswara Rao vs Government of Andhra Pradesh and Others ; and R. vs Thamples Magistrates ' Court ex.
p. Greenbaum, [19571 in Yardley Source Book of English Administrative Law, , referred to.
|
Appeal No. 342 of 1972.
Appeal by special leave from the judgment and order dated the 16th September, 1972 of the High Court of Bombay in Civil Revision No. 263 of 1967.
F. section Nariman, Additional Solicitor General of India, P. C. Bhartari, B. R. Zaiwala and B. section Bhesania, for the appellant.
Anil B. Divan, K. section Cooper, Vasant C. Kotwal, section C. Agarwal and P. D. Sharma, for the respondents.
The Judgment of the Court was delivered by KRISHNA IYER, J.
A small cause involving a petty claim of Rs. 1147.42 has sailed slowly into the Supreme Court by special leave.
Both sides The Bombay Port Trust, appellant, and the New Great Insurance Co. (a nationalised institution), the contesting respondent agree before us that while there is only a short point of law in the case, a large section of the business community, as well as the Port Trust, are affected by the ambiguity of the legal situation and an early pronouncement by this Court on the law of limitation applicable to consignee 's actions for short delivery by the Port Trust is necessary.
Is the period so brief as six months in terms of section 87 of the Bombay Port Trust Act, 1879 (hereinafter called the Act), and if so, does time begin to run within around a week of the landing of the goods (suggested by section 6lA) of the Act ? Or, alternatively, does the longer spell allowed by the avail the plaintiff and the terminus a quo start only when the owner has been finally refused delivery ? Although the Court in this case is enquiring whether the little delay alleged legally disentitles the plaintiff to claim the value of the lost goods, it is a bathetic sidelight that the judicial process has limped along for 15 years to decide in this small, single point commercial cause, whether a little over seven months to come to court was too late.
Pope Paul in opening the judicial year of the Second Roman Rota pontificated that delay in dispensing justice is 'in itself an act of injustice '.
Systemic slow motion in this area must claim the nation 's 399 immediate attention towards basic reformation of the traditional structure and procedure if the Indian Judicature is to sustain the litigative credibility of the community.
Indeed, even about British Justice Lord Devlin 's observations serve as warning for our court system : "If our business.
methods were as antiquated, as our legal methods, we would be a bankrupt country.
" The problem that falls for resolution by this Court turns on the subtle semantics alternatively spun by counsel on both sides out of the words "any thing done, or purporting to have been 'done, in pursuance of this Act, .
after six months from.
the accrual of the cause of such suit.
True to Anglo Indian forensic tradition, a profusion of precedential erudition has been placed for our consideration in the able submissions of the learned advocates on both sides.
Intricacy and refinement have marked the arguments and meticulous judicial attention is necessitated to discover from the tangled skein of case law the pertinent principle that accords with the intendment of the statute, the language used, the commonsense and justice of the situation.
A relevant diary of facts and dates will help focus attention on the primary legal question.
The first plaintiff became entitled to claim a consignment of 53 bundles of mild steel plates despatched by a Japanese exporter to be delivered at the port of Bombay.
The goods were discharged in the docks into the custody of the.
Bombay Port Trust (the defendant, and now the appellant) on September 12, 1959.
The goods had been insured and the second plaintiff is the insurer.
Within a week, that is, on September 19,1959, delivery of the goods was applied for and was given but of only 52 bundles.
A week thereafter, the first plaintiff demanded the missing bundle, but was tenta lisingly put off from time to time by the defendant by letters of September 29, October 10, and December 4, 1959 assuring that a search was in progress to trace the goods.
It is important at this stage to notice that the plaintiff 's letter of September 26, 1959 sought "information regarding the whereabouts of the above bundle so as to enable us to clear the same at an early date".
The broad implication is that at that time the first plaintiff had.
no idea where the missing bundle was in the vessel or the port.
It is not unreasonable to infer that he did not then know, for sure, whether the undelivered item had been landed from the ship at all.
None of the three, letters by the defendant stated firmly that it had been discharged into the port, and it is quite on the cards that part of the total consignment had not been discharged into the port, in these any thing may happen days of expect the unexpected.
Significantly ' the first plaintiff inquired of the Indian Maritime Enterprises, the agents of the Japanese vessel, whether the entire consignment of 53 bundles bad been duly landed.
The reply received by the first plaintiff is meaningful in that the Indian Maritime Enterprises in there letter dated November 7, 1959, told the first plaintiff that all the 53 bundles had been duly unloaded.
It inevitably follows that the earliest date when we can attribute to the plaintiff clear knowledge of the port authorities having come into possession of the missing bundle was November 7, 1959.
of course, 400 the inquiry Section of the Alexandra Dock of the defendant indifferently informed the first plaintiff even on December 4, 1959 that the missing bundle was still under search and a definite reply regarding the out turn of that item could be given only later when loading sheets were fully checked.
However, the first plaintiff by letter dated December 5, 1959 wrote to the port authorities that he had been informed by the agents of the vessel (The Indian Maritime Enterprises) that the entire 53 bundles had been landed and desired "to please let us know immediately whether the bundle has been landed; if landed let the, information regarding the whereabouts and, if not, kindly confirm the short landings".
Apparently, this was to make assurance doubly sure which could be gained only when the defendant 's officials also confirmed it.
Counsel for the plaintiffs, with sweet reasonableness, urges that the interested ipse dixit of the agents of the vessel may not by itself be sufficient to impute clear knowledge of the discharge from the ship into the port of goods of which the Port Trust dis claimed knowledge of whereabouts.
Long later, on January 22, 1960, the Port Trust informed the first plaintiff "that the bundle under reference had been out turned as landed but missing".
Within a week thereafter, the first plaintiff asked for a non delivery certificate so that he could claim from the insurers the value of the article lost.
Such a certificate was issued on March 1, 1960 and on May 12, 1960 a statutory notice under section 87 of the Act was issued, followed on June 18, 1960 by the suit for the missing bundle or its value by way of damages.
The deadly defence put forward by the defendant and reiterated before us with great plausibility, was that the suit being governed by section 87 of the Act and the cause of action having been born on and limitation commenced to run from around September 19, 1959, the claim was stale, being well beyond six months and the statutory notice of a month super added.
The second plaintiff, insurer, having paid the value of the lost articles to the first plaintiff got itself subrogated to the latter 's right, and they together laid the suit before the Court of Small Causes.
That Court held on the merits that the defendant had been negligent in bestowing the basic care which as statutory bailee it was bound to take, and on the preliminary plea of bar of limitation repelled it, taking the view that non delivery of a consignment could not attract the shorter period prescribed in section 87 of the Act.
The decrees passed was, however, set aside by the Full Court in appeal which held the claim to fall within the ambit of the lesser limitation laid down by the Act, and so beyond time.
The teetering course of the case brought success to the plaintiffs in the High Court when a single Judge upset the finding on limitation and directed disposal of the appeal on the merits.
The last lap of the litigation has spurred them to this Court where learned counsel have addressed arguments principally on two facets of the plea of limitation.
The primary question is whether the present suit is one 'for any thing done, or purporting to have been done, in pursuance of this Act '.
The action is for non delivery of one out of 53 bundles.
plaintiffs ' counsel argues that an omission to do cannot be 'an act done 401 or purporting to have been done '.
Again, the failure to do what the Act mandates the Port Trust to do, viz., to deliver consignments to owners, cannot be 'in pursuance of this Act '.
How can the statute direct non delivery and how can the Port officials reasonably conceive that not delivering the goods committed to their charge is in pursuance of statutory duty? The perverse verdict would then be reached that violation of a law is fulfilment thereof.
Embellished by numerous rulings, Shri Cooper strove to convince us of the substance of the further link in the chain of his case that the cause of action for recovery of the value of the lost article could not spring to life before the knowledge of the landing and loss was brought home to the plaintiff.
How can a party, other than one with uncanny powers of extra sensory perception, sue for recovery from a bailee of compensation for loss of goods at a time when he is ignorant of the key fact that they have come into the latter 's, hands and have been lost? In short, for a cause of action for non delivery by the bailee to materialise, scienter that there has been delivery to the bailee and that it has since become non deliverable while in his custody, is a sine qua non.
Otherwise, suits for loss of goods would be some sort of a blind man 's buff game.
The Additional Solicitor General, armed with many decisions, Indian and English, parried the thrust by urging the rival position that an act includes an omission in circumstances like the present, that an official may contravene the duty laid under an Act and may yet purport to act under it, so much so delivery of 52 out of 53 bundles, impliedly omitting to deliver one item, is in pursuance of the statutory scheme of accepting the cargo discharged from the vessel, warehousing them and making them available for delivery to consignees.
In his submission, to dissect the integral course of statutory performance and to pick out a minor component of 'commission ' as constituting the infringement of the owner 's right which has given rise to the cause of action, is to misread the purpose and to re write the effect of section 87 and similar provisions in many statutes calculated to protect public officer and institutions on a special basis He further contends that even if, theoretically speaking, knowledge of the landing of the goods may be an ingredient of the cause of action, correspondence between the bailee and the owner regarding search for the landed goods is no ground to postpone the accrual of the right to sue, and When in a large consignment the bulk of it is delivered on a certain date the few undelivered items should also be reasonably presumed as having been landed and ready to be handed over, thus bringing into being, on such short delivery, the 'cause ' to sue.
Likewise, when the rules specify a week of the landing (vide section 61A) within which the owner is expected to take charge of the goods and the Port Trust is absolved from liability thereafter that is indication of the reasonable limit of time for delivery.
Limitation begins to run when the goods should reasonably have been delivered, ignoring operations for tracing the missing goods.
The absurd result would otherwise be that the right to sue would flicker fitfully as the search for the last bundle is protracting and the Port Trust can indefinitely put off a claimant 's suit by persisting in vain searches for the pilfered article and sending soothing 402 letters that efforts trace are 'in progress. ' And more sinister is the possibility of owners of considerable consignments, by oblique methods, getting letters of promise of search despatched by Port officials and thus postpone the time for taking delivery, thereby saving immensely on warehousing charges which are heavy in big cities.
Corruption spreads where such legal construction protects.
The proponents of both views have cited rulings in support but the sound approach of studying for oneself the sense of section 87 prompts us to set it out together with other cognate sections, get the hang of the statutory scheme and read the plain meaning of the notice and limitation provisions.
"section 87.
No suit or other proceeding shall be commenced against any person for any thing done, or purporting to have been done, in pursuance of this Act, without giving to such person one month 's previous notice in writing of the intended suit or other proceeding, and of the cause thereof, nor after six months from the accrual of the cause of such suit or other proceeding. " "section 61A(1).
The Board shall, immediately upon the landing of any goods, take charge thereof, except as may be otherwise provided in the bye laws, and store such as are liable in their opinion to suffer from exposure in any shed or warehouse belonging to the Board.
(2) If any owner, without any default on the part of the Board, fails to remove any goods other than those stored in the warehouses appointed by the Board for the storage of duty paid goods or in warehouses appointed under section 15, or licenced under section 16 of the , from the premises of the Board within seven clear days from the date on which such goods shall have been landed, such goods shall remain on the premises of the Board at the sole risk and expense of the owner and the Board shall thereupon be discharged from all liability theretofore incurred by them in respect of such goods. ' "61B. The responsibility of the Board for the loss, destruction or deterioration of goods of which it has taken charge shall, subject to the other provisions of this Act and subject also in the case of goods received for carriage by railways to the provisions of the Indian Railways Act, 1890 be that of a bailee under section 151, 152 and 161 of the , omitting the words "in the absence of any special last mentioned Act.
" Let us interpret and apply.
Non delivery of an article is an omission, not an act and, in any case.
not one in pursuance of the Act, because the statute does ,not direct the Port Trust not to deliver the goods received from the 403 ships that Call at the port.
This view has found favour with the High Court.
With due difference to the learned judge, we think this approach to be too literal, narrow and impractical." 'For, inaction has a positive side as where a driver refuses to move his vehicle from the middle of tile road or even an operator declines to stop an engine or a surgeon omits to take out a swab ' of cotton after the operation.
Omission has an activist, facet "like commission, more so when there is a duty not to omit.
Again, where a course of conduct is enjoined by a law, the whole process pursuant to that obligation is an act done or purporting to be done under that Act although the components of that comprehensive act may consist of commissions and omissions.
A policeman acts or purports to act not only when he uses his lathi but also when he omits to open the lock up to set the arrested free or omits to produce him before a Magistrate.
The ostensible basis of 'the whole conduct colours both doings and defaults and the use of the words ' purporting to have been done".
in their natural sweep, cover the commission omission Complex.
A, cognate point arises as to whether you can attribute the neglect to comply with a law as something done in pursuance of that law.
Here again the fallacy is obvious.
If under colour of office.
clothed with the rules of authority, a person indulges in conduct not falling under the law he is not acting in accordance with the sanction of the statute or in bona fide execution of authority but ostensibly under the cloak of statute.
It is the apparel that oft proclaims the man and whether anything is done under, in pursuance of or under colour of a law.
merely means that the act is done in apparent, though not real, cover of the statute.
Broadly understood, can the official when challenged fall back, in justification, on his official trappings? A revenue officer distraining goods wrongfully or a municipal officer receiving license fee from a non licensee is violating the law but purports to act under, it.
On the other hand, a police officer who collects water cess or a municipal officer who takes another into custody, is not by any stretch of language acting in pursuance of or under the relevant Act that gives him power.
And certainly not an act of taking bribe or committing rape.
Such is the sense of the words we are called upon to construe.
The true meaning of such and similar words used in like statutes has been set out In, Halsbury correctly and concisely : "An act may be done in Pursuance of or in the execution of the powers granted by a statue, although that act is prohibited by the statute.
A person acting under statutory powers may erroneously exceed the powers given, or inadequately discharge the duties imposed, by a statute, vet if he acts bona fide in order to execute such powers Pr to discharge such duties.
he is considered as acting in pursuance of the statute.
Where a statute imposes a duty, the omissions to do something that ought to be done in order completely to Perform the duty, on the continuing to leave any such duty unpe rformed, amounts to an act done or 404 intended to be done, within the meaning of a statute which provides a special period of limitation for such an act." (3rd edn., vol.
24, pp.189 190).
A selective reference to the rulings cited at the bar may now be made.
although in this blurred area conflicting pronouncements have made for confusion, a systematised presentation will yield the clear inference we have reached without reference to the citations.
In one of the earliest cases under the Highway Act, the defendant.
surveyor of the perish of T., was charged with failure to remove the gravel from the highway which obstructed and caused nuisance to the public and overturned the plaintiff 's carriage.
It was proved that the defended was guilty of want to care in leaving the gravel there, and the questions arose whether under section 109 of the Highway Act he was entitled to notice.
Lord Denman, C.J., disposed of the matter tersely : "It is clear that the defendant is charged with a tort committed in the course of his official duty,; he is charged, as surveyor.
with the positive act of leaving the gravel on 'the road, where it had been improperly placed, for, an unreasonable time On that simple ground, I think it clear that he was entitled to notice.
" Patterson J. considered the same point a little more at length taking the, view ". that the charge is not one of mere omissions, but of actually continuing the nuisance.
That is a charge of doing something wrong, of keeping the gravel in an improper place.
an act continued until the concurrence of the mischief.
Is it then an act done in pursuance of the statute ? It is not denied that the heap of gravel was put there in pursuance of the statute , it could not be spread at the same moment; the question then would arise, whether the length of time during which it was kept in a heap was reasonable or not.
The continuing, therefore, was a thing done in pursuance of the statute. ' Wightman J. struck a similar note.
The learned Judge observed "The defendant is liable only by virtue of his office.
lie is charged with ' permitting an obstruction to remain, of which permission he is guilty in his character of an officer described in the Act of Parliament.
He is, therefore, under sev 109, entitled to a notice, in order to enable him to tender amends." This decision rendered around 130 years ago has a modern freshness and it is remarkable that the language of the statute construed by the Judges there has a likeness to the one we are concerned with here, namely, "anything done in pursuance of or under the authority" of statute.
405 Still earlier rulings may be referred to; for instance Palmer V. Tile Grana Junction Railway Company(1) where the same point was ruled.
but where Baron Parke said : "If the action was brought against the railway company for the omission of some duty imposed upon them by the Act.
this notice would be required.
" In another old decision, Poulsum vs Thirst(2) the construction of the expression, acts "done or intended to be done under the powers of the Metropolitan Board of Works, and fell for decision.
Byles, J. relied on Newton vs Ellia(3) where also a similar set of words had to be interpreted and "omitted to be done" was absent.
In the case decided by Byles, J., the defendant stopped up the sewer, and neglected to drain it, thereby causing injury. 'The learned Judge belt] that the defendant 's conduct must be looked at as a whole, and that he was entitled to notice of action.
The other two Judges took the same view.
Newton vs Ellis(4) decided in 1855 under section 139 of the Public Health Act, 1848, for injury caused by digging a hole on the road without placing a light or signal there, turned on the need for notice before summons.
Earlier cases like Davis vs Curling(5) were referred to and the conclusion reached that though the gravamen of the charge against the defendant was the omission to place a light in the spot of danger it attracted the formula "anything done or intended to be done under the provisions of this Act" comparable to the phraseology of the Act which came under the judicial lens in.
Davis vs Curling 'things done in pursuance of or under the authority ' of the Act.
Coleridge, J. observed with felicitous precisions "This is not a case of not doing; t e defendant does something, omitting to secure protection for the public.
He is not sued for not putting up a light, but for the complex act.
" Erle J. likewise said ".Here the cause of action is the making the hole, compounded with the not putting up a light.
When these are blended, the result is no more than if two positive acts were committed, such as digging the hole and throwing out the dirt; the two would make up one act.
" Are we not concerned with a blended brew of act and omission, a complex act, a compound act of delivery cum non delivery, pursuant to the statute without which the vinculum juris between the Board and the plaintiff did not exist? Jolliffee vs The Wallasey Local Board(6) is a leading case, rightly pressed for acceptance of its ratio by the, learned Solicitor General.
Kesting, J., after finding for the plaintiff on negligence, focussed atten (1) ; (3) ; ; (5) 8 Q. D. 286.
(2) (1867) 2 L. R. 449.
(4) ; (6) (1873) L. R. 62.
406 tion on the nature of the Act and the need for notice.
He observed "As a matter of fact, therefore I come to the conclusion that the defendants were guilty of the negligence complained of, and that negligence was the cause of the accident; and, as matter of law, I hold that negligence to give the plaintiffs a cause of action against the local board.
But, assuming that to be so, then comes the further question, whether the defendants are not absolved from liability in this action, by reason of the absence of a notice of action.
For myself, I must express my regret that this case should be decided upon such a point; but my opinion is that the defendants were entitled to notice.
This question depends upon the construction of the several Acts of Parliament which have been placed before us." "Now the local board was originally constituted under the Public Health Act, 1848; and it is not denied that, for anything done or intended to be done under that Act, they would be entitled to a notice of action under section 139." "That.
however, does not dispose of the matter; a further question arises, viz., whether the acts complained of here are acts which could be done by the local board under the provisions of the Act of Parliament, so as to entitle them to a notice of action." "It has been suggested that protection is not intended to be given by clauses of this description in cases of nonfeasance.
so, is clear, from the cases of Davis vs Curling, Newton vs Ellis, Wilson vs Mayor, & C., of Halifax, and Salmes vs Judge, all of which seem to me to establish that a case of what appears to be nonfeasance may be within the protection of the Act.
" Brett, J, expressed himself equally unminicingly: "Now. two objections were urged by Mr. Aspinnal.
In the first place, he says the thing complained of here is a mere nonfeasance, and therefore not "an act done.
" If I rightly understand the judgments in former cases, the rule is this,where a man is sued in tort for the breach of some positive duty imposed upon him by an Act of Parliament, or for the omission to perform some such duty, either may be an act done or intended to be done under the authority of the Act, and if so done or intended to; be done, the defendant is entitled to a notice of action." "In Wilson vs Mayor, & c. of Halifax(1), Kelly, C.B., states the proposition in those terms: It has been urged on the part of the plaintiff that the charge against the defendants is not of any act done or intended to be done, but of an omission to erect or cause to be erected a fence between the foot path and the goit, and that the omission to do an act is not (1) Law Rep. 407 an act done or intended to be (lone, ' Some authorities have been cited on both sides: but we think that, whatever may be the construction which might be put upon the words of the statute if the question arose in this case for the first time, it is now settled by authority that an omission to do something that ought to be done in order to the complete performance of a duty imposed upon a public body under an Act of.
Parliament, or the continuing to leave any such duty unperformed, amounts to an act done or intended to be done, within the meaning of these clauses requiring notice of action for the protection of public bodies acting in the discharge of public duties under Acts of Parliament." "It would seem from these authorities that, where the plaintiff is suing in tort, nonfeasance is to be considered as " an act done," within.
such clauses as these." Mr. Cooper tried to distinguish Jolliffee 's case but having given our close attention to the matter we decline to jettison this weighty judgment.
Jolliffee 's case was followed by the Privy Council in Queen vs Williams(1).
The Judicial Committee took the view that "an omission to do something which ought to be done in order to the complete performance of a duty imposed upon a public body under an Act of Parliament, or the continuing to leave any such duty unperformed, amounts to "an act done or intended to be ' done" within the meaning of a clause requiring a notice of action." A case which went up to the Privy Council from India under the Calcutta Port Act, 1890, was decided on similar lines by the Judicial Committee in Commissioner for the Port of Calcutta vs Corporation of Calcutta(2).
Lord Alness observed "Reliance was placed by the respondents on the case of the Bradford Corporation vs Myers [(1916) I. A.C. 242].
Now, inasmuch as that case related to the construction of the Public Authorities Protection Act (1893), which contains language not to be found in the Indian statute, and which omits language to be found in the latter, manifestly the decision falls to be handled with c are.
In particular, the English Act does not contain the word is "purporting or professing" to act in pursuance of the statute.
Their Lordships regard these words as of pivotal importance.
Their presence in the statute appears to postulate that work which is not done in pursuance of the statute may nevertheless be accorded its protection if the work professes or purports to ' be done in pursuance of the statute.
The English Act was properly treated by the, House in the Bradford case as one from which the words "profession or purporting" were omitted, and the observations of the House must, of course, be construed secundum subjectam materiem." (2) [1937] 64IA 363; 371.
(1) (1884) 9 L. R. 41 8. 408 In a different context though, the Privy Council had to deal with a similar provision, namely, section 197 of the Criminal Procedure Code, in the well known case of Gill vs The King(1).
Lord Simonds, speaking for the Board, explained the position of law thus : "A public servant can only be said to act or to purport to act in the discharge of his official duty, if his act is such as to lie within the scope of his official duty.
Thus, a judge neither acts nor purports to act as a judge in receiving a bribe, though the judgment which he delivers may be such an act: nor does a Government medical officer act or purport to act as a public servant in picking the pocket of a patient whom he is examining, though the examination itself may be such an act.
The test may well be whether the public servant, if challenged, can reasonably claim that, what he does, he does in virtue of his office.
" It may be mentioned even here that the Judicial Committee had distinguished Bradford Corporation vs Myers(2) on which considerable reliance was placed by Shri Cooper and also in several decisions which took the opposite point of view.
We need make no comments on that decision except to state that for exceedingly excellent reasons the Judicial Committee has put that ruling out of the way.
Shri Cooper brought to our notice the circumstance that Public Authorities Protection Act, 1893, brought in 'neglect and default ', which became necessary only because "any act done in pursuance. of any Act of Parliament." would not otherwise comprehend omissions and defaults.
We are not impressed with this submission and decline to speculate why a change of language was made if the law packed "omission" into "act".
Gill vs The King (supra), just referred to, affirms the careful analysis of the authorities by Varadachariar, J., in Hori Ram Singh vs The Crown(3) and also the ratio in Huntley 's (4) case.
In Hori Ram 's case, which related to the construction of section 197 of the Criminal Procedure Code and section 270(1) of the Government of India Act, Varadachariar, J., brought out the true meaning of the words "act done or purporting to be done in the execution of his duty".
The learned Judge observed : "Apart from the principle that, for the purposes of the criminal law, acts and illegal omissions stand very much on the same footing, the conduct of the appellant in maintaining the accounts, which it was his duty to keep, has to be dealt with as a whole and the particular omission cannot of itself be treated as an offence except as a step in the appellant 's conduct in relation to the maintenance of the register which it was his duty correctly to maintain." Stress was laid rightly by the learned Judge on the relevance of public interest in protecting a public servant and in restrictions being placed on an aggrieved citizen seeking redress in a court of law, to point out (1) [1948] 75 I. A. 41; 59 60.
(3) (2) (4) 409 that acts which have no reference to official duty should not come within the protective umbrella of these statutory provisions.
The learned Judge insisted that "an act is not less one done or purporting to be done in execution of a duty because the officer concerned does it negligently." The true test, if we may say so with great respect, is whether the conduct of the public servant or public body, viewed as a whole, including as it may 'omissions ' also, be attributed to the exercise of office.
Sri Cooper reinforced his contrary argument by reliance on the case of Revati Mohan Das vs Jatindra Mohan Ghosh(1) which dealt with section 80 of the Civil Procedure Code.
That decision, however, is distinguishable and relates to an optional act or omission of a public officer where it could not be designated that the failure to pay the debt by a manager was an 'illegal omission ' constituting an 'act ' under section 3 of the General Clauses Act.
A decision of the Calcutta High Court (Commissioner for the Court of Calcutta vs Abdul Rahim Osman & Co.(2), turning on the construction of a similar provision (section 142 of the Calcutta Port Act) covers the various decisions, Indian and English, and after pointed reference to Amrik Singh 's case reaches the conclusion : "There must be a reasonable connection between the act and the discharge of official duty; the act must bear such relation to the duty that the accused could lay a reasonable, but not a pretended or fanciful claim, that he did it in the course of the performance of his duty.
" The Bench proceeded to set out the following propositions which meet with our approval: (a) I order to apply the bar under sec.
142 of the Calcutta Port Act, it is first to be determined whether the act which is complained of in the suit in question can be said to come within the scope of the official duty of the person or persons who are sought to be made liable.
This question can be answered in the affirmative where there is a reasonable connection between the act and the discharge of the official duty.
(b) Once the scope of the official duty is determined, sec.
142 will protect the defendants not only from a claim based on breach of the duty but also from a claim based upon an omission to perform such duty.
(c) The protection of sec.
142 cannot be held to be confined to acts done in the exercise of a statutory power but also extends to acts done within the scope, of an official duty.
" The case dealt with was also one of short delivery and consequent loss of a part of the goods, and the suit was dismissed for being beyond the short period of limitation prescribed under the special Act.
Again, in District Board of Manbhum vs Shyamapada Sarkar(3) the Bihar Local Self Government Act containing a provision analogous to (1) [1934] 61 I. A. 171.
(2) 68 Cal.
Weekly Notes 814.
(3) A. I. R. 1955 Pat.
410 what we are, concerned with here was construed by a bench of that Court reading the words "anything done under this Act" to include "anything Omitted to be done under the Act", and further that anything done tinder this Act ' necessarily and logically embraces anything wrongfully done or wrongfully omitted to be done.
In Gorakh Fulji Mahala vs State(1), Chandrachud, J., as he then was, made an elaborate study of a comparable provision in the Bombay Police Act (section 161) and followed the Federal Court decisions already referred to by us, as well as this Court 's decision in Shreekantiah Ramayya kunipalli vs State of Bombay(2).
The learned Judge summed up the law thus "The decisions cited above have uniformly taken the view that in an act cannot be said to be done under colour of office or under colour of duty or in the Purported execution of official duties unless there is a reasonable connection between the act and the office.
A view has also been taken in these decisions that one of the tests for determining whether an act has been done in the purported discharge of official duties is whether the public servant can defend his act by reference, to the nature of the duties of his office if he is challenged while doing the act.
" A few more decisions, apart from what has already been referred to by us, specifically dealing with similar causes of action under similar statutes, viz., the Calcutta Port Act and the Madras Port Trust Act, have discussed the problem before us.
In Madras Port vs Home Insurance Co. (3), a Division Bench of the Madras High Court adopted the wider view and held "The services which the Board has to perform and could perform statutorily under the statutory powers and duties cannot be dissociated from its omissions and failures in relation to the goods.
Any action Which is called for will properly be covered by the Words 'anything done or purporting to be done in pursuance of this Act.
Under the Madras General Clauses Act, 1891 words which refer to.
the acts done extend also to illegal omissions.
" Natesan, J., relied on Calcutta Port Commissioner vs Corporation of Calcutta(4), where the Judicial Committee had stressed the ampler sense of 'purporting or professing to act in pursuance of the statute ' and observed "Their Lordships regard these words as of pivotal importance.
Their presence in the statute appears to postulate that work which it hot done in pursuance, of the statute may nevertheless be accorded its protection, if the work professes or purports to be done in pursuance of the statute." (1) I. L. R. (3) A. I. R. ; 57 58.
(2) ; (4) A. I. R. 411 The whole issue is clinched in our view by the final pronouncement of this Court in Public Prosecutor Madras ;vs R. Raju(1).
the, interpretation of s.40(2) of the Central Excis ' and Salt Act, 1944 and the antithesis argued between 'act ' and 'omission ' provoked a panoramic survey of the Indian statute book.
Reference was made to Pritam Singh 's (2) case where absence from duty at the time of the roll call was held to be something done under the provisions of the Police Act.
Maulad Ahmadabad 'S(3), case Was relied an as fortifying this view, for there too a Head Constable who made false entries in a General Diary of the Police Station *as held entitled to.invoke the 3 months limitation under section 42 of the Police Act since the act complained of was the non discharge of duty in keeping a regular diary.
Even filing false returns by a sales tax assessee was held in Sitaram vs State of Madhya Pradesh(4) as an act done under the Berar Sales Tax Act whereunder a prosecution for such an.
act had to be brought in three months.
The ratio decidendi is set out by Ray, J. (as he then was) thus : "25.
These decisions in the light of the definition of the word 'act ' in the General Clauses Act establish that non compliance with the provisions of the statute by omitting to do *hat the act enjoins will be anything done or ordered to be, done under the Act.
The complaint against the respondents was that they wanted to evade payment of duty.
Evasion was by using and affixing cut and torn banderols.
Books of accounts were not correctly maintained There was shortage of banderol in stock.
Unbanderolled matche 's were found.
These are all infraction of the provisions in respect of things done or ordered to be done under the Act.
In Amalgamated Electricity Co. vs Municipal Committee, Ajmer [(1969) 1 S.C.R. 430] the meaning of 'omission ' of a statutory duty was explained by this Court.
Hegde, J., speaking for the Court said "The omission in question must have a positive content in it.
In other words, the non discharge of that duty must amount to An illegality".
The positive aspect of omission in the present case in evasion of payment of duty.
The provisions of the Act require proper affixing of banderols.
Cut or turn banderols were used.
Unban dderolled match boxes were found.
These proisions about use of banderols are for collection and payment of excise duty.
The respondents did not pay the lawful dues which are acts to be done or ordered to be done under the Act.
" We readily concede that it is oversimplfication to state that no court has taken the contrary view, both on the question of act not including an omission and action contrary to the behest of the statute not being done pursuant to or under the statute.
An exhaustive consideration of these twin propositions is found in Zila Parishad vs Shanti Devi(5).
(1) A. I. R. (2) ; (3) [1963] Supp, 2 section C. A. 38.
(4) [1962] Supp. 3 section C. R. 21.
(5) ; 412 Seemingly substantial support for Shri Cooper 's contention is derived from observations in State of Gujarat vs Kansara Manilal Bhikhala(1), where, rejecting a plea of protection under section 117 of the , by an occupier of a factory who had violated the duties cast on him, Hidayatullah, J. (as he then was) observed "But the critical words are "any thing done or intended to he done" under the Act.
The protection conferred can only be claimed by a person who can plead that he was required to do or omit to do something under the Act or that he intended to comply with any of its provisions, It cannot confer immunity in respect of actions which are not done under the Act but are done contrary to it.
Even assuming that an act includes an omission as stated in the General Clauses Act, the omission also must be one which is enjoined by the Act.
It is not sufficient to say that the act was honest.
That would bring it only within the words "good faith".
It is necessary further to establish that what is complained of is something which the Act requires should be done or should be omitted to be done.
There must be a compliance or an intended compliance with a provision of the Act, before the protection can be claimed.
The section cannot cover a case of a breach or an intended breach of the Act however honest the conduct otherwise.
In this connection it is necessary to point out, as was done in the Nagpur case above referred to, that the occupier and manager are exempted from liability in certain cases mentioned in section 101.
Where an occupier or a manager is charged with an offence he is entitled to make a complaint in his own turn against any person When acctual the actual offender and on proof of the commission of the offence by such person the occupier or the manager is absolved from liability.
This shows that compliance with the peremptory provisions of the Act is essential and unless the occupier or the manager brings the real offender to book he must bear the responsibility.
Such a provision largely excludes the operation of section 117 in respect of per sons guilty of a breach of the provisions of the Act.
It is not necessary that mens rea must always be established as has been said in some of the cases above referred to.
The responsibility exists without a guilty mind.
An adequate safeguard, however, exists in section 1 0 1 analysed above and the occupier and manager can save themselves if they prove that they are not the real offenders but who, in fact is".
It is obvious that this ruling can hardly help, once we understand the setting and the scheme, of the statute and the purpose 'of protection of workers ensured by casting an absolute obligation on occupiers to observe certain conditions.
The context is the thing and not verbal similitude.
In a recent ruling of this Court in Khandu Sonu Dhobi vs State of Maharashtra(2), Khanna, J., while repelling a plea of immunity from (1) (2) ; 413 prosecution put forward by the accused on the score of limitation and the case being "in respect of anything done or intended to be done under this Act" (The Bombay Land Improvement Scheme Act, 1942) said: "This contention, in our opinion, is devoid of force.
Subsection (2) refers to suit or prosecution against a public servant or person duly authorised 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. 309.07 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 authorised 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.
" How slippery and specious law and logic can be unless the Court is vigilant is evident from this kind of defence Here is a case not of performing or omitting to perform an official act in the course of which an offence is committed.
On the contrary, an independent excursion into crime using the opportunity of office without any nexus with discharge of official function is what we have, in that case.
The Court significantly highlights the fact that 'not only they did no rectification work for the Bundh they also misappropriated the amount entrusted to them for the purpose of rectification. ' We hope no policeman can shelter himself after a rape of an arrested *Oman or shooting of his own wife on the pretext of acting under the Police Act.
Immunity cannot be confused with toxicity disastrous in law as in medicine.
Nor can functions of office be equated with opportunities of office, without being guilty of obtuseness.
This chapter of our discussion yields the conclusion that an act includes an omission (regardless of the General Clauses Act, which does not apply to antecedent statutes) not under all circumstances but in legislations like the Act we are construing.
Again, what is done under purported exercise of statutory functions, even if in excess of or contrary to its provisions, is done pursuant to or under the Act so long as there is a legitimate link between the offending act and the official role.
Judged thus the defence by the Board fills the bill.
The Scheme of the statute is simple.
When cargo ships call at the port, the Board constituted under the Act shall take charge of the goods landed from the vessel and store them properly (section 61 (A)( 1) ).
The 14 L954SupCI/74 414 Board cannot keep goods indefinitely, hard pressed as any modern port is for space and facing as it does intractable problems of protection of goods.
When the goods have landed the owner has to be on the alert and get ready to remove them within 7 days, after which the statutory bailee, the Board, is discharged from liability subject, of course, to any default on the part of the Board in the matter of making the goods deliverable (section 61A(2)).
The span of statutory custody of the Board is short but during that time its obligations are those of a bailee under sections 151, 152 and 161 of the , omitting the words "in the absence of any special contract" in section 152 of the Contract Act (section 61B).
If the person entitled to the goods defaults in removing them within one month of the Board coming into custody, special powers of disposal by public auction are given by section 64A.
The Act charges, the Port authorities with a wealth of functions and duties and necessarily legal proceedings follow upon the defects, defaults and other consequences of abuse of power.
Even so, a public body undertaking work of the sort which a Port carries out will be exposed to an explosive amount of litigation and the Board as well as its officers will be burdened by suits, and prosecutions on top of the pressure of handling goods worth crores daily.
Public bodies and officers will suffer irremediably in such vulnerable circumstances unless actions are brought when evidence is fresh and before delinquency fades; and so it makes sense to provide, as in many other cases of public institutions and servants, a reasonably short period of time within which the legal proceedings should be started.
This is nothing unusual in the jurisprudence of India or England and is constitutionally sound.
Section 87 is illumined by the protective purpose which will be ill served if the shield of a short limitation operates in cases of misfeasance and malfeasance but not nonfeasance.
The object, stripped of legalese and viewed through the glasses of simple sense, is that remedial process against official action showing up as wrong doing or non doing which inflicts injury on a citizen should not be delayed too long to obliterate the probative material for honest defence.
The dichotomy between act and omission, however, logical or legal, has no relevance in this context.
So the intendment of the statute certainly takes in its broad embrace all official action, positive and negative, which is the operative cause of the grievance.
Although the Act, in the present case, uses only the expression 'act ' and omits 'neg lect or default or omission, the meaning does not suffer and if other statutes have used all these words it is more the draftsman 's anxiety to avoid taking risks in court, not an addition to the semantic scope of the word 'act '.
Of course, this is the compulsion of the statutory context and it may well be that other enactments, dealing with different subject matter, may exclude from an 'act ' an 'omission '.
This possibility is reduced a great deal by the definition of 'act ' in the various General Clauses Acts, as including 'illegal omissions '.
The leading ,case of Jolliffee vs The Wallesey Local Board(1) decided nearly a century ago has stood the test of time and still cunent coin, and (1) (1873) 9 L. R. 62.
415 Stroud (Stroud 's Judicial Dictionary; 3rd edn.
Vol. 1; page 877) has extracted its ratio thus : "An omission to do something which ought to be done in order to complete performance of a duty imposed upon a public body under an Act of Parliament, or the continuing to leave any such duty unperformed, amounts to "an act done or intended to be done" within the meaning of a clause requiring a notice of action (Joliffe vs Wallesey, L.R. 9 C.P. 62).
" We regret the prolixity of the judgment because we appreciate brevity but it is the judicial price or tribute to the learning and length of the arguments presenting a panoramic view of Anglo Indian judicial thought for which we are obliged to both counsel.
Indeed, the plethora of rulings cited has been skipped here and there by a process of calculated ricochet, without omitting the more salient cases.
And we are re assured, at the end of this pilgrimage through precedents, that the soundness of the view we have taken is attested by pronouncements of vigorous judges twice three score and ten years ago, in words which 'age cannot wither nor custom stale '.
Law is a practical instrument, a working tool in a workaday world and where, as here, the effected fraction of the community is the common official.
the commercial man and ordinary folk, the wiser rule of construction follows commonsense, not casuistry, context, not strictness and not subtle nuance but plain sense.
The logical conclusion of the legal study is that the short delivery of one bundle or rather the act of under delivery in purported discharge of the bailee 's obligation under section 61B of the Act is covered by section 87 and the truncated limitation prescribed thereunder will apply.
Of course, the statutory notice under section 83 is a condition precedent to, although not a constituent of, the cause of action And there is some authority for the position that the period of one month may also be tacked on under section 15(2) of the .
In the view we take on the ultimate issue this question is immaterial.
Even so, the decisive date on which the decree turns and time runs has to be settled.
if the applies, the suit, by any reckoning, is not barred but since it does not apply the critical issue is as to when time begins to run.
Brushing aside technicalities and guided by the analogy of article 120 of the , we think it night to ]told that the cause of action for short delivery comes into being only when the consignee comes to know that the bailment has come into existence.
You cannot claim delivery from a statutory bailee till you know of the bailment, which under the Act arises only on the vessel discharging the goods into the port certainly not before.
In this species of actions, the right to sue postulates knowledge of the right.
Till then it is embryonic, unborn.
A vital point, then, is as to when the first plaintiff came to know of the goods in question having landed.
The defendant says that when the bulk of the consignment is delivered 'on a Particular date, it must be presumed, unless a contrary inference on special circumstances is made out, that the undelivered Dart was deliverable on that date so 416 much so that limitation began to run from then on.
Any further representation by the bailee that he was trying to trace the missing bundle would not affect the cause of action and therefore the commencement of limitation.
How can a claim be barred without being born ? 'When, then, did the right to sue arise ? It depends on what right was infringed or duty breached.
Which leads us to the enquiry as to what is the statutory responsibility cast on the Board and what is the violation alleged to create the 'cause ' of action.
The bundle of facts constitutive of the right to sue certainly includes the breach of bailee 's duties.
Section 61B of the Act saddles the Board with the, obligations of a bailee under sections 151, 152 and 161 of the Contract Act in regard to loss, destruction or deterioration of goods of which it takes charge.
The degree of care is fixed by section 151 the absolvatory circumstances are indicated by section 152 and the responsibility for loss is fastened by section 162 if, by the fault of the bailee, the goods are not delivered or tendered at the proper time to the bailor.
The proper time for delivery is as soon as the time for which the goods were bailed has expired or the purpose of the bailment has been accomplished Sec. 160, although not in terms woven into the Port Trust Act, is impliedly incorporated, because section 161 inevitably brings it into play.
Even so, when does the time for which the goods are bailed expire ? The answer is, according to the Solicitor General, when the week after landing of the goods expires if section 61A(2) betokens anything on this point.
He urges that when the bulk of a consignment is delivered by the bailee the time for delivery of the short delivered part must be reasonably held to have come.
Finally, he submits that the time consumed by search for the landedgoods cannot be added for fixing the terminus a quo of limitation.
Assuming for arguments sake all these in favour of the appellant, one critical issue claims precedence over them.
When does the statutory bailment take place and can the time for delivery to the owner of the goods arise before he knows or at least has good grounds to know that the bailment has in law come into being ? The owner must ordinarily take delivery in a week 's time after landing since thereafter the Board will cease to be liable for loss, etc., save, of course, when the latter defaults in giving delivery as for instance the goods are irremovably located or, physical obstruction to removal is offered by striking workers or natural calamities.
Here the 7 days ended on September 19, 1959 when actually 52 out of the 53 bundles were delivered.
And if the due date for delivery of the missing bundle had arisen then the suit is admittedly time barred.
However, the learned Solicitor General rightly agrees that 7 days of unloading is no rigid, wooden event to ignite limitation and it depends on other factors which condition the reasonable time when delivery ought to be made.
If a tidal bore has inhibited approach to the port it is a futile law which insists on delivery date having arrived and therefore limitation having been set in motion.
The key question is, according to counsel, when ought the goods have been put in a deliverable state by the Board ?.
If, having regard to reasonable circum 417 stances, the Port Trust did not tender delivery, the right of action for non delivery, subject to statutory notice, arose and the calendar would begin to count the six months in section 87.
We are inclined to assent to this stand for legal and pragmatic reasons.
In Madras Port Trust case where action for loss of goods was laid, two extreme contentions competed for acceptance.
The Board argued that the goods once landed, time ran inflexibly and an absolute span of one month having expired before statutory notice was given the suit was barred.
This was over ruled by the Court (M/s. Swastik Agency vs Madras Port Trust) (1).
But the opposite plea, equally extravagant, commended itself to the Court, erroneously in our view.
The plea was that till the plaintiff knew of the loss, destruction or deterioration time stood still even if many months might have rolled on after the vessel had discharged the goods.
It is true that section 87 speaks of '6 months from the accrual of the cause of such suit '.
What is cause of the suit? Loss, destruction or deterioration ? If so, as Ramamurti, J., has held : "It stands to common sense that the owner cannot be expected to file a suit before he is given access to the goods and also an effective opportunity to examine the goods and he becomes aware of the loss or damage which had occurred to the goods.
To hold that the period of one month specified in s.40(2) would, commence to run even before the owner of the goods became aware, of the loss or damage would result in absurd and startling results.
" The legal confusion issues from the clubbing together of the triple categories of damage.
Cause of suit being destruction or deterioration while the goods are in the custody of the bailee it is correct to read as this Court did in a different situation under the Land Acquisition Act in Harish Chandra vs Deputy Land Acquisition Officer(2), knowledge of the damage by the affected party as an essential requirement of fair play and natural justice.
The error stems from visualising loss as the 'cause ' of suit.
The bailee is bound to return, deliver or tender.
If he defaults in this duty the ,cause ' of action arises.
While destruction or deterioration may need inspection by the owner, it may be proper to import scienter as integral to the 'cause ' or grievance.
But loss flows from sheer non delivery, with nothing super added.
_Loss is the direct result.
viewed through the owner 's eyes, of non return, non delivery or non tender by the bailee the act/omission which completes the 'cause, (vide ;.
161 Contract Act).
What is complained of is the nondelivery, the resultant damage being the loss of goods.
We must keel) ' the breach of duty which is the cause distinct from the loss which is the conse quence.
The judicial interpretation cannot take liberties with the language of the law beyond the strict needs of natural justice.
So we hold that awareness of the factum of loss of goods is not a sine qua non of the 'cause '.
(1) A. I. R. (2) A.I.R. 1961 S.C. 1500.
418 In a stroke of skilful advocacy it was urged that when the bailee fails to return the goods it is like a suit for wrongful detention and the cause of action is a continuing one.
This is an action in detention and its impact on limitation must be recognised, was the contention, stren gthened by Dhian Singh Sabha Singh vs Union of India(1) and certain passages from Clerk & Lindsell on Torts (11th Edition, pages 441 and 442; paras 720 & 721).
The flaw in the argument is that we are concerned with a statutory bailment, statutory action for loss due to non delivery and not a contractual breach and suit in damages or for value of the goods bailed.
Another fascinating,line of thought was suggested to extricate the plaintiff from the coils of brief limitation.
When the defendant holds goods as bailee, the plaintiff may found his cause of action on a breach of the defendant 's duty as bailee of the goods by refusal to deliver them upon request.
Gopal Chandra Bose vs Surendra Nath Dutt(2), Laddo Begam vs Jamal ud din(3) and Kupruswami Mudaliar vs Pannalal Sawcar(4) were cited in support.
Other rulings striking a similar note were also relied on.
But we need not express any opinion on the soundness of that position for here we are dealing with a statutory liability where the plenary liabilities of a bailee cannot be imported.
Counsel for the respondents also urged that the analogy of article 120 of the entitles him to reckon time from when he came to know of the facts making up the right to sue.
In Annamalai Chettiar vs Muthukarappan Chattiar(5), the Judicial Committee had observed: "In their Lordships ' View the case falls under article 120, under which the time begins to run when the right to sue accrues.
In a recent decision of their Lordship 's Board, delivered by Sir Binod Mitter, it is stated, in reference to article 120 : There can be no 'right to sue ' until there is an accrual of the right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted" : Bala vs Koklan(6).
Counsel for the appellants admitted that he was unable to specify any date at which the claim to an account here in suit was denied by the appellants.
Accord ingly this contention fails.
" The reference to Sir Binod Mitter 's observations relates.
to the ruling in Bala vs Koklan.
The proposition is impeccable but is inapplicable if it is urged that the knowledge of the loss marks the relevant date.
On the other hand, if the right to sue or the accrual of the cause of action is based on the infringement by non delivery the knowledge must be the knowledge of the factum of bailment which takes place on the unloading from the vessel and the taking charge by (1) ; (2) (3) All 45.
(4) (5) 58 I.A. 18.
(6) (1930) L.R. 57 I.A. 325.
419 the Board.
That is to say, it is preposterous to postulate the running of limitation from a date anterior to when the plaintiff has come to know that his missing goods have been landed on the port.
Mohammad Yunus vs Syed Unnisa(1) is authority for the rule that there can be no right to sue (under article 120) until there is an accrual of the right asserted which as we have shown, involves awareness of the bailment.
It meets with reason and justice to state that the cause in section 87 cannot arise until the consignee gains knowledge that his goods have come into the hands of the Board.
The Railways Act has spanned cases where courts have laid down legal tests for determining the commencement of limitation.
Views ran on rival lines till in Bootamal 's case(2) this Court settled the conflict and gave the correct lead which has been heavily relied on by the Solicitor General.
Sri Cooper contested the application of the principle in Bootamal on the score that article 31, Limitation Act, 1908, which fell for construction there, used the words 'when the goods ought to be delivered" and covers both delayed delivery and nondelivery, which were absent in s.87, and argued that even otherwise it did not run counter to the contention of the respondent.
Anyway, the Court held there as follows: "Reading the words in their plain grammatical meaning, they are in our opinion capable of only one interpretation, namely, that they contemplate that the time would begin to run after a reasonable period has elapsed on the expiry of which the delivery ought to have been made.
The words "when the goods ought to be delivered" can only mean the reasonable time taken (in the absence of any term in the contract from which the time can be inferred expressly or impliedly) in the carriage of the goods from the place of despatch to the place of destination.
Take the case, where the cause of action is based on delay in delivering the goods.
In such a case the goods have been delivered and the claim is based on the delay caused in the delivery.
Obviously the question of delay can only be decided on the basis of what would be the reasonable time for the arriage of goods from the place of despatch to the place of destination.
Any time taken over and above that would be a else of delay.
Therefore, when we consider the interpretation of these words in the third column with respect to the case of non delivery, they must mean the same thing, namely, the reasonable time taken for the carriage of goods from the place of despatch to the place of destination.
The view therefore taken by some of the High Courts that the time begins from the date when the railway finally refuses to deliver cannot be correct, for the words in the third column of article 31 are incapable of being interpreted as meaning the final refusal of the carrier to deliver." (1) ; (2) ; , 76, 79.
420 "With respect, it is rather difficult to understand how the subsequent correspondence between the railway and the consignor or the consignee can make any difference to the starting point of limitation, when that correspondence only showed that the railway was trying to trace the goods.
The period that might be taken in tracing the goods can have no relevance in determining the reasonable time that is required for the, carriage of the, goods from the place of despatch to the place of destinations.
" The ratio is twofold, viz. (1) not when the final refusal to deliver but when the reasonable time for delivery has elapsed does limitation start; (2) correspondence stating that efforts are being made to trace the goods cannot postpone the triggering of limitation.
Of course, 'reasonable ' time is a relative factor and representation by the Railway inducing the plaintiff not to sue may amount to estoppel or waiver in special circumstances.
We are inclined to confine, Bootamal to the specific words of article 39.
The discussion discloses the influence of the words in columns 1 and 3 on the conclusion, rendering it risky to expand its operation.
Section 87 speaks only of the accrual of the cause.
The cause is the grievance which is generated by nondelivery.
But can it be said that it is unreasonable not to be aggrieved by non delivery if the Board credibly holds out that delivery will shortly be made and vigorous search for the goods is being made amidst the enormous miscellany of consignments lying pell mell within the Port? Do you put yourself in peril of losing your right by behaving reasonably and believing the Board to be a responsible body ? We think not.
We are not impressed by the argument based on Bootamal and the train of decisions following it, under the Railways Act.
The rulings of this Court in Union of India vs Amar Singh,(1), Governor General in Council vs Musaddi Lal(2) and Jetumull Bhojrai vs The Darjeeling Himalayan Railway Co.(3) relate to the Limitation Act and the Railways Act; ' and, while public carriers and Port authorities may in many respect bear similar responsibility, the limitation law applicable is different.
May be, some uniformity is desirable in this area of law.
But we have to go by the language of section 87 and not be deflected by analogy drawn from the Railways Act or Limitation Act with noticeable variations.
Never the less, one of the legal lines harshly but neatly drawn in Bootamal lends some certainty to the 'from when ' of limitation, by eliminating an impertinence letters informing that search for the goods is under way.
The snag is in linking this proffer of search to the vital ingredient in the 'accrual of the cause '.
If, as Bootamal has correctly highlighted, the tracing process is after the 'cause ' is complete it is irrelevant to procrastinate limitation.
This is the wider contribution of that decision to this blurred branch of the law.
So much so, sheafs of letters from the Port officials that the landed goods are being tracted out or searched for are impotent to alter the date from when the crucial six months ' race with time be gins.
Once limitation starts, nothing not the most tragic events can interrupt it; for 'the moving hand writes, and having writ (1) ; (2) ; (3) [1963] 2 S.C.E. 832.
421 moves on; not all thy tears nor piety can lure it back to cancel half a line '.
This implacable start is after 'the accrual of the cause ', which is when non delivery or non tender takes place.
That event is fixed with reference to reasonable lapse of time after the unloading of the goods.
Thus, if the search is to find out whether the goods have landed at all, it is integral and anterior, to the 'cause '; but if it be to trace what has definitely been discharged into the port it is de linked from the, 'cause 'a la Bootamal.
Such an approach reduces the variables and stops the evils of fluctuation of limitation.
It is easy to fix when the vessel has discharged the goods into the port by, looking into the tally sheet or other relevant documents prescribed in the bye laws.
This part of the tracing cannot take long although it is regrettable and negligent for the Bombay Port officials to have taken undue time to give the plaintiffs even this information.
On the contrary, search for the missing but landed goods in the warehouses and sheds and open spaces can be a wild goose chase honestly or as long as the consignee or port officials with dishonestly.
Reasonable diligence will readily give the consignee information of landing, of his goods.
In the major port cities warehousing facilities are expensive and difficult to procure so that a consignee of considerable goods may manage to get free warehousing space within the port for as long as he wants by inducing, for illicit consideration, the port officials to issue letters that the goods are being traced out.
This is a vice which adds to the sinister uncertainty of the terminus a quo if we accept the plea that every letter from the port authorities that the missing goods are being traced out has the effect of postponing limitation.
We wish to make it clear however that the event which is relevant being the discharge of the goods from the ship into the port, the bailment begins when the Board takes charge of the goods and a necessary component of the "cause" in section 87 of the Act is the knowledge of the owner that the goods have landed.
One small but significant argument of the Solicitor General remains to be noticed.
In the search for what 'is the reasonable time for delivery by the bailee a pragmatic or working rules is suggested by him which we think merits consideration.
When a large consignment is entrusted with the Board and the bulk of it is delivered on a particular date it ordinarily follows that the reasonble time for the delivery of the missing part of the consignment also fell on that date.
There may be exceptional circumstances whereby some items in the consignment might not have been unloaded from the ship by mistake or might be stored by error in a wrong shed mixed up with other goods so that they are not deliverable readily, or a substantial part of the goods has been taken delivery of and by the time the balance is sought to be removed a bandh or strike or other physical obstruction prevents taking delivery.
Apart from these recondite possibilities which require to be specially proved by him who claims that limitation has not started, it is safe to conclude that the date for delivery of the 422 non delivered part of the consignment is the same as that when a good part of it was actually delivered.
The ruling in Trustees of the Port of Mad? as vs Union of India, cited by Shri Cooper in this context, is good in parts.
The learned judges were dealing with the short delivery by the Madras Port Trust.
While pointing out that attempts made by the Port Trust to locate the goods would be no answer to the claim for delivery made by the consignee, the Court held that the date when limitation starts in such cases is when a certificate that the missing packages are not available (Shedmaster 's certificate 'C ') is issued.
While it is correct to say that alleged attempts by the Port officials to locate the goods which have definitely landed has no bearing on the "cause", it is equally incorrect to hold that till the certificate that the non delivered package is not forthcoming limitation does not begin.
The true test, as we have earlier pointed out, is to find out when delivery should have been made in the normal course, subject to the fact of discharge from the ship to the port of the relevant goods and the knowledge about that fact by the consignee.
In Union of India vs Jutharam(1) a single Judge of that High Court took the view that when part of the goods sent in one consignment was not delivered it is right to hold that it should have reasonably been delivered on the same day the delivery of the other part took place.
The date of delivery of part of the consignment must be deemed to be the starting point of limitation.
This approach has our broad approval.
In Union of India vs Vithalsa Kisansa & Co.(2) a single Judge of Bombay High Court, while emphasizing that what is reasonable time for delivery may depend upon the circumstances of each case, the point was made if the correspondence between the bailee and the consignee disclosed anything which may amount to an acknowledgment of the liability of the carrier that would give a fresh starting point of limitation.
even as.
if the correspondence discloses material which may throw light on the question of determining the reasonable time for delivery, the Court may take into account that correspondence but not subsequent letters relating only to the tracing of the goods.
This statement of law although made in the context of a public carrier 's liability applies also to the Port Trust.
In short, there is force in the plea that normally the date for delivery of the missing packages should be deemed to be the same as the date when another part of the consignment was actually delivered.
We thus come to the end of the case and may formulate our conclusions, as clearly as the complex of facts permits.
(1) Section 87 of the Acts insists on notice of one month.
This period may legitimately be tacked on to the six month period mentioned in the section (vide Sec.
15(2) ).
(2) The starting point of limitation is the accrual of the cause of action.
Two components of the "cause" are important.
The date (1) A.I.R. 1968 Pat.
(2) A.I.R. 1971 Bom.
423 when the plaintiff came to know or ought to know with reasonable diligence that the goods had been landed from the vessel into the port.
Two clear, though not conclusive indications of when the consignee ought to know are (1) when the bulk of the goods are delivered, there being short delivery leading to a suit (ii) 7 days after knowledge of the landing of the goods suggested in Sec.
Whichever is the later date ordinarily sets off the running of Limitation.
(3) Letters or assurances that the missing packages are being searched for cannot enlarge limitation, once the goods have landed and the owner has come to know of it.
To rely on such an unstable date as the termination of the search by the bailee is apt to make the law uncertain, the limitation liable to manipulation and abuses of other types to seep into the system.
(4) Section 87 is attracted not merely when an act is committed: but also when an omission occurs in the course of the performance of the official duty.
The act omission complex, if it has a nexus to the official functions of the Board and its officers, attracts limitation under section 87.
Judged by these working rules, the present case has to be decided against the plaintiffs.
For one thing, the short delivery of one bundle of steel plates is an integral part of the delivery of the consignment by the port authorities to the consignee in the discharge of their official functions as statutory bailee.
Section 87 of the Act, therefore, applies.
The delivery of the bulk of the consignment took place on September 19, 1959 and more than seven months had passed after that before the institution of the suit.
Of course, a later date, namely, November 7, 1959 (Ext. 'A ') clearly brings to the ken of the plaintiff the fact that the missing bundle has been duly landed in the port.
It is true that the enquiry section of the Bombay Port Trust Docks did not even, as late as December 4, 1959, give a definite reply about the "outturn" for this item.
On December 5, 1959, the first plaintiff brought to the notice of the Board "that the above mentioned bundle has been landed and they (agents of the vessel) hold receipt from you (the Board)".
The plaintiffs made an enquiry "Whether the bundle has been landed, if landed, let the information regarding the whereabouts and, if not, confirm the short landings." Further reminders by the plaintiffs proved fruitless till ;It last on January 22.
1960,, the port officer concerned wrote : "I beg to inform you that the bundle under reference has been outturned as "Landed but missing." It was contended that the plaintiffs, for certain, came to know of the landing of the missing bundle only on January 22, 1960.
We are unable to accept this plea because the first plaintiff had already got the information, as early as November 7, '1959, about the due landing of the missing item from the Indian Maritime Enterprises.
Nothing has been suggested before us as to why this knowledge of the plaintiff should be discarded.
The subsequent correspondence between the port officers and the plaintiffs was more for getting requisite documents.
424 to follow up legal proceedings against the insurer by the consignee.
In this view, the starting point of limitation arose on November 7, 1959 and the suit was instituted on June 18, 1960, a little over 10 days beyond the period of limitation.
The plaintiffs thus missed the bus and we regret to decide on this technical point that the suit is liable to be dismissed but we must.
A faint plea that the Board is not a 'person ' falling with in section 87 was suggested by Sri Cooper but its fate, if urged, is what overtook a similar contention before a Bench of the Madras High Court in Trustees of the Port of Madras vs Home Insurance Co.(1) dismissal without a second thought.
It is surprising that a public body like the Port Trust should have shown remissne in handling the goods of consignees and in taking effective action for tracing the goods.
It is seen that while there is ,a special police station inside the port, called the Yellow Gate Police Station, with six or seven officers and 200 policemen for duty by day and with about 400 policemen for duty by night, the port authorities ,did not care to report to the police till December 16, 1959.
Three months is far too inordinate and inexcusable a delay for reporting about the pilferage of a vital and valuable item, namely, a bundle of ,steel plates imported from Japan by an automobile manufacturing company.
While we dismiss this suit, we feel that it is not enough that the State instal police stations inside the ports; it must ensure diligent action by the officials, and if there is delinquency or default in discharging their duties promptly and smartly, disciplinary action should be taken against those concerned.
In this country our major harbours are acquiring a different reputation for harbouring smugglers :and pilferers and an impression has gained currency that port officials ,connive at these operations for consideration.
Every case is an event and an index, projects a conflict of rights between two entities but has a social facet, being the symptom of a social legion.
We consider that the Government and the public must be alerted about the unsatisfactory functioning of the ports so 'that delinquent officials may be proceeded against for dubious default in the discharge of their duties.
It is not enough that diligence is shown in pleading limitation when honest citizens aggrieved by loss ' of their goods entrusted to public bodies come to court.
The responsibility of these institutions to do their utmost to prevent pilferage is implied in the legislative policy of prescribing a short period of ' limitation.
Another important circumstance we wish to emphasize is that ambiguity in language leading to possibilities of different constructions should not be left to the painfully long and expensive process of being ,settled decades later by the highest court in the land.
The alternative and quicker process in a democracy of rectification by legislative amendment should be resorted to so that private citizens are not subjected to inordinate expense and delay because the legalese in a legislation reads abstruse or ambiguous.
The very length of this judgment, and of this litigation, is eloquent testimony to the need (1) A.I.R. 1970 Mad.
425 for prompt corrective legislation on such small matters as have cropped up in the present case.
Moreover, some uniformity in regard to.
statutory bailee 's responsibilities, whether they be public carriers like the Railways, or strategic institutions like Ports, will give the community a sense of certainty and clarity about their rights and the duties.
of public bodies in charge of their goods.
Counsel had drawn attention to the difficulties of the community where conflicting judicial currents aided by tricky words have made law chancy, and the need for this Court to clear the ground and give.
the lead.
We are aware, with justice Jackson of the U.S. Supreme Court, that 'the judicial decree, however, broadly worded, actually binds in most instances, only the parties to the case.
As to others,.
it is merely a weather vane showing which way the judicial wind is blowing '.
The direction of the wind.
in this branch of law, is as we have projected.
We are of the view, in reiteration of earlier expression on the same lines, that public bodies should resist the temptation to take technical pleas or defeat honest claims by legally permissible but marginally unjust contentions, including narrow limitation.
In this and similar cases, where a public carrier dissuades private parties from suing by its promises of search for lost articles and finally pleads helplessness,, it is doubtful morality to non suit solely on grounds of limitation, a plaintiff who is taken in by seemingly responsible representation only to find himself fooled by his credibility.
Public institutions convict themselves of untrustworthiness out of their own mouth by resorting to such defences.
What should be the proper direction for.
costs ? Both the parties arc public sector bodies.
But the principle which must guide us has to be of general application.
Here is a small claim which is usually associated with the little man and when, as in this test action, the litigation escalates to the final court wafted by a legal nicety, his financial back is broken in a bona fide endeavour to secure a declara tion of the law that binds all courts in the country for the obvious benefit of the whole community.
The fact that the case has gained special leave under article 136 is prima facie proof of the general public importance of the legal issue.
The course of this litigation proves that the fine but decisive point of law enmeshed in a conflict of precedents found each court reversing the one next below it, almost hopefully appetising the losing party to appeal to the higher forum.
The real beneficiary is the business community which now knows finally the norm of limitation they must obey.
Is it fair in these circumstances that one party, albeit the vanquished one, should bear the burden of costs throughout for providing the occasion not provocation for laying down the correct law in a controversial situation.
Faced with, a similar moral legal issue, Lord Reid observed : "I think we must consider separately costs in this House and costs in the Court of Appeal.
Cases can only come before this House with leave, and leave is generally given because some general question of law is involved.
In this 426 case it enabled the whole vexed matter of non est factum to be re examined.
This seems to me a typical case where the costs of the successful respondent should come out of public funds.
"The Evershed Committee on Supreme Court Practice and Procedure had suggested in England that the Attorney General should be empowered to issue a certificate for the use of public funds in appeals to the House of Lords where issues of outstanding public importance are involved.
Maybe, a scheme for a suitor 's fund to indemnify for costs as recommended by a Sub Committee of Justice is the answer, but these are matters for the consideration of the Legislature and the Executive.
We mention them to show that the law in this branch cannot be rigid.
We have to make a compromise between pragmatism and equity and modify the loser pays all doctrine by exercise of a flexible discretion.
The respondent in this case need not be a martyr for the cause of the, certainty of law under section 87 of the Act, particularly when the appellant wins on a point of limitation.
(The trial court had even held the appellant guilty of negligence).
In these circumstances we direct that the parties do, bear their costs throughout.
Subject to this, we allow the appeal.
S.C. Appeal allowed.
(1) Gallie vs Lee.
(2) ,1048.
| IN-Abs | The first plaintiff became entitled to claim a consignment of 53 bundles of mild steel plates despatched by a Japanese exporter to be delivered at the port of Bombay.
The goods were discharged in the docks on 12th September 1959, into the custody of the Bombay Port Trust, the appellant.
The goods were insured and the second plaintiff was the insurer.
On September 19, 1959, delivery of the goods was applied for and was given but only 52 bundles.
A week thereafter, the first plaintiff demanded the missing bundle but was put off from time to time by the appellant assuring that a search was in progress to trace the goods.
From the Indian Maritime Enterprises, the agents of the Japanese vessel, the plaintiff came to know on November 7, 1959 that all the 53 bundles had been duly unloaded.
The plaintiff enquired from the appellant again on December 5, 1959 whether the bundle had been landed; but the port authorities still informed that the missing bundle was still under search.
Thereafter, on January 22, 1960, the appellant informed the first plaintiff that the bundle under reference had been out turned as landed but missing.
Within a week thereafter, the first plaintiff asked for a non delivery certificate and the certificate was issued on March 1, 1960 and on May 12, 1960 a statutory notice under section 87 of the Bombay Port Trust Act, 1879, was issued and a suit was filed for the missing bundle or its value by way of damages.
The defence put forward by the appellant was, that since the suit was governed by section 87 of the Act and the cause of action having arisen on September 19, 1959, the claim is barred by limitation because 6 months had already passed from the time the first cause of action arose.
The second plaintiff, insurer, having paid the value of the lost articles to the first plaintiff got itself subrogated to the later 's right, and they together filed the suit before the Court of Small Causes.
That Court held against the appellant but the full Court in appeal reversed the judgment of the trial court and held in favour of the appellant holding that the claim was barred by limitation.
The High Court, however, held in favour of the plaintiff and hence the appeal to this Court.
Section 87 of the Bombay Port Trust Act, 1879, provides that no suit or other proceeding shall be commenced against any person for anything done or purporting to have been done, in pursuance of this Act without one month 's previous notice, and not after 6 months from the accrual of the cause of such suit or other proceeding.
The question was whether the suit was for anything done or purporting to have been done in pursuance of this Act, when the action is for non delivery of one out of 53 bundles.
Allowing the appeal, HELD : (1) Where a statute imposes a duty, the omission to do something that ought to be done in order completely to perform the duty, or the continuing to have any such duty unperformed, amounts to an act done or intended to be done within the meaning of a statute which provides a special period of limitation for such an act.
[403 H 404 A] Halsburys Laws of England, 3rd Ed.
Vol. , referred to.
Therefore in the present case, the truncated limitation prescribed under the Act will apply.
[415 E] 13 L 954 SupCI/74 398 (2)Sec.
87 of the Act insists on notice of one months This period may legitimately be tacked on to the six months period mentioned in the section (vide sec.
15(2) .
[422 G H] (3) The starting point of limitation is the accrual of the cause of action.
Two components of the "Cause" are Important.
The date when the plaintiff came to know or ought to know with reasonable diligence that the goods had been landed from the vessel into the port.
Two clear indications of when the consignee ought to know are : (1) when the bulk of the goods are delivered, there being short delivery leading to a suit, and (2) 7 days after knowledge of ,he landing of the goods suggested in Sec.
Whichever is the later date ordinarily sets off the running of limitation.
[422 H 423 B] (4) Utters of assurance cannot enlarge the limitation once the goods have landedand the owner has come to know of it.
[423 B C] (5) Sec. 87 is attracted not merely when an act is committed but also when a omission occurs in the course of the performance of the official duty.
[1423C D] In the present case, applying the above principles, the case has to be decided against the plaintiffs and the appeal is allowed.
[423D]
|
ppeal (Civil Appeal No. 32 of 1950), from a judgment and order of the High Court of Judicature at Madras dated 5th January, 1948, reversing an order of the District Judge of East Tanjore in an applica tion under section 47 and O. XXI, r. 2, of the Civil Procedure Code.
R.K. Kesava Aiyangar (T. K. Sundararaman, with him) for the appellants.
section Ramachandra Aiyar for the respondent.
March 5.
The judgment of the Court was delivered by MUKHERJEA J.
This appeal is on behalf of the decree holders in a mortgage suit and it is directed against a judgment and order of a Division Bench of the Madras High Court dated January 5, 1948, by which the 294 learned Judges reversed, on appeal, an order of the District Judge of East Tanjore made in a proceeding under section 47 and Order 21, rule 2, of the Civil Procedure Code.
The material facts are not in controversy and may be briefly stated as follows.
The appellants before us are the representatives of three original plaintiffs who, as mortga gees, instituted a suit (being O.S. No. 30 of 1934) in the Court of the District Judge, East Tanjore, for enforcement of a mortgage, against the present respondent, who was defendant No. 1 in the suit, and six other persons.
The mortgage bond, upon which the suit was brought, was executed by defendant No. 1 for himself and his minor undivided brother, the defendant No. 2, and also as authorised agent on behalf of defendants 3 to 7 who were interested in a joint family business.
The suit was contested by all the defendants except defendant No. 1, against whom it proceeded ex parte, and there was a preliminary decree passed on May 15,1937, by which a sum of RS.
1,08,098 was directed to be paid by defendant No.1 and defendants 3 to 7, in default of which the plaintiffs were declared entitled to apply for a final decree for sale of the mortgaged properties, and the suit was dismissed against defendant No. 2.
Against this decree, two appeals were taken to the Madras High Court, one by defendants 3 to 7 being Appeal No. 48 of 1938 who contended that the mortgage was not binding on them or on their shares in the joint family property; and the other by the plaintiffs being Appeal No. 248 of 1938 who chal lenged the propriety of the judgment of the trial judge in so far as it dismissed their claim against defendant No. 2.
During the pendency of these appeals, the Madras Agricultur ists ' Relief Act (Act IV of 1938) came into force and appli cations were made by defendants 2 to 7 to the High Court, praying that in the event of a decree being passed against them, the decretal debt might be scaled down in accordance with the provisions of the Act.
The defendant No. 1, who did not appear at any stage of the proceeding, did not make any such application.
The High Court forwarded 295 these applications to the lower court for enquiry into the matter and for return, with its finding on the question as to whether the applicants were agriculturists, and if so, to what extent, the decretal dues should be scaled down.
The District Judge, ' after making enquiries, submitted a finding that the applicants were agriculturists and that the debt, if scaled down, would amount to Rs. 49,255 with interest thereupon at 6% per annum from 1st of October, 1937, exclu sive of costs.
On receipt of this finding, the appeals were set down for final hearing and by their judgment dated March 23, 1942, the learned Judges of the High Court accepted the finding of the court below and held that defendants 2 to 7 were entitled to have the debts scaled down; but as no application had been made on behalf of defendant No. 1, he was held entitled to no relief under the Act.
A decree was drawn up in accordance with the judgment.
The amount due by defendants 2 to 7 was stated to be Rs. 49,255 with inter est thereon at 6% per annum; while, so far as defendant No. 1 was concerned, the decree of the trial judge was affirmed subject to a slight modification regarding the rate of interest.
The defendant No. 1 thereupon filed an applica tion in the court of the District Judge, East Tanjore, claiming relief under the Agriculturists ' Relief Act alleg ing that he too was an agriculturist and hence entitled to the benefits of the Act.
The application was dismissed on February 25, 1943, on the ground that as the decree had already been passed by the High Court definitely negativing his claim to any relief under the Agriculturists ' Relief Act, such application was not entertainable by the lower court.
The next step taken by the defendant No. 1 was to file an application in the High Court itself, praying for setting aside the ex parte decree which excluded him from the benefits of Act IV of 1938.
This application was re jected by the High Court on December 13, 1943.
As no payment was made in accordance with the prelimi nary decree passed by the High Court, a final decree in terms of the same was passed by the 296 District Judge on September 25, 1943. ' Proceedings for execution of this final decree were started on August 16, 1944, in E.P. 2 of 1945 of the court of the District Judge, East Tanjore.
Two lots of the mortgaged properties were put up to sale and purchased by the decree holders for a total sum of Rs. 12,005 on July 15, 1946.
The sale was con firmed on August 17, 1946, and part satisfaction of the decree was entered for that amount.
Apparently, certain terms of settlement were thereafter offered by the judgment debtors.
The estate of the decree holders was in the hands of the Receivers and from the Receivers ' report dated January 10, 1947, it appears that the Receivers agreed with the sanction of the court, to receive Rs. 24,000 only from or on behalf of defendant No. 2 and release him and his share of the mortgaged property from the decretal charge.
Likewise, the Receivers were agreeable to receive Rs. 48,000 from defendants 3 to 7 and to release them and their proper ties from the decretal debt.
With regard to defendant No. 1, the proposal, which seems to have been accepted by the Receivers, was that the amount payable by him under the decree was to be settled at Rs. 37,500 and one Yacob Nadar would 'pay this amount on his behalf on consideration of the decree against defendant No. 1 being assigned to him by the Receivers excluding the rights of the latter to execute the decree against defendants 2 to 7 as scaled down by the High Court.
The records of the execution case show that on January 20, 1947, a sum of Rs. 24,000 was paid on behalf of defend ant No. 2; and his properties, namely, lots 2 and 6 were exonerated from the decree.
On January 27, 1947, a sum of Rs. 30,000 was paid by defendants 3 to 7 and on February 17 following, they paid a further sum of Rs. 18,610 12 0.
These three amounts aggregated to Rs. 72,610 12 0.
Nothing was done towards the payment of the sum of Rs. 37,500 by defend ant No. 1 or by Yacob Nadar, but on March 6, 1947, the defendant No. 1 deposited in court a sum of Rs. 3,215 and put in a petition under section 47 and 297 Order 21, rule 2, Civil Procedure Code, praying that as the amount thus deposited together with the payments already made completely wiped off the amount due under the decree as scaled down by the High Court in favour of defendants 2 to 7, full satisfaction of the decree might be recorded exoner ating the mortgaged properties and also the defendant No. 1 himself from any further liability in respect of the decre tal debt.
The position taken up by defendant No. 1, in substance, was that the mortgage debt was one and indivisible and even though different amounts were mentioned as payable by two groups of defendants in the decree, the decree holders were bound under the terms of the decree to release the entire mortgaged property even on payment of the amount directed to be paid by defendants 2 to 7.
In other words, even though the defendant No. 1 's application for relief under the Madras Agriculturists ' Relief Act was expressly rejected and he was held liable for the entire amount of the mortgage debt, he would still be entitled to avail himself of the benefit of the scaling down of the decree in favour of defendants 2 to 7.
This contention was negatived by the District Judge, but was accepted by the High Court on appeal, who allowed the application of defendant No. 1 and directed that the court below should enter up full satisfac tion of the mortgage decree.
It is against this judgment that the decree holders have come up on appeal to this court.
The learned Judges of the High Court observed at the outset that in the working of the Madras Agriculturists ' Relief Act alongside the provisions of the Transfer of Property Act several curious and novel situations had arisen for which it was not possible always to find logical solu tions.
They then proceeded to discuss the various decisions of the Madras High Court which had a bearing on this point and the conclusion which they reached may be summed up in their words as follows: "It is no doubt somewhat odd that when a person is declared liable to pay a larger amount he should on 298 payment or tender of a smaller amount get his property exonerated from liability but this is inherent in and arises out of the proposition established by the decisions already dealt with, namely, that by the application of the principle of unity and indivisibility of a mortgage decree a non agriculturist can indirectly get relief which he cannot directly get".
It seems to us that the High Court 's approach to the case has not been a proper one and the conclusion it has reached cannot be supported in law.
The learned Judges appear to have overlooked the fact that they were sitting only as an executing court and their duty was to give effect to the terms of the decree that was already passed and beyond which they could not go.
It is true that they were to interpret the decree, but under the guise of interpretation they could not make a new decree for the parties.
As said above, the mortgage decree was scaled down by the High Court in favour of defendants 2 to 7 only and the amended decree directs that the said defendants do pay into court the sum of Rs. 49,255 with certain interest and costs on payment of which the plaintiff was to bring into court all the documents in his power or possession relating to the mortgage and reconvey or retransfer the property if so required.
So far as defendant No. 1 is concerned, the decree states in clear and express terms that he is to pay the sum of Rs. 1,05,000 and odd and it is on payment of this sum only that redemption would be allowed of the mortgaged property.
If the decision of the High Court is correct, this direction in the decree would be manifestly unmeaning and without any effect.
What is said, however, on behalf of the respondent is that he is not claiming any benefit in viola tion of this clause.
By virtue of the decree against defend ants 2 to 7 being satisfied, the entire mortgaged property would, by force of the very decree, be freed from the debt and if the respondent gets any benefit thereby, such benefit would be merely incidental or consequential in its nature.
The High Court agreed in substance with this contention 299 and based its decision entirely upon the view that by opera tion of the principle of indivisibility of the mortgage decree, a non agriculturist debtor, whose debt has not been scaled down under the provisions of the Agriculturists ' Relief Act, may indirectly get the benefit of the relief which has been granted to his agriculturist co debtor under the provisions of the Act.
The general law undoubtedly is that a mortgage decree is one and indivisible and exceptions to this rule are admitted in special circumstances where the integrity of the mortgage has been disrupted at the instance of the mortgagee himself; e.g., when there is severance of the interests of the mort gagors with the consent of the mortgagee or a portion of the equity of redemption is vested in the latter.
It is to be noted, however, that the Madras Agriculturists ' Relief Act is a special statute which aims at giving relief not to debtors in general but only to a specified class of debtors, viz., those who are agriculturists as defined in the Act.
To this extent it trenches upon the general law and section 7 of the Act expressly provides that "notwithstanding any law, custom, contract or decree of court to the contrary, all debts payable by an agriculturist at the commencement of this Act shall be scaled down in accordance with the provi sions of this chapter".
Thus in case of a mortgage debt when the loan has been advanced to more than one person, if one of the debtors happens to be an agriculturist while others are not, the agriculturist debtor would certainly be enti tled to have his debts scaled down under the provisions of the Act in spite of the provision of general law which prevents a mortgagor from denying the liability of the interest which he owns in the mortgaged property to satisfy the entire mortgage debt.
There is, therefore, nothing wrong in law in scaling down a mortgage decree in favour of one of the judgment debtors, while as regards others the decree is kept intact.
The Madras High Court expressly adopted this view in Rainier vs Srinivasiah (1), which is one of the (1) [1940] 2 M. 39 39 300 decisions referred to in the judgment appealed from.
The fact that in that case it was a puisne mortgagee and not a mortgagor whose application for relief under section 19 of the Madras Agriculturists ' Relief Act was allowed, does not make any difference in principle.
The puisne mortgagee was made a party defendant in the suit instituted by the first mortgagee to recover his dues and as the puisne mortgagee was liable to pay the debt due to the first mortgagee, he was held to be a debtor and hence entitled to claim the benefit of section 19 of the Agriculturists ' Relief Act.
It may be mentioned here that section 14 of the Madras Agricul turists ' Relief Act which provides for separation of a debt incurred by a Hindu family, some members of which are agri culturists while others are not, affords a clear indication that the splitting up of a debt in such circumstances is quite in accordance with the scheme of the Act.
The catena of cases upon which the learned Judges of the High Court relied in support of their decision seems to proceed on a different principle altogether and whether that principle is right or wrong, it has, in our opinion, no application to a case like the present.
In this class of cases, the mortgagors were agriculturists and hence entitled to have their debts scaled down under the Agriculturists ' Relief Act, but there were purchasers of the mortgaged property who were not agriculturists, and the question arose whether a purchaser could get the benefit of the debt scaled down in favour of the original debtors.
This question was answered in the affirmative.
The reason for taking this view was thus given by the learned Judges in Arunachalam Pillai vs Seetharam(1), where the purchase of the equity of redemp tion was at an execution sale: "When the 12th respondent purchased the properties in court auction, he took them subject to the burden of the appellant 's mortgage and if the burden is by reason of the provisions of section 8 refer.red to above reduced without pay ment, the purchase proves to that (1) 301 extent an advantageous one, and there is nothing in the Act to deprive him of the fruits of his.
lucky purchase, even though he is not an agriculturist.
He gets the benefit of the scaling down not because the provisions of the Act apply to him, for obviously they do not, but because such benefit is a necessary incident of his purchase under the general law and the Act does not deprive him of it.
" A somewhat different reason was assigned in Pachigola vs Karatam(1) which however was a case where a portion of the.
equity of redemption was transferred to a purchaser by a private sale.
It was held that the court by allowing the mortgagor to redeem the mortgage sale was not conferring on the purchaser, a non agriculturist, the benefit of the Act, as he would have to refund to his vendor the purchase money reserved with him which as a result of the scaling down he would not have to pay to the mortgagee.
In both these cases, the question was raised in the proceeding for scaling down of the decree under the provisions of the Agricultur ists ' Relief Act itself and not at the execution stage.
There is however the case of Subramanian vs Ramachandra (2), where the question arose in course of execution pro ceedings and a purchaser of a portion of the equity of redemption was held to be entitled to the benefit of the scaled down decree in favour of the mortgagors, although his own application for relief under the Act was refused.
It is not necessary for purposes of this case to express any opinion as to the correctness or otherwise of these deci sions.
It is enough to say that the ratio decidendi in all these cases is not applicable to the case before us.
In the present case there is no purchaser of the mortgaged property and consequently there is no question of the pur chaser, who is not an agriculturist himself, being entitled to the benefit of a decree which has been scaled down in favour of the agriculturist mortgagor.
Here the judg ment debtors are the mortgagors themselves and according to the plain provisions of the Agriculturists ' Relief Act there could (1) (2) 302 not be any objection to a decree for reduced amount being passed against an agriculturist debtor, while the same relief is not given to his co debtors who do not fulfil that description.
Some exception could undoubtedly be taken to the form and wording of the decree that has been passed in the present case.
The decree, in our opinion, should not only have stated the amount payable by defendant No. 1 and that by defendants 2 to 7 separately but should have expressly directed ,that on payment of the amount directed to be paid by defendants 2 to 7 their interest alone in the mortgaged property would not be liable to be sold.
The further direc tion should have been that in case they did not pay this amount, the whole of the mortgaged property including their interest would be sold for the entirety of the mortgage debt for which defendant No. 1 was made liable.
It is true that the decree contains no such clear directions but reading the decree as a whole and having regard to the actual decision in the case, this must be taken to be its plain implica tions.
The subsequent agreement between the parties arrived at in course of the execution proceedings by which the decreeholders agreed to release the interest of defendant No. 2 and that of defendants 3 to 7 separately on payment of certain specified amounts by 'them proceeds clearly on the assumption that the mortgage debt and the security have been split up, and in our opinion it is not possible for the defendant No. 1 to contend that the mortgage debt remained indivisible.
Our conclusion is that the view taken by the District Judge was right and should not have been disturbed.
The result is that the appeal is allowed, the order of the High Court is set aside and that of the District Judge restored.
We make no order as to costs of this appeal.
Appeal allowed.
| IN-Abs | Under the Madras Agriculturists ' Relief Act, 1938, a mortgage decree can be sealed down in favour of some of the judgment debtors alone, while as regards the others it is kept intact.
In a suit to enforce a mortgage executed by defendant No. 1 on his own behalf and on behalf of defendants Nos. 2 to 7, the defendant No. 1 remained ex parte, and the others contested the suit.
A decree for Rs. 1,08,098 was passed by the trial court.
The Madras Agriculturists ' Relief Act, 1938, was passed during the pendency of an appeal and cross appeal, and on the application of defendants Nos. 2 to 7 under the said Act the amount of the decree was sealed down to Rs. 49,255 so far as defendants Nos. 2 to 7 were con cerned.
So far as defendant No. 1 was concerned the decree for the full amount remained as it was.
Defendant No. 1 thereupon applied for scaling down, but his 293 application was rejected.
Defendants Nos. 2 to 7 deposited certain amounts and got their properties released.
Defend ant No. 1 deposited the balance of the amount that remained due under the decree as scaled down on the application of defendants Nos. 2 to 7, and prayed that full satisfaction of the decree may be recorded.
The Subordinate Judge rejected this application but the High Court, on appeal, held that defendant No. 1 was entitled to the benefit of the scaling down in favour of defendants Nos. 2 to 7, as the mortgage debt was one and indivisible.
On further appeal: Held, that the ratio decidendi of the cases in which it was held that a purchaser of mortgaged properties was enti tled to the benefit of a decree which has been scaled down, even though the purchaser himself was not an agriculturist was not applicable to the present case.
According to the plain provisions of the Act, there was no objection to a decree for a reduced amount being passed against an agricul turist debtor, while the same relief is not given to his co debtors, and defendant No. 1 was not entitled to claim the benefit of the scaling down of the decree debt in favour of defendants No. 2 to 7.
Judgment of the Madras High Court reversed.
Ramier vs Srinivasiah ( referred to.
Arunachalam Pillai vs Seetharam (119413 1 M.L.J. 561), Pachigola vs Karatam ( , Subramaniam vs Ramachandra ( distinguished.
|
minal Appeal No. 62 of 1953.
Appeal under.
Article 134(1)(c) of the Constitution from the Judgment and Order dated the 27th March 1953 of the High Court of Judicature at Patna in Criminal Revision No. 1290 of 1951 arising out of 79 the Judgment and Order dated the 12th November 1951 of the Court of Sessions Judge, Singhbhum in Criminal Revision No. 16 of 1951.
Mahabir Prasad, Advocate General for the State of Bihar (Shyam Nandan Prasad and M. V. Sinha, with him), for the appellant.
section N. Mukherji, for the respondent.
March 24.
The Judgment of the Court was delivered by SINHA J.
In this appeal we did not think it necessary to hear the counsel for the respondents on the merits of the decision appealed from in the view we have taken, as will presently appear, of the terms of the surety bond which was being sought to be enforced against the sureties, the respondents in this Court.
The surety bond in question was taken in circumstances which clearly appear from the follow ing resolution of the Government of Bihar dated the 17th October 1946: "Whereas one Maulavi A. Ali Khan, who was convicted under section 120 B read with section 420, Indian Penal Code by the First Special Tribunal, Calcutta and sentenced to four years ' rigorous imprisonment and a fine of rupees one lac which conviction and sentence have been subsequently upheld by the Patna High Court, has submitted to the Provincial Government a petition praying for suspension of his sentence in order to enable him to prefer an appeal against the said conviction and sentence to the judicial Committee of the Privy Council And Whereas the Provincial Government have granted the prayer of the petitioner subject to the conditions hereinafter specified which the petitioner has accepted: Now, therefore, the Governor of Bihar hereby orders that the execution of the aforesaid sentence of Maulavi A. Ali Khan be suspended pending the hearing of the proposed appeal to the Judicial Committee of the Privy Council on his furnishing security worth Rs. 50,000 with two sureties of Rs. 25,000 each to the 80 satisfaction of either the Sub Divisional Officer, Jamshedpur or the Deputy Commissioner of Singhbhum and undertaking (1) to furnish proof by the 1st December, 1946 of his having taken all necessary steps for the filing of the appeal and also (2) to surrender to the Deputy Commissioner of Singhbhum within three days of the receipt of the notice of the order or judgment of the Judicial Committee if by the said order or judgment the sentence is upheld either partly or wholly.
The petitioner, if in custody, may be released if he complies with the above conditions.
By order of the Governor of Bihar, (sd.) T.G.N. Ayyar, Secretary to Government".
In pursuance of that resolution the surety bond in question was taken from the respondents.
The material portion of the bond (exhibit 2) is in these terms: "We, section T. Karim, son of Abdul Wahab, by caste Mohammedan, by occupation Contractor and Proprietor Jamshedpur and Star Talkies, Jamshedpur, residing at Sakchi, police station Sakchi in Town Jamshedpur, district Singhbhum, (2) Manik Homi, son of late Homi Engineer, by caste Parsee, by occupation zamindar of Mango, residing at Mango, police station Sakchi, district Singhbhum, Stand surety for the amount of Rs. 25,000 only each and bind ourselves to the Government of Bihar of which we bind ourselves, our heirs, executors and successors firmly for payment of Rs. 50,000 only in case Mr. Ali Khan fails to furnish proof by the 1st December 1946 of his having taken all necessary steps for the filing of the appeal and to surrender to the Deputy Commissioner of Singhbhum within three days of the receipt of the notice of the order or judgment of the Judicial Committee if by the said order or judgment the sentence is upheld either partly or wholly".
It is dated the 19th October, 1946.
As a result of the constitutional changes the jurisdiction of the Privy Council came to be transferred to the Federal Court by virtue of the Abolition of the Privy Council Juris 81 diction Act (Constituent Assembly Act V of 1949) which came into force on the 10th October, 1949.
As, from that date ("the appointed day") all appeals ' pending before the Judicial Committee of the Privy Council by virtue of section 6 stood transferred to the Federal Court.
Ali Khan 's appeal to the Privy Council thus got transferred to the Federal Court and in due course was heard by this Court.
This Court dismissed the appeal in November 1950.
In the meantime Ali Khan, the convicted person, who had gone to London to look after his appeal there, migrated to Pakistan and thus placed himself beyond the jurisdiction of the courts in India.
In December 1950 the Deputy Commissioner of Singhbhum issued notice to the sureties, the respondents, to produce Ali Khan within three days.
On their failure to do so, the Deputy Commissioner called upon the sureties to show cause why their bond should not be forfeited.
The sureties raised certain legal objections to the proceedings taken by the Deputy Commissioner.
They contended that he had no jurisdiction to initiate the proceedings.
The Deputy Commissioner postponed the decision of the preliminary objections and directed that all the points in controversy shall be heard and determined at the final hearing.
Against that order the respondents moved the Sessions Judge of Singhbhum who by his orders dated the 12th November, 1951 overruled their objections and held that the Deputy Commissioner had jurisdiction to initiate the proceedings.
It is not necessary to set out his reasons.
The respondents moved the High Court in revision against the orders aforesaid of the Sessions Judge.
A Division Bench of the High Court allowed the application holding that the Deputy Commissioner had no such jurisdiction as he purported to exercise in the matter of enforcing the terms of the surety bond against them.
Accordingly, the High Court quashed the proceedings before the Deputy Commissioner.
Hence this appeal by the State of Bihar.
From the terms of the surety bond quoted above it would appear that the sureties bound themselves for 11 82 payment of Rs. 50,000 "only in case Mr. Ali Khan fails. . . . . to surrender to the Deputy Commissioner of Singhbhum within three days of the receipt of the notice of the order or judgment of the Judicial Committee if by the said order or judgment the sentence is upheld either partly or wholly".
In view of this clear provision in the bond the terms of which being penal in nature must be very strictly construed, it cannot be said that the contingencies contemplated by the parties has occurred.
There was no judgment or order of the Judicial Committee upholding either in part or in whole the sentence against Ali Khan.
As the terms of the bond so construed cannot be said to have been fulfilled, the penalty stipulated has not been incurred.
It must therefore be held that the proceedings taken against the respondents were entirely misconceived.
It was in these circumstances that we did not think it necessary to hear the appeal on its merits, that is to say, on the point of jurisdiction on which the case had been decided by the High Court.
It was contended by the Advocate General of Bihar who appeared in support of the appeal that in the events which had happened there could be no judgment or order of the Judicial Committee and that therefore the judgment of this Court, which by virtue of the constitutional changes had come by the jurisdiction vested in the Privy Council, should be deemed to be the judgment or order contemplated by the parties to the surety bond.
In our opinion, there is no substance in this contention, firstly, because there is no term in the bond to the effect that the surety would be bound by any judgment or order given by such other court as may succeed to the jurisdiction then vested in the Judicial Committee of the Privy Council to hear the appeal preferred by Ali Khan against his conviction by the courts in India: and secondly, because there is no room, while construing the penal clause of a surety bond, for the application of a legal fiction as suggested on behalf of the appellant.
The Government through their legal advisers were not 83 circumspect enough to insert any such alternative clause as would have given the judgment or order of, this Court the same effect as is contemplated by the terms of the surety bond quoted above.
The appeal must therefore be dismissed in limine.
Appeal dismissed.
| IN-Abs | In a surety bond the sureties bound themselves for payment of Rs. 50,000 "only in case Mr. Ali Khan fails. . to surrender to the Deputy Commissioner of Singhbhum within three, days of the receipt of the notice of the order or judgment of the Judicial Committee if by the said order or judgment the sentence is upheld either partly or wholly".
As a result of the constitutional changes the jurisdiction of the Privy Council came to be transferred to the Federal Court, and eventually Ali Khan 's appeal to the Privy Council was heard and dismissed by the Federal Court.
Thereupon the Deputy Commissioner issued notice to the sureties to produce Ali Khan within three days.
Held, that the proceedings taken against the sureties were entirely misconceived as the penalty stipulated had not been incurred, in view of the terms of the bond set out above.
Provisions in a surety bond which are penal in nature must be very strictly construed and there is no room for the application of a legal fiction that the judgment of the Federal Court must be deemed to be the judgment or order contemplated by the parties to the surety bond.
|
iminal Appeal No. 58 of 1970.
Appeal by special leave from the judgment and order dated the 3rd December, 1969 of the Orissa High Court in Criminal Revision No. 325 of 67.
N. C. Sikri, for the appellant.
section Chatterjee and R. N. Sachthey, for the respondent.
657 The Judgment of the Court was delivered by KHANNA, J.
Chittaranjan Das appellant was convicted by Magistrate First Class Cuttack under section 16(1) (a) of the (Act 37 of 1954) (hereinafter referred to as the Act) and was sentenced to undergo rigorous imprisonment for a period of six months and to pay a fine of Rs. 50,0 or in default to undergo rigorous imprisonment for a further period of six weeks.
Appeal filed by the appellant was, dismissed by the Addi tional Sessions Judge Cuttack.
The appellant then went up in revision to the High Court but his revision petition too was dismissed by the Orissa High Court.
The appellant thereafter filed the present appeal by special leave.
The case for the prosecution is that on July 17, 1965 Food Inspector Behera went to the stall of the accused in the Old Secretariat Compound Cuttack and found potato chops being fried by an employee of the accused in groundnut oil in a frying pan.
The Food Inspector disclosed his identity to the accused and after giving the requisite notice, he purchased 375 gms of the groundnut oil in which the potato chops were being fried.
After the oil was cooled, the Food Inspector divided it into three equal parts and poured each part of the oil in a clean bottle.
The bottles were then sealed.
One of the bottles was handed over to the accused.
Another bottle was sent to a public analyst.
The public analyst found on analysis the groundnut oil to be adulterated as it did not conform to the prescribed standard.
The Superintendent of Police, Vigilance thereafter gave written consent for the prosecution of the accused.
The accused was after that sent up for trial.
It may be stated that the date on which the, sample of groundnut oil was purchased by the Food Inspector from the accused has been mentioned in the Judgments of the trial magistrate as well as those of the Additional Sessions Judge and the High Court to be March 14, 1964.
This date was wrong because on reference to the record of the trial court, we find that the date on which the sample of the oil was purchased by the Food Inspector from the accused was July 17, 1965.
This mistake in any event does not affect the merits of the case.
The plea of the accused at the trial was that the sample of the oil had been taken not from the frying pan but from a tin wherein he had kept burnt oil for the purpose of using it as fuel.
The oil, according to the accused, was stored neither for sale nor for being used for frying food articles.
This plea of the accused was found by the trial court as well as by the learned Addition Session Judge to be false.
In the High Court it was not disputed on behalf of the accused that the groundnut oil purchased by the Food Inspector had been taken out of the frying Dan and that potato chops were being prepared with that oil.
One of the contentions which was raised on behalf of the accused before the High Court was that the sanction or consent given by the Superintendent of Police, Vigilance for the prosecution of the accused was not in conformity with section 20 of the Act as the authority 658 contemplated by that section must be in respect of each individual case and a general authority given to the Superintendent of Police to sanction prosecution was not legal.
The High Court rejected this contention as also some other contentions which had been raised on behalf of the accused.
In appeal before us, Mr. Sikri has at the outset submitted that there was non compliance with the provisions of section 10(7) of the Act as the Food Inspector did not call one or more persons to be present at the time he purchased the sample of groundnut oil from the accused.
In this respect we find that the judgment of the High Court shows that no such argument was advanced before the High Court.
This argument involves questions of fact and as the accused appellant failed to agitate it before the High Court, we have not permitted the appellant to agitate it before us in this Court.
The main contention which has been advanced in appeal before us on behalf of the appellant is that there was no valid consent to the prosecution of the accused appellant in accordance with sub section (1) of section 20 of the Act and, as such, the prosecution of the appellant was not in accordance with law.
To appreciate this contention it would be relevant to reproduce the material part of sub section (1) of section 20 of the Act, as it stood before its amendment by Act 49 of 1964.
It was as under: "No prosecution for an offence under this Act shall be instituted except by or with the written consent of the State Government or a local authority or a person authorised in this behalf by the State Government or a local authority. ' On December 16, 1964 a notification was issued by the Orissa Government authorising, inter alia, the Superintendent of Police Cuttack Vigilance Division to give written consent for instituting prosecutionfor offences under the Act within the local limits of CuttackMunicipality.
The notification reads as under: HEALTH DEPARTMENT NOTIFICATION The 16th December, 1964 "No. 25485 H.
In exercise of the powers conferred by sub section (1) of section 20 of the (37 of 1954), the State Government do hereby authorise the following officers of the Political and Services (Vigilance) Department to give written consent for instituting prosecutions for offences under the said Act, within the local limits specified against each in 659 respect of cases detected by the Food Inspectors attached to the concerned Vigilance Divisions: Name of officer Local Limits Cuttack Municipality (1) Superintendent of Police '.
Cuttack Vigilance Division By order of the Governor C. VENKATARAMANI Joint Secretary to Government.
" The was amended by Act 49 of 1964 with effect from March 1, 1965.
One of the amendments made by the amending Act was in section 20 of the Act.
As a result of amendment, the material part of sub section (1) of section 20 reads as under : "section 20 (1) : No prosecution for an offence under this Act shall be instituted except by, or with the written consent of the Central Government or the State Government or a local authority or a person authorised in this behalf, by general or special order, by the Central Government or the State Government or a local authority;" The contention which has been raised on behalf of the appellant is that while it is permissible under section 20 of the Act, as it stands after the amendment made by Act 49 of 1964, to issue a general notification authorising a person to give written consent under the above provision of law, such a course was not permissible under section 20, as it stood before the above amendment.
It was, according to the learned counsel, essential under section 20, as it stood before the amendment, that the authority should be in respect of some specified individual offence.
As notification dated December 16, 1964 was issued before Act 37 of 1954 was amended by Act 49 of 1964 and as the said notification gave a general authority to the Superintendent of Police, Vigilance to give consent for instituting prosecutions for offenses under the Act committed within the local limits of Cuttack Municipality, the said notification, it is urged was not in accordance with law.
As against the above, Mr. Chatterjee on behalf of the State has argued that there is no infirmity in the notification dated December 16, 1964 and such a notification could have been validly issued under section 20 of.
the Act, as it stood before the amendment.
In our opinion there is force in the submission of Mr. Chatterjee.
It would appear from what has been stated above that the short question which arises for consideration is whether it is permissible for the State Government or local authority under section 20, as it stood before the amendment, to give a general authority to a person to give consent to the institution of prosecutions for offenses under the Act without mentioning a specified individual offence.
We have reproduced 660 above section 20, as it stood before the amendment, and we find nothing in its language which makes it imperative to specify a particular offence in the order authorising a person to give consent to the institution of prosecution.
The words "in this behalf" hi the above provision, to which our attention his been invited, indicate that the authority ' conferred by the State Government or local authority upon a person should relate to the giving of written consent for institution of prosecutions for offenses under the Act.
It is difficult to spell out an inference from those words that the authority conferred upon a person under the above provision cannot be a general authority in respect of offenses under the Act but must relate to some specified individual offence.
If the interpretation sought to be placed upon the words "in this behalf" on behalf of the appellant were to be accepted, in such an event no general authority can be conferred even under sub section (1) of section 20, as amended by Act 49 of 1964, because even the amended section contains those words.
The words "by general or special order" in the amended section in that event would become meaningless and lose all significance.
It is, indeed, not disputed that under the amended section a general authority can be conferred upon a person for giving consent to the institution of prosecutions for offenses under the Act.
The words "in this behalf" in sub section (1) of section 20, as it existed before the amendment, as well as after the amendment must obviously carry the same meaning.
If those words in the amended section do not postulate that the authority conferred by the State Government or local authority should have reference to a specified individual offence committed by a particular accused, we fail to understand as to how those words as used in the section before the amendment would carry a different connotation.
Perusal of sub section (1) of section 20 of the Act, as it existed before the amendment, shows that the legislature had two fold object in enacting this provision.
One object was to prevent institution of prosecutions for offenses under the Act unless written consent to the.
institution of such prosecutions was given by the State Government or a local authority or a person authorised in this behalf by the State Government or local authority .
The other object was to relieve the State Government or local authority of the necessity of applying it,,,, mind and dealing with each individual case of prosecution under the Act.
Provision was accordingly made to enable the State Government or local authority to assign the function of giving written con sent to some other person.
In case the authority conferred by the 661 State Government or local authority could not be general but had to relate to an individual offence, the very purpose of the latter part of sub section (1) of section 20 would be defeated, for it would in such an event become necessary for the State Government or local authority first to authorise a person to give written consent in respect of art individual case of prosecution and thereafter for the person authorised to pass another order for giving the written consent.
The result would be that what could be done in one step by the State Government or local authority by straightaway giving its written consent would have to be done in two steps.
It is difficult to accede to the contention that the above provision instead of simplifying the matter was intended to make it needlessly more cumbersome.
The change made in section 20 by Act 49 of 1964 has now put the thing beyond any, pale of controversy.
Even without the change made in the section the authority conferred by the State Government or local authority upon a person for giving the consent contemplated by the section, in our opinion, could be of general nature and it was not essential that the order authorising the person should have mentioned specified individual offenses.
The amendment made in this section had the effect of making more clear what was already contemplated by the section.
The Madras High Court in the case of Corporation of Madras vs Arumugham,(1 the Mysore High Court in the case of Laxman Sitaram Pai & Anr.
vs The State of Mysore(2) and the Andhra Pradesh High Court in the case of Public Prosecutor vs Thatha Rao &Ors.(8) have all taken the view that a general authorisation to launch, prosecutions under the Act is sufficient.
For the reasons stated above, we agree with the view taken in the above three cases.
We see no cogent ground to interfere with the sentence.
The appeal fails and is dismissed.
V. P. section Appeal dismissed, (1) A. I. R. 1966 Madras 194.
| IN-Abs | Section 20(1) of the Food Adulteration Act, 1954, as it stood before its amendment by Act 49 of 1964 provided that no prosecution for an offence under the Act shall be instituted except by or with the written consent of the State Government or a local authority or a person authorised in this behalf by the State Government or a local authority.
On the written consent of the Superintendent of Police, Vigilance, who was authorised to give written consent for instituting prosecutions for offences, under the Act, the appellant was prosecuted and convicted for an offence under section 16 (1) (a) of the Act.
It was contended on his behalf that while it was permissible under the section, after its amendment by Act 49 of 1964, to issue such general notification authorising a person to give written consent, under the section as it stood before the amendment, the authority should be in respect of a specified individual offence.
Dismissing the appeal, HELD : There is nothing in the language of the section which makes it imperative to specify a particular offence in the order authorising a person to give consent to the institution of prosecution.
The legislature had a two fold object in enacting section 20 (1) (a) to prevent institution of prosecutions for offences under the Act except with the written consent of the authorities mentioned in the section, and (b) to relieve the State Government or local authority of the necessity of applying its mind and dealing with each individual case of prosecution under the Act.
In case the authority conferred by the State Government or local authority could not be general but had to relate to an individual offence the very purpose of the section would be defeated, for then, it would become necessary for the State Government or local authority fast to authorise a person to give written consent in respect of an individual case and thereafter for the person authorised to give written consent, so that what could be done in one step by the State Government or local authority would have to be done in two steps.
The words 'in this behalf ' indicate that the authority conferred by the State Government or local authority upon a person should relate to the giving of written consent for the institution of prosecution for offences under the Act and not that the authority conferred must relate to some specified individual offence.
The amended section also contains those words, and must obviously carry the same meaning.
If the interpretation sought to be placed upon these words is accepted no general authority can be conferred even under section 20(1) even as amended , and the words 'by general or special order ' in the amended section would become meaningless and lose all significance.
The amendment bad only made more clear what was already contemplated by the section.
[659G 661B] Corporation of Madras vs Arumagham.
AJ.R. 1966.
Madras 194, Laxman Sitaram Pai & Anr.
vs The State of Mysore, A.I.R. and Public Prosecutor vs Thatha Rao & Ors., A.I.R. 1968 A.P. 17, approved.
|
Appeal No. 1825 of 1967.
Appeal by special leave from the judgment and order dated the 18th May, 1967 of the Punjab and Haryana High Court in L.P.A. No. 158 of 1967.
Naunit Lal and Lalit Kohli, for the appellant O.P. Verma, for the respondent The Judgment of the Court was delivered by ALAGIRISWAMI, J.
The property in dispute in this appeal belonged to Wadhawa Singh, the father of the respondent.
After his death in the year 1933 his widow, who succeeded to the estate, made a gift of the property in favour of her daughter, the respondent, in.
April, 1933.
The appellants filed a suit as reversioners to the estate of Wadhawa Singh questioning the gift.
The suit was decreed and the decree was confirmed on appeal.
After coming into force of the on 17 6 1956 the widow again made a gift of the same lands to the respondent.
She died in 1963.
The appellants then filed the suit, out of which this appeal arises, for possession of the lands alleging that the second gift was void.
The Trial Court decreed their suit but on appeal the respondent succeeded in the first Appellate Court as well as the High Court on second appeal.
There is no doubt that Wadhawa Singh 's widow had no right to male a gift of the property which she inherited from her husband in 1933 and the decree obtained by the appellants, who were reversioners to her husband 's estate would bind the respondent who was also a party, to that suit.
The question then is whether the coming into force, of the Hindu succession Act and the subsequent gift made by the widow in favour of the respondent make any difference.
Had not the widow made the gift to the respondent in 1933, she would have become an absolute owner of the property as a result of section 14 of the and the gift made by her subsequently in favour of the respondent could not have been questioned.
But having made the gift in 1933 she was not in possession of the property inherited by her from her husband and, therefore, did not become a full owner, with the result that the subsequent gift made by her in favour of the respondent was of no effect.
This point that unless the limited owner is in possession of the property section 14 does not apply has now been settled by decisions of this Court beyond dispute.
What then is the effect of the provision of section 8 of the in the circumstances of this case. 'The Punjab High Court in its decisions in Banso vs Charan Singh (AIR 1961 Punjab 45), and Kuldip Singh vs Karnail Singh (AIR 1961 Punjab 573), where the facts 530 were similar to the present case, has taken the view that when a widow dies after the coming into force of the the next heir to her husband is to be determined in accordance with the law prevailing on the date of the death of the widow and not in accordance with the law prevailing at the time of the death of her husband and held that the daughter succeeded in preference to the reversioners.
The Mysore High Court on the other hand in Kempiah vs Girigamma (AIR has held that on the death of the widow succession would be governed by the Hindu Law which was in force when the last mate holder actually died.
The Patna High Court in Renuka Bala vs Aswini Kumar (AIR 1961 Patna 498) was disposed to take a similar view though the case before it was concerned with succession to the property of a female under s.15.
The Madras High Court in Sampathkumari vs Lakshmi Ammal (AIR 1963 Madras 50) also took the view that in such circumstances section 8 of the would not apply.
But the case before that Court was one where two widows who had succeeded to the estate of their husband were in possession, and therefore, section 14 was applicable.
Lastly, we have the decision of this Court in Eramma vs Verrupanna In that case this Court after setting out the provisions of section 6 of the observed: "It is clear from the express language of the section that it applies only to coparcenary property of the mate, Hindu holder who dies after the commencement of the Act.
It is manifest that the language of section 8 must be construed in the context of section 6 of the Act.
We accordingly hold that the provisions of section 8 of the are not retrospective in operation and where a male Hindu died before the Act came into force i.e., where succession opened before the Act section 8 of the Act will have no application.
" Interpreted literally this dicision would seem to accord with the decisions of all the other High Courts except the Punjab High Court.
But it should be noticed that the problem that we are faced within the present appeal and in the cases before the Punjab and Mysore High Courts did not arise before this Court on the earlier occasion.
The decisions of the Madras High Court and the Patna High Court are not directly in point.
In the case before this Court the two women were in possession of property whose last male holder, who had died before coming into force of the , was their step son.
They were not, therefore in legal possession of the properties of the last male holder.
The question that had to be decided was whether because of the coming into force of the they were entitled to succeed under section 8, and the further question whether section 14 would be attracted as they were actually in possession.
It was held that as they were not legally in possession s, 14 would not apply, It was in that context that it was said that where a male Hindu died before the; Act came into force i.e., where succession opened before the section 8 of the Act will have no application, The point that succession 531 might open not only when the male Hindu died but also subsequently again when a limited owner who succeeds him dies was not taken into account.
There was no need and no occasion to consider such a contingency in that case.
There was the further fact that the last male holder was succeeded on his death by persons who were then.
his nearest heirs and the property vested in them could not be divested by the coming into force subsequently thought this fact was not adverted to in the judgment.
This Court had, therefore.
also no occasion to consider the effect of the earlier decisions on the question as to what happens when a female limited owner, whether she is a widow, mother or daughter who succeeds the last male bolder, dies.
That position may now be considered.
It was authoritatively laid down by the Privy Council in its decision in Moniram Kolita vs Keri Kaliteni (ILR 5 Calcutta 776 at 789) that : "According to the Hindu Law, a widow who succeeds to the estate of her husband in default of male, issue, whether she succeeds by inheritance or survivorship as to which see the S hivagunga case (1) does not take a mere life estate in the property.
The whole estate is for the time vested in her absolutely for some purposes, though in some respects for only a qualified interest.
Her estate is an anomalous one, and has been compared to that of a tenant in tail.
It would perhaps, be more correct to say that she holds an estate of inheritance to herself and the heirs of her husband.
But whatever her estate is, it is clear that, until the termination of it, it is impossible to say who are the persons who will be entitled to succeed as heirs of the husband (2).
The succession does not open to the heirs of the husband until the termination of the widow 's estate.
Upon the termination of that estate the property descends to those who would have been the heirs at the husband if he had lived up 'to and died at the moment of her death (3).
" In the subsequent decision in Duni.
Chand vs Anar Kali (AIR the Privy Council observed: ". during the lifetime of the widow, the reversioners in Hindu Law have no vested interest in the estate but have a mere spes succession is or chance of succession, which is a purely contingent right which may or may not accrue,that the succession would not open out until the widow died, and that the person who would be the next reversioner at that time would succeed to the estate and the alteration in the rule of the Hindu Law brought about by the Act would then be in full force.
(1) 9 Moore 's I.A., 604.
(2) Id., 532 In the argument before their Lordships, reliance was placed upon the words "dying intestate" in the Act as connoting the future tense, but their Lordships agree with the 'view of the Lahore High Court in at p. 367, that the words are a description of the status of the deceased and have no reference and are not intended to have any reference to the time of the death of a Hindu male.
The expression merely m eans "in the case of intestacy of a Hindu male".
To place this interpretation on the Act is not to give a retrospective effect to its provisions, the materials point of time being the date when the ,.succession opens, namely, the death of the widow.
On the position of reversioners in Hindu Law, opinions have been expressed by this Board from time to time with which the views of the learned Chief Justice in 58 All.
1041(2) mentioned above, are in agreement.
It was said, for instance, that until the termination of the widow 's estate, it is impossible to say who are the persons who will be entitled to succeed as heirs to her husband; (3) at p. 604.
The succession does not open to the heirs of the husband until the termination of the widow 's estate.
Upon its termination, the property descends to those who would have been the heirs of the husband If he had lived uP to and died at the moment of her death 7 I. A. 115 (4) at 154.
" It would be noticed that the Privy Council interpreted the words "dying intestate" as merely meaning "in the case of intestacy of a Hindu male" and said that to place this interpretation on the Act is not to give retrospective effect to its provisions.
Those are the very words found in section 8.
These may be contrasted with the words of section 6 "where a male Hindu dies after the commencement of this Act.
" Here the reference is clearly to the time of the death.
In section 8 it is only to the fact of intestacy.
The material point of time, as pointed out by the Privy Council, is the date when the succession opens, namely, the death of the widow.
It is interesting to note that the Privy Council was interpreting the provisions of the Hindu Law of Inheritance (Amendment) Act, 1929 where the two contrasting expressions found in the are not found. ' The case for the interpretation of the words "dying intestate" under the is stronger.
The words "where a male Hindu dies after the commencement of this Act" in section 6 and their absence in section 8, are extremely significant.
Thus two propositions follow: (1) Succession opens on the death of the limited owner.
and (2) the law then in force would govern the succession.
Now if this proposition is correct, as we hold it is, that where a female heir succeeds to an estate, the person 'entitled to succeed on the basis as if the last male holder had lived up to and died at the (1) Mt. Rajpali Kunwer vs Surju Rai (58 All. 1041).
(2) Shakuntala Devi vs Kambsalya Devi (3) Katam Natchiar vs Rajah of Shiva Gunga , (4) Monirain Kolita vs Kerry Kolitang (7 IA 115: 533 death of the limited owner, succession to Wadhawa Singh 's estate in the present case opened when his widow died and it would have to, be decided on the basis that Wadhawa Singh had died in 1963 when his widow died.
In that case the succession to his estate would have to, be decided on the basis of s.8 of the .
The various High Courts which have held otherwise seem to have been oppre ssed by the feeling that this amounted to giving retrospective effect to section 8 of the whereas it is only prospective.
As the Privy Council pointed out it means no such thing.
The accepted position under the Hindu Law is that where a limited owner succeeds to an estate the succession to the estate on her death will have to be decided on the basis that the last full owner died on that day.
It would be unreasonable to hold that in such a circumstance the law as it existed at the time when the last male holder actually died should be given effect to.
If the person who is likely to succeed at the time of the limited owner 's death is not, as happens very often, likely to be the person who would have succeeded if the limited owner had not intervened, there is nothing unreasonable in holding that the law as to the person who is entitled to succeed on the limited owner 's death should be the law then in force and not the law in force at the time of the last full owner 's death.
The Madras High Court thought that the decision of the Privy Council in Duni Chand vs Anar Kali (supra) was based upon a legal fiction and that fiction cannot be given effect to except for a limited purpose.
The Mysore High Court also thought that the death referred to in section is actual death and not fictional death.
In East end Dwellings Co., Ltd. vs Finsbury Borough Council 132) lord Asquith of Bishopstone observed :.
"If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so,. also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it.
One of those in this case is emancipation from the 1939 level of rents.
The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs".
This observation was cited with approval by this Court in Venkatachalam vs Bombay Dyeing & Mfg. Co., Ltd (1959 S.C.R. 703) If, therefore, succession opens and is to be decided on the basis of the last full owner dying on the date of death of the limited owner the inevitable corollary is that it is only the law in force at the time of the death of the limited owner that should govern the case.
To hold that the old Hindu Law applies to such a case is to allow your imagination to boggle.
In the case decided by the Privy Council in Duni Chand vs Anar Kali (supra) if this principle had been applied the new heirs 534 introduced by the Hindu Law of inheritance (Amendment) Act, 1929 could not have then come in.
We are not impressed with the reasoning of the Patna High Court that because the change brought about by that Act is different from the change brought about by the a different conclusion follows.
We should consider that if even the limited change in the area of succession effected by the Hindu Law of Inheritance (Amendment) Act, 1929 is to be given effect to as the law applicable on the date of the death of the limited owner, it is all the more reason why the which makes a much more radical change in the Hindu Law should have similar application.
The Mysore High Court thought that the not being a mere declaratory Act, retrospective effect should not be given to it so as to impair existing rights and obligations.
But the reversioners ' right being a mere spes succession is there is no question of impairing existing rights by adopting the interpretation we place on section 8 apart from the fact that, as earlier pointed out, the interpretation does not amount to giving retrospective effect to section 8.
of course, if the property had already vested in a person under the ,old Hindu Law it cannot be divested.
We must also point out that the classes of cases where such a question is likely to arise is very limited.
Where a widow, mother or daughter was in possession of the estate on the coming into force of the she would become full owner under the provisions of the section 14 of the Act.
Even if a widow was in possession of the share belonging to her in the joint family estate tinder the pro visions of the Hindu Women 's Right to property Act, 1937, she would become a full owner under section 14.
In both those cases section 8 would have no operation.
It is only in rare cases, like the present, that the question is likely to arise at all and we can see no reason either in principle or on authority why the principle consistently followed under the earlier Hindu Law that on the death of the limited owner succession opens and would be decided on the basis that the last male owner died on that day, should not apply even after coming into force of the Hindu ,Succession Act, Mr. Naunit Lal appearing for the appellant argued that the result ,of the decision of this Court in Eramma vs Verrupanna (supra) is that on the death of Wadhawa Singh 's widow it is the old Hindu Law that applied and therefore under the custom in force in Punjab under which a daughter was not entitled to succeed to the ancestral property of the father in preference to the reversioners should apply and the appellants are entitled to succeed.
There is no doubt about the position under the Customary Law of Punjab before coming into force of the .
In Rattigan 's Digest of the Customary Law ' published by the University Book Agency (14th Ed.), paragraph 23 at age 132 it is stated: " 23.(1) A daughter only succeeds to the ancestral landed property of her father, if an agriculturist, in default : (1) Of the heirs mentioned in the preceding paragraph and 535 (2) Of near male collaterals of her father, provided that a married daughter sometimes excludes near male collaterals, especially amongst Muhammadan tribes : (a) where she has married a near collateral descendant from the same common ancestor as her father; or (b) where she has, with her husband continuously lived with her father since her marriage; looking after his domestic wants, and assisting him in the management of his estate; or (c) where being married to a collateral of the father 's family, she has been appointed by her father as his heir.
(2) But in regard to the acquired property of her father,the daughter is preferred to collaterals.
" It is on the basis of this Customary Law that the reversioners succeeded in the suit filed by them questioning the gift made by the respondent 's mother to her.
There is no doubt that Rattigan 's work is an authoritative one on the subject of Customary Law in Punjab, This Court in Mahant Salig Ram vs Musammat Maya Devi at 1196) said : "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 (if Rattigan 's Digest of Customary Law.
it is categorically stated in sub paragraph (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 Singhi (1).
It is not now open to the respondent to show whether any of the circumstances mentioned in sub paragraph (2) of paragraph 23 of Rattigan 's Digest of Customary Law is present here as the previous decision is resjudicata between the parties and in any case it has not been attempted to be shown in this case.
But in the view we have taken that it is section 8 of the that applies and not the Customary Law the appellants cannot succeed in this appeal.
In the result the appeal is dismissed.
The appellants will pay the respondent 's costs.
section B. W. Appeal dismissed.
| IN-Abs | The respondent 's father, W, who owned the suit property died in 1933.
His widow, who succeeded to the estate, gifted the property to her daughter, the respondent.
The appellants filed a suit as reversioners of W questioning the gift.
The "it 'as decreed and the decree was confirmed on appeal.
After coming into force of the on 17 6 1956, the widow again made a gift of the same, lands to the respondent.
She died in 1963.
The appellants then filed the suit, out of which this appeal arose, for possession of the lands.
alleging that the second gift was void.
The trial court decreed their suit but on appeal the respondent succeeded in the first Appellate Court as well as in the High Court on second appeal.
On appeal by special leave to this Court, Dismissing the appeal, HELD (1) Following the decisions of the Privy Council in Moniram Kolita vs Keri Kolitani, I.L.R. 5 Calcutta 776 at 789 and Duni Chand vs Anar Kali, A.I.R. 1946 P.C. 173, (infra) the words "dying intestate in Sec.
8 of the Act must be interpreted as merely meaning "in the case of intestacy of a Hindu male" and to place this interpretation on the Act is not to give retrospective effect to its provisions.
The reference is only to the fact of 'intestacy.
The material point of time is the date when the succession opens, namely, the death of the widow.
Thus this propositions follow (i) Succession opens on the death of the limited owner, and (ii) the law then in force would govern the succession.
[532D G] Moniram Kolita vs Keri Kolitani, I.L.R. 5, Calcutta 776 789 and Duni Chand vs Anar Kali, A.I.R. 1946 P.C. 173, followed.
Eramma vs Verritpatina, , explained and distinguished.
Banso vs Charan Singh, A.I.R. 1961, Punjab 45 and Kuldip Sing vs Karnail Singh, A.I.R. 1961, Punjab, 573, approved.
Kempiah vs Giriganima, A.I.R. , overruled.
Renuka Bala vs Aswini Kumar A.I.R. 1961, Patna 498 and Sam pathkumari N. Lakshmi Ammal, A.I.R. 1963 Madras, 50, distinguished.
(ii)Succession to W 's estate in the present cage opened when his widow died and it would have to be decided on the basis that W died in 1963 when his widow died.
in that case succession to his estate would have to be decided on the basis of section 8 of the .
The accepted position under the Hindu law is that where a limited owner succeeds to an estate the succession to the estate on her death will have to be decided on the basis that the last full owner died on that day.
If, therefore, succession opens and is to be decided on the basis of the last full owner dying on the date of the death of the limited owner it is only the law in force at the time of the death of the limited owner that should govern the case.
To hold that the old Hindu law applies to such a case is to allow your imagination to boggle.
[533 A C, G H] Eastend Dwellings Co. Ltd. vs Finsbury Borough Council, , 132, per Lord Acsquit and Venka tachalam vs Bombay Dyeing & Mfg. Co. Ltd., ; , referred to.
The reversioners ' right being a mere spes successions there is no question of impairing existing rights by adopting the interpretation we place on section 8 apart from 529 the fact that it does not amount to giving retrospective operation to section 8.
Of course,, if the property had already vested in a person under the old Hindu Law, it cannot be divested.
We can see no reason either in principle or on authority why the principle consistently followed under the earlier Hindu law that on the death of the limited owner succession opens and would be decided on the basis that the last male owner died on that day, should not apply even after coming into force of the Act.
In the view we have taken it is section 8 of the Act that applies and not the Customary Law.[534C D,E F.535G]
|
minal Appeal No. 226 of 1970.
Appeal by special leave from the judgment and order dated the 14th April, 1970, of the Allahabad High Court (Lucknow Bench) at Lucknow in Criminal appeal No. 260 of 1968.
A. N. Mulla and O. N. Mohindroo, for the appellant.
O. P. Rana, for the respondent.
The Judgment of the Court was delivered by KHANNA, J.
Barati (26) was tried in the court of Sessions Judge Sitapur for an offence under section 302 Indian Penal Code for causing the death of Lekhai (45).
Prabhu (24) and Ram Lal (24) were also tried along with Barati for offence under section 302 read with section 109 Indian Penal Code for having abetted the commission of the offence of murder.
Learned Sessions Judge acquitted all the three accused.
On appeal filed by the State the Allahabad High Court convicted Barati under section 302 Indian Penal Code and sentenced him to undergo imprisonment for life.
The appeal against Prabbu and Ram Lal was dismissed.
Barati then came up in appeal to this Court by special leave.
The prosecution case is that the relations between Lekhai deceased and his younger brother Pancham (PW 3) on the one side and Barati accused on the other were strained.
All three of them belong to village Nasirapur in district Sitapur.
Dispute had been going on between them regarding the construction of a wall.
About a couple of months before the present occurrence, Baratia effected an opening in the western wall of his house which gave rise to an apprehension that he intended to encroach upon the land belonging to Lekhai and Pancham.
Pancham made complaint dated May, 27, 1967 to the Judicial Panchayat in that connection.
The said complaint was still pending when the present occurrence took place.
About three days prior to the present occurrence Barati and Prabhu accused after arming themselves with lathis went to the door of Lekhai and Threatened to assault him.
Mainku PW intervened and persuaded Barati and Prabhu to go away.
On the evening of July 30, 1967, it is stated, Lekhai deceased after taking his meals was lying on a cot in an open space near his baithak.
Lekhai 's son Nagai (PW 1) and brother Pancham (PW 3) slept nearby on another cot.
A lighted lantern was hanging nearby.
At about 10.30 p.m. the three accused came there.
On hearing some sound, Lekhai opened his eyes.
Lekhai saw the three accused standing near the cot.
Ram Lal accused is the brother in law of Barati accused.
At the instigation of Ram Lal and Prabhu, it is stated, Barati accused, who was holding a bottle, poured acid over Lekhai.
Lekhai cried aloud and shouted that he was being killed.
On hearing the cries of Lekhai, his son Nagai and brother Pancham got up from their cot and saw the three accused standing there.
Barati accused was holding a bottle in his hand.
Nagai and Pancham too raised alarm whereupon 572 Bhallu (PW 2) and Jeorakhan (PW 4), whose houses are nearby, also arrived there with lighted torches and lathis in their hands.
On seeing them, the three accused ran into the house of Barati and closed the door from inside.
Nagai and others chased the accused and knocked at the door of the house but the accused did not open the door.
Nagai, Pancham, Bhallu and Jeorakhan were told by Lekhai that Barati accused had poured acid over him.
Badri Pradhan (PW 6) also came there and on his enquiry he too was told by Lekhai that Barati accused had poured acid over him.
Nagai, Pancham, Bhallu, Jeorakhan and Badri Pradhan PWs saw acid present all over the body of Lekhai deceased.
His clothes too were stained with acid.
At the suggestion of Badri, Lekhai was then taken in a bullock cart by Nagai and Pancham PWs to police station Sandhana at a distance of two miles from the place of occurrence.
Report Ka 1 was lodged at the police station at 2.30 a.m. by Lekhai.
In that report Lekhai stated that Barati accused had poured acid over his body.
The names of Nagai, Pancham, Bhallu and Jeorakhan were also mentioned in the first information report and it was stated that they had seen the accused present near his cot when Lekhai had raised alarm.
The motive for the assault, as given earlier, was also given.
After recording the first information report, Sub Inspector Asrarul Haq (PW 18) recorded statement Ka 22 of Lekhai.
In that statement Lekhai reiterated what he had stated in the first information report.
The Sub Inspector thereafter recorded the statements of Nagai and Bhallu PWs.
Lekhai was then sent to Misrikh dispensary at a distance of about 12 miles from the place of occurrence.
The party arrived at the dispensary at about 3 p.m. on July 31, 1967.
Soon thereafter Dr. Bisht (PW 5) recorded statement Ka II at 3 p.m. of Lekhai deceased.
Lekhai was at that time in a fit condition to make statement.
In that statement also Lekhai stated that Barati accused had poured acid over his body and as such had caused him injuries.
The injuries of Lekhai were examined by Dr. Bisht at 3 .15 p.m.
As the condition of Lekhai was serious, Dr. Bisht referred the case of Lekhai to District Hospital Sitapur.
Lekhai was then taken to the District Hospital Sitapur.
The party arrived in the hospital at about 4 45 p.m. the same day but about an hour thereafter at 5 .45 p.m.
Lekhai succumbed to the injuries.
Post mortem examination on the body of Lekhai was performed by Dr. N. Verma on the following day, i.e. August 1, 1967, at 4 pm.
Barati accused absconded after the occurrence.
Proceedings under sections, 87 and 88 of the Code of Criminal Procedure were initiated against him.
Barati surrendered in court on August 17, 1967.
He was thereafter put under arrest.
At the trial the plea of Barati accused, with whom we are concerned was denial simpliciter.
No evidence was produced in defence.
The trial court did not place reliance upon the evidence of Nagai, Pancham, Bhallu and Jeorakhan PWs.
The reason which weighed 573 with the trial court was that the witnesses were related to the deceased.
The evidence with regard to the dying declarations of the deceased was not accepted by the trial court.
The deceased, in the opinion of the trial court, became unconscious and as such was not in a position to lodge first information report Ka 1 or to make statement Ka 22.
The trial court also rejected dying declaration Ka II recorded by Dr. Bisht as it found the language of the same to be chaste and the same, in the opinion of the trial court, was not expected of a rustic living in a village.
In the result the accused were acquitted.
On appeal the learned Judges of the High Court accepted the evidence of Nagai, Pancham, Bhallu and Jeorakhan PWs as well as the evidence about the dying declarations made by the deceased.
The High Court also took note of the fact that Barati accused had a motive to assault the deceased and that when witnesses knocked at his door, he instead of professing his innocence, did not open the door.
Reference was also made to the fact that Barati accused had absconded after the occurrence.
In the result the appeal against Barati accused was accepted, and he was convicted and sentenced as above.
So far as Ram Lal and Prabhu accused were concerned, the High Court gave them the benefit of doubt and as such acquitted them.
In appeal before us Mr. Mulla on behalf of the appellant has urged that the High Court should not have reversed the judgment of acquittal of the trial court in respect of the appellant.
According to the learned counsel, the evidence relied upon by the High Court is not satisfactory and as such the conviction of the appellant cannot be based upon it.
In reply Mr. Rana has canvassed for the correctness of the view of the High Court.
It cannot be disputed that acid was poured on Lekhai deceased on the night of July 30, 1967 as a result of which he died.
Dr. Bisht, who examined Lekhai deceased on July 31, 1967 at 3 .15 p.m., found the following injuries on his person : "Burnt area of black colour on the left side of the face, on both sides of the neck, on the front part of the whole chest, on the right arm, right fore arm, and back part of right palm on the front and back part of both shoulders.
" Dr. Bisht also found black marks caused by running down of fluid on the front and outer part of abdomen and on the vertebral column.
Burnt areas of black colour were found by the doctor on the front and inner part of right thigh, inner and upper Part of right leg and inner part of the left thigh in the middle.
The injuries, in the opinion of the doctor, were previous and were caused by acid in liquid form.
The injuries were about 12 to 24 hours old.
Lekhai died at 5 .45 p.m. on July 31, 1907.
Dr N. Verma who performed the post mortem examination on the body of Lekhai on August 1, 1967 at 4 p.m. found the following injuries on the body 574 "1.Corrosive burns area.
There were marks of acid,on the left side of the face, in front and both sides of the neck, in front of the chest and in front, up and back side of the shoulders ; upper side and in front of the right arm and in front and in several places of the other arm.
In front and outer side of right thigh and in front inside of left shoulder, in front and down part of the right leg and both sides of the back.
The marks on account of pouring of acid existed on the left side of the face, and also existed on both sides of the chest, abdomen, and shoulders, the inner part of the skin and flesh of front of the chest, neck, side and several places became discolored by the action of acid.
Injuries were on account of corrosion burns which were upto III, IV, V degree.
" On internal inspection the brain and thin skin cover were found to be congested.
The same was the condition of the longs, larynx, trachea and bones.
The heart was full of blood, while the stomach was empty.
Death, in the opinion of the doctor, was due to shock as a result of the pouring of acid.
The injuries were sufficient to cause death in the ordinary course of nature.
The case of the prosecution is that it was Barati accused who poured acid over Lekhai deceased as a result of which Lekhai died.
In support of this allegation, the prosecution has relied, in the first instance, upon the four dying declarations of Lekhai deceased.
The first dying declaration of the deceased was the one made by him to Nagai, Pancham, Bhallu and Jeorakhan immediately after the occurrence.
It is in the evidence of these witnesses that they were told immediately after the occurrence that it was Barati accused who, had poured acid over him.
There appears to be no cogent reason to disbelieve the above evidence of the witnesses.
The trial court, in our opinion, was wholly in error in rejecting the evidence of these witnesses on the ground that they were related to the deceased.
Close relatives of the deceased would normally be most reluctant to spare the real assailant and falsely mention the name of another person as the one responsible for causing injuries to the deceased.
Lekhai deceased also told Badri Pradhan (PW 6) who arrived at the place of occurrence on hearing alarm that Barati accused had poured acid over him.
No cogent ground has been shown as to Why the above evidence of Badri Pradhan be not accepted.
All that was suggested on behalf of the accused was that Badri was inimical to Prabhu accused.
If that was so, no reason has been shown as to why Badri should attribute the major part in the assault on the deceased to Barati accused and not to Prabhu.
It is also plain that Lekhai deceased must have seen as to who was the person who poured acid over his body.
The moment the acid first came in contact with his body, the immediate reaction of Lekhai, as of any other person, would be to see as to who was responsible for all that.
Even if the assailant took only a few seconds to pour acid over the body of Lekhai, the latter would not have failed to fix the identity of the assailant during that short time.
It is significant that Barati was no stranger to Lekhai.
They were neighbours and were well known to each other.
it is, in our opinion, most difficult 575 to believe that Lekhai would spare his real assailant and falsely mention the name of Barati as one who had poured acid over his body.
Apart from the oral dying declarations made by the deceased to Nagai, Pancham, Bhallu, Jeorakhan and Badri Pradhan PWs, we have the evidence of Sub Inspector Asrarul Haq that the deceased lodged report Ka 1 at the police station at 2.30 a.m. when the deceased was brought there in a cart.
The deceased stated in that report that Barati accused had poured acid over him and thus caused him injuries.
Sub Inspector, Asrarul Haq thereafter recorded statement Ka 22 of Lekhai, deceased.
In that statement also the deceased reiterated that it was Barati accused who had poured acid over him and thus caused him injuries.
We see no particular reason to disbelieve the evidence adduced by the prosecution regarding the dying declaration of Lekhai deceased contained in report Ka 1 and statement Ka 22.
The trial court reacted the above evidence because it was of the view that Lekhai deceased, as mentioned by him in dying declaration Ka 1 made to Dr. Bisht, had become unconscious after the occurrence.
There was, however, nothing in that statement to indicate that Lekhai remained unconscious for a long time and as such was not in a position to lodge the first information report at the police station or make statement Ka 22 to Sub Inspector Asrarul Haq.
The view taken by the trial court in rejecting the above evidence, in our opinion, was clearly erroneous '.
Another dying declaration upon which prosecution has placed reliance was Ka 11 recorded by Dr. Bisht in Misrikh dispensary According to Dr. Bisht, Lekhai was in possession of his senses when he made statement Ka 11.
Dr. Bisht is a wholly disinterested and respectable witness and there appears no reason as to why his statement regarding the dying declaration Ka 11 be not accepted.
Dying declaration Ka 11 is a brief document consisting of about 9 or 10 lines.
The statement incorporated in dying declaration Ka 11 is very simple and relates to the pouring of acid by Barati accused on Lekhai deceased.
The fact that the language used in it is rather chaste would not go to show that the said statement could not have been made by Lekhai deceased.
The statement of Lekhai in exhibit Ka 11 that Barati accused had poured the liquid from a bottle on him clearly establishes the guilt of Barati accused.
Reference was made on behalf of the accused to the fact that statement Ka 11 was sent by Dr. Bisht to Additional District Magistrate not immediately after recording that statement but on the third day.
According to Dr. Bisht, the delay took place because of rush of work.
No adverse inference, in our opinion, can be drawn from the fact that the dying declaration was sent by Dr. Bisht on the third day after recording the same.
The dying declaration bears the thumb impression of Lekhai deceased.
Lekhai was sent from Misrikh dispensary soon after the dying declaration was recorded and his injuries were examined.
There could be no possibility of any such dying declaration being prepared subsequently.
576 Mr. Mulla has pointed out that the language used in dying declaration Kall is chaste while that used in report Ka 1 as well as in statement Ka 22 has some words which are spoken by villagers.
This fact, in our opinion, is not of much significance because there is nothing abnormal or unusual in the same person using colloquial language while talking to one person and using refined language while talking to another person.
Apart from the dying declaration& of the deceased, we have the evidence of Nagai, Pancham, Bhallu and Jeorakhan PWs that they saw Barati accused with a bottle in his hand near the cot of the deceased when those witnesses got up on hearing alarm.
The High Court accepted the evidence of these witnesses and we see no particular reason to take a different view.
As mentioned earlier, the reason given by the trial court in rejecting the evidence of these witnesses was wholly erroneous.
It is well settled that the High Court in an appeal under section 417 of the Code of Criminal Procedure has full power to review at large the evidence on which the order of acquittal was founded and to reach the conclusion that upon the evidence the order of acquittal should be ' reversed.
No limitation should be placed upon that power unless it be found expressly stated in the Code, but in exercising the power conferred by the Code and before reaching its conclusion upon fact the High Court should give proper weight and consideration to such matters as (1) the views of the trial judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any real and reasonable doubt and (4) the slowness of an appellate court in disturbing a finding of fact arrived at by a judge who had the advantage of seeing the witnesses.
Keeping the above principles in view as well as the fact that the approach of the trial court was clearly unreasonable, the High Court, in our opinion, was fully justified in setting aside the acquittal of Barati accused.
There is, in our opinion, no force in the appeal which fails and is dismissed.
P.B.R. Appeal dismissed.
| IN-Abs | The appellant and his companions were charged with an offence under section 302 I.P.C. for causing the death of the deceased by pouring acid on him when he was sleeping on his cot on the night of the occurrence.
After recording the first information report the police sub inspector recorded the statement of the deceased and at the dispensary the doctor recorded the statement of the deceased, in both of which he stated that the appellant poured acid over his body and caused injuries to him.
The deceased succumbed to his injuries.
Disbelieving the prosecution evidence the trial court acquitted him.
The High Court on the other hand accepted the evidence of all the prosecution witnesses and convicted and sentenced the appellant to life imprisonment but acquitted the remaining two accused.
In appeal to this Court it was contended that the High Court should not have reversed the judgment of the trial court and the evidence relied upon by the High Court was not satisfactory.
Dismissing the appeal.
HELD : that the approach of the trial court was clearly unreasonable and the High Court was fully justified in setting.aside the acquittal of the.
appellant.
It is well settled that in an appeal under section 417 of the Code of Criminal Procedure the Court has full power to review at large the evidence on which the order of acquittal was founded and to reach the conclusion that upon the evidence the order of acquittal should be reversed.
No limitation should be placed upon that power unless it be found expressly stated in the Code, but in exercising the power conflict by the Code before reaching its conclusion upon facts the High Court should give proper weight and consideration to such matters as (1) the views of the trial judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any real and reasonable doubt and (4) 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.
[576 D F] In the instant case there was no doubt that the deceased died as a result of acid bums.
There was no cogent reason to disbelieve the evidence of the prosecution witnesses.
The trial court was wrong in rejecting evidence of these witnesses on the ground that they were related to the deceased.! Close relatives of the deceased would normally be most reluctant to spare the real assailant and falsely mention the name of another person as the one responsible for causing injuries to the deceased.
The deceased would not spare his real assailant ' and falsely mention the name of the appellant as one who poured acid over his body.
There was no reason to discard the dying declaration made by the appellant to the police sub inspector, The trial Court was wrong in rejecting the dying declaration to the police (F.I.R.) on the ground that the deceased had stated to the doctor that he had become unconscious after the occurrence.
There was nothing in the statement recorded by the doctor to indicate that the deceased remained unconscious for.
a long time and as such was not in position to lodge the F.I.R. The fact that the language used in the dying declaration made to the doctor was rather chaste would not go to show that the said statement could not have been made by the deceased.
As to the language used in the dying declaration there is nothing abnormal or unusual in the same person using colloquial language while talking to one person and using refined language while talking to another person.
[574 E F ; 575D; 576A] 571
|
Appeals Nos.
1186 1188 of 1972.
Appeals by special leave from the Judgment and Order (fated 12/ 13/15th October, 1971 of the Bombay High Court in Special Civil Application Nos. 555, 556 of 1967 and 72 of 1968.
K. section Cooper, M. K. Shah, P. H. Parekh and Sunanda Bhandare, for the appellants.
B. N. Lokur, Rameshwar Nath, for respondent No. 1.
Subodh Markendeya, for Respondent No. 2.
The Judgment of the Court was delivered by SARKARIA, J.
Whether the principle of apportionment is applicable to the fixation of standard rent of a premises under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short, the Act); if so whether on the facts of the case, the principle has been rightly invoked is the two fold question that falls for decision in these three appeals by special leave directed against the judgment of the High Court of Judicature at Bombay.
The material facts are as under A big compound, measuring 11,150 sq.
yards, at 156 Tardeo Road, Bombay, belonged to Raja Bahadur Moti Lal Mills, Ltd., Bombay, appellant No.1.
The Mills were shifted from these premises in the year 1930.
In 1932, the whole of this estate including the structures standing on.
a part of it, was let out to Sound Studios Ltd. Between the years 1932 and 1940, some part of it was sub let by Sound Studios to Sheraj Ali, who was the proprietor of M/s. Famous 579 Cine Laboratory and another part to Neon Signs (India) Ltd., and the rest of the estate continued to be with Sound Studios.
Thereafter, Sound Studios went out of the picture and the whole estate was let out to National Studios Ltd. on October 23, 1940 at a monthly rent of Rs. 1700/ for a period of two years.
In July 1941, National Studios surrendered their lease and Sheraj Ali became a direct tenant under appellant 1 in respect of the premises in his possession, called for the sake of identification, 983/1 (whole) and 983/2 (Ground floor).
On December 1, 1941 and again in November 1942, Sheraj Ali took on rent additional portions of this estate so that his original rent, which was Rs. 400/ , was first increased to Rs. 600/and then to Rs. 700/ and thereafter in November 1942 to Rs. 875/ .
By November 1947, Sheraj Ali was paying Rs. 1200/ per month as rent for the premises demised to him including some new structures which had been built.
Sheraj Ali had taken a loan from M/s. Govind Ram Bros. Ltd., Respondent 1 on the security of his Film Studio Equipments.
He failed to repay the loan.
Thereupon, Respondent 1 instituted a suit for recovery of the amount and obtained a decree from the High Court,.
on February 27,1948.
As a result of the High Court 's decree, the right, title and interest of Sheraj Ali in the mortgaged property were assigned to Respondent 1.
Respondent 1, in consequence, took a fresh lease on March 19,1948 from appellant No. 1 of the, properties (called for identification) 983/1 to 983/12, which were in the tenancy of Sheraj Ali ', at a contractual rent of Rs. 1228/ p.m.
On the same date, Respondent 1 executed another lease in respect of three rooms in the same premises (marked for identification as) 984, in favour of appellant 1, on a monthly rent of Rs. 750/ Respondent 1 failed to pay the contractual rent, regularly, which fell into arrears which were not cleared despite the pressing demands made by the Receiver.
On March 13, 1954 the Receiver wrote to Respondent 1 threatening to take legal proceedings for the recovery of the rent.
This Receiver, who is now appellant No. 2, had been appointed by the High Court in Suit No. 454 of 1949 instituted by appellant 1 against the Insurance Company On April 14, 1954, two applications were filed in the Court of Small Causes by Respondent 1 for fixation of standard rent in respect of the premises comprised in the said two leases one application, R.A.N. 983/54, relates to properties 983/1 to 983/12, and the other (R.A.N. 984) to premises 984.
It was alleged in the applications that since on September, 1, 1940, the entire estate, including the properties in question.
had been let out on a monthly rent of Rs. 1700/ , standard rent of the premises it question should be fixed on the basis of apportionment In particular, it was pleaded that fair rent of Rs. 983/1 to 983/12 should be 1/8th of Rs. 1200/ which was later corrected as 1700/ .
On the same basis it was alleged in the second application, that fair rent of premises 984 should be Rs. 75/ p. m. 580 The appellants resisted these applications and averred in R. A. N. 983/54, that several entirely new structures had been built and substantial alterations made in most of these structures between the years 1940 and 1948, as a result whereof the property had lost its identity, and consequently, fair rent could not be fixed on apportionment basis.
On June 11, 1958, Respondent 1 made an application for amendment of the Standard Rent Application (R.A. N. 983154) for adding an alternative ground based on the value of the land and cost of construction so that in the event of the court holding on the preliminary issue in favour of the appellants, the standard rent could be fixed on the basis of the valuation of the land and the construction.
This application was disallowed.
On July 30,1958 Respondent 1 made an application for amendment of his R. A. N. 984 of 1954 on lines similar to that in R. A. N. 983/54.
It was also dismissed by an order, dated July 31, 1958.
At the stage of arguments on December 4, 1958, Respondent 1 moved another application for amendment and addition of the plea that they were the owners of the structures in premises 983/10, 983/1] and 983/12.
The second amendment was not sought to be made in the other application R. A. N. 98411954 relating to property 984.
This prayer was also declined.
The trial court (Samson J.) by its judgment dated April 2, 1959, found that the premises in question on account of structural alterations had undergone such a change that they could no longer be identified with the property that existed in September 1940 and that the mode of ,determining rent by apportionment was not available to the tenants.
In the result he dismissed the applications, adding "there is no sufficient ,material to ascertain the standard rent in any other way '.
Against those orders, Respondent 1 filed a revision petition under section 129 (3) of the Act before the Revisional Court of Small Causes, Bombay, which accepted, the same set aside the order of the trial judge, allowed the amendment and remanded both the applications for fixation of fair rent to the trial court.
Against this remand order, dated August 8, 1960, of the Revisional Court, the appellants preferred two Civil Revisions to the High Court of Bombay.
During the pendency of those Revisions, the trial court allowed the amendment and proceeded to decide the entire matter afresh.
These facts were brought to the notice of the High Court, which, however, ,dismissed the revision petitions by a judgment dated February 3, 1961 holding that the first Revisional Court had, in fact, remanded the entire matter for trial de novo, after rightly allowing both the amendments.
After the remand, the trial court by its judgment, dated April 25, 1961 held that except 983/10, 983/11 and 983/12, which were new structures there was no change of identity in the rest of the properties 581 i. e. 983/1 to 983/9; that new structures 983/10, 983/11 and 983/12 belonged to Respondent 1 who was consequently, liable to pay rent only for the land underneath; that the cost of repairs of the properties, 983/8 and 983/9 after they had been destroyed by fire, was mainly borne by Respondent 1, the landlord 's contribution being Rs. 8,500/ only.
Applying the principle of apportionment, it fixed the standard rent of the properties 983/1 to 983/12 at Rs. 400/ p.m. subject to permitted increases after 1954.
Regarding the premises 984(in R.A.N.984/54), the trial court gave are turn on the investment of Rs.40,000/ made by the landlord inclusive of the cost of structure and the value of land underneath at Rs. 30/ per sq. yard (as that of 1940) and fixed the standard rent at Rs. 386/ p. m. subject to permitted increases after 1946.
Aggrieved by these orders of the trial court, appellants and Respondent 2 filed two revision applications under section 129 (3) to the Revisional Court of Small Causes which by its judgment, dated September 30, 1964, substantially upheld the findings of the trial court, inter alia with the exceptions : (i) that the ownership of the new structures 983/10, 983/11 and 983/12 vested in Appellant 1, who was entitled to get a fair return on that investment; (ii) that the value of the land "married" to the new structures 983/10, 983/11 and 983/12, and 984/54, should be taken at Rs. 50/ per sq.
yd., i. e. as of 1948 and not as of 1940 as had been done by the trial court on remand.
In the result, the standard rent in R.A.N. 983 was raised to Rs. 981 / and in R.A.N. 984 to Rs.411/ p.m.
To impugn the decision, dated September, 30, 1964, of the Revisional Court, the parties preferred six Special Civil Applications under article 226/227 of the Constitution to the High Court.
By a common order, a learned single Judge of the High Court dismissed these applications except that he corrected some arithmetical errors and, in consequence, fixed the standard rent of properties 983/1 to 983/12 at Rs. 841.07 and that of premises 984/54 at Rs. 462/11 p. m.
It is against this decision dated 12/13th October 1971 of the High Court that these appeals have been filed by special leave.
The first contention of Mr. Cooper, learned Counsel for the appellants is that there is no provision in the Act which requires standard rent to be fixed on apportionment basis; rather, the definition of "premises" in section 5(8) (b) which speaks of "part of a building let separately," read with clause (i) of section 5(10) and clause (c) of section 11 (1) with due emphasis on the article 'the ' immediately preceding the, word 'premises ' in the said clauses, indicates that the standard rent would be the rent for which the suit premises were first let separately on or, after the basic date i.e. September 1, 1940.
If on the basic date proceeds the argument the premises in question did not form the subject of a separate, single ,demise but had been let out together with other portions of larger premises, its standard rent could not be determined on the footing of the rent payable for those different portions.
Reliance 582 has been placed on Dhanrajgirji Naraingirji vs W. G. Ward;(1) and Bata Shoe Co ' Ltd. vs Narayan Das Mullick and Ors.(2) Counsel had further tried to distinguish Capital and Provincial Property Trust Ltd. vs Rice(3) and Bhikaji Ramchandra Paranjpe vs Vishnu Ramchandra Paranjpe(4), referred to in the judgment of the High Court.
On the other hand, Mr. Lokur, learned Counsel for Respondent maintains that the principle of apportionment has always been accepted by the Bombay High Court as an appropriate guide in fixing standard rent under the Act of premises which on the basic date had been let out as part of a larger entity.
It is pointed out that in Narayanlal Bansilal vs Venkatrao Anant Rai(5); a Bench of the High Court while considering the question of standard rent in respect of another portion of the very property of the appellant Mills, had invoked this principle.
Before we deal with the contentions canvassed, it will be proper to make a brief survey of the relevant provisions of the Act: The material part of the definition of "premises" in s.5(8) reads: "Premises" means: (a) any land not being used for agricultural purposes; (b) any building or part of a building let separately.
" (emphasis supplied) Sub section (10) of the same Section defines "standard rent", in relation to any premises, to mean (a) where the standard rent fixed by the court and the Controller respectively under the Bombay ]tent Restrictions Act, 1939 or the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944, such standard rent; or (b) Where the standard rent is not so fixed/subject to the provisions of section 11, (i) the rent at which the premises were let on the first day of September 1940, or (ii) where they were not let on the first day of September 1940, the rent at which they were last let before that day, or (iii) where they were first let after the first day of September 1940, the rent at which they were first let, or (iv) in any of the cases specified in section 11, the rent fixed by the Court; (1) (2) A.I.R. 1953 Cal.
(3) [1952] Appeal Cases 142.
(4) (5) 583 Section 1 1 empowers the Rent Court to fix the standard rent at such amount, as having regard to the provisions of this Act and the circumstances of the case, the court deems just (a) where any premises are first let after the first day of September 1940, and the rent at which they are so let is in the opinion of the Court excessive; or (b) where the Court is satisfied that there is no sufficient evidence to ascertain the rent at which the premises were let in anyone of the cases mentioned in sub clause (i) to (iii) of clause (4) of sub section (10) of section 5; or (c) Where by reason of the premises having been let at one time as a whole or in part and another time in parts or a whole, or for any other reasons, any difficulty arises in giving effect to this part; or (d) Where any premises have been or are let rent free or at a nominal rent or for some consideration in addition to rent; or (e) Where there is any dispute between the land lord and the tenant regarding the amount of standard rent.
" Clause (c) read with the opening part of section 11(1) is crucial for our purpose.
One of the primary objects of the Act is to curb exaction of extortionate rents and to stabilise the same at prewar level.
In achieving that object, however, it avoids a Procrustean or mechanical approach.
While pegging the basic line to September 1, 1940, it significantly subordinates "standard rent" by its very definition in section 5 (10) (b) to the benignant jurisdiction of the Court under s.11.
And the key words of the latter provision, into which the conscience of this anti rack renting statute is compressed, are "the circumstances of the case, the Court deems just".
These words inhibit a rigid and ossified determination of "standard rent".
They leave sufficient "play at the joints", investing the court with a wide discretion in the matter.
According to the scheme of the Act, while "rent" recoverable by the landlord, may owing to permitted increases, fluctuate, the 'standard rent ' always remains fixed or stationary.
If on the basic date, the suit premises were not let out separately but were a part of the subject matter of a larger demise as in the instant case difficulty arises in giving effect to the statute.
Clause (c) of section II (1) then comes into operation.
To resolve the difficulty this clause and the related provisions are not to be construed in a narrow technical sense which would stultify or defeat their object.
It is to be interpreted liberally in a manner which would 'advance the remedy ', 'suppress the 584 mischief, and foil 'subtle inventions and evasions ' of the Act.
Construed in accordance with this socially relevant rule in Hayden 's case the meaning of 'the premises ' having been let at one time as a whole, spoken of in this clause, can legitimately be deemed to cover ' the larger premises which, on the basic date, had been let as a: whole and of which the suit premises was a part let out subsequently.
In any event, the amplitude of the phrase "or any other reason" in the latter part of the clause, is wide enough to embrace cases of this kind and confers a plenary curative power on the Court.
True, that unlike the English Rent Control Act of 1920 or the later English Acts, the (Bombay) Act does not expressly speak of apportionment.
But the language of its relevant provisions construed consistently with the scheme and in built policy of the Act, is elastic enough to permit the fixation of standard rent on apportionment basis.
As noticed already, section II (1) gives a discretion to the Court to fix such amount as standard rent as it "deems just".
However, in exercising this discretion the Court has to pay due regard to (i) the provisions of the.
Act and (ii) the circumstances of the case.
Apportionment or equal distribution of the burden of rent on every portion is a rule of justice and good sense.
If the standard rent of a whole was a specific amount, it stands to reason that the standard rent of a part or sub division of that whole should not ordinarily exceed that amount.
Therefore, if in the circumstances of a given case the Court feels that for securing the ends of justice and giving effect to the provisions and policy of the Act, it is reasonably necessary and feasible to work out the standard rent by apportionment, it can legitimately do so.
This principle, however, is applicable where on the basic date, that portion of which the standard rent is to be determined, had not been let separately as on unit, but the whole, of which it is a part, had been let on that date.
Apportionment postulates that on account of its having been let on the basic date, the whole had acquired a standard rent which has to be allocated to smaller units subsequently carved out of it.
It is thus clear that the principle of apportionment is not alien to the spirit of the Act, and has indeed been often invoked by the courts in fixing standard rent under this Act.
In Narayanlal Bansilal 's case (supra), a Division Bench of the Bombay High Court determined standard rent of another part of this very estate of the Mills in accordance with that principle.
However, while conceding that apportionment is not foreign to the scheme, purpose and policy of the Act, we will like to emphasise the need for caution and circumspection in invoking it.
It is not to be rigidly and indiscriminately applied as a cast iron rule of law regardless of time and circumstances or the equities of the case.
A doctrinaire approach, not consistent with a just and fair determination, stultifies the whole salutary purpose of justice to both, the landlord and the tenant.
If necessary, it can be adjusted, adapted and attuned in the light of the particular circumstances of the case, to satisfy the statutory requirement of 585 fixing the standard rent as at a "just amount.
Thus if after the material date, the landlord has made investments and improvements in the promises, it will be just and reasonable to take that factor also into account and to give him a fair return on such investments.
Further, in appor tioning the rant, the Court must consider other relevant circumstances, such as "size, accessibility, aspect, and other 'Physical advantage enjoyed by the tenant of the premises of which the standard rent is in question, as compared with those of the rent of the property in which it is comprised [see Bainbridge vs Contdon(1)].
Where after the basic date, the premises completely change their identity, apportionment as a method of determining just standard rent, loses its efficacy and may be abandoned altogether.
We have only illustrated, not exhaustively enumerated the relevant circumstances and their implications.
At this stage, we may notice the decisions in Danrajgirji vs W.C. Ward (supra) and Bata Shoe and Co. vs Narayan Dass (supra) relied upon by Mr. Cooper.
In the first, a learned single Judge of the Bombay High Court was considering sections 2(1)(a) and 13(1)(a) of the Bombay Rent (War Restriction Act II of 1918), which were, to an extent, similar to sections 5(8)(b) and (10) and 11(1)(c) of the 1947 Act.
There, the Port Trust had in March 24,1915, leased the building known as Watson 's Annexe to one Dr. Billimoria at a rental of Rs. 2,850, besides ground rent and taxes.
Dr. Billimoria sublet the premises in different flats to different tenants.
The premises in the occupation of the defendant were sublet to him at a rental of Rs. 75/ in September, 1915, i.e. before September 1, 1916 which was the basic date under the 1918 Act.
The tenancy of Dr. Billimoria was terminated by a consent decree on July 31, 1923 and thereafter, the defendant held directly under the plaintiff.
The question arose as to whether standard rental of the flat should be calculated on the basis of the actual rent of Rs. 75/ , on the basis of the subletting or whether it should be determined by apportionment of the rent which Dr. Billimoria was paying to the Port Trust on the basis of the first letting.
Pratt J answered this question thus: "The Rent Act itself in the definition of the premises refers to a part of the building separately let as premises of which the standard rent has to be determined and such standard rent must be determined with reference to those premises in the manner spe cified by s 2(1)(a) of the Act.
The standard rent, therefore, must be ascertained on the admitted basic rent of Rs. 75./. .
Again, if the head lease instead of being as here the lease of one building consisting of flats had been a lease of a large number of buildings constituting a large estate, it would be almost impossible to make a correct apportionment of the rent.
I do not think it was the intention of the Rent Act that landlords and tenants should be driven to do a difficult and expensive process of valuation.
and calculation before their rent could be ascertained.
" (1) M45Sup.
CI/75 586 We see force in the argument as also textual and pragmatic support.
But these considerations do not preclude the Court from importing the flexible factors of fairness suggested by the circumstances of the case.
Indeed, section 11, as explained earlier, obliges the Court to do it.
Moreover, the interpretation of "premises" adopted by the learned judge was a little too literal, narrow and divorced from the purpose and content of the provisions relating to fixation of standard rent.
Nor was it in accord with the scheme and object of the 1918 Act.
The court 's jurisdiction to consider, as a strong circumstance, proper apportionment of rent is not taken away, in our view.
It may be noted that just like the opening clause of section 5 of the 1947Act, which defines "premises" "standard rent" etc., the corresponding section 2(1) of the 1918 Act, also, started with the qualifying words "In this Act, unless there is anything repugnant in the subject or context".
While applying these definitions to particular cases and provisions of the Acts, these words should not be lost sight of.
The argument in favour of adopting the restricted interpretation, ignores this rider to the definitions, provided by the Legislature in these statutes.
We do not intend to over burden this judgment with a discussion the decision in Bata Shoe & Co 's case (supra).
Suffice it to say that is a decision under the West Bengal Premises Rent Control Act (17 of 1950) which stands on its own facts.
It cannot be accepted as laying down a rule of universal application.
It is vulnerable, more or less on the same grounds, on which the decision in Dhanrajgirji 's case can be assailed.
We reject the narrow interpretation of the relevant provisions of Ss. 2 and II, canvassed for by the appellants, for two reasons: Firstly, it will leave the door wide open for evasion of this statute by what Abbot C. J. in Fox vs Bishop of Chester(1) called "shift or contrivance" All that a greedy landlord, need do to squeeze out more rent would be to divide his premises into several parts and let them out separately on exorbitant rents.
Such an evasion may amount to a fraud upon the statute.
Secondly, such a construction so manifestly subversive of one of the primary objects of the Act would be wholly beyond the intendment of the Legislature.
For reasons aforesaid we would negative the first contention of Mr. Cooper, as an inflexible proposition and answer the first part of the question posed in the affirmative to the extent indicated.
it takes us to the second part of that question namely whether the principle of apportionment was correctly applied to the fact, of the case ? Mr. Cooper contends that the first trial court (Samson J.) had rightly found that the premises in question on account of extensive alterations and constructions undergone a complete change after the basic date, and therefore standard rent could not be determined by apporoining the rent of the whole among the parts.
It is maintained that (1) (824) ; at 655.
587 this finding of Samson J. was wrongly set aside by the High Court and must be deemed to be still holding the field.
Objection is also taken to the amendments allowed by the trial court on remand.
In the alternative, it is argued that even the courts below found that properties 983/10, 983/11, 983/12 and 984/54 were admittedly new structures and extensive repairs and replacements had been made in the remaining suit premises which had been destroyed or severely damaged by fire in 1948 49.
On account of these substantial alterations and reconstructions the premises in question had lost their identity and consequently, the principle of appointment was not applicable.
The first part of the contention based on the judgment of Samson J. is groundless.
The judgment of the first trial court was set aside in toto by the Revisional Court, and further by the High Court and the case was remanded for de novo trial to the trial court which thereafter, decided the case afresh after allowing the applicant to amend his R.A. N.S.
It is too late in the day any way to argue on the assumption that the findings still survive.
The question whether a certain property has changed its identity after the basic date is largely one of fact.
The courts below have found that excepting properties 983/10, 983/11,983/12 and 984/54 which were admittedly new structures contracted near about 1948, the rest of the properties, namely 983/1 to 983/9 had not lost their identity.
The courts therefore, worked out the economic rent of these new structures by capitalising their value and gave the landlord a fair return on Ms investments and fixed their standard rent mainly on that basis.
It was with regard to the unchanged old properties 983/1 to 983/9 that the High Court and the Revisional Court mainly adopted the method of appointment.
Even so, it allowed the landlord fair return over Rs. 14,448/ being the cost of flooring, ceiling and other fixtures fixed to property 983/6.
Now it is not disputed that on the basic date (September 1, 1940), these properties in question were parts of a larger entity comprised in a single lease or tenancy in favour of Sound Studios at a monthly rent of Rs. 1700/ .
The courts below have therefore taken into account this basic circumstance along with the other relevant facts of the case.
We do not find anything so wrong or unfair or untenable in the method adopted by them which would warrant an interference by this Court in the exercise of its special jurisdiction under article 136 of the Constitution.
Not that apportionment must be applied in all cases as a rule of law but that, if applied along with other considerations dictated by a sense of justice and fairplay, cannot be condemned by this Court as, illegal.
We therefore, overrule this contention, also.
Lastly, it is contended that the courts below have seriously erred in evaluating the land under the suit properties at Rs. 30/ per sq.
on the basis of an instance (exhibit R 6) of the year 1942, while they should have taken into account the value of the land as in the year 1948.
it is added that some photostat co pies of sale deeds pertaining to the rele vant year were produced by Mr. Deweja, architect examined by the Landlord, and the Revisional Court wrongly rejected them As unproved.
it is maintained that in 1948, the market value of the site underneath the 288 structures was Rs. 120/ per sq.
in support of his contention that the value of the land at the date of the letting is the appropriate value to be taken into account, Counsel has cited Bukmanibai Khunji Cooverji vs Shivnarayan Ram Ashre.
We are unable to accept this contention also.
The courts below in capitalising the structures, 983/10 to 983/12 and 984/54 did take into account the value of the land married to those properties at the rate of Rs. 50/ per sq.
yd; which, according to their estimate, after adding Rs. 30/ per sq.
yd for escalation, would be the market value of that land in the year 1948.
Since the rent of the old unchanged properties 983/1 to 983/9 was fixed mainly on apportionment basis, the courts did not think it necessary to take the value of their sites separately into computation in fixing the standard rent.
Moreover, there was no evidence on the record to show that the value of the land in question, in the year 1948 was Rs. 120/ per sq.
We, therefore, do not think it necessary to examine Cooverji 's case cited by the Counsel.
We however, do not rule out the propriety of paying regard to escalations in land value as put forward by Mr. Cooper, but do hold that this Court will be loath to re investigate factual conclusions not shown to be perverse or manifestly unjust.
Such is not the case here.
For all the foregoing reasons, we would answer the question posed for decision.in the affirmative and dismiss these appeals with one set of costs.
V.P.S. Appeals dismissed (1)(1966)67 Bom.
L.R. 692.
| IN-Abs | On September 1, 1940, the basic date under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the properties in dispute were parts of a larger entity comprised in a single lease.
In March 1948, the respondent took a fresh lease of the properties in dispute, Thereafter, the respondent filed applications in the court of Small Causes for fixation of standard rent on the basis of apportionment.
The trial court dismissed the applications holding that the premises, on account of structural alterations, had undergone such a change that they could no longer be identified with the property that existed in September 1940; that the mode of determining the rent by apportionment was not available to the tenant; and that there was no sufficient material for ascertaining the standard ' rent in any other way.
This order was set aside in revision and the case was remanded to the trial court.
After remand, the trial court held that except with respect to three items of the premises in dispute, which were new Structures, there was no change of identity in the rest of the properties; that the new structures belonged to the respondent who was consequently liable to pay rent only for the land underneath; and on that basis, applying the principle of apportionment, fixed the standard rent.
With respect to one item the trial court took into consideration the investment made by the landlord inclusive of the, cost of structures, estimated the value of the land underneath as in 1940, and fixed the standard rent on that basis.
In revision it was held that the ownership of the three new structures also vested in the appellant, that he was entitled to get a fair return on that investment also and that the value of the land should be taken as in 1948 and not in 1940, and the standard rent was fixed on that basis.
Further revisions to the High Court were dismissed with some arithmetical corrections.
In appeal to this Court, HELD : The principle of apportionment is applicable to the fixation of standard rent of the premises in dispute and the principle had been rightly invoked and applied.
[584 F G] (a) One of the primary objects of the Act is to curb exaction of extortionate rent.
Section II (1) empowers the Court to fix the standard rent at such amount, as having regard to the provisions of the Act and the circumstances of the case, the Court deems just, If on the basic date the premises were not let out separately but were a part of the subject matter of a larger demise then section 11(1)(c) comes into operation.
If the standard rent of a whole was a specific amount it stands to reason that the standard rent of a part or sub division of the whole should not ordinarily exceed that amount.
Therefore, if in the circumstances of a given case the court feels that for securing the ends of justice and giving effect to the provisions and policy of the Act it is reasonably necessary and feasible to work out the standard rent by apportionment, it can legitimately do so.
The language of the Act consistently with its scheme and in built policy is elastic enough to permit the fixation of standard rent on apportionment basis.
At the same time, caution and circumspection are necessary in applying the principle to the particular circumstances of a case.
For example, if after the material date, the landlord has made investments and improvements in the premises it will be just and reasonable to take that factor also into account and give him a fair return on such investment.
Similarly, in apportioning the rent, the Court must also consider other relevant circumstances and advantages enjoyed by the tenant of the premises of which the standard rent is in question as compared with the rest 578 of the Property in which it is comprised.
Further,where after the basic date the premises completely changed their identity, apportionment as a method of determining just standard rent loses its efficacy and may be abandoned altogether.[583E 585C] Narayanlal Bansilal vs Venkatrao Anant Rai 67 Bom.
L.R. 352, Bainbridge vs Congdon and Fox vs Bishop of Chester ; at 655 referred to.
Dhanrajgirji Naraingirji vs W. G. Ward (1925) 27, Bom.
L.R. 877 and Bata Shoe & Co. Ltd. vs Narayan Das Mullick and Ors.
not approved.
(b)(1) The findings of the trial court before remand had been set aside in the order of remand, and there is nothing wrong or unfair or untenable in the method adopted by the lower courts after remand which would warrant interference by this Court in exercise of special jurisdiction under article 136 of the Constitution.
[587D G] (ii) The question whether certain property has changed its identity after the basic date is largely one of fact.
The factual conclusions arrived at by the revisional court and High Court are not shown to be perverse or manifestly unjust" It was with regard to the unchanged old properties that the High Court and the Revisional Court mainly adopted the method of apportionment.
Even so, they allowed the landlord a fair return over the amount invested by him towards the cost of flooring, ceiling and other fixtures.
since the rent of the old unchanged premises was fixed mainly on apportionment basis, the courts rightly did not think it necessary to take the value of their sites separately into computation in fixing the standard rent.
[588 B D] (iii) As regards the new structures the courts below, in capitalising their value did take into account the value of the land and took the market value of the land as in the year 1948.
[588B]
|
Appeal No. 1330 of 1973 Appeal by special leave from the Judgment and Order dated the 22nd January, 1973 of the Delhi High Court in I. A. No. 1854 of 1972 in Suit No. 485 (A) of 1972 and Civil Appeals Nos. 1224 & 1225 of 1973.
Appeals by special leave from the Judgment and Order dated the 15th November, 1972 of the Delhi High Court in I. A. Nos. 846 and 119 of 1972 in Suit No. 158 of 1971.
L. N. Sinha, Solicitor General of India Shyamala pappu & section P. Nayar for the appellant (in all the appeals) D. G. Singhania, M. K. Garg and Shiv Khurana for respon dent (in C. A. 1330) D. D. Sharma for respondent (in C.A.s. 1224 1225) The Judgment of the Court was delivered by BHAGWATI, J.
These appeals, raise an interesting question relating to the interpretation of cl. 18 of the General Conditions of Contract contained in the Standard Form of Contract No. D.G.S. & D. 68.
That is the standard form in which contracts are entered into by the Central Purchase Organisation of the Government of India for purchase of stores from third parties described as 'contractors and the question of interpretation which arises for determination is, therefore, one of some importance, affecting as it does a large number of people who enter into such contracts with the Government of India.
The facts giving rise to these appeals follow a common pattern and it would, therefore, be sufficient if we set out the 559 facts relating to civil appeals Nos. 1221 and 1225 of 1973.
They bring out clearly the point which arises for consideration in all the three appeals.
The respondent tendered for supply of certain quantity of foam compound to the appellant and its tender was accepted by the appellant by acceptance of Tender dated 16th July, 1968.
The Acceptance of Tender was subject to the General Conditions of Contract contained in the Standard Form of Contract No. D.G.S. & D. 68.
The only clauses of the General Conditions of Contract which are material for our purpose are cls.18 and 24 and they read as follows: "18. RECOVERY OF SUMS DUE Whenever any claim for the payment of a sum of money arises out of or under the contrat against the contractor, the purchaser shall be entitled to recover such sum by appropriating in whole or in part, the security, if any, deposited by the contractor, and for the purpose aforesaid, shall be entitled to sell and/or realise securities forming the whole or part of any such security deposit.
In the event of the security being insufficient, the balance and if no security has been taken from the contractor, the entire sum recoverable shall be recovered by appropriating any sum then due or which at any time thereafter may become due to the contractor under the contract or any other contract with the purchaser or the Government or any person contracting through the Secretary, if such sum even be not sufficient to cover the full amount recoverable, the contractor shall on demand pay to the purchaser the balance remaining due.
"24. ARBITRATION In the event of any question, dispute,or difference arising under these conditions or any special conditions of contract, or in connection with this contract, (except as to any matters the decision of which is specialty provided for by these or the special conditions) the same shall be referred to the sole arbitration of an Officer in the Ministry of Law, appointed to be the arbitrator by the Director General of Supplies & Disposals.
It will be no objection that the arbitrator is a Government Servant, that he had to deal with the matters to which the contract relates or that in the course of his duties as a Government servant he has expressed views on all or any of the matters in dispute or difference.
The award of the arbitrator shall be final and binding on the parties to this contract.
Work under the contract shag, if reasonably possible, continue ' during the arbitration proceedings and no payment due to or payable by the purchaser shall be withheld on account of such proceedings.
560 The performance of this contract ran into difficulties and a dispute arose between the parties giving rise to claims by either party against the other.
The respondent contended that the appellant had committed a breach of the contract and was, therefore, liable to pay to the respondent a sum of Rs. 2,35,800/ by way of damages.
suffered by the respondent by reason of the breach of the contract.
The appellant, on the other hand, said that it was the respondent who had committed the breach, of the contract and was liable to pay to the appellant by way of damages a sum of Rs. 2.28,900/ under clause 14 of the General Conditions of Contract.
The Assistant Director of Supplies by his letter dated 30th March, 1971 called upon the respondent to make payment of the amount of Rs. 2,28,900/and intimated that if the respondent failed to do so on or before 30th April, 1971, the Pay and Accounts Officer, New Delhi/Madras would be authorised to recover the, same from the pending bills of the respondent in respect of other contracts.
This dispute between the parties being a dispute arising out of the contract was liable to be settled by arbitration under cl. 24 of the General Conditions of Contract and the respondent, therefore, filed an application in the Delhi High Court under section 20 of the Indian for filing the Arbitration Agreement contained in that clause.
The respondent also, at the same time, made an application to the Delhi High Court for an interim injunction restraining the appellant from recovering the amount of damages claimed by it from the pending bills of the respondent.
This application was, however, rejected by the Delhi High Court on the ground that it was not shown that there were any pending bills of the respondent at that time out of which the threatened recovery could be made by the appellant.
The application under section 20 of the Indian was thereafter heard by the Delhi High Court and by an order dated 5th May, 1972 the Delhi High Court allowed that application and ordered the arbitration agreement contained in cl. 24 to be filed and made an order of reference to arbitration in accordance with the arbitration agreement.
The claim of the respondent against the appellant for Rs. 2,35,800/ and the counter claim of the appellant against the respondent for Rs. 2,28,900/ thus became the subject matter of reference tO arbitration.
During the pendency of the arbitration some amounts became due and payable by the appellant to the respondent in respect of other contracts entered into between the parties.
In view of the letter dated 30th March, 1971 the respondent apprehended that the appellant would appropriate these amounts towards recovery of the amounts of damages claimed by it even though the claim for damages was disputed by the respondent and was pending adjudication before the arbitrator.
The respondent, therefore, made interim Application No. 119 of 1972 to the Delhi High Court on 17th January, 1972 under section 41 read with the Second Schedule to the Indian praying that the status quo should be maintained and the appellant should be restrained from recovering its claim for damages from the amounts due and payable by the appellant to the respondent in respect of the pending bills.
How it appears that this Interim Application No. 119 of 1972 was made in the Original Application under section 20 of the Indian , 561 1940 and the appellant, therefore, raised a technical objection that the Original Application under section 20 having been disposed of, Interim Application No. 119 of 1972, as filed, could not be maintained.
The respondent, in view of this technical objection raised on behalf of the appellant, filed another Interim Application No. 746 of 1972 as an independent application under section 41 read with the Second Schedule to the Indian on 16th May, 1972 praying for the same interim relief as was claimed in the earlier Interim Application No. 119 of 1972.
Both these interim applications were resisted by the appellant relying on cl. 18 of the General Conditions of Contract but Mr. Justice Avadh Bihari of the Delhi High Court, who heard these interim application, took the view that cl. 18 did not authorise the appellant to appropriate.
the amounts of any pending bills of the respondent towards satisfaction of its claim for damages against the respondent, unless such claim for damages was either admitted by the respondent or adjudicated upon by arbitration or suit in civil court.
The learned Judge accordingly by an order dated 15th November, 1972 allowed both the interim applications and issued an interim injunction restraining the appellant "from effecting recovery of the amounts claimed to be due from the other pending bills" of the respondent.
The appellant thereupon, with certificates obtained from the Delhi High Court, preferred Civil Appeals Nos. 1224 and 1225 of 1973 in this Court.
One appeal was directed against ' the impugned order in so far it related to Interim Application No. 119 of 1972 and the other in so far as it related to Interim Application No. 846 of 1972.
The appellant also preferred Civil Appeal No. 1330 of 1973 against a similar order passed by the learned Judge in Interim Application No. 854 of 1972 in the other case.
There are in the main two grounds on which the learned Solicitor General, appearing on behalf of the appellant, challenged the order of Interim injunction made by Mr. Justice Avadh Bihari A.The impugned order amounted in effect and substance to an order directing the appellant to pay the amounts of the pending bills of the respondent: in respect of the other contracts and since the question of payment of the amounts of such pending bills did not form the subject matter of the reference which was pending before the arbitrator.
, the learned Judge had no jurisdiction under section 41 read with the Second Schedule to make such an order and the impugned order was, therefore, outside the scope of his power and hence invalid.
, B.Clause 18 comes into play when there is a claim for payment of a sum of money arising out of or under the contract.
It is not necessary that the sum of money must be due and payable to the purchaser.
It is enough if there is a claim even for damages.
Whenever, there is such claim, the purchaser is given a right under cl. 18 to recover it by appropriating "any sum then due or which at any time thereafter 562 may become due to the contractor under the contract" or under any other contract.
The appellant was, therefore, en titled to recover the amount of its claim for damages against the respondent by appropriating the sums which subsequently became due to the respondent under other contracts, even though the claim for damages was contested by the respondent and was pending adjudication before the arbitrator.
No interim injunction could be granted to prevent the exercise of such right.
If interim injunction were to be granted in a case of this kind as of course merely on the ground, without anything more, that the claim for damages is pending adjudication and until it is determined in favour of the purchaser, ' it should not be allowed to be recovered by the purchaser out of other sums due to the contractor, it would render cl.
18 meaningless and ineffectual and the tight to the purchaser under that clause would become illusory.
of course, it would be open to the court even in such a case to grant interim injunction, if it is satisfied that the claim for damages is prima facie not well founded and the balance of convenience requires that, Pending adjudication, the purchaser should be restrained from effecting recovery of the claim for damages from out of other sums due to the contractor.
But here admittedly neither of these two factors was taken into consideration by the learned Judges and the order of interim injunction made by ' him cannot, therefore, be sustained.
We shall proceed to examine these grounds in the order in which we have set them out.
Re: Ground A.
It was common ground between the parties that the order of interim injunction was made by the learned Judge under section 41 (b) read with the Second Schedule to the Indian .
Now section 41(b) says that the court shall have, for the purpose of and in relation to arbitration proceedings, the same , power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of and in relation to any proceedings before the Court and one of the matters set out in the Second Schedule is "interim injunction".
The Court has, therefore, power under s.41 (b) read with the Second Schedule to issue interim injunction, but such interim injunction can only be "for the purpose of and in relation to arbitration proceedings".
, The arbitration proceedings in the present case were for determination of the mutual claims of the appellant and the respondent arising out of the contract contained in the acceptance of Tender dated 16th July, 1968.
The question whether any amounts were payable by the appellant to the respondent under other contracts was not the subject matter of the arbitration proceedings.
The Court obviously could not, there fore, make an interim order which, though ostensibly in form an order of interim injunction, in substance amounted to a direction to the appellant to pay the amounts due to ' the respondent under other contracts.
Such an interim order would clearly not be for the purpose of or in relation to the arbitration proceedings as required by 563 section 41 (b).
But here the order of interim injunction made by the learned judge does not, expressly or by necessary implication, carry any direction to the appellant to pay the amounts due to the respondent under other contracts.
It is not only in form but also in substance a negative injunction.
It has no positive content.
What it does is merely to injunct the appellant from recovering, suo moto, the damages claimed by it from out of other amounts due to the respondent.
It does not direct that the appellant shall pay such amounts to the respondents.
The appellant can still refuse to pay such amounts if it thinks it has a valid defence and if the appellant.does so, the only remedy open to the respondent would be to take measures in an appropriate forum for recovery of such amounts where it would be decided whether the appellant is liable to pay such amounts to the respondent or not.
No breach of the order of interim injunction as such would be involved in non payment of such amounts by the appellant to the respondent.
The only thing which the appellant,is interdicted from doing is to make recovery of its claim for damages by appropriating such amounts in satisfaction of the claim. 'That is clearly Within the power of the Court under section 41 (b) because the claim for damages forms the subject matter of the arbitration proceedings and the Court can always say that until such claim, is adjudicated upon, the appellant shall be restrained from recovering it by appropriating other amounts due to the respondent.
The order of interim injunction made by the learned Judge cannot, therefore, be said to be outside the scope of his power under section 41 (b) read with the Second Schedule Re: Ground B.
That takes us to the second ground of challenge against the order of interim injunction.
This ground of challenge is based on the proper interpretation of cl. 18.
The argument of the appellant was that what is required for attracting the applicability of cl. 18 is a mere claim for payment of a sum of money arising out of or under the contract against the contractor and it is not necessary that a sum of money must be actually due and payable from the contractor to the purchaser.
If the purchaser has a claim for payment of a sum of money against the contractor, he would be entitled to exercise the right given under cl. 18, even though such claim may not be for a sum due and payable but pay be for damages and it may be disputed by the contractor and may not have been adjudicated upon in a court of law or by arbitration.
The purchaser can in such a case recover the amount of his claim, without resort to a court of law or arbitration, by appropriating sums due to the contractor under the same contract or under other contracts, if the claim of the purchaser is not well founded and the appropriation made by him is, therefore, unjustified, the contractor can always institute a suit or arbitration for recovering the sums due to him which have been wrongly appropriated by the purchaser and in such suit or arbitration,the court or the arbitrator, as the case may be, would examine theclaim against which appropriation has been made bypurchaser and if the claim is found to be unsustainable, set at naught the appropriation and pass a decree or award for the sums due to the contractor.
But the court cannot and should not restrain the purchaserfrom exercising 564 his right of appropriation merely because the claim against which appropriation is sought to be made by the purchaser is disputed by the contractor and is pending adjudication before a court of law or arbitrator.
The court should not prevent the normal operation of cl. 18 by interfering with it, unless it appears to the court prima facie that the claim which is sought to be recovered by appropriation is not well founded and the balance of convenience lies in favour of restraining the purchaser from recovering it by appropriation.
The respondent, however, disputed the validity of this construction placed on cl. 18 by the appellant and contended that though the words used in the opening part of cl. 18 are "any claim for the payment of a sum of money", which are general words of apparently wide amplitude sufficient to cover even a claim for damages arising out the contract, a proper construction of the clause read as a whole clearly suggests that these words are intended to refer only to a claim for a sum due and payable and do not take in a claim for damages which is disputed by the contractor.
It is only when a claim for damages is adjudicated upon by a civil court or an arbitrator and the breach of the contract is established and the amount of damages ascertained and decreed that a debt due and payable comes into existence; till then it is nothing more than a mere right to sue for damages and it does not fall within the words of cl. 18.
Moreover, cl. 18 merely provides a mode of recovery and it can have no application where a claim, even though it be for a sum due and payable, is dis puted by the contractor and has to be established in a court of law or by arbitration: cl.18 applies only where a claim is either admitted,or in case of dispute, substantiated by resort to the judicial process.
Therefore, when the purchaser has a claim for damages which is disputed by the contractor, the purchaser is not entitled under cl. 18 to recover the amount of its claim for damages by appropriating other sums due to the contractor until the claim for damages is adjudicated upon and culminates in a decree.
The appellant in the present case had consequently no right under cl. 18 to appropriate sums due to the respondent under other contracts in satisfaction of its claim for damages against the respondent, when the claim for damages was pending adjudication before the arbitrator and the learned Judge was right in restraining the appellant from doing so by issuing an interim injunction.
These were broadly the contentions of the parties under this head of challenge and the question is which of these rival contentions is correct.
It is true that the Words "any claim for the payment of a sum of money" occurring in the opening part of, cl. 18 are words of great amplitude, wide enough to cover even a claim for damages, but it is a well settled rule of interpretation applicable alike to instruments as to statutes that the meaning of ordinary words is to be found not so much in strict etymological propriety of language nor even in popular use as in the subject or occasion on which they are used and the object which is intended to be attained.
The context and collocation of a particular expression may show that it was not intended to be used in the sense which it ordinarily bears.
Language is at best an imperfect medium of expression and a variety of meanings may often 565 lie in a word or expression.
The exact colour and shape of the meaning of any word or expression should not be ascertained by reading it in isolation, but it should be read structurally and in its context, for its meaning may vary with its contextual setting.
We must, therefore, read the words 'any claim for the payment of a sum of money ' occurring in the opening part of cl. 18 not in isolation but in the context of the whole clause, for the intention of the parties is to be gathered not from one part of the clause or the other but from the clause taken as a whole.
It is in the light of this principle of interpretation that we must determine whether the words 'any claim for the payment of a sum of money ' refer only to a claim for a sum due and payable which is admitted or in case of disputes, established in a court of law or by arbitration or they also include a claim for damages which is disputed by the contractor.
The first thing that strikes one on looking at cl. 18 is its heading which reads: "Recovery of Sums Due".
It is true that a heading cannot control the interpretation of a clause if its meaning is other wise plain and unambiguous, but it can certainly be referred to as indicating the general drift of the clauses and affording a key to a better understanding of its meaning.
The heading of cl. 18 clearly suggests that this clause is intended to deal with the subject of recovery of sum due.
Now a sum would be due to the purchaser when there is an existing obligation to pay it in present.
It would be profitable in, this connection to refer to the concept of a 'debt ', for a sum due is the same thing as a debt due.
The classical definition of 'debt ' is to be found in Webb vs Stenton (1) where Lindley, L. J., said : "a debt is a sum of money which is now payable or will become payable in the future by reason of a present obligation".
There must be debitum in praesenti; solvendum maybe in praesenti or in future that is immaterial.
There must be an existing obligation to pay a sum, of money now or in future.
The following passage from the judgment of the Supreme Court of California in People vs Arguello (2) which, was approved by this Court in Kesoram Industries vs Commissione of Wealth Tax (3) clearly brings out the essential characteristics of a debt "Standing alone, the word 'debt, ' is as applicable to a sum of money which has been promised at a future day as to a sum now due and payable.
If we wish to distinguish between the two, we say of the former that it is a debt 'owing, and of the latter that it is debt due.
" This passage indicates, that when there is an obligation to pay a sum of money at a future date, it is a debt owing but when the obligation, is to pay a sum of money in praesenti, it is a debt due.
A sum due would, therefore, mean a sum for which there is an existing obligation to pay in praesenti or in other words, which is presently payable. (2) [1869] 37 Calif. 524 (1) (3) ; 566 Recovery of such sums is the subject matter of cl. 18 according to the heading.
That is the dominant idea running through the entire cl.18.
The language used in the body of cl. 18 also supports the view that it is with recovery of sums presently due and payable by the ,contractor to the purchaser that this clause deals.
It may be noted that cl. 18 does not lay down the substantive rights and obligations of the parties under the contract.
It is merely intended to provide a mode of recovery of ' a claim for payment of a sum of money arising out of or under the contract".
It, therefore, postulates a claim for a sum which is due and payable, that is.
presently recoverable and may be recovered by the mode therein provided.
it is difficult to believe that the contracting parties could have intended that even though a sum is not due and payable by the contractor to the purchaser under the contract, the purchaser should be entitled to recover it by adopting ,the mode set out in cl. 18.
It is important to note that cl. 18 does not create a lien on other sums due to the contractor or give to the purchaser a right to retain such sums until his claim against the contractor is satisfied.
If merely a right of lien or retention were given to secure payment of a claim, then even if the claim were for a sum not presently due and payable, the provision perhaps would not have been so startling ,or unusual.
But here the right given to the purchaser under.
18 is a right to recover the amount of his claim by appropriating other sums due to the contractor and, on the, interpretation of the appellant, this can be done even if the claim is for a sum which is not due or payable in praesenti and the purchaser is otherwise not entitled to recover it.
That would indeed be a highly extra ordinary result which we would be loathe to reach in the absence of clear and compelling language.
This interpretation, if accepted, would mean that as soon as a claim is made by the purchaser, it would immediately become recoverable and the purchaser would be entitled to sell off the securities of the contractor and appropriate the sale proceeds in or towards satisfaction of such claim and in case that is insufficient, recover the balance by appropriating other sums due to the contractor and if there is even then a shortfall, recover it personally from the contractor, for the last words of cl. 18 provide that "the contractor shall on demand pay to the purchaser the balance remaining due".
And this consequence would ensue even if the claim is for a sum which the contractor is under no existing obligation to pay or which is not presently payable or is disputed as regards the existence of liability or its quantum.
A mere making of a claim by the purchaser would impose a liability on the contractor to pay it.
That surely could not have been the intention of the contracting parties.
It would be more consonant with reason and good sense to take the view, which, as pointed out above, is plainly and indubitably supported by the language used by the contracting parties, that cl.
Is does no more than merely provide an additional mode of recovery to the purchaser, and the purchaser is entitled to exercise the right conferred, under that clause only where there is a claim for a sum which is presently due and payable by the contractor.
This view, indeed, becomes irresistible 567 when we consider the last words of cl. 18, namely, "the contractor shall on demand pa to the purchaser the balance remaining due", which clearly postulate that the reference in the clause is to a sum presently due and payable by the contractor to the purchaser, so that, if any balance remains unrecovered after adopting the special mode of recovery provided in the clause, such balance must be paid by the contractor to the purchaser on demand.
The appellant laid great emphasis on the use of the word 'claim ' in the opening part of cl. 18 and contended that the Standard Form of Contract which was in use prior to the adoption of the present Standard Form of Contract, cl. 14, and which corresponded to the present cl. 18, opened with the words " whenever under this contract any sum of money is recoverable from and payable by the contractor", but this formula was deliberately and advisedly altered when the present Standard Form was introduced and instead, the words "whenever any claim for the payment of sum of money arises. " were substituted and this change in phraseology indicated that in order to attract the applicability of the present cl.18 it was not necessary that there should be a sum due and payable by the contractor to the purchaser but it was enough if there was a mere claim on the part of the purchaser for payment of a sum of money by the contractor, irrespective of whether such sum of money was presently due and payable or not.
This contention is, in our opinion wholly untenable.
We do not think it is legitimate to construe cl. 18 of the contract between the parties by reference to a corresponding clause which prevailed in an earlier Standard Form of Contract.
This is not a statute enacted by the Legislature where it can be said that if the Legislature has departed from the language used by it in an earlier enactment, it would be a fair presumption to make that the alteration in the language was deliberate and it was intended to convey a different meaning.
It is a clause in a contract which we are construing and there, any reference to a similar or dissimilar clause in another contract would be irrelevant.
The only question before us is, what does cl.18 mean and that depends on the plain interpretation of its language in the context in which it occurs.
Moreover, on a question of construction of cl. 18, mere use of the word "claim" cannot be a decisive factor.
18 has to be read as a whole, each part throwing light on the other, without any undue emphasis on one word or the other.
We cannot allow our interpretation of cl. 18 to be hijacked from its true course by the use of a solitary word such as "claim", but we must arrive at the true meaning of the clause by construing it in all its parts and in its proper contextual setting.
So viewed, it is clear that cl. 18 applies only where the purchaser has a claim for a sum presently due and payable by the contractor.
Having discussed the proper interpretation of cl. 18, we may now turn to consider what is the real nature of the claim for recovery of which the appellant is seeking to appropriate the sums due to the respondent under other contracts: The claim is admittedly one for damages for breach of the contract between the parties.
Now, it is true that the damages which are claimed are liquidated damages under cl. 14, 568 but so far as the law in India is concerned, there is no qualitative difference in the nature of the claim whether it be for liquidated damages or for unliquidated damages.
74 of the Indian Contract Act eliminates the some what elaborate refinements made under the English common law in distinguishing between stipulations providing for payment of liquidated damages 'and stipulations in the nature of penalty.
Under the common law a genuine preestimate of damages by mutual agreement is regarded as a stipulation naming liquidated damages and binding between the parties a stipulation in a contract in terrors is a penalty and the Court refuses to enforce it, awarding to aggrieved party only reasonable compensation.
The Indian Legislature has sought to cut across the web of rules and presumptions under the English common law, by enacting a uniform principle applicable to all stipulations naming amounts to be paid in case of breach, and stipulations by way of penalty, and according to this principle, even if there is a stipulation by way of liquidated damages, a party complaining of breach of contract can recover only reasonable compensation for the injury sustained by him, the stipulated amount being merely the outside limit.
It, therefore makes no difference in the present case that the claim of the appellant is for liquidated damages.
It stands on the same footing as a claim for unliquidated damages.
Now the law is well settled that a claim for unliquidated damages does not give rise to a debt until the liability is adjudicated and damages assessed by a decree or order of a Court or other adjudicatory authority.
When there is a breach of contract, the party who commits the breach does not eo instanti incur any pecuniary obligation, nor does the party complaining of the breach becomes entitled to a debt due from the other party.
The only right which the party aggrieved by the breach of the contract has is the right to sue for damages.
That is not in actionable claim and this position is made amply clear by the amendment in section 6(e) of the Transfer of Property Act, which provides that a mere right to sue for damages cannot be transferred.
This has always been the law in England and as far back as 1858 we, find it stated by Wightman, J., in Jones vs Thompson (1) "Exparte Charles and several other cases decide that the amount of a verdict in an action for unliquidated damages is not a debt till judgment has been signed".
It was held in this case that a claim for damages dots not become a debt even after the jury has returned a verdict in favour of the plaintiff till the judgment is actually delivered.
So also in O ' Driscoll vs Manchester Insurance Committee,(2) Swinfen Eady, L. J., said in reference to cases where the claim was for unliquidated damages "in such cases there is no debt at all until the verdict of the jury is pronounced assessing the damages and judgment is given.
The same view has also been taken consistently by different High Courts in India.
We may mention only a few of the decisions, namely, Jabed Sheikh vs Taher Mallik,(3) section Malkha Singh vs M/s N. K. Gopala Krishna Mudaliar(4) and Iron & Hardware (India) Co. vs Firm Shamlal & Bros.(5) (1) (3) 45 Cal.Weekly Notes, 519.(2) (4) (5) 569 Chagla, C. J. in the last mentioned case, stated the law in these terms: " In my opinion it would not be true to say that a person who commits a breach of the contract incurs any pecuniary liability, nor would it be true to say that the other party to the contract who complains of the breach has any amount due to him from the other party.
As already stated, the only right which he has is the right to go to a Court of law and recover damages.
Now, damages are the compensation which a Court of law gives to a party for the injury which he has sustained.
But, and this is most important to note, he does not get damages or compensation by reason of any existing obligation on the part of the person who has committed the breach.
He gets compensation as a result of the fiat of the Court.
Therefore, no pecuniary liability arises till the Court has determined that the party complaining of the breach is entitled to damages.
Therefore, when damages are assessed, it would not be true to say that what the Court is doing is ascertaining a pecuniary liability which already existed.
The Court in the first place must decide that the defendant is liable and then it proceeds to assess what that liability is.
But till that determination there is no liability at all upon the defendant.
" This statement in our view represents the correct legal position and has our full concurrence.
A claim for damages for breach of contract is, therefore, not a claim for a sum presently due and payable and the purchaser is not entitled, in exercise of the right conferred upon it under cl. 18, to recover the amount of such claim by appropriating other sums due to the contractor.
On this view, it is not necessary for us to consider the other contention raised on behalf of the respondent, namely, that on a proper construction of cl. 18, the purchaser is entitled to exercise the right conferred under that clause only where the claim for payment of a sum of money is either admitted by the contractor, or in case of dispute, adjudicated upon by a court or other adjudicatory authority.
We must, therefore, hold that the appellant had no right or authority under cl. 18 to appropriate the amounts of other pending bills of the respondent in or towards satisfaction of its claim for damages against the respondent and the learned Judge was justified in issuing an interim Injunction restraining the appellant from doing so.
We accordingly dismiss the appeals.
The appellant in each appeal will pay the costs of the respondent all throughout, V.P.S. Appeals dismissed.
| IN-Abs | A dispute arose regarding the performance of a contract between the appellant and respondent, each party contending that the other had committed a breach of the contract and claiming large sums of money by way of damages.
The appel lant 's claim was for damages stipulated under cl. 14 of the contract.
The respondent was called upon to pay the amount claimed and was also informed that on failure to make the payment the appropriate officer would be authorised to recover the amount from the pending bills of the respondent in respect of other contracts under cl. 18 of the Contract.
The respondent thereupon moved the High Court under section 20 of the , and the claim and counter claim were referred to arbitration.
During the pendency of the arbitration some amounts became due and payable by the appellant to the respondent in respect of other contracts between them.
The respondent applied to the High Court for an injunction restraining the appellant from recovering its claim for damages from the amounts which had fallen due and the High Court granted the injunction holding that cl. 18 did not authorise the appellant to appropriate the amounts of any pending bills of the respondent towards satisfaction of its claim for damages against the respondent unless such claim was either admitted by the respondent or adjudicated upon by the arbitrator or the Court.
Dismissing the appeal to this Court, HELD : (1) The order of interim injunction cannot be said to be outside the scope of the High Court 's power under section 41 (b) of the .
[563D E] (a) Section 41 (b) says that the Court shall have, for the purpose of and in relation to arbitration proceedings, the same power of making orders in respect of any of the matters set out in the second schedule as it has for the purpose of and in relation to any proceedings before the Court and one of the matters set out in the second Schedule is 'interim injunction. ' The, Court has therefore power to issue interim injunction.
But such interim injunction can only be for the purpose of and in relation to arbitration proceedings.
The Court could not therefore make an interim order which, though ostensibly in form an order of interim injunction, in substance amounted to a direction to the appellant to pay the amounts due to the respondent under other contracts.
[562F 563A] (b) However, in the present case, the order of interim injunction ' does not expressly or by necessary implication direct the appellant to pay amounts due to the respondent under other contracts.
The a appellant can still refuse to pay such amounts if it thinks it has a valid defence and the only remedy open to the respondent then would be to take measures in an appropriate forum.
No breach of the interim injunction as such would be involved in non payment of such amounts by the appellant to the respondent.
The only thing which the appellant is interdicted from doing is to satisfy its claim for damages by appropriating such amounts.
Such an order would be within the power of the court under section 41 (b), because the claim for damages forms the subject matter of arbitration proceedings.
[563A D] (2) The appellant had no right or authority under cl. 18 to appropriate the amounts of other pending bills of the respondent, 'in or towards satisfaction of its claim for damages against the respondent, and so, the High Court has justified in issuing the interim injunction .
[569G] 557 (a) Though the words"where any claim for the payment of a sum of money arises" occurring in the opening part of cl. 18 are words of great amplitude, covering even a claim for damages, it is a well settled rule of interpretation, applicable alike to instruments as to statutes that the meaning of ordinary words is to be found not so much in strict etymological propriety of language nor even in popular use as in the subject or occasion on which they are used and the object which is intended to be attained.
The context and collection of a particular expression may show that it was not intended to be used in the sense which it ordinarily bears.
The words must therefore be read not in isolation but in the context of the whole clause.
[564G 565B] (b) The heading of the clause reads "Recovery of sums due".
The heading cannot control the interpretation of a clause if its meaning is otherwise plain and unambiguous, but it can be referred to as indicating the general drift of the clause and affording a key to a better understanding of the meaning.
When there is an obligation to pay a sum of money at a future date it is a debt owing, but when the obligation is to pay a sum of money in present, it is a debt due.
A sum due would therefore mean a sum for which there is an existing obligation to pay in present or in other words which is presently payable.
[565 C D, G H] (c) The language used in the body of the clause also supports the view that it is with recovery of sums presently due and payable by the respondent that this clause deals.
The clause is merely intended to provide a mode of a claim for payment of a sum of money arising out of or under the contract. ' It therefore postulates a claim for a sum which is due and payable, that is, presently recoverable and it may be recovered by the mode therein provided.
It is difficult to believe that the contracting parties could have intended that even though a, sum is not due and payable by the respondent, the appellant should be entitled to recover it by adopting the mode set out in the clause.
Such an interpretation would mean that as soon as a claim is made by the appellant, it would immediately become recoverable and the appellant, under the clause, would be entitled to sell of the securities of the respondent and appropriate the sale proceeds in or towards satisfaction of such claim, and in case that is insufficient, to recover the balance by appropriating other sums due to the respondent, and if there is even then a shortfall, to recover it personally from the respondent.
And this consequence would ensue even if the claim is for a sum which the respondent is under no existing obligation to pay or which is not presently payable or, is disputed as regards liability or quantum.
It would be more consonant with reason and good sense to take the view, which is supported by the language of the clause that it does no more than merely provide an additional mode of recovery.
to the appellant and that the appellant is entitled to exercise the right conferred under it only where there is a claim for a sum which is presently due and payable by the respondent.
The last words of the clause namely, "the contractor shall on demand pay to the purchaser the balance remaining due", clearly postulate that the reference in the clause is to a sum presently due and payable by the respondent to the appellant.
[566B 567B] (d) It is not legitimate to construe the clause by reference to a corresponding clause which prevailed in the earlier standard form of contract where the words were whenever under the contract any sum of money is recoverable '.
This is not a statute enacted by the legislature where it can be said that if the legislature has departed from the language used by it in an earlier enactment, it would be a fair presumption to make that the alteration in ,the language was deliberate and was intended to convey a different meaning ' This is a clause in a contract and in construing it any reference to a similar or dissimilar clause in another contract would be irrelevant.
Moreover, on a question of construction of the clause the mere use of word 'claim ' cannot be a decisive factor.
The clause has to be read as a whole, and so read, it applies.only where the appellant has a claim for a sum presently due and payable by the respondent.
[567B G] (e) In the present case, the claim is for damages for breach of the contract.
The damages claimed are liquidated damages under cl. 14 of the Contract; but under Indian law there is no difference in the nature of the claim whether it be for liquidated damages or for unliquidated damages.
Even if there is a stipulation for liquidated damages a party complaining of breach of contract can recover 558 only reasonable compensation for the injury sustained by him, the stipulated amount being merely the outside limit.
The claim in the present case therefore stands on the same footing as a claim for unliquidated damages.
A claim for unliquidated damages does not give rise to a debt until the liability is adjudicated upon and damages assessed by an adjudicatory authority.
When there is a breach of contract, the party who commits the breach does not eo instanti incur any pecuniary obligation nor does the party complaining of the breach become entitled to a debt due from the other party.
The only right which the party aggrieved by the breach has is the right to sue for damages and this is not an actionable claim.
A claim for damages for breach of contract is therefore not a claim for a sum presently due and payable and the appellant is not entitled, in exercise of the right conferred upon it under cl. 18, to recover the amount of such claim by appropriating other sums due to the respondent.
[567H 569G] Kesoram Industries vs Commissioner of Wealth Tax ; followed.
Jones vs Thompson , Jabed Sheikh vs Taher Malik 45 Cal.
Weekly Notes, 519 and section Malkha Singh vs M/s. N. K. Gopala, Krishna Mudaliar 1956 A.I.R. Pun.
174, referred to.
Iron & Hardware (India) Co. vs Firm Shamlal & Bros. approved.
|
l Appeal No. 1827 of 1967.
Appeal by special leave from the judgment and order dated the '29th April 1966 of the Rajasthan High Court at Jodhpur in D. B. ,Civil Regular First Appeal No. 57.
U. N. Trivedi and Ganpat Rai, for the Appellants.
Sobhagmal Jain, for the respondent.
The Judgment of the court was delivered by MATHEW, J.
This is an appeal by special leave against the judgment and decree of the High Court of Rajasthan, setting aside decree for recovery of damages under the Patel Accidents Act, 1855 hereinafter referred to as the 551 Navneetlal was a resident of Udaipur.
He was in the employment of the State of Rajasthan and was, at the material time, working in the office of the Executive Engineer, Public Works Department, Bhilwara as a Store Keeper.
In connection with the famine relief works undertaken by the department he was required to proceed to Banswara.
For that purpose he boarded truck No. RJE 131 owned by the department from Bhilwara on May 19, 1952 and reached Chittorgarh in the evening.
Besides himself, there were Fateh Singh Fundilal and Heera Singh, the driver, cleaner and a stranger in the truck.
On May 20, 1952, they resumed the journey from Chittorgarh at about 11 A. M. and reached Pratapgarh in the same evening.
The truck started from Pratapgarh to Banswara at about 10 A.M. on May 21, 1952.
After having travelled for 4 miles from Pratapgarb, the engine of the truck caught fire.
As soon as the fire was seen the driver cautioned the occupants to jump out of the truck.
Consequently, Navneetlal and the other persons jumped out of the truck.
While doing so, Navneetlal struck against a stone lying by the side of the road and died instantaneously.
Parwati Devilwidow of Navneetlal brought a suit against the State of Rajasthan for damages under the provisions of the Act, The plaintiff alleged that it was on account of the negligence of the driver of the truck that a truck which was not road worthy was put on the road and that it caught, fire which led to the death of Navneetlal and that the State was liable for the negligence of its employees in the course of his employment.
The plaint also alleged that the decreased had left behind him his widow, , namely, the plaintiff, two minor sons,one minor daughter and his parents.
The plaintiff claimed damages to the tune of Rs. 20,000./ and prayed for a decree for that amount.
The State contended that the truck was quite in order when it started from Bhilwara and even when it started from Pratapgarh to Banswara and that if it developed some mechanical troubles suddenly which resulted in its catching fire, the defendant was not liable as there was no negligence the part of the driver.
The trial court found that the act of the driver in putting the truck on the road was negligent as the truck was not roadworthy and since the driver was negligent, the, State was vicariously liable for his act.
The Court assessed the damages at Rs. 14,760/ and granted a decree for the amount to this plaintiff.
It was against this decree that the State appealed to the High Court.
The High Court came to the conclusion that the plaintiff had not proved by evidence that the driver was negligent, that the mere fact that the truck caught fire was not evidence of negligence on his part and that the maxim res ipsa loquitur had no application.
The Court said that the truck travelled safely from Bhilwara to Pratapgarh and that the engine caught fire after having 552 travelled a distance of 4 miles from Pratapgarh and that there was nothing on record to show that the engine of the truck was in any way defective or that it was not functioning properly.
The Court was of the view that the mechanism of an automobile engine is such that with all proper and careful handling it can go wrong while it is on the road for reasons which it might be difficult for a driver to explain.
The Court then discussed the evidence and came to the conclusion that no inference of negligence on the part of the driver was possible on the basis that the engine of the truck got heated of and on and that water was put in the radiator frequently, or that it took considerably long time to cover the distance between Bhilwara and Chittorgarh and that between Chittorgarh and Pratapgarh.
The High Court therefore, allowed the appeal.
The main point for consideration in this appeal is, whether the fact that the truck caught fire is evidence of negligence on the part of the driver in the course of his employment.
The maxim res ipsa loquitur is resorted to when an accident is shown to have occurred and the cause of the accident is primarily within the knowledge of the defendant.
The mere fact that the cause of the accident is unknown does not prevent the plaintiff from recovering damage,,, if the proper inference to in drawn from the circumstances which are known is that it was caused by the negligence of the defendant.
The fact of the accident may, sometimes, constitute evidence of negligence and then the maxim res ipsa loquitur applies.
The maxim is stated in its classic form by Erle, C. J. " Where the thing is to shown to be under the management of the defendant or his servants, and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care, it affords reasonable evidence, in the absence of explanation by the defendants, that the accident arose from want of care.
" The maxim does not embody any rule of substantive law nor a rule of evidence.
It is perhaps not a rule of any kind but simply the caption to an argument on the evidence.
Lord Shaw remarked that if the phrase had not been in Latin nobody would have called it a principle (2).
The maxim is only a convenient label to apply to a set of circumstances in which the plaintiff proves a case so as to call for a rebutting from the defendant, without having to allege and prove any specific act or omission on the part of the defendant.
The principal function of the maxim is to prevent injustice which would result if a plaintiff were invariably compelled to prove the precise cause of the accident and the dependent responsible for it, even when the facts bearing on the matter are at the outset unknown to him and often within the knowledge of the defendant.
But though the parties ' relative access to evidence is an influential factor, it is not controlling.
Thus the fact that (1) See SCOtt vs London St. Katherine Docks ; , 601.
(2) See Ballard vs North British Railway Co. 1923 section C. (H.L.) 43.
553 the defendant is as much at a loss to explain the accident or himself died in it, does not preclude an adverse inference against him if the odds otherwise point to his negligence (see John G. Fleming, The Law of Torts, 4th ed., p. 264).
The mere happening of the accident may be more consistent with the negligence on the part of the defendant than with other causes.
The maxim is based on common sense and its purpose is to do justice when the facts bearing on the causation and on the care exercised by defendant are at the outset unknown to the plaintiff and are or ought to be within the knowledge of the defendant (see Barkway vs section Wales Transport(1).
The plaintiff merely proves a result, not any particular act or.
omission producing the result.
If the result in the circumstances in which he proves it, makes it more probable than not that it was caused by the negligence of the defendant, the doctrine of res ipsa loquitur is said to apply, and the plaintiff Will be entitled to succeed unless the defendant by evidence rebuts that probability.
The answer needed by the defendant to meet the plaintiff Is case may take alternative forms.
Firstly, it may consist in a positive explanation by the defendant of how the accident did in fact occur of such a kind as to exonerate the defendant from any charge of negligence.
It should be noticed that the defendant does not advance his case inventing fanciful theories, unsupported by evidence, of how the event might have occurred.
The whole inquiry is concerned with probabilities and facts are required, not mere conjecture unsupported by facts.
As Lord Macmillan said in his dissenting judgment in Jones vs Great Western (2) "The dividing line between conjecture and inference is often a very difficult one to draw.
A conjecture may be plausible, but it is of no legal value, for it sessense is that it is a mere guess.
An inference, inthe, legalsense, on the other hand,is a deduction from the evidence, and if it is are a sonable deduction it may have the validity of legal proof.
The attribution of an occurrence to a cause is, I take it, always a matter of inference.
The cogency of a legal inference of causation may vary in degree between practical certainty and reasonable probability.
Where the coincidence of cause and effect is not a matter of actual observation there is necessarily a hiatus in the direct evidence, but this may be legitimately bridged by an inference from the facts actually observed and proved.
" In other words, an inference is a deduction from established facts.and an assumption or a guess is something quite different but not necessarily related to established facts.
(1) [1950] 1 All England Reports 392, 399.
7 M 45 Sup CI/75 (2) 554 Alternatively, in those instances where the defendant is unable to explain the accident, it is incumbent upon him to advance positive proof that he had taken all reasonable steps to avert foreseeable harm.
Res ipsa loquitur is an immensely important vehicle for importing strict liability into negligence cases.
In practice, there are many cases where res ipssa loquitur is properly invoked in which the defendant is unable to show affirmatively either that he took all reasonable precautions to avoid injury or that the particular cause of the injury was not associated with negligence on his part.
Industrial and traffic accidents and injuries caused by defective merchandise are so frequently of this type that the theoretical limitations of the maxim are quite overshadowed by its practical significance (1).
Over the years, the general trend in the application of the maxim has undoubtedly become more sympathetic to plaintiffs.
Concomitant with the rise in safety standards and expanding knowledge of the mechanical devices of our age less hesitation is felt in concluding that the miscarriage of a familiar activity is so unusual that it is most probably the result of some fault on the part of whoever is responsible for its safe performance (see John, G. Fleming, The Law of Torts,4th ed., p. 260).
We are inclined to think the learned District Judge was correct in inferring negligence on the part of the driver.
Generally speaking, an ordinary road worthy vehicle would not catch fire.
We think that the driver was negligent in putting the vehicle on the road.
From the evidence it is clear that the radiator was getting heated frequently and that the driver was pouring water in the radiator after every 6 or 7 miles of the journey.
The vehicle, took 9 hours to cover the distance of 70 miles between Chittorgarh and Pratapgarh.
The fact that normally a motor vehicle would not catch fire if its mechanism is in order would indicate that there v as some defect in it.
The District Judge found on the basis of the evidence of the witnesses that the driver knew about this defective condition of the truck when he started from Bhilwara.
It is clear that the driver was in the, management of the vehicle and the accident is such that it does not happen in the ordinary course of things.
There is no evidence as to how the truck caught fire.
There was no explanation by the defendant about it.
It was a matter within the exclusive knowledge of the defendant.
It was not possible for the plaintiff to give any evidence as to the cause of the accident.
In these circumstances, we think that the maxim res ipsa loquitur is attracted.
It was, however, argued on behalf of the respondent that the State was engaged in performing a function appertaining to its character as sovereign.
as the driver was acting in the course of his employment in connection with famine relief work and therefore, even if the driver (1) See Millner : "Negligence in Modern Law".
555 was negligent, the State would not be liable for damages.
Reliance was placed on the ruling of this Court in Kasturilal Ralia Ram Jain vs State of Uttar Pradesh (1) where this Court said that the liability of the State for a tort committed by its servant in the course of his emp loyment would depend upon the question whether the employ ment was of the category which could claim the special characteristic of sovereign power.
We do not pause to consider the question whether the immunity of the State for injuries on its citizens committed in the exercise of what are called sovereign functions has any moral justification today.
Its historic and jurisprudential support lies in the oftquoted words of Blackstone(2) : "The king can do no wrong.
The king, moreover, is not only incapable of doing wrong, but even of thinking wrong; he can never mean to do an improper thing : in him is no folly or weakness".
In modern times, the chief proponent of the sovereign immunity doctrine has been Mr. Justice Holmes who, in 1907, declared for a unanimous Supreme Court(3) : "A sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends.
" Today hardly anyone agrees that the stated ground for exempting the sovereign from suit is either logical or practical.
We do not also think it necessary to consider whether there is any rational dividing line between the so called sovereign and proprietary or commercial functions for determining the liability of the State.
We are of the view that, as the law stands today, it is not possible to say that famine relief work is a sovereign function of the State as it has been traditionally understood.
It is a work which can be and is being undertaken by private individuals.
There is nothing peculiar about it so that it might be predicated that the State alone can legitimately undertake the work.
In the view we have taken on the merits of the case, we do not think it necessary to canvass the correctness of the view expressed by the High Court that the appeal by the State before the High Court did not abate even though the legal representatives of the plaintiff respondent there were not impleaded within the period of limitation.
In the result, we set aside the decree of the High Court, restore the decree and judgment passed by the District Judge and allow the appeal with costs.
S.B.W. (1) ; (2) Blackstone, Commentaries (10th ed., 1887) (3) Kawananaka V. Polyblank, ; , 353.
Appeal allowed.
| IN-Abs | The deceased, who was at the material time in the employment of the State of Rajasthan in the Public Department, was required to proceed from his office at Bhilwara to Banswara, in connection with famine relief work undertaken by the department.
For that purpose, he boarded a truck owned by the department from Bhilwara on May 19, 1952 with six others.
Throughout the journey the radiator of the truck was getting heated frequently and the driver was pouring water into it after every 6 or 7 miles of journey.
The truck took nine hours to travel the distance or seventy miles.
After having travelled four miles from Peragraph, the engine of the truck caught fire.
As soon as the fire was seen, the driver cautioned the occupants to jump out of the truck.
Consequently, they did so, The deceased struck against a stone lying by the side of the road and died instantaneously.
The widow of the deceased brought a suit for damages against the State of Rajasthan under the provisions of the Act.
The plaintiff alleged, inter alia, that it was on account of the negligence of the driver of the truck that a truck which was notroad worthy was put on the road and that it caught fire which led to the death of her husband and that the State was liable for the negligence of its employee in the course of his employment.
The plaint also alleged that the deceased had left behind him his widow namely, the plaintiff, two minor sons, one minor daughter and his parents.
The plaintiff claimed damages to the tune of Rs. 20,000/ and prayed for a decree for that amount.
The state resisted the claim denying negligence of the driver and pleading sovereign immunity.
The trial Court relied on the maxim res ipsa loquitur, found that in putting the truck on the road the driver was negligent as the truck was not road worthy and since the driver was negligent, it held that the State was vicariously liable for his act.
The court assessed the damages at Rs. 14,760/ and granted a decree for the amount to the plaintiff.
Against this decree the state appealed to the High Court on the evidence on record, the High Court held that the principle of res ipsa loquitur had no, application to the facts of the case.
Accordingly, the High Court allowed the appeal.
On appeal by special leave to this Court.
HELD : (1) Generally speaking an ordinary road worthy vehicle would not catch fire.
The driver was negligent in putting the vehicle on the road.
From the evidence, it is clear that the radiator was getting heated frequently and that the driver was pouring water in the radiator after every 6 or 7 miles of journey.
The vehicle took 9 hours to cover the distance of 70 miles between Chittorgarh and Paragraph The fact that normally a motor vehicle would not catch fire if its mechanism is in order would indicate that there was some defect in it.
The Distt.
Judge found on the basis of evidence of witnesses that the driver knew about this defective condition of the truck when he started from Bhilwara.
[554D F] It is clear that the driver was in management of the vehicle and the accident is such that it does not happen in the ordinary course of things.
There is no evidence as to how the truck caught fire.
There was no explanation by the defendant about it. ' It was a matter within the exclusive knowledge of the defendant.
It was not, possible for the plaintiff to give any evidence as to the cause of the accident.
these circumstances, the maxim ipsa loquitur is attracted.
[514F G] 550 The maxim does not embody many rule of substantive law nor a rule of evidence.
It is perhaps not a rule of any kind but simply a caption to an arguments on the evidence.
The maxim is only a convenient label to apply to a set of circums tances, in which the plaintiff proves a case so as to call for a rebuttal from the defendant, without having to allege any specific act or omission on the part of the defendant.
Its principal function is to prevent injustice which would result if a plaintiff were invariably compelled to prove the precise cause of the accident and 'the dependent responsible for it, even when the facts bearing on the matter are at the outset unknown to him and often within the knowledge of the defendant.
The maxim is based on commonsense and its purpose is to do justice when the facts bearing on causation and on care exercised by the defendant are at the outset unknown to the plaintiff and are or ought to be within the knowledge of the defendant.
[k52F 553 C] The plaintiff merely proves a result, not any particular act or omission producing the result.
If the result, in circumstances which he proves it makes it more probable than not that it was caused by the negligence of the defendant, the doctrine of res ipsa loquacious is said to apply, and the plaintiff will be entitled to succeed unless the defendant by evidence rebuts that probability.
Res display loquitur is an immensely important vehicle for importing strict liability into negligence cases.[583 C D, 584 F] Scott.
vs London & St. Catherine Docks ; , 601, (1923) section C. (HL) 43, Barkway vs South Wales Transport [1950]1 All E.R. 392, Jones vs Great Western, , referred to.
(11)As the law stands today, it is not possible to say that famine relief work is :.it sovereign function of the State as it has been traditionally understood.
It is a work which can be and is being undertaken by private individuals.
There is nothing ,peculiar about it so that it might be predicated that the State alone can legitimately undertake the work.
[555 E F] Kasturilal vs State of Uttar Pradesh [1965] 1 S.C,.
R. 375, referred to.
Quaere : (a) Whether the Immunity of the State for injuries on its citizens committed in the exercise of what are called sovereign functions has any moral justification today; (b) whether there is any rational dividing line between the so called sovereign and proprietary commercial functions for determining the liability of the state.
1555 B C, E] Sensable : The modern sovereign immunity doctrine which is based on the ground that there can be no legal right as against the authority that makes the law on which the right depends, for exempting the sovereign from suit is neither logical nor practical.
[555 D E].
|
Appeal No. 1817 of 1967.
From the judgment and Decree dated the 21st September 1965 of the Andhra Pradesh High Court in A.S. No. 508 of 1959.
K. R. Choudhury and Veena Khanna, for the appellants.
M. K. Ramamurthi and J. Ramamurthi, for the respondent.
The Judgment of the Court was delivered by ALAGIRISWAMI, J.
Venkanna, the father of the appellants, had a brother Ramamurti who died childless in the year 1908 leaving behind him his widow Narasimham.
After Ramamurti 's death a series of litigations started between Venkanna and Narasimham and it is not over yet.
Venkanna filed O.S. No. 14 of 1913 against the widow in respect of acts of waste committed by her of Ramamurti 's estate and was appointed a receiver in that suit.
In that suit he got a decree against Narasimham for a sum of Rs.13,539/ as she failed to furnish security as originally decreed by the court.
Venkanna as receiver filed three suits on the foot of three mortgages in favour of Ramamurti.
One was O. section No. 34 of 1916.
In execution of that decree item 1 of the 'A ' Schedule properties was purchased in court auction.
O.S. No. 443 of 1918 was filed on the, foot of another mortgage in favour of Ramamurti executed in 1904 and items 2 and 5 of the plaint schedule properties were purchased in execution of decree in that suit.
These three items of properties are the subject matter of this appeal.
It is unnecessary for the purpose of this appeal to refer to the third suit.
Venkanna died in 1947 and Narasimham in 1951 after executing a will bequeathing in favour of her brother Venkata Sattayya all her properties.
Venkata Sattayya filed the suit, out of which this appeal arises, for possession of the properties bequeathed to him under the will and for mesne profits.
The Subordinate Judge who tried the suit held that items 1, 2 and 5 become accretions to the main estate of Ramamurti and therefore the plaintiff was entitled only to an account of the income from those properties till the death of Venkanna.
The appeal against the Subordinate Judge 's judgment came up for hearing before Justice Satyanarayana Raju and Justice Venkatesam of the Andhra Pradesh High Court.
The learned Judges called for a finding with regard to the interest on the two mortgages in execution of the decrees in which items 1, 2 and 5 had been purchased, relating to *he period before Ramamurti 's death and the period after Ramamurti 's death.
After that finding was received they allowed the appeal in part and held that the plaintiff would be entitled to a 19/34th share of item 1, and 12/23rd share of items 2 and 5.
This appeal is filed in pursuance of a certificate granted by the High Court.
Mr. Ramasesneya Chaudhri appearing on behalf of the appellants raised four points which we shall deal with seriatim.
The learned Judges of the High Court committed an error in confining the appeal after receipt of the finding from the Subordinate Judge 's court only to the question of the share, which the appellants ,and the respondent were entitled to, based on the calculation of the 597 interest due on the mortgages before and after the death of Ramamurti.
His contention was that as the High Court had merely framed issues and referred them for trial to the court of first instance under Order XLI Rule 25 of the Code of Civil Procedure and not remanded the whole case under Order XII Rule 23, they should have heard the whole appeal and not confined the hearing merely to the points on which the finding was called for.
We think that he is right in this contention.
Before the High Court the learned advocate for the appellants had contended that Narasimham owed to the estate of Ramamurti a sum of Rs.14,639/ and that when the decree was sought to be executed by Venkanna, Narasimham claimed that the account due to her by way of interest under the three mortgage bonds should be set off and that the execution could proceed only for the balance, that the set off claimed by Narasimham was actually allowed and that therefore she would not be entitled to any share in the properties purchased in execution of the decrees obtained on the foot of the mortgage bonds, in lieu of the interest claimed.
The learned Judges disallowed him from raising that question on the ground that it was not raised or argued at the time when the finding was called for on the issues framed by them, and that if it had been raised and accepted there would have been no need to call for a finding or at any rate the finding called for would have been different, and that the argument of the learned counsel impugned the correctness of the conclusions reached by the Court on the basis of which the findings were called for.
We consider that when a finding is called for on the basis of certain issues framed by the Appellate Court the appeal is not disposed of either in whole or in part.
Therefore, the parties cannot be barred from arguing the whole appeal after the findings are received from the court of first instance.
We find the same view taken in Gopi Nath Shukul vs Sat Narain Shukul (AIR 1923 Allahabad 384) where it was held that: "Where an appellate Court at the first hearing does not decide the case but merely remits certain specific issues, it is open to the Court before which the case ultimately comes to disregard the findings on those issues and equally to form its own opinion on the whole case irrespective of anything that is said in the remand order.
" It was also held that: "An order remanding issues under Rule 25 is not a final order.
No appeal lies against it.
The responsibility for the decree ultimately passed is entirely that of the Court before which the case comes after remand.
It is quite otherwise with an order of remand passed under order 41, Rule 23, for this is an order which does finally determine, subject to any right of appeal, the issues which it decides.
A similar view was taken by the Nagpur High Court in Sultan 598 Beg Al.
chunilal (AIR 1918 Nagpur 193).
In Abinash Chandra Bidyanidhi Bhattacharjee vs Dasarath Malo (XXXII (1927 28) Calcutta 'Weekly Notes 1233) it was sail: An order of remand made under Or. 41, r. 25 decides nothing.
The Court, either the same or as differently constituted, has jurisdiction, while finally hearing the appeal, to go back on the reasons given or views expressed in the order of remand and must do so when those appear erroneous.
" We are, therefore, of opinion that the High Court should have gone into this question and decided the matter, for if it turns out that the interest due on the two mortgages subsequent to the death of Ramamurti had been set off against the amount due to Venkanna in the decree obtained by him against Narasimham in O.S. 14 of 1913 there can be no question of Narasimham being entitled to any share in the properties purchased in court auction in execution of the decree in the two mortgages and her brother getting those properties by virtue of the will executed by her in his favour.
In the Trial Court the plaintiff 's contention was that these properties were purchased out of the accumulated interest on the mortgages and the defendants asserted that they were purchased out of the principal.
That Court dismissed the plaintiff 's claim on the ground that there was no proof of his allegations.
It was before the High Court apparently that the attempt to split the interest due on the mortgages into two portions, one before Ramamurti 's death and the other after, was made and accepted by the High Court.
It was on that basis that the High Court called for findings.
After the findings were received the appellants raised the question about the set off.
They raised the ,question before the Trial Court when it was considering the appor tionment of the interest but that Court felt it had no power to go into that question in view of the terms of the High Court 's order calling for the finding.
And the High Court refused to allow the appellants to raise that question, which as we have just held was not correct.
The decree in Venkanna 's suit appears to have directed payment of interest to Narasimham [Para III (c) of the plaint and judgment of the High Court, page 102 of the paper book].
We find that Venkanna had submitted accounts to the court in his capacity as receiver till 1940.
We have also evidence in this case that even When Venkanna died a sum of Rs.4,486/ was due.to him on the foot of the decree he obtained against Narasimham.
It is, therefore, highly unlikely that any amount due to Narasimham was not given credit to.
We find from the finding submitted by the Trial Court (Page 86 of the paper book) Narasimham claimed that the amounts due to her should be set off and execution should proceed only for the balance and from exhibit A 7 it would appear that the claim was allowed.
It seems therefore unlikely, taking the direction in the decree and the order evidenced by exhibit A 7 into account, that the interest due to Narasimham, was not 599 one of the items set off.
We do not want to express any final opinion on the point but are of opinion that in the circumstances the High Court should consider this aspect of the matter and dispose of the appeal afresh.
Out of about 16 acres comprised in item 1, 5 acres had been lost in revenue sale because of Narasimham 's failure to pay the land revenue on those lands.
It was urged before the High Court and it has been urged again before us that in allotting to the appellants a share of items 1, 2 and 5 these 5 acre , which were lost to the estate as a result of Narasimham 's negligence should be debited against her share in them.
We find ourselves unable to accept this contention just as the High Court, though they gave no reason for their conclusion.
Neither on principle nor on authority could the contention on behalf of the appellants be supported.
A Hindu widow is entitled to the full beneficial enjoyment of the estate.
So long as she is not guilty of willful waste, she ' is answerable to no one.
Her estate is not a life estate, because in certain circumstances she can give an absolute and complete title.
Nor is it in any sense an estate held in trust for reversions.
Within the limits imposed upon her, the female holder has the most absolute power of enjoyment and is accountable to no one.
She fully represents the estate, and, so long as she is alive, no one has any vested interests in the succession.
The limitations upon her estate are the very substance of its nature and not merely imposed upon her for the benefit of reversioners.
She is in no sense a trustee for those who may come after her.
She is not bound to save the income, nor to invest the principal.
If she makes savings, she can give them away as she likes.
During her lifetime she represents the whole in heritance and a decision in a suit by or against the widow as representing the estate is binding on the reversionary heirs.
It is the death of the female owner that opens the inheritance to the reversioners, and the one most nearly related at the time to the last full owner becomes entitled to possession.
In her lifetime, however, the reversionary right is a mere possibility or sues successions.
It cannot be predicted who would be the nearest reversioner at the time of her death.
It is, therefore, impossible for a reversioner to contend that for any loss which the estate might have sustained clue to the negligence on the part of the widow he should be compensated from out of the widow 's separate properties.
He is entitled to get only the property left on the date of the death of the widow.
The widow could have, during her lifetime, for necessity, including her maintenance alienated the whole estate.
The reversioner 's right to institute a suit to prevent waste is a different matter.
If it could have been established that in having allowed some part of the properties to be sold in revenue sale she was guilty of willful waste if would have been a different matter.
It would still have been necessary for the nevermore to have instituted a suit on that basis.
It is doubtful whether such a suit can be instituted after her death.
In any case the necessary averments are not available in this suit.
We are, therefore, unable to accept this contention 3.
Another point urged before the High Court as well as before us was that the cost incurred by Venkanna in the suit and in the execution proceedings should have been taken into account in allocating 600 items 1, 2 and 5 between the appellants and the respondent.
The High Court took the view that as the income received by Venkanna and the amounts spent by him including the amounts spent for the suit and the execution proceeding were taken into account at the time of the settlement of the accounts and there was an executable decree in favour of Venkanna for a sum of Rs. 4,486/ as the amount due on settlement of account, and it was peon to Venkanna to realise the amount against the estate of Ramamurti in execution of the decree, it is not now open to the appellants to claim that these should be separated from the amount of the decree and should be added on to the amount of principal and interest accrued during the lifetime of Ramamurti.
We agree with this view.
Incidentally it should be noticed that the conclusion of the High Court on this point would seem to point to the same conclusion in respect of the first point.
Lastly, it was argued that Narasimham, the widow, had treated this property as accretion to the husband 's estate and therefore the appellants are entitled to the whole of the property.
The facts on the basis of which this contention is urged are : (a) When Narasimham 's life interest in the estate was sold in E.P. No. 93 of 1927 filed by Venkanna she did not question the legality of the sale on the ground that her interest in the property was not a life interest but was a full interest.
(b) In the order in E.A. 624 of 1935 passed by the Subordinate Judge, Visakhapatnam the widow treated items 1, 2 and 5 as part of the estate of her husband and she had also asserted therein that she had a right to enjoy the same as representative of his estate.
(c) Life interest in the A Schedule properties was &old in E.P. 28 of 1940 in execution of the decree in O.S. 14 of 1913 and the widow did not object to the sale on the ground that what was being sought to be sold was a life interest but that she was entitled to full interest.
We do not think anyone or all of these grounds are sufficient to establish that the widow had treated this property as accretion to the husband 's estate.
As observed by the Madras High Court in Akkanna vs Venkayya (I.L.R. "the acquirer of property presumably intends to retain dominion over it and in the case of a Hindu widow the presumption is none the less so when the fund with which the property is acquired is one which, though derived from her husband 's property, was at her absolute disposal.
In the case of property inherited from the husband, it is not by reason of her intention but by reason of the limited nature of a widow 's estate under the Hindu Law, that she has only a limited power of disposition.
But her absolute power of disposition over the income derived from such limited estate being now fully recognised, it is only reasonable that, in the absence of an indication of her intention to the contrary, she must be presumed to retain the same control over the investment of such income.
The mere fact that properties thus acquired by her are managed and en 601 joyed by her without any distinction, along with properties inherited from her husband, can in no way effect this presumption.
She is the sole and separate owner of the two sets of properties so long as she enjoys the same, and is absolutely entitled to the income derived from both sets of properties.
" The fact that she wanted possession of those properties or that when in execution of his decree Venkanna bought what he alleged was her life interest in the properties she did not object to it and assert that she had full interest does not affect this question.
It was to her advantage to keep quiet.
She was not there by estopped from contending that she had an ' absolute interest in the properties.
It should, more over, be remembered that the question that the items 2 and 5 may have to be divided as between the reversioners and the widow in proportion to the respective shares of the husband 's estate and the widow in that property was really a later development.
Before the Trial Court both parties proceeded on a different footing altogether as mentioned earlier.
The widow was all along doing everything to prevent her husband 's reversioners getting anything from the estate.
She had transferred quite a good part of it to her brother, which was what enabled the reversioner to file the suit against her for acts of waste.
She exhibited a very clear intention that whatever she possessed should go to her brother.
There is absolutely no room on the facts of this case to hold that she exhibited the least intention to treat the income from the husband 's estate as an accretion to that estate.
In the result the appeal is allowed and the judgment of the High Court set aside.
The High Court will dispose of the appeal afresh.
The costs of this appeal will abide and be provided in the fresh decree to be passed by the High Court.
C.M.P. No. 2016 of 1969 is dismissed.
S.C. Appeal allowed.
| IN-Abs | V, the father of the appellants had a brother R who died childless leaving behind him his widow, N.
After R 's death a series of litigation started between V & N. V filed a suit in 1913 against R. for waste committed by her husband 's estate and was appointed a receiver in that suit.
In that suit, he got a decree, V as receiver filed 3 suits on the foot of 3 mortgages in favour of R.
In execution of the decrees, 3 valuable properties were purchased.
These three properties are the subject matter of the present appeal.
V died in 1947 and N in 1951 after executing a will bequeathing in favour of her brother S all her properties.
S filed the suit out of which this appeal arises, for pos session of the properties bequeathed to him under the will and for mesne profits.
The Sub judge held that the said properties became accretions to the main estate of R and therefore, the plaintiff was entitled only to an account of the income from these properties till the death of V.
On appeal, the High Court allowed the appeal in part.
Before this Court four points were raised by the appellants : (I) The High Court committed an err or in not hearing the whole appeal but confining the hearing merely to the points on which the finding was called for from the lower court.
(2) a portion of the properties which was lost to the estate due to N 's negligence of not paying the land revenue, should be debited against her share in them.
(3) the cost incurred by V in the suit and in the execution proceedings should have been taken into account in allocating the properties between the appellants and the respondents and (4) that the widow N, bad treated the properties as accretion to the husband 's estate and therefore, the appellants are entitled to the whole of the property.
Allowing the appeal, HELD : (1) When a finding is called for on the basis of certain issues framed by the Appellate Court, the appeal is not disposed of either in whole or in part.
Therefore the parties cannot be barred from arguing the whole appeal after the findings are received from the Court of first instance.
[597 E) Gopi Nath Shukul vs Sal Narain Shukul, A.I.R. 1923 Allahabad 384, referred to.
(2) A Hindu widow is entitled to the full beneficial enjoyment of the estate.
So long as she is not guilty of wilful waste, she is answerable to no one.
In her lifetime, the reversionary right is a mere possibility or spes successionis.
It cannot be predicted who would be the nearest reversioner at the time of her death.
It is, there , fore, impossible to contend that for any loss to the estate due to the negligence on the part of the widow, he should be compensated from out of the widow 's separate properties.
He is entitled only to the property left on the date of the death of the widow.
[599 C; FG] (3) The income received by V and the amounts spent for the suit and the execution proceeding were taken into account at the time of settlement of accounts and it was open to V to realise the excess amount from the estate of R.
It is not now open to the appellants to claim that these amounts should be separated from the amount of the decree and should be added to the amount of principal and interest accrued during the lifetime of R. [600 A C] (4) From the evidence, it is clear that the widow did not show any intention to treat the income from, the husband 's estate as an accretion to that estate.
[601D] Akkanna vs
Venkayya, I.L.R. , referred to.
The appeal was sent back to High Court for hearing afresh.
|
iminal Appeal No. 213 of 1970.
Appeal by special leave from the judgment and order dated the 17th June, 1970 of the Punjab and Haryana High Court at Chandigarh in Criminal Appeal No.258 of 1970.
726 Harbans Singh, for the appellant.
Nuruddin Ahmed and U. P. Singh, for the respondents.
The Judgment of the Court was delivered by BEG, J.
The State of Panjab ha contained special leave to appeal against the judgment of the High Court of Punjab and Haryana, acquitting the two respondents from charges under Sections 302 and 302/34 Indian Penal Code and under Sections 307/34 Indian.
Penal Code.
The Trial Court had convicted the respondents under each of these two sections and sentenced Hari Singh to death under Section 302 Indian Penal Code and Gian Singh to life imprisonment under sections 302/34 I.P.C., and it had sentenced both to six years rigorous imprisonment and to pay a fine of Rs. 2,000/ , and, in default of payment of fine, to undergo further rigorous imprisonment for two years under Sections 307/34 I.P.C.
The occurrence which gave rise to the prosecution of the two respondents together with two others, Milkiat Singh and Dalip Singh, who were acquitted by the Trial Court, took place during the night between 18th and 19th June, 1969.
The victims, Gian Singh, deceased, and his nephew, Zora Singh, P.W. 3, cultivated lands jointly with Bachan Singh, P.W. 5, his son Mukhtiar Singh, his two brothers Gian Singh and Sarwan Singh, and, Surjit Singh, P.W. 4, and Jagjit Singh, the brothers of Zora Singh and sons of Sarwan Singh.
All of them also lived together in village Dhandri Kalan.
The respondents and the acquitted accused persons are brothers who also lived in village Dhandri Kalan in District Ludhiana.
It is said that there had been a fight between Hari Singh, respondent, and Gian Singh deceased in 1968 which had been settled by the Panchayat.
In 1969, sometime before the occurrence, another incident is said to have taken place.
Jagjit Singh and Mukhtiar Singh, by show of force, were said to have carried away some "toori ' in a cart to their house against the wishes of Hari Singh, respondent, and another person in his company.
Un doubtedly, the motive disclosed was not be strong enough for a murderous assault of a rather brutal kind on Gian Singh and Zora Singh.
This, however, is immaterial if the alleged eye witnesses of the occurrence could be relied upon to establish the prosecution case.
The whole question before the Courts was whether the three alleged eye witnesses, Zora Singh, P.W. 3, and Surjit Singh, P.W. 4, and Bachan Singh, P.W. 5, who are related to each other and the victims, as stated above could be relied upon, when corroborated by other facts and circumstances which may appear in the case, to sustain the conviction, The prosecution case was that Gian Singh and Zora Singh had gone to their field for watering their sugarcane crop in it on the evening of 18th June, 1969.
At about 9 p.m. Bachan Singh, P.W. 5, and Surjit Singh, P.W. 4, are said to have carried the meals for Gian, Singh and Zora Singh, who were at their field situated about "100 karams ' (nearly 100 paces) away from their tubewell, which was, as is usual, lit up by electric light.
After that, Gian Singh and Zora Singh went to sleep a few feet from each other at their tubewell while Bachan Singh and Surjit Singh are said to have stayed on at the sugarcane 727 field nearby.
At about mid night, Zora Singh is said to have got up to urinate, and to have just laid himself down on his cot after urinating.
when he saw the respondents and Milkiat Singh and Dalip Singh Arrive.
with their weapons.
Hari Singh is said to have struck his kirpan on the neck of Gian Singh, deceased, and Milkiat Singh is said to have struck Zora Singh on the right arm with his Gandasa, whereupon Zora Singh raised an alarm.
All the four assailants then gave blows to the deceased and Zora Singh who had cried out: "Marditta Marditta".
Bachan Singh, P.W. 4, and Surjit Singh, P.W. 4, rushed to their, aid and alleged having seen the attack and the assailants running away.
They found Zora Singh unconscious when they came near him.
Gian Singh and Zora Singh were removed to a Hospital in Ludhiana, where Gian Singh died at 5.45 a.m.
The condition of Gian Singh, which was not such as to enable him to make a dying declaration, was described as follows "B.P. was not recordable.
Pulse 60/mt.
fuble, unconscious, Gasping cynotic.
Pupils constricted ', Reacting Slugishly to light.
There was 8"x4" wound on the left side of the neck cutting deep to the muscles.
The trachea was cut almost through and through and be was breathing through the hole of the trachea.
Hyoid bone was lying exposed in the wound.
Could not feel the left carotid artery.
No bleeding was present when patient was brought to the hospital".
Zora Singh who survived had the following injuries : 1.
An incised wound 3"x1/2"x2 1/2" on the inner side of left hand and was cutting the 5th and 4th matacarpals completely.
Incised wound 1/2"x 1/6"x flesh deep on the inner side of left wrist.
Incised wound.
5" x 1" x 2" deep on the outer side of left hand and was chopping off the thumb completely from the hand.
Incised wound 6"x1/4"x flesh deep back of left forearm lower part.
Incised wound 4" x 1" x 2" deep on the right side of the face and the middle of the lower part of the nose and was cutting it and the right side of the upper jaw partially.
Inside wound 3" X 1/2"X l 1/2" deep on the upper part of the back of right side of the neck and was cutting the, spine bone partially.
Incised wound 4"x 1"x 3" deep on the back of right elbow and was cutting the ulna bone completely and the forearm was hang ing just with a flesh.
" A First Information Report of this occurrence was lodged at 5.15 a.m. at Police Station Sadar, Ludhiana, at a distance of 7 miles from village Dhandri Kalan, disclosing offences punishable under Sections 307 and 326 Indian Penal Code only as Gian Singh was still alive, at 728 that time.
It was stated in the F.I.R. that the respondents were recognised and that two other unknown assailants, who were young Sikhs, could be identified if produced before the witnesses.
Surjit Singh, P.W. 4, the maker of the F.I.R., upon cross examination denied that he had been tutored to state that he could not identify the two of the assailants as they had their backs towards him.
He had stated in the F.I.R. that they were youngmen although Milkiat Singh, aged 53, and Dalip Singh, aged 46, years were not so young.
He had also stated there that he could identify the two youngmen thereby implying that he had seen them properly.
He had stated in his evidence that one or two bighas of sugarcane can be irrigated in an hour by their Tubewell.
Watering was said to have commenced at ' p.m. and Zora Singh, P.W. 3, had stated that only 4 bighas of the field had to be watered.
The High Court, therefore, did not think it likely that either Bachan Singh or Surjit Singh would still remain at the Sugarcane field or be awake at the time when the occurrence took place.
Moreover, the High Court thought that both Bachan Singh and Surjit Singh were too far away, at abount 100 karams, to be able to reach in time to see the occurrence.
Bachan Singh, P.W.5, had supported the statement of Surjit Singh, P.W.4, that he ran up to help the attacked persons after hearing Zora Singh Shouting: "Marditta Marditta".
He said that he saw the assailants from a distance of 15 karams.
He also said that Hari Singh was using his kirpan to attack and that the other assailants had used their gandasas.
On cross examination, this witness also stated that he could not recognise the companions of Hari Singh and Gian Singh as they had their backs towards him, although it was proved that he had stated before the Police that the unidentified persons were young Sikhs with Gandasas whom he could identify if produced before him.
The High Court had found some difficulty in getting over the statement of Zora Singh, P.W. 3.
It had observed that Zora Singh, aged only about 16 years, would have tried to run away as soon as he saw four assailants by electric light attacking Gian Singh only at a distance of 10 feet, if he was really awake.
It had also opened that he would have cried out earlier than the moment of time when he received the injury on his right arm if he was actually awake when the assault on Gian Singh, deceased, took place.
It was not disposed to rely upon the statement of Zora Singh that he was lying awake because he had got up to urinate 5 minutes before the occurrence as this appeared to it to be an improvement upon his previous statement.
Zora Singh, on cross examination, had explained that he had not stated this earlier as he was not questioned about it.
The High Court had doubted the veracity of Zora Singh because he disclaimed knowledge that Milkiat Singh and Dalip Singh were employed in the Air Force although their fields adjoined his own fields.
The High Court thought that it was likely that Zora Singh would have become unconscious after receiving injuries before he could recognise his assailants.
The High Court had also attached importance to the fact that no special report of the occurrence was proved to have been sent to a Magistrate.
It has considered the explanation that this was due to the fact that the F.I.R. disclosed only offences punishable under Sections 307 and 326 I.P.C. to be insuffi 729 cient to explain this omission.
After relying upon the State of Punjab(1) that the prcsecution must traverse the whole gap between "what may be true" and "what must be true" before a conviction could be recorded in a criminal case, the High Court had given the respondents the benefit of doubt and acquitted them.
The Trial Court, on the other hand, which had the additional advantage of seeing the witnesses depose in the witness box, was impressed by the evidence of the, three alleged eye witnesses and had convicted the respondents.
It had not relied upon the alleged recoveries by Hardit Singh, Sub Inspector, P.W.8, of a kirpan on 28th June, 1969, from a straw bin at a tube well at the instance of Hari Singh and a gandasa on the roof of a tubewell at the instance of Gian Singh.
Both the weapons were proved to be stained with human blood.
As the recovery was shown to have taken place 4 days after the arrest of the respondents, the Trial Court thought that it must have resulted from the use of 3rd degree methods during the interrogation of the accused.
The Trial Court had also considered it unsafe to rely upon the sole testimony &the Investigating Officer on this question when other witnesses of the. recovery were not produced for some unexplained reason.
The Trial Court, had, however, relied upon the circumstance that the respondents could not be found when searched in their village and could only be arrested several days later. 'The question raised before us is: should we, even if we do not entirely agree with the reasoning of the High Court, substitute our own views and reverse an order of acquittal Vaidyanatha Iyer(2) to point out that this Courts power of interference under Article 136 of the Constitution with Judgments of acquittal is not exercised on principles which are different from those adopted by it in dealing with convictions.
It is a principle, common to all criminal appeals by special leave, that this Court will retrain from substituting its own views about the appreciation of evidence if the judgment of the High Court is based on one of two alternative views each of which was reasonably open to the High Court to accept.
If, however, the High Court 's approach is vitiated by some basically errcneous apparent assumption or it adopts reasoning which, on the face of it, is unsound, it may become the duty of this Court, to prevent a miscarriage of justice, to interfere with an order whether it be of conviction or of acquittal.
In the case before us, the Trial Court, which had the additional advantage of seeing the witnesses depose in the witness box, had accepted the testimony of the three eye witnesses, despite the fact that they are relations of the victims.
It has been repeatedly held by this Court that the mere fact that a witness is related to the victim could not be a good enough ground for rejecting his testimony although it may be a ground for scrutinizing his evidence more critically and carefully where facts and circumstances disclose that only relations have been produced and others, presumably independent witnesses, who were available, were not produced.
In the.
instant case, there is no evidence that anyone (2) ; (1) ; 730 besides the witnesses produced had actually witnessed the attack upon Gian Singh and Zora Singh.
The High Court 's reasons for doubting the correctness of some of 'the statements of Surjit Singh, P.W. 4, and Bachan Singh, P.W. 5, as, for instance, that they had actually failed to recognise Milkiat Singh and Dalip Singh because they had their backs towards them when these very witnesses had asserted before the police that the two other parti cipants were youngmen who could be identified by them, if produced before them, are quite sound and reasonable.
If, however, a false implication was really intended and the F.I.R. was the result of some conspiracy, there was no reason to omit the names, of Milkiat Singh and Dalip Singh, the two brothers of the respondents, from the F.I.R. The prosecution had an explanation for this omission.
This was that Zora Singh, who had seen and recognised these two accused persons had become unconscious before their names could be communicated to 'Surjit Singh.
The High Court had itself accepted the evidence that Zora Singh had actually become unconscious.
In fact, it had gone to the extent of holding, that he must have become unconscious even before he recognised any of the assailants.
On the last mentioned point, we certainly do not find it, possible to accept the view adopted by the High Court.
It is in dealing with the evidence of Zora Singh, P.W. 3, that the High Court seems to us to have adopted a patently erroneous approach and to have given grounds which do not appear to us to be reasonably sustainable.
The High Court seems to have assumed that Zora Singh must have invented the story that he had got up to, urinate so that he may pose as an eye witness of the occurrence.
The ordinary presumption is that a witness speaking under an oath is truthful unless and until he is shown to be untruthful or unreliable in :any particular respect.
The High Court, reversing this approach, seems to us to have assumed that witnesses are untruthful unless it is proved that they are telling the truth.
Witnesses, solemnly deposing on oath in the witness box during a trial upon a grave charge of murder, must be presumed to act with a full sense of responsibility of the consequences ,of what they state.
It may be that what they say is so very unlikely or unnatural or unreasonable that it is safer not to act upon it or even to disbelieve them.
The High Court bad no, doubt tried to show that this was the position with regard to the whole of the testimony of Zora .Singh.
But, we do not think that it was successful.
It is true that the statement of a witness that he had got up to urinate just before a murder was committed, so that he could witness the murder, looks suspicious.
But, the statement is not, for that reason necessarily untrue.
Again, if, as , the High Court believed, both Gian Singh and Zora Singh were attacked almost simultaneously, its view, that Zora Singh would have got up and Tun away or shouted earlier than he was attacked had he been really awake, is unreasonable.
Let us, however, assume, for the sake of argument, that the High Court 's guess is correct that Zora Singh was actually asleep when the 731 attack upon Gian Singh and the Zora, Singh. began.
Even then it would be quite unreasonable to and hold, as.
the, High Court.
did that Zora Singh must have become unconscious before he could see and recognise his assailants.
There was the fight of the electricity at the tubewell where Zora Singh lay on.
his bed whether asleep or awake.
Zora Singh must have necessarily got up at, least when he was, struck on the arm.
He could not have avoided seeing and then recognising his assailants, whom he knew very well before he became unconscious.
His account, that he was struck first on the arm and then hecried out, is corroborated by the fact that other injuries indicate that.
his face and jaw were aimed at and struck probably in an attempt.
to silence him.
The injuries were of such a nature that he must have been awakened, shouted, writhed in pain., and seen the assailants before he became unconscious.
The absolutely unacceptable guess work indulged in by the High Court, that Zora Singh must have become unconscious before he could see and recognise his assailants, is utterly unsupported by evidence and seems very unreasonable.
Even if other parts of his evidence are, for some reason, not accepted, Zora Singhs statement that he saw and recognised assailants, before, he became unconscious cannot be held to be capable of arousing doubts.
There is no evidence that the assailants covered him up with a blanket or a cloth, so as to disable him from seeing them, before.
attacking him.
If we accept this part of the evidence of Zora Singh, as we think we must, since it is so strongly corroborated by the medical ' evidence and there is nothing on record which conflicts with this inference, it becomes evident that he must have shouted for help.
If that be so, it is difficult to understand why Surjit Singh and Bachan Singh would, not go to his rescue as they naturally would on hearing shouts even if they were at some distance.
We think that, judging from the number of injuries on the two victims, the incident must have lasted long enough to enable Surjit Singh, P.W. 4, and Bachan Singh, P.W. 5, to rush towards the scene of occurrence and to see and recognise at least the escaping assailants.
It is possible that they may have exaggerated in stating that they actually saw the attack on both the victims.
But that would not be enough to discard the whole of their testimony on the ground that they were not likely to be present at their field nearby at the time of the attack.
There is no evidence to suggest that they were elsewhere at the time.
Indeed, the fact that they arranged for the transport of the victims to a hospital ' in Ludhiana and took them there before day break shows that they were there to be able to do all this.
We do not think that the reasons given for suspecting their presence near enough from the tubewell.
at their sugarcane field, are strong enough to make it incredible that they should come to the help of the two attacked persons and to see at least the escaping assailants out of whom they recognised two.
As human testimony, resulting from widely different powers of observation and description, is necessarily faulty and even truthfull witnesses not infrequently exaggerate or imagine or tell half truths.
the Courts must try to extract and separate the hard core of truth from the whole evidence.
This is what is meant by the proverbial saying 732 that Courts must separate "the chaff from the grain". ' 'If, after considering the whole mass of evidence, a residue of acceptable truth is established by the prosecution beyond any reasonable doubt the Courts are bound.
to give effect to the result flowing from it and not throw it overboard on purely hypothetical and conjectural grounds.
In so far as the grounds given for rejecting the evidence of Zora Singh appear to us to be patently unreasonable and highly conjectural, we think that the case before us calls for interference by this Court.
That evidence, as we have already pointed out, is corroborated by medical evidence as well as by the statements of Surjit Singh and Bachan Singh.
Hence, although, the statements of Bachan Singh and Surjit Singh, taken by themselves, may not have been enough to warrant the conviction of the respondents, yet, when the evidence of Zora Singh, strongly corroborated by medical evidence is there, we think that the statements of Surjit Singh & Bachan Singh could be used to support the conclusion thus reached without going to the extent of holding that Surjit Singh and Bachan Singh must be wholly believed before their evidence could serve any useful purpose at all as the High Court seems to have erroneously thought.
Indeed, it is very difficult to find a witness whose evidence is so flawless that it has to be wholly, completely and, unqualifiedly accepted.
We think that the High Court had, without saying so, ignored the principle repeatedly laid down by this Court in appraising evidence, that Courts do not, in this country, act on the maxim : "falsus in uno falsus in omnibus".
In considering the effect of each allegation proved to be incorrect or the likelihood of its being true or untrue, we have to view it in the light of a whole setting or concatenation of facts in each particular case.
There may be reasons for doubting the, worth of the evidence of recovery from the respondents, but, that does not mean that the evidence given by Hardit Singh, S.I., P.W.8, relating to recoveries, is necessarily false so that the investigation itself is tainted.
Similarly, the more fact that, after the lodging of the F.I.R., the necessary precaution of sending the special report to a Magistrate speedily was not shown by the prosecution to have been observed does not mean that the whole, prosecution case is false or unacceptable.
On the other hand, the fact that the F.I.R. discloses only offences punishable under Sections 307 and 326 I.P.C. indicates that it must have been lodged before,6.
a.m. In any event, before the Inquest report on the morning of 19 6 1969, the police had before it the.
prosecution version contained in the F.I.R. to which a reference is made in the Inquest report.
The statements of Bachan Singh and Surjit Singh were also recorded before that.
Therefore, the alleged suspected delay in the lodging of the F.I.R. or in sending a special report to a Magistrate do not, on the facts of this case, indicate an attempt to conspire and fabricate.
Indeed, if this was so, as already observed, one would have expected to find the names of Milkiat Singh and Dalip Singh also in the F.I.R. instead of a description given of the unidentified youngmen which did not fit these two acquitted accused persons who were, therefore, given the benefit of doubt.
This feature of the evidence indicates that the names of these two accused were introduced in the case only after Zora Singh had regained consciousness and revealed them as the pro 733 secution alleged.
Hence, it is likely that the F.I.R. must have been made soon enough to contain the earliest version before Zora Singh 's version could get into it after he regained consciouness.
We think that the High Court had missed the core of truth in the case and had unjustifiably rejected the prosecution case which was strong enough on the statement of Zora Singh alone corroborated by medical evidence.
It had, we think, made the error of throwing away the prosecution case, without attempting to separate the chaff from the grain on the wrong assumption that the two were inseparable here.
We, therefore, set aside the order of acquittal by the High Court and convict the respondents for the offences with which they were charged.
As, however, the occurrence took place several years ago, we refrain from awarding a death sentence in this case.
We sentence both Hari Singh respondent u/s 302 I.P.C. and Gian Singh respondent sons of Arjan Singh to life imprisonment under Sections 302/34 I.P.C. We also sentence each of them to six years rigorous imprisonment and to pay a fine of Rs. 2,000/ each, and, in default of payment of fine, to rigorous imprisonment for a further period of two years under Sections 307/34 I.P.C. The sentences awarded shall run concurrently.
S.C. Appeal Allowed.
| IN-Abs | The trial court had convicted the respondents u/S. 302/34 I.P.C. and section 307/34 I.P.c.
for the death of two persons G&Z.
The occurrence took place during the night between 18th & 19th June, 1969.
The victims used to cultivate jointly with others.
The respondents and the two acquitted accused persons were brothers who lived in the same village.
It is said that there was enmity between the deceased persons and the respondents.
The prosecution case was that on the of 18th June 1969, the respondents with two others attacked G&Z and as result G died but Z survived.
The trial court had convicted the respondents but the High Court acquitted them.
I On appeal by the State, the main question was whether the three alleged eye witnesses, P.W.3, P.W.4 & P.W.5 who were related to each other and the victims could be relied upon, when corroborated by other facts and circumstances.
Allowing the appeal, HELD : (1) It is a principle, common to all criminal appeals by special leave that this Court will refrain from substituting its own views about the appreciation of evidence if the judgment of the High Court is based on one of two alternative views each of which was reasonably open to the High Court to accept.
If however, the High Courts approach is vitiated by some basically erroneous assumptions, or it adopts reasoning which, on the face of it is unsound, it may become the duty of this Court, to prevent a miscarriage of justice and to interfere with an order whether it be of conviction or of acquittal.[729F] (2) In the present case, the trial court had accepted the testimony of 3 eye witnesses, despite the fact that they are relations of the victims.
It has been repeatedly held by this Court that the mere fact that witness is related to the victim could not be a good enough ground for rejecting his testimony although it may be a ground for scrutinizing his evidence more critically and carefully where facts and circumstances disclose that only relations have been produced and others, presumably independent witness", who were available, were not produced.
[729 H] The ordinary presumption is that a witness speaking under an oath Is truthful unless and until he is shown to be unreliable or untruthful.
In any particular respect, witnesses solemnly deposing on oath in the witness box during a trial upon a grave charge of murder, must be presumed to act with a full sense of responsibility of the consequences of what they state.
it may be that what they say is so ' very unlikely or unreasonable that it is safer not to act upon it or even to disbelieve them.
[730 F] In the present case, the evidence of Z who became unconscious due to fatal blows by the assailants can be accepted when his evidence is strongly corroborated by medical and other evidence. 'Therefore, the present case is a fit case where this court will interefere.
|
Appeal No. 1573(N) of 1972.
Appeal by special leave from the judgment and order dated the 3rd February, 1971 of the Gujarat High Court at Ahmedabad in Second Appeal No.639 of 1968.
V. section Desai, P. C. Bhartari and A. G. Meneses, for the appellants.
D. V. Patel, P. H. Parekh and Sunanda Bhandare, for respondent No. 1.
section K. Dholakia and M. N. Shroff, for respondent No. 2.
D. N. Mishra, for respondents Nos.
3a to 3d.
117 The Judgment of the Court was delivered by KHANNA, J.
Whether the decree for the possession of the land in dispute awarded in favour of Laxman Purshottam Pimputkar respondent No. 1 (hereinafter described as the respondent has become inexecutable after the coming into force of the Gujarat Patel Watans Abolition Act, 1961 (Gujarat Act 48 of 1961) (hereinafter referred to as the Act) is the short question which arises for determination in this appeal brought by special leave against the judgment of the Gujarat High Court.
The appellants and the respondent belong to one family.
The respondent represents the seniormost branch of the family.
The family was granted Patilki Watan in a number of villages, including Solsumbha, in district Thana.
The watan land situated in Solsumbha is the subject matter of the present dispute.
Under the Bombay Hereditary Offices Act, 1874 the person who actually performs the duty of a hereditary office for the time being is called an officiator.
Purshottam, father of the respondent, was the officiator till 1921 when, because of a disqualification incurred by him, a deputy was appointed in place of Purshottam.
After the death of Purshottam in 1940, the respondent became the officiator the branch of the appellants claimed to be ill possession of the watan land in dispute and some other lands under a partition effected in 1914.
In 1944 the respondent moved the government for resumption of the, watan land in dispute which was in possession of the branch of the appellants.
Prayer was also made by the respondent that he might be delivered possession of the land.
The government after some enquiry resumed that land by order dated October 9, 1946 and directed that possession of the same be restored to the respondent.
The appellants thereafter moved the government for reconsideration of that order.
The government on May 2, 1947 modified its previous order by directing that the.
appellants could continue to retain the possession of the land in dispute subject to payment of rent as might be fixed by the government from time to time.
The respondent thereupon instituted suit for a declaration that the order of the government dated May 2,1947 and an ancillary order dated March 1, 1949 were null, void and inoperative.
Prayer was also made that the appellants should remove all obstructions and hindrances from the land in dispute and should hand over the possession of the same to the respondent.
It was further prayed that the appellants should render account of the income, of the land to the respondent.
The suit was resisted by the appellants on the ground that the impugned orders were administrative orders and no suit could lie for setting them aside.
The suits were also stated to be barred by limitation.
The trial court decreed the suit in favour of the respondent.
On appeal the District Judge set aside the decreed in favour of the respondent.
The decision of the District Judge was affirmed on second appeal by the High Court.
The respondent then came up in appeal to this Court by special leave.
This Court as per its judgment dated December 13, 1962, reported in, (1964) 1 S.C.R. 200, accepted the appeal of the respondent and set aside the judgment of the High Court and the District Judge and restored that of the trial court whereby decree for possession of the land in dispute had been awarded in favour of the respondent against the appellants.
118 In the meanwhile in 1960 the State of Bombay was bifurcated and the land in dispute which was earlier part of Bombay State became part of the State of Gujarat.
On April 1, 1963 the Act came into force.
On July 19, 1966 the respondent filed an application to execute the, decree for possession of the land which had been awarded in his favour.
Objection was then taken by the appellants that the decree awarded in favour of the respondent had become inexecutable because of the coming into force of the Act.
This objection found favour with the executing court which consequently dismissed the execution application.
Appeal filed by the respondent against the order of the executing court was dismissed by the District Judge Bulsar.
The respondent thereafter filed second appeal before the Gujarat High Court.
The High Court came to the conclusion that the respondent was entitled to execute the decree for possession of the land obtained by him against the appellants.
Appeal of the respondent was accordingly allowed.
The appellants have thereafter come up in appeal to this Court by special leave.
The question which arises for determination, as stated earlier, is whether the decree for possession of the land in dispute which was awarded in favour of the respondent has become inexecutable because of the coming into force of the Act.
It would, therefore, been to refer to the relevant provisions of the Act.
Section 2 contains the definitions.
According to section 2(7), "hereditary patelship" means every village office of a revenue or police patel held hereditarily under the existing watan law for the performance of duties connected with the administration or collection of the public revenue of a village or with the village police, or with the settlement of boundaries or other matters of civil administration of a village and includes such office even where the services originally appertaining to it have ceased to be demanded.
Section 2(11) defines "patel watan" to mean a watan held under the existing watan law for the performance of duties appertaining to the hereditary patelship whether any commutation settlement in respect of such patel watan has or has not been effected. "Unauthorised holder" has been defined in section 2(14) to mean a person in session of a watan land without any right or under a lease, mortgage sale, gift or any other kind of transfer thereof, which is null and void under the existing watan law.
"Watan", according to section 2(15), means watan property, if any, together with the hereditary office and the rights and privileges attached 'to it.
Section 2(16) defines "watandar" to mean a person having hereditary interest in a patel watan under the existing watan law and includes a matadar and 'a representative watandar.
Section 2(17) defines "watan land" to mean the land forming part of the watan property.
According to section 2(18).
"watan property" means the movable or immovable property held, acquired or assigned under the existing watan law for providing remuneration for the performance of the duty appertaining to a hereditary patelship and includes a right under the existing watan law to levy customary fees or perquisites in money or in kind, whether at fixed times or otherwise and also includes cash payments in addition to the original watan property made voluntarily by the State Government and subject periodically,to motion or withdrawal.
119 Section 3 gives, powers to the Collector, to decide various questions arising under the Act including the question whether any land is watan land and whether a person is, watandar or authorised holder or unauthorised holder.
Right is also given to a person aggrieved by the order of the Collector to file appeal to the State Government Section 4 has material bearing and reads as under : "4.
Notwithstanding any usage or custom or anything contained in any settlement, grant, agreement, sanad, or any decree or order of a court or the existing watan law, with ,effect on and from the appointed day, (i) all patel watans shall be and are hereby abolished; (ii) all incidents (including the right to hold office and watan property, the right to levy customary fees or perquisites in money or in kind, and the liability to render service) appertaining to the said watans shall be, and are hereby extinguished; (iii) no office of patel shall be, hereditary; and (iv) subject to the provisions of sections 6, 7 and 10 all watan land shall be and is hereby resumed and shall be subject to the payment of land revenue under the provisions of the Code and the rules made thereunder as if it were an unalienated land : Provided that such resumption shall not affect the validity of any alienation of such watan land made in accordance with the provisions of the existing watan law or of the rights of an alienee thereof or any person claiming under or through him." Section 5 deals with resumption of watan land which is not a grant of soil and is held subject to a total or partial exemption from payment of land revenue thereof.
We are, in the present case not concerned with such watan land.
According to section 6, watan land to which the provisions of section 5 do not apply shall, in cases not falling under section 7 or section 10 be regranted to the watandar of the watan to which it appertained on payment by or on behalf of the watandar to the State Government of the occupancy price equal to six times the amount of the full assessment of such land within the prescribed period and in the prescribed manner and the watandar shall be deemed to be occupant within the meaning of the Code in respect of such land and shall primarily be liable to pay land revenue to the State Government in accordance with the provisions of the Code and the rules made thereunder; and all the provisions of the Code and the said rules relating to unalienated land shall subject to the provisions of this Act, apply to the said land.
Section 7 deals with the regrant of watan land to authorised holders.
According to the section, any watan land other than land to which the provisions of section 5 apply held by an authorised holder shall be regranted to him on payment by him or on his behalf 120 to the State Government of the occupany price mentioned in section 6 and subject to the like conditions and consequences and all the provisions of section 6 shall apply mutatis mutandis in relation to the regrant of the, land under this section to the authorised holder as if were the watandar.
Section 10 provides that where any watan land is in possession of an unauthorised holder, he shall be summarily evicted therefrom by the Collector in accordance with the provisions of the Code : Provided that if the State Government is of opinion that in view of the investment made by such bolder in the development of the land or in the non agricultural use of the land or otherwise, his eviction will cause undue hardship to him, it may direct the Collector to regrant the land to such holder on payment of such amount and subject to such terms and conditions as the State Government may determine and the Collector shall regrant the land accordingly.
It is further provided in the section that watan land unless regranted under the section shall be disposed of in accordance with the provisions of the Bombay Land Revenue Code applicable to disposal of unoccupied unalienated land.
Section 22 contains the saving clause and reads as under "22.
Nothing contained in this Act shall affect (i) any obligation or liability already incurred under an incident of a patel watan before the appointed by, or (ii) any proceeding or remedy in respect of such obligation or liability, and any such proceeding may be continued or any such remedy may be enforced as if this Act had not been passed.
" Mr. Dasai on behalf of the appellants has contended before us that in view of the provisions contained in section 4 of the Act, the decree for the possession of the land in dispute awarded in favour of the respondent has become inexecutable.
it is submitted that as the decree was awarded in favour of the respondent in his capacity as a watandar and as patel watans have been abolished, the respondent cannot obtain the possession of the land to which he was entitled as a watandar ' This stand has been controverted by Mr. Patel on behalf of the respondent and he submits that there is nothing in the language of section 4 which renders the decree for the possession of the land in dispute inexecutable.
In any case, according to Mr. Patel, the right of the respondent to execute the decree and the liability of the appellants to hand over possession of the land to the respondent under the decree have been kept intact by section 22 of the Act.
The provisions of section 4 of the Act have been reproduced above and it is manifest therefrom that with effect from the appointed day, viz, April 1, 1963 all patel watans are abolished and all incidents appertaining to the said watans are extinguished.
It is further provided that as from the appointed day no office of patel shall be hereditary and that subject to the provisions of section 6, 7 and 1 0 all watan lands are resumed and would be subject to the, payment of land revenue.
The question with which we are concerned is whether the 121 right to execute the decree for the possession of watam land which has been obtained by the watandar against other persons comes to an end because of the abolition of patel watans and the extinguishment of all incidents appertaining to the said watans.
The answer to this question, in our opinion, should be in the negative.
There is nothing in the language of section 4 which renders Such decrees for possession to be inexecutable.
Had the legislature intended that the decrees for possession of the watan lands which had been obtained by the watandars against third persons should become inexecutable, the legislature would have indicated such an intention by incorporating some provision to that effect.
In the absence of any such provision, it is not permissible to read 'a prohibition in section 4 of the Act 'On the execution of a decree for possession of the watan land obtained in favour of the watandar.
The fact that patel watans have been abolished 'and incidents.
appertaining to the watans have been extinguished does not lead to the conclusion that the right of the erstwhile watandar to the possession of the watan lands also comes to an end.
Indeed, clause (iv) of section 4 of the Act expressly provides that the resumption of watan land consequent upon the abolition of patel watans and the extinguishment of incidents appertaining to the said watans would be subject to the provisions of sections 6, 7 and 10.
According to section 6, the watan land, subject to the conditions mentioned in that section, 'shall be regranted to the watandar of the watan and he shall be deemed to be occupant of the said land.
The watandar would be entitled to continue to be in possession of the watan lands, if he complies with the provisions of that section despite the abolition of patel watans and the extinguishment of incidents appertaining to the said watans.
The object of the Act as would appear from its preamble was to abolish patel watans because its hereditary character smacked of some kind of feudalism.
At the same time, the legislature made it clear that it was not intended to deprive the watandar of the possession of the land if he complied with the conditions laid down in section 6 of the Act.
It, therefore, cannot be said that there was a severance of all connections between the watandar and the watan land because of the abolition of patel watans and the extinguishment of incidents appertaining to such watans.
A residual right was still there in the erstwhile watandar and that included the right to retain possession of watan land if the conditions mentioned in section 6 were complied with.
Section 7 of the Act contains provisions for regrant of watan lands to authorised holders.
while section 10 provides for eviction of unauthorised, holders.
Provision is also made for regrant of the land by the State Government to unauthorised holders if the Government forms the opinion that his eviction would cause undue hardship to him.
It would follow from a combined reading of sections 4, 6 7 and 10 of the Act that a watandar on the abolition of patel watans and extinguishment of the incidents appertaining to the watans does not automatically lose his right to possession of the watan lands.
The same is.
true of an authorised holder.
Their right to retain possession of 122 watan land as long as they comply with the prescribed conditions is .statutorily recognised.
The position of a watandar and an authorised holder is in marked contrast to that of an unauthorised holder who can be summarily evicted from the watan lands by the Collector under section 10 of the Act.
So far as quondam watandars are concerned, they are entitled to be in possession of the watan lands not in their capacity as watandars but by virtue of the operation of section 6 of the Act.
Likewise, the authorised holders are entitled to be in possession by virtue of section 7 of the Act.
If the respondent is entitled to be in possession of the land in dispute under section 6 of the Act, the right to execute the decree for possession of the land can plainly be not denied to him on account of the provisions of the Act.
According to Mr. Desai, if the appellants are not dispossessed from the land in dispute in execution of the decree obtained by the respondent against them, the appellants can 'approach the State Government for regrant of the land in dispute to them because their eviction would cause undue hardship to them.
It is, in our opinion, not necessary for the purpose, of the present case to go into the question whether the appellants can claim regrant of the land under section 10 of the Act because this question does not materially affect the right of the respondent to execute the decree for possession of the land in dispute obtained by him against the appellants.
If the respondent is entitled to execute the decree for possession of the land obtained against the appellants, in that event the question whether the appellants, if allowed to remain in possession, could have applied for regrant of the land to them, is hardly of any relevance.
Reference has been made by Mr. Desai to the words "any decree or order of a court" in the opening clause of section 4 of the Act.
It is urged that those words indicate that the decree or order of a court can also be not executed with effect from the appointed day.
This ,contention, in our opinion, is not well founded.
What is contemplated by the opening clause of section 4 of the, Act is that not withstanding any usage or custom or anything contained in any settlement, grant, agreement, sanad, or any decree or order of a court or the existing law with effect from the appointed day, the results mentioned in the various clauses of that section would follow.
The words "any decree or order of a court" are preceded by the words "anything conta ined in any settlement, grant, agreement, sanad".
It is a well established rule in construction of statutes that general terms following particular ones apply only to such perso ns or things as are ejusdem generis with those comprehended 'in the language of the Legislature,.
In other words, the general expression is to be read as comprehending only,things of the same kind as that designated by the preceding particular expressions, unless there is something to show that a under sense was intended.(see p. 297 of Maxwell on the Interpretation of Statutes Twelfth Edition).
In our opinion, the opening clause of section 4 indicates that irrespective of any usage or custom and irrespective of any settlement, grant, agreement, sanad, or decree or ,order of a court or the, existing watan law, which might have defined ,and declared the incidents appertaining to patel watans.
the results contemplated by the various clauses of section 4 would follow and 123 nothing contained in the settlement, grant, agreement, sanad, or decree or order of the court or the existing watan law would prevent the operation of that section.
In view of what has been held above, it is, in our opinion, not necessary to deal with the alternative argument of Mr. Patel that the execution proceedings taken by the. respondent to recover possession of the land were also protected by section 22 of the Act.
Reference has been made by Mr. Desai to a Full Bench decision of Nagpur High Court in the case of Chhote Khan vs Mohammad Obedulla Khan(1).
It was held by the majority in that case that after the coming into force of the M.P. Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 the preemption decrees obtained by landlords are no longer executable because the persons seeking to enforce them have lost their proprietary interest.
The aforesaid case cannot be of any help to the, appellants because it has been conceded by Mr. Desai that there were no provisions in the above mentioned Madhya Pradesh Act corresponding to sections 6, 7 and 10 of the Act with which we are concerned.
It is also consequently not necessary to express any opinion about the correctness of the view taken by the majority in the above mentioned Full Bench decision.
There is, in our opinion, no merit in this appeal which is accordingly dismissed with costs.
V.P.S. Appeal dismissed.
(1) A.I.R. 1953,Nag.
| IN-Abs | On the question whether, the right to execute a decree for the possession of watan land which has been obtained by the watandar came to an end, because of the abolition by the Gujarat Patel Watans Abolition Act.
1961, of patel watans and the extinguishment of all incidents appertaining to them under section 4 of, the Act, HELD : (1) There is nothing in the language of section 4 which renders such decrees for possession to be in executable.
Had the legislature intended that such decrees should become in executable, the legislature would have indicated .such intention by incorporating some provision to that effect.
[121B] (2) The words "any decree or order of a Court" in the opening clause of the section do not indicate that the decree or order of court could not be executed with effect from the appointed day.
The opening clause of the section only indicates that irrespective of any usage or custom and irrespective of any settlement, grant, agreement, sanad or decree or order of a court or the existing watan law.
which might have defined and declared the incidents appertaining to patel watans, the results contemplated by the various clauses of the section would follow and nothing contained in such settlement etc.
would prevent the operation of that section.
[122E 123A] (3) If the fact that patel watans have been abolished and incidents appertaining to them have, been extinguished does, not lead to the conclusion that the right of the erstwhile watandar to the possession of the watan lands also comes to an end.
Section 4(iv) expressly provides that the resumption of watan land consequent upon the abolition of patel watans would be subject to the provisions of sections 6, 7 and 10, According to section 6, the watan land.
subject to the conditions mentioned in that section, shall be regranted to the watandar.
He shall be deemed to be occupant of the said land, and he would be entitled to continue in possession if he complies with the provisions of that section.
That is, so far as the quondam watandars are concerned, they are entitled to be in possession of the watan lands, though not in their capacity as watandars but by virtue of the operation of section 6 of the Act.
If the respondent would be entitled to be in possession of the land under section 6, the right to execute the decree for possession of land cannot be denied to him.
[121C 122] (4) If the respondent is entitled to execute the decree for possession of the land obtained against the appellants the question whether the appellants, if allowed to remain in possession, could have applied for regrant to them under section 10 is not relevant.
[122C E]
|
Appeal No. 582 of 1969.
Appeal from the Judgment and Decree dated the 19th March, 1968 of the Bombay High Court at Nagpur in First Appeal No. 72 of 1959.
M. N. Phadke, R. A. Gupta and K. B. Rohatgi for the Appellant.
B. N. Lokur, Arun Kumar Sanghi and A. G. Ratnaparkhi for the The Judgment of the Court was delivered by CHANDRACHUD, J.
This is a plaintiff 's appeal on a certificate granted by the High Court of Bombay, Nagpur Bench, under Article 133(1)(a) of the Constitution On March 24, 1953 defendant 1 executed on behalf of himself and 'his minor son defendant 2, a deed of mortgage in favour of the plaintiff.
Defendant 3 is also a son of defendant 1 but he was born, after the mortgage deed, on September 30, 1955.
On January 11, 1956 a registered deed of partition was executed amongst the defendants under which the mortgaged property was allotted to the share of defendants 2 and 3. 884 On September 1, 1956 the mortgagee filed Civil Suit No. 3A of 1956 to enforce the mortgage.
On September 20, 1958 the trial court passed a preliminary decree for sale of defendant 1 's interest in the mortgaged property.
It held that part of the consideration for the mortgage was not supported by legal necessity and the, balance of the debt incurred on the mortgage was tainted with immorality.
Though, therefore, defendant 1 had executed the mortgage as a manager of the joint Hindu family consisting of himself and defendant 2, the debt was held not binding on the one half share of defendant 2 in the mortgaged property.
On the issue relating to the genuineness of the partition effected by defendant 1 between himself and his suits, the trial court recorded a finding that it wag a sham and colourable transaction and its object was to delay or 1 defeat the creditors.
Being aggrieved by.
the decree directing the sale of half the mortgaged property only, the plaintiff filed First Appeal No. 40 of 1959 in the High Court of Bombay.
Though the suit was dismissed as against defendants 2 and 3, they also filed an appeal in the High Court to challenge the finding of the trial court that the deed of partition was a sham and colourable transaction.
That was First Appeal No. 72 of 1959.
During the pendency of these two appeals, the preliminary decree was made final by the trial court on October 23, 1958.
On March 2, 1960 the plaintiff purchased, with the permission of tile court, a joint half share in the mortgaged property in full satisfaction of his decree.
On September 21, 1960 the auction sale was confirmed and on November 25, 1960 the plaintiff was put in joint possession of the property.
On March 15, 1966 the appeals filed by the plaintiff and by defendants 2 and 3 came up for hearing before a.
Division Bench consisting of Abhyankar and Deshmukh JJ.
The hearing of the appeals was adjourned from time to time and while the appeals were part heard, defendants 2 and 3 applied on August 2, 1966 for amendment of their Memorandum of Appeal in First Appeal No, 72 of 1959.
By the proposed amendment they sought leave of the High Court to challenge the preliminary decree passed by the trial court.
The plaintiff opposed that amendment and applied that she did not desire to prosecute First Appeal No. 40 of 1959 filed by her.
The High Court did not pass any orders either on the application for amendment made by defendants 2 and 3 or on the application of the plaintiff asking that her appeal be dismissed for non prosecution.
On August 24, 1966 the High Court adjourned the hearing of the appeals for three months to enable defendants to pay the amount due under the preliminary decree.
On November 24, 1966 defendants 2 and 3 deposited Rs. 12,500 and applied for an extension of two months for paying the balance.
The extension was granted by the High Court and on fabruary 25, 1967 defendants 2 and 3 deposited a further sum of Rs. 25,000 towards the satisfaction of the preliminary decree.
On February 14, 1968 another Division Bench of the High Court (Tambe and Badkas, JJ.) allowed the application of defendants 2 and 3 for amendment of their Memorandum of Appeal in First 885 Appeal No. 72 of 1959.
On an application made by their counsel, the High Court granted to those defendants time till February 23, 1968 to pay the deficit court fees, which they did.
The High Court then took up the two First Appeals.
for hearing in March, 1968.
As the plaintiff had applied that she did not desire to proceed with First Appeal No. 40 of 1959 filed by her, the High Court dismissed that appeal for non prosecution.
As a consequence of this order the High Court observed that the findings recorded by the trial court in favour of the defendants and adverse to the plaintiff would stand confirmed.
In First Appeal No. 72 of 1959 filed by defendants 2 and 3 it was urged by the plaintiff that as the appeal was originally filed to challenge the finding of the trial court on the question of genuineness of the partition.
defendants 2 and 3 were not entitled to include now grounds in the Memorandum of Appeal and that the Memorandum should not have been permitted to be amended.
The High Court hold that in view of the Provisions of Order 41, Rule 2, Civil Procedure Code.
it was oven to defendants 2 and 3.
with leave of the court, to urge additional grounds in their appeal without amending the Memo randum of appeal and therefore the objection raised by the plaintiff as against the amendment was futile.
The High Court further held that the appeal filed by defendants 2 and 3 was competent even though the suit, was wholly dismissed as against them.
According to the High Court, defendants 2 and 3 were aggrieved by the adverse finding on the question of partition and further they were denied under the preliminary decree the right to pay the decretal amount and to redeem the mortgage.
It was there fore open to them to file an appeal against that decree.
On the merits of the appeal the High Court set aside the finding of the trial court and held that the partition was "real and genuine" and that it was not effected in order to defeat :lie creditors.
Defendants 2 and 3 bad therefore become owners of the, equity of redemption and they could not be deprived of the right to redeem the mortgage.
In the result, the High Court set aside the preliminary decree as also the final decree and with it the auction sale in favour of the plaintiff.
The High Court passed a fresh preliminary decree under Order 34, Rule 4, Civil Procedure Code declaring that the plaintiff was entitled to recover Rs. 34, 386 and odd and directing the defendants to pay the entire decretal amount within six months of the date of decree.
The plaintiff questions the correctness of that decree in this appeal.
It is necessary first to understand the nature of the appeal filed by ,defendants 2 and 3 in the High Court and the relief they sought therein.
That appeal was in terms filed only against the finding recorded by the trial court that the partition between defendant 1 and his sons was a sham and colourable transaction intended to defeat or delay the creditors.
The Memorandum of Appeal as filed originally contained 886 seven grounds, each of which was directed against the finding given by the trial court on the question of partition.
The Memorandum contained a note that as the subject matter in dispute was not capable of being estimated in terms of a money value, a fixed court fee of Rs. 20 was paid thereon.
Only one prayer was originally made in the Memorandum of Appeal that the partition deed be declared as genuine.
Counsel for defendants 2 and 3, furnished to the registry of the High Court a written explanation as required by Rule 171 of the High Court Rules that as defendants 2 and 3 were only challenging the finding recorded by the trial court on the question of partition and as they were merely seeking a declaration that the partition was genuine, the fixed court fee of Rs. 20 was properly paid.
It is thus clear that the appeal filed by defendants 2 and 3 in the High Court was directed originally not against any part of the preliminary decree but against mere finding recorded by the trial court that the partition was not genuine.
The main controversy before us centers round the question whether that appeal was maintainable on this question the position seems to us well established.
There is a basic distinction between the right of suit and the right of appeal.
There is an inherent right in every person to bring suit of a civil nature and unless the suit is barred by statute one may, at one 's peril,_bring a suit of one 's choice.
It is no answer to a suit howsoever frivolous the claim, that the law confers no such right to sue.
A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit.
But the position in regard to appeals is quite the opposite.
The right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law.
That explains why the right of appeal is described as a creature of statute.
Under section 96(1) of the Code of Civil Procedure, save where otherwise expressly provided by the Code or by any other law for the time being in force, an appeal lies from every decree passed by any court exercising original jurisdiction, to the court authorised to hear appeals from the decisions of such court.
Section 100 provides for a second appeal to the High Court from an appellate decree passed by a court subordinate to the High Court.
Section 104(1) provides for appeals against orders of the kind therein mentioned and ordains that save as otherwise expressly provided by the Code or by any law for the time being in force an appeal shall lie "from no other orders".
Clause (i) of this section provides for an appeal against "any orders made under Rules from which an appeal is expressly allowed by rules". 'Order 43, Rule 1 of the Code, which by reason of clause (i) of section 104(1) forms a part of that section, provides for appeals against orders passed under various rules referred to in clauses (a) to (w) thereof, Finally, section 105(1) of the Code lays down that save as otherwise expressly provided, no appeal shall lie from any order made by a court in exercise of its original or appellate jurisdiction.
These provisions show that under the Code of Civil Procedure, an appeal lies only as against a decree or as against an order passed under, rules from which an appeal is expressly allowed by Order 43, Rule 1. 887 No appeal can lie against a mere finding for the simple reason that the Code does not provide for any such appeal.
It must follow that First Appeal No. 72 of 1959 filed by defendants 2 and 3 was not maintainable as it was directed against a mere finding recorded by the trial court.
The High Court mixed up two distinct issues : one, whether it was competent to defendants 2 and 3, if they were aggrieved by the preliminary decree of file an appeal against that decree; and two, whether the appeal such as was filed by them was maintainable.
If it be correct that defendants 2 and 3 could be said to have been aggrieved by the preliminary decree, it was certainly competent for them to challenge that decree in appeal.
But they did not file an appeal against the preliminary decree and therefore the question whether they were aggrieved by that decree and could file an appeal therefrom was irrelevant.
While deciding whether the appeal filed by defendants 2 and 3 was maintainable ' , the High Court digressed into the question of the competence of defendants 2 and 3 to file an appeal against the preliminary decree and taking the view that it was open to them to challenge that decree even though the suit was wholly dismissed against them, the High Court held that the appeal, which in fact Was directed against a find ing given by the trial court, was maintainable.
It the High Court had appreciated that the two questions were distinct and separate, it would not have fallen into the error of deciding the latter question by considering the former.
Adverting to the question which the High Court did consider, namely, whether defendants 2 and 3 could be said to be aggrieved by the preliminary decree, there is nothing in the terms of that decree which precluded those defendants from depositing the decretal amount to be able to redeem the mortgage.
The trial court had passed the usual preliminary decree for sale in Form No. 5A, under Order 34, Rule 4, Civil Procedure Code.
If the amount found due to the appellant under the decree was paid into the court within the stipulated or extended period, the appellant would have been obliged to deliver to the mortgagors all the documents in her possession or power relating to the mortgaged property and to deliver up to the defendants quiet and peaceable possession of the property free from the mortgage.
The amount declared to be due to the appellant by the preliminary decree was not paid by the defendants, from which it would appear that they were not interested in paying the amount.
It is significant that defendants 2 and 3 were served with the notice of final decree proceedings and they appeared therein.
The Code is merciful to mortgagors and perhaps 'rightly, because the mortgagee ought to have no grievance if the loan advanced by him is repaid with permissible interest, costs and expenses.
Under Order 21, Rule 89, it was open to defendants 2 and 3 as late as after the appellant purchased the property in the auction sale, to pay the amount due to her.
These defendants had interest in the mortgaged property by virtue of a title acquired before the sale, that is, under the registered partition dated January 11, 1956.
Under Order 21, Rule 89, where immovable property is sold in execution of a decree, any person owing the property or holding an interest there 888 in by virtue of a title acquired before the sale, can apply to have the sale set aside on his depositing in Court, for payment to the purchaser a sum equal to five per cent of the purchase money and for payment to the decree holder, the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered.
Nothing of the kind was done and even the last significant opportunity was not availed of by the defendants.
Counsel for the appellant seems right that the defendants were content that only half the mortgaged property was directed to be sold and that it was only because of the later appreciation in prices of real property that defendants 2 and 3 awoke to the exigency of challenging the preliminary decree.
That was much too late.
So late indeed, that not having any plausible reason to assign for the inordinate delay caused in applying for an amendment of the appeal, they preferred not to file an application for condonation of delay at all.
The appeal was filed on January 4, 1959 while, the application for amendment was made on August 2, 1966.
Event though no explanation was offered for the long delay of over 7 1/2 years, the High Court allowed the amendment with a laconic order "Application for amendment allowed".
Thus, the appeal filed by defendants 2 and 3 being directed against a mere finding given by the trial court was not maintainable; defendants 2 and 3 were not denied by the preliminary decree the right to pay the decretal amount; and the two defendants could even have applied under Order 21, Rule 89, for setting aside the sale in favour of the appellant but they failed to do so as, presumably, they were not interested in paying the amount.
The High Court was therefore wholly in error in allowing the amendment of the Memorandum of Appeal, particularly when defendants 2 and 3 had neither explained the long delay nor sought its condonation.
The preliminary decree had remained unchallenged since Sep tember 1958 and by lapse of time a valuable right had accrued in favour of the decree holder.
The power to allow an amendment is undoubtedly wide and may at any stage be appropriately exercised in the interest of justice, the law of limitation notwithstanding.
But the exercise of such far reaching discretionary powers is governed by judicial considerations and wider the discretion, greater ought to be the care and circumspection on the part of the court.
The appeal in terms was originally directed against the finding given by the trial court that the partition was sham and colourable. "Being aggrieved by the finding given in the Judgment and the Decree. . . it is humbly prayed that findings given by the learned Judge in Para 34 of his Judgment may kindly be set aside, and instead the partition deed dated 11 1 56 may kindly be declared as genuine" So ran the Memorandum of Appeal.
Defendants 2 and 3 reiterated through their counsel by Ming a note to explain the payment of fixed court fees of Rs. 20 that they were "seeking the relief of declaration only" and therefore the court fee paid was proper and sufficient.
Long years thereafter, the High Court allowed the Memorandum to be amended not a reason was cited to, explain the delay and not a reason was given to condone it.
And it was not appreciated that in granting time to defendants 2 and 3 to 889 make up the deficit of the court fees 71 years after the appeal was filed, an amendment was being allowed which had its impact not only on the preliminary decree but on the final decree which was passed in the meanwhile, the auction sale which was held in pursuance of the final decree and the sale certificate which was granted to _the appellant who, with the leave of the court and in full satisfaction of her decree, had purchased a joint 1/3 share in the mortgaged property.
With the striking down of the preliminary decree, these proceedings had to fall but the error really lay in allowing the amendment so as to permit, without good cause shown, a belated challenge to the preliminary decree.
One other aspect of the question relating to the maintainability of the appeal yet remains to be examined.
Counsel for the respondents.
argues that the finding of the trial court on the issue of partition would have operated as res judicata against them and they were therefore entitled to appeal therefrom.
In Harchandra Das vs Bholanath Day on which the learned counsel for the respondents relies in support of this submission, a suit for preemption was dismissed by the trial court on the ground of limitation.
In an appeal filed by the plaintiff, the District Court reversed that finding but confirmed the decree dismissing the suit on the ground that the sale effected by defendants 4 and 5 in favour of defendants 1, 2 and 3 was not validly registered and there being no "sale", there can be no right of preemption.
Defendants 1 to 3 preferred an appeal to the High Court against the finding recorded by the District Court that the sale effected in their favour by defendants 4 and 5 was not valid as it was not lawfully registered.
On a preliminary objection raised by the plaintiffs to the maintainability of the appeal, the High Court of Calcutta, held that though under the Code of Civil Procedure there can be no appeal as against a mere finding, "it may be taken to be the view of courts in India generally, that a party to the suit adver sely affected by a finding contained in a judgment, on which a decree, is based, may appeal; and the test applied in some of the, cases for the purpose of determining whether a party has been aggrieved or not was whether the finding would be res judicata in other proceedings".
The High Court, however, upheld the preliminary objection on the ground that the issue regarding validity of the sale which was decided against defendants 1 to 3 would not operate as res judicata in any subsequent proceeding and therefore the appeal which was solely directed against the finding on that issue was not maintainable.
The position here is similar to that in the Calcutta case.
The trial court decreed the mortgagee"s suit only as against defendant 1, the father, and directed the sale of his one half interest in the mortgaged property on the ground that part of the consideration for the mortgage was not supported by legal necessity, the remaining part of the consideration was tainted with immorality and therefore the mortgage was not binding on the interest of the sons, defendants 2 and 3.
Whether the partition between the father and sons was sham or real had no (1) I.L.R. 890 impact on the judgment of the trial court and made no material difference to the decree passed by it.
The finding recorded by the trial court that the partition was a colourable transaction was unnecessary for the decision of the suit because even if the court were to find that the partition was genuine, the mortgage would only have bound the interest, of the father as the debt was not of a character which, under the .Hindu law, would bind the interest of the sons.
There is no substance .in the submission made on behalf of the sons that if the partition was held to be genuine, the property would have been wholly freed from .the mortgage encumbrance.
The validity or the binding nature of an .alienation cannot depend on a partition effected after the alienation; or else, a sale or a mortgage effected by the Karta of a joint Hindu family ,can easily be avoided by effecting a partition amongst the members of .the joint family.
As the matter relating to the partition was not directly and substantially in issue 'in the suit, the finding that the partition was sham cannot operate as res judicata.
Therefore, the appeal filed by defendants 2 and 3 against that finding was not maintainable, even on ,,the assumption that the High Court of Calcutta is right in its vie", that though under the Code there could be no appeal against a finding, ,yet "On grounds of justice" an appeal may lie against a finding provided that it would operate as res judicata so as to preclude a party aggrieved by the finding from agitating the question covered by the .finding in any other proceeding.
It is not necessary here to determine ,whether the view of the Calcutta High Court is correct.
For these reasons we allow the appeal with costs, set aside the judgment of the High Court and restore that of the trial court.
section C. Appeal allowed.
| IN-Abs | In 1953, defendant 1 executed on behalf of himself and his minor son, defendant 2, a deed of mortgage in favour of the plaintiff.
Deft. 3 is also a son of deft.
I who was born after the mortgage deed.
In 1956, a regd.
deed of partition was executed amongst the defendants under which the mortgaged property was allotted to the share of defts 2 & 3.
Thereafter, the mortgagee filed a civil.
suit to enforce the mortgage and the trial court passed a preliminary decree for sale of deft.
1 's interest in the mortgaged property.
It held that part of the consideration for the mortgage was not supported by legal necessity and the balance of the debt incurred was tainted with immorality.
Therefore, the debt was held not binding on the one half share of deft.
2 in the mortgaged property.
As regards the partition, the trial court held that it was a colourable transaction effected to delay or defeat the creditors.
Being aggrieved, pltf.
filed an appeal (40/59) in the High Court.
Deft. 1 & 2 against whom the suit was dismissed, also filed an appeal (72/59) against the finding of the trial court that the partition was a colourable transaction.
During the pendency of these 2 appeals, the preliminary decree was made final by the trial court and in 1960, the plaintiff purchased with the permission of the court, a joint half share of the mortgaged property in full satisfaction of his decree.
Thereafter, the auction sale was confirmed and the plaintiff was put in joint possession of the property.
Thereafter, the appeals filed by the) plaintiff and defendants 2 and 3 came up for hearing and while the appeals were part hard, defts 2 & 3 applied on August 2, 1966 (nearly 7 1/2 years after filing the appeals), applied for amendment of their Memorandum of appeal in first appeal No. 72/59 and sought permission of the High Court to challenge the preliminary decree passed by the trial Court.
The plaintiff opposed that amendment and applied that she did not desire to prosecute first appeal No. 40/59 filed by her.
The High Court did not pass any orders either on the application for amendment or the plaintiff 's appeal, but adjourned the hearing of the appeals for 3 months to enable defendants to pay the amount due under the preliminary decree.
Accordingly the defendants deposited the money towards the satisfaction of the preliminary decree.
After about 2 years, another division bench of the High Court, allowed the amendments of the defendants Memo of Appeal in Appeal No. 72/59 and allowed time to the defendants to pay the deficit Court fee, which they paid.
The High Court, then took the 2 appeals for hearing and dismissed appeal No. 40/59 for non prosecution and confirmed the findings of the trial court in favour of the defendants.
As regards appeal No. 72/59, the High Court held that in view of Order 41, Rule 2 C.P.C., it was open to the defendants.
with the leave of the court, to urge additional grounds without amending the Memo of Appeal and therefore, the objection raised.
by the plaintiff that amendment should not be allowed, cannot be upheld.
The High Court further held that the defendants ' appeal was competent and they had the right to redeem the mortgage.
On the merits, the High Court held that the partition was real and genuine.
In the result, the High Court set aside the preliminary decree as also the final decree and with it the auction 883 sale in favour of the plaintiff.
The High Court passed a fresh preliminary decree under order 34, Rule 4 C.P.C., directing that that the plaintiff was to recover Rs. 34,386/ and 'odd and directed the defendants to pay the entire decretal amount within 6 months of the date of decree.
The plaintiff questions the correctness of the decree before this Court.
The appeal filed by defendants 2 & 3 Was against the finding recorded by the trial court that the partition between deft. 1 and his sons was a colourable transaction.
Therefore, it was clear that the appeal filed by defts.
2 & 3 was directed originally not against any part of the preliminary decree but against a mere finding recorded by the trial court that the partition was not genuine.
Before this Court, the main question was whether that appeal was maintainable and secondly, whether it was proper for the High Court to allow the amendment of the Memo of appeal after 7 1/2 years without good cause shown and Without any application for condonation of delay.
Allowing the appeal, HELD : (i) There is a basic distinction between the right of suit and the right of appeal.
There is an inherent right in every person to bring a suit of at civil nature, but the right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law.
The various provisions in the C.P.C. show that under the Code, an appeal lies only as against a decree or as against an order passed under rates from which an appeal is expressly allowed by Order 43, Rule 1.
No appeal can lie against a mere finding for the simple reason that the Codes does not provide for any such appeal.
Therefore, the first appeal filed by.
defendants 2 and 3 in the High Court was not maintainable as it was directed against a mere finding recorded by the trial court.
[886 D H] (ii) The High Court should not have allowed the amendment of the Menlo of Appeal particularly when defendants 2 & 3 had neither explained the long delay nor sought its condonation.
Defendants 2 & 3 were not denied by the preliminary decree the right to pay the decretal amount and the two defendants could even have applied under order 21, Rule 89 for setting aside the sale in favour of the appellant; but they failed to do so.
The preliminary decree had remained unchallenged since September, 1958 and by lapse of time a valuable right had accrued in favour of the decree holder.
Therefore, to allow the amendment after such a long time without a good cause was not a proper exercise of judicial discretion in the circumstances of the case.
[888 D E]
|
Appeal No. 207 of 1954.
Appeal by special leave from the Judgment and Order dated the 31st day of August 1953 of the Labour Appellate Tribunal of India, Lucknow, in Appeal No. III 57 of 1953.
A. section R. Chari (Bawa Shiv Charan ' Singh and M. R. Krishna pillai, with him), for the appellant.
Achhru Ram (Naunit Lal, with him), for the respondent.
March 15.
The Judgment of the Court was delivered by SINHA J.
This is an appeal by special leave against the orders of the Lucknow Bench of the Labour Appellate Tribunal of India (hereinafter to be referred to as "The Appellate Tribunal") dated the 31st August 1953, setting aside the award dated the 13th October 1952 made by the Chairman, Central Government Industrial Tribunal, Calcutta (herein after to be referred to as "The Tribunal") reinstating the appellant as the head cashier with back salary under the Punjab National Bank (hereinafter called "The Bank").
The facts leading up to this appeal may shortly be stated.
The appellant started his service as the head cashier in the Una Branch of the Bank on the 18th June 1949.
The Cash Department of the Bank is in charge of Treasurers.
The relation between the Bank and the Treasurers is evidenced by an agreement dated the 1st May 1944 (exhibit 1) which will be noticed in detail hereinafter.
That was an agreement between the Bank and "Messrs Rai Bahadur Karam Chand Puri & Bros".
That firm was appointed the Treasurers at the head office of the Bank and other places in and outside the Punjab.
On the 28th September 1951 the District Manager of the Northern Circle of the.
Bank wrote a letter (exhibit 4) to the Treasurers informing 1420 them that it had been decided to close the Una office of the Bank with effect from the close of business on the 3rd November 1951.
In pursuance of that letter the Treasurers intimated by a letter dated 2nd October 1951 enclosing a copy of exhibit 4 to the appellant that the Una Branch of the Bank will cease to function from the close of business on the 3rd November 1951 and that his services will not be required after that date.
The Punjab National Bank Em ployees ' Union (Punjab) took up the cause of the appellant as also that of other employees and made representations to the Government of India.
The Government of India by a notification No. SRO 432 dated the 8th March 1952 published in the Gazette of India, Part II Sec. 3, in exercise of its powers under section 10 of the Industrial Disputes Act XIV of 1947 (hereinafter called the Act) referred the industrial dispute between the Bank and its workmen named in schedule 2 (concerning workers dismissed) and schedule 3 (relating to workers transferred) for adjudication to the Industrial Tribunal at Calcutta constituted under section 7 of the Act.
Schedule 1 in so far as it is necessary for purposes of this case contains the following points of dispute between the employer and the workmen: "1.
Wrongful dismissal of the workmen mentioned in schedule II and their reinstatement.
In the event of any order for reinstatement payment of wages and other allowances from the date of dismissal to the date of reinstatement".
The appellant is No. 5 in schedule 2 aforesaid.
The 'Tribunal gave its award on the 13th October 1952 in respect of a number of employees whose cases were actually in controversy before it.
It is only necessary to refer to the award in so far as it concerned the appellant.
After overruling the preliminary objection of the Bank that the Union bad no locus standi to represent the appellant the Tribunal formulated the following point for its decision: "On merits the main point involved is as to whether the services of an employee of the Cash 1430 Department can be terminated on a change made in the services of the Contractor Cashier".
It answered this point in these words: "This point has been agitated in more than one case and I have also held in Reference No. 3 of 1951 as Chairman of Industrial Tribunal (P. N. Bank dispute) relating to 5 cashiers that the employees of the Cash Department are the employees of the Bank and not the nominees of the Contractor Cashiers so far service conditions are concerned, and I think it will serve no useful purpose to discuss all the legal precedents cited, more especially when the point has been set at rest by their Lordships of the Supreme Court in Civil Appeal No. 66 of 1952 in the matter of United Commercial Bank Ltd. vs Secretary, U. P. Bank EmPloyees ' Union and Others.
I am of the opinion that the dismissal of Shri Sharma was wrongful and liable to be set aside.
Now the normal remedy is reinstatement and I have no hesitation in allowing the same.
He will also be paid his back salary an allowance from the date of dismissal to the date of reinstatement".
Whatever may be the merits of the answer given to the question propounded by the Tribunal, there is no doubt that the question posed had been wrongly framed.
The discharge or dismissal of the appellant had nothing to do with the change in the personnel of the Treasurers.
The appellant 's services were dispensed with on the ground that the Una Branch where he was employed as head cashier being an un economic unit had to be closed and that therefore the appellant 's services were no more required.
The res pondent 's case appears to have been that the firm.
known as Messrs R. B. Karam Chand Puri & Bros. have been contractors for the Cash Department of the Bank at the head office and some of the other offices in the Punjab and beyond; that from time to time agreements were executed between the Bank and the aforesaid firm; that the last agreement was executed on the 1st May 1954 (exhibit 1); that the appellant according to the respondent Bank was the nominee of the said firm, and that his services had been dispensed 1431 with by the said firm whose employee he was and not by the Bank which had nothing directly to do with the employment of cashiers and other workers in the Cash Department which was in charge of the Treasurers described as "Contractor Treasurers".
Hence the main question in controversy between the parties was whether the appellant was an employee of the Bank or of the said "Contractor Treasurers", whom we shall call the "Treasurers" for the sake of brevity.
The Tribunal did not address itself to the determination of that question.
This Court also did not discuss and decide the matter in Civil Appeal No. 66 of 1952, but assumed that cashiers of the Bank were its employees.
If that question had been decided by this Court, as the Tribunal erroneously thought this Court had, in Civil Appeal No. 66 of 1952, the controversy would have been at an end.
Therefore when the respondent preferred an appeal to the Appellate Tribunal, the Bank at the forefront of its attack against the award of the Tribunal raised the ground that the Tribunal had not determined the basic question which could have given jurisdiction to the Tribunal to decide the dispute whether the head cashier was an employee of the Bank or was a nominee of the "Treasurer" as contended on behalf of the Bank.
The Bank relied very strongly before the Appellate Tribunal on the memorandum of agreement (exhibit 1) and the correspondence that passed between the Bank and the "Treasurers" on the one hand and the latter and the appellant before us on the other (Exs. 2, 3, 4 and 5).
The Appellate Tribunal rightly remarked that the Tribunal had recorded no finding on that basic question and had assumed that the respondent before it was an employee of the Bank.
The Appellate Tribunal took the view that the agreement (exhibit 1) was decisive of that question.
After referring in great detail to the terms of the agreement the Appellate Tribunal came to the conclusion that the cashier was not an employee of the Bank but of the Treasurers and that therefore the Tribunal had no jurisdiction to give any relief to the complainant before it.
The 183 1432 award by the Tribunal was, in the result, set aside and the Bank 's appeal allowed.
The appellant in this Court through his counsel Shri Chari, argued that the Appellate Tribunal had misinterpreted the provisions of the Industrial Disputes Act in coming to the conclusion that the Tribunal had no jurisdiction to entertain the dispute simply on the ground that one of the parties to the dispute bad successfully denied the relationship of employer and employee; that the Appellate Tribunal misconceived its functions by basing its findings on the interpretation of the written agreement between the Bank and its Treasurers when it should have gone into all the relevant facts to determine the substance of the matter; and finally, that the Appellate Tribunal misdirected itself on the question of the interpretation of the agreement for coming to the conclusion that the appellant was not an employee of the Bank but was a nominee of the "Treasurers".
It was further argued on behalf of the appellant that the Tribunal having based its decision on its previous award dated the 16th September 1952 in Reference No. 3 of 1951 between persons more or less in the same position as the appellant and the respondent Bank, in the background.
of the decision of the previous Tribunals, e.g., the award of the Conciliation Board presided over by Mr. Justice Bind Basni Prasad of the Allahabad High Court, the award by the Tribunal presided over by Mr ' K. C. Sen, and the award of the All India Industrial Tribunal '(Bank Disputes), presided over by Sri section Panchapagesa Sastri and the award dated the 24th March 1951 in Reference No. 20, the award of the Tribunal was really final.
The argument was that the award of the Tribunal was based on considerations of facts and circumstances disclosed in those earlier awards to which the Bank and its cashiers and other employees employed in the Cash Department were parties.
It was thus a final finding of fact which was not open to appeal before the Appellate Tribunal.
It was therefore contended that the Appellate Tribunal bad no jurisdiction to entertain the appeal and to reverse the award of the Tribunal.
1433 On behalf of the respondent Bank it was contended that no specific grounds had been taken either before the Appellate Tribunal or in the memorandum of appeal to this Court that the Appellate Tribunal had no jurisdiction on the ground now taken by the appellant in this Court, nor was that ground taken in the statement of case.
On merits it was contended by the respondent 's counsel that the Tribunal is as much bound by the rules of evidence and procedure as any other Tribunal and as the Tribunal had not addressed itself to the question whether the cashier appellant was an employee of the Bank, the question was open before the Appellate Tribunal which was competent to pronounce on that basic question.
Finally it was argued that on a true construction of the provisions of the agreement (exhibit 1) this Court should accept the finding of the Appellate Tribunal that the appellant was not an employee of the Bank and that on that account the Tribunal had no jurisdiction to grant any relief to the appellant.
On behalf of the respondent the case was practically rested on the construction of the agreement (exhibit 1).
With reference to the terms of the agreement the learned counsel for the respondent argued that the Treasurers were not servants or employees of the Bank but were "independent contractors" and that the appellant and other employees in the Cash Department having been nominees of the "independent contractors" there could not be any relation of employer and employee between the Bank and the appellant.
It is therefore necessary to examine in some detail the terms of the agreement aforesaid.
We set out below, underlining important words, the terms of the agreement in so far as they are relevant for the determination of the true relation between the Bank and the Treasurers.
Though this agreement is dated the 1st May 1944, cl.
(1) provides that it will be deemed to have commenced and come into force from the 15th March 1942, the date of the death of R. B. Karam Chand Puri and will take the place of the previous agreement dated the 26th July 1941, thus maintaining the continuity of the relationship between the 1434 Bank and the Treasurers '.
The agreement provides that the Treasurers shall diligently and faithfully serve the Bank at the Head Office and its various offices mentioned in schedule A attached to and forming part of the agreement and at other offices where they may hereafter be appointed treasurers and shall in all respects diligently and faithfully obey and observe all lawful orders and instructions of the Bank or the person placed by the Bank in authority over them in relation to the due discharge of their duties as Treasurers.
The Treasurers in addition to the duties, liabilities and responsibilities devolving upon them by virtue of the provisions of the agreement shall also be liable to perform such duties and discharge such responsibilities as by custom usually devolve on treasurers in the employ of a bank.
The Treasurers shall be paid for their services a remuneration as mentioned in schedule A aforesaid or such remuneration as the General Board of Directors of the Bank may determine from time to time.
Out of the remuneration paid to them by 'the Bank the Treasurers shall pay salaries to their nominees employed by them for performing the duties of a cashier in the Bank on their behalf or other functionaries of a similar nature.
The salaries of such nominees employed by them will be fixed by the Treasurers themselves but the same will be subject to the approval of the Bank.
The remuneration of the Treasurers will be the net amount which will be left to them after paying salaries to their nominees employed by them for working as cashiers, etc.
The Treasurers themselves will not be entitled to any kind of allowances besides the net remuneration as aforesaid but their nominees or working cashiers will be entitled to allowances which ,the authorities of the Bank may sanction for members of the staff from time to time.
The Treasurers shall employ the number of men at each office as mentioned in schedule A aforesaid.
The Board of Directors shall have the power to increase or decrease the number of their nominees for any particular office and the amount of remuneration fixed for that office.
The Treasurers shall be responsible for the due safety, both within and outside the premises of the Bank at any 1435 office placed under their charge, of all money, specie, ornaments, bullion, cash, etc.
and of other valuable documents received by them for and on behalf of the Bank or from the Bank and shall be answerable to the Bank for all losses occurring either inadvertently or by or through the negligence or misconduct of the Treasurers or any of their nominees.
The Treasurers shall be entitled to resign the services of the Bank by giving three calendar months ' notice to the Bank.
The Bank shall also be entitled to dispense with the Treasurers ' services on giving three months ' notice In case of gross negligence or misconduct or of any fraud, misappropriation or embezzlement by the Treasurers or any of the nominees in the discharge of ,their duties as such Treasurers, no notice shall be necessary and the Bank shall have the right to dispense with their services forthwith.
The Bank shall have the right to take the Treasurers into the service of the Bank after settlement of remuneration with the Treasurers at any other office or offices of the Bank.
The Treasurers and their nominees shall obey all the orders, rules and regulations prescribed by the Bank with regard to the discharge of their duties by the cashiers as well as with regard to the amount of balance they are allowed to keep with them.
It shall be the duty of the cashiers to inform the manager of the Bank as soon as the balance in hand exceeds the prescribed limit and to ask for orders on the point.
The Treasurers shall not engage any person as their assistant or peon about whose character, conduct or reliability the manager of the Board of Directors of the Bank may have any objection.
The Treasurers shall also arrange that no person under employment absents himself from duty without the written permission of the manager for the time being.
If any such employee is absent without leave, or he is turned out on the objection of the Board or the Manager, the Treasurers shall forthwith appoint a substitute in his place.
The Treasurers shall be responsible for the acts and defaults of all their nominees.
The Treasurers and their nominees shall be entitled to traveling allowance according to rates sanctioned by the Board 1436 of Directors of the Bank.
The Treasurers have deposited security of the value of Rs. 15,000/ on which they shall be entitled to receive interest at the rate of 31 per cent.
per annum.
As a further security for the due performance of the terms and conditions of the agreement as a cover for loss that may be caused to the Bank by any act or omission of themselves or any one of their nominees, the Treasurers hypothecated properties as per schedule C attached to and forming part of the agreement.
Schedule A aforesaid contains the names of the offices, the monthly remuneration of the Treasurers in respect of each one of those offices separately, net savings of the Treasurers after paying the salaries of the total number of men including cashiers, etc., as stated against each one of the offices.
Apart from the terms set out above bearing on the relation between the Bank and the Treasurers, some of which apply equally to their nominees, the following terms of the agreement bear directly on the relation between the nominees of the Treasurers, like the appellant, and the Bank.
In this connection the agreement provides that the Board of Directors shall have the power to increase or decrease the number of the Treasurers ' nominees for any particular office and the amount of remuneration fixed for that office.
Such nominees shall be entitled as servants of the Bank to any bonus which may from time to time be declared for the members of the staff.
The bonus of the Treasurers shall be limited to the amount of their own net remuneration and no further.
They shall not be entitled to any bonus to which their cashiers are not eligible under the rules of the Bank.
The nominees of the Treasurers shall be entitled to participate as ordinary members of the staff in the provident fund constituted by the Bank.
Such nominees shall also be entitled to traveling allowance according to rates sanctioned by the Board of Directors of the Bank whenever they are required to go to out stations on bank business.
From the terms of the agreement aforesaid set out above almost verbatim omitting such clauses and words as are not relevant to this case, it will appear 1437 that the Treasurers are under the employment of the Bank on a monthly basis for an indefinite term, that is to say, until such time as either party to the agreement terminated it in accordance with the terms quoted above.
They are under the complete control and direction of the Bank through its manager or other functionaries.
The Treasurers have to take their orders from day to day as regards the cash balance or other cognate matters relating to the safe custody of cash, valuable documents, etc.
belonging to the Bank or its constituents.
The Treasurers receive in respect of each office under the incharge a certain name sum out of which they have to pay the salary of a stated number of their assistants who may be head cashiers or cashiers or assistant cashiers and other such functionaries.
They are entitled to receive bonus on the net amount secured to them as their remuneration, being the lump sum fixed in respect of each office, minus the salary of the assistants.
It is true that these Treasurers are not and cannot be expected to be personally present to discharge their onerous duties at each one of the large number of offices spread over the Punjab and outside.
Naturally they had to be authorized to engage head cashiers, or assistant cashiers in respect of each of the offices placed in their charge.
They had to guarantee the fidelity of the persons so employed as their assistants.
Those assistants had to be persons in whose reliability, 'honesty and efficiency both the Bank and the Treasurers had confidence.
The Treasurers have the right to nominate those assistants but the Bank had the final words in the choice.
The Bank Manager has complete control over such nominees in the matter of leave of absence, discipline and conduct in the discharge of their duties as assistants managing the cash and other valuables in the custody of the Bank.
From the very nature of things it bad to be a dual control in the sense that the Treasurers had to nominate the assistants who are to discharge those responsible functions in connection with cash and other valuables of the Bank and the Bank could not abdicate its powers of full control over the day to day working of 1438 the Cash Department.
The nominees of the Treasurers are treated on the same footing as the other servants of the Bank in the matter of bonus ' travelling allowance and provident fund, etc.
It is true those nominees are to be paid by the, Treasurers but it is out of the money provided by the Bank.
It is not always easy to determine whether the relation between two parties, in the present case of the Treasurers vis a vis the Bank, is that of servants to a master or of independent contractors who have undertaken to do a particular job for their employer.
The question has generally arisen in connection with the determination of vicarious liability of an employer in respect of acts done by his agent (using a neutral word which includes an independent contractor as also a servant).
The distinction between a servant and an independent contractor has been the subject matter of a large volume of case law from which the text book writers on torts have attempted to lay down some general tests.
For example, in Pollock 's Law of Torts,* the distinction has thus been brought out: "A master is one who not only prescribes to the workman the end of his work, but directs or at any moment may direct the means also, or, as it has been put, 'retains the power of controlling the work ', a servant is a person subject to the command of his master as to the manner in which he shall do his work. .
An independent contractor is one who undertakes to produce a given result but so that in the actual execution of the work he is not under the order or ,control of the person for whom be does it, and may use his own discretion in things not specified before hand. . . . ." Clerk & Lindsell on Torts (11th Edn.) at p. 135 have adopted the description of an independent contractor given by Pollock as quoted above.
In the 11th Edn. of Salmond 's Treatise on the Law of Torts, the same distinction has been clearly indicated in the following passage at p. 98 *Pages 62 & 63 of Pollock on Torts, 15th Edn.
1439 "what then, is the test of this distinction between a servant and an independent contractor? The test is the existence of a right of control over the agent in respect of the manner in which his work is to be done.
A servant is an agent who works under the supervision and direction of his employer; an in dependent contractor is one who is his own master.
A servant is a person engaged to obey his em ployer 's orders from time to time; an independent contractor is a person engaged to do certain work, but to exercise his own discretion as to the mode and time of doing it he is bound by his contract, but not by his employer 's orders".
Those learned authors have discussed in great detail cases illustrative of those distinctions, indicating the circumstances in which the general rule has been applied to individual cases with such modifications as the facts and circumstances of a particular case required.
We are here not concerned with those nice distinctions which have been drawn in connection with the rule of vicarious liability in torts.
We are here concerned only with the question how far the test laid down by the standard authors as quoted above can be applied to determine the present controversy whether the Treasurers of the Bank were its servants as contended on behalf of the appellant or independent contractors as claimed on behalf of the respondent Bank.
The agreement between the parties, as summarised above, is a composite transaction constituting the Treasurers agents of the Bank, the former agreeing to indemnify the latter against any loss occasioned to the Bank due to the lack of fidelity and efficiency of the ministerial staff entrusted with the charge of the Bank 's cash and valuable documents.
The Treasurers have been charged with the duty of nominating their assistants who are to be responsible in their day to day work to the Bank which all the time has full control over them in the matter of their leave of absence, as to how they shall keep the cash and other valuables and as to how they shall be under the general direction of the Bank 's manager or, some 184 1440 other functionary who may be nominated by the Bank to supervise the work of the Cash Department.
The Bank makes itself answerable to the employees thus appointed by the Treasurers with the concurrence of the Bank for their bonus, provident fund and travelling allowance.
For those purposes these assistants are to be on the same footing as the other employees of the Bank.
It was contended on behalf of the respondent Bank that its agreement with the Treasurers shows that the latter bad the fullest responsibility for the appointment and dismissal and payment of salary of the employees in charge of the, Cash Department of the Bank and that therefore the Treasurers could not but be independent contractors.
It has already been noticed that the appointment of such assistants as are entrusted with the work of the Cash Department is not under the absolute power of the Treasurers.
The appointment has to be approved by the Bank and the Treasurers cannot continue to employ those workmen in whose fidelity and efficiency the Bank has no confidence.
Hence both in the matter of appointment and dismissal of the employees the Bank reserves to itself the power to ' give direction to the Treasurers.
Similarly in the matter of the payment of salary the money comes out of the coffers of the Bank, though it may be paid by the hand of the Treasurers.
In this connection it was contended on behalf of the appellant that payment of salary of the employees in the Cash Department is made through the Ban].
,, itself but we have no tangible evidence in this case beyond the bare assertion at the Bar.
But, in our opinion, the situation in respect of the appointment, dismissal and payment of salary of the employees of the Cash Department is analogous to that of the employees of a particular department of Government, in which appointment and dismissal of ministerial staff may rest with an authority so empowered by the head of the department.
Payment of salary may also be made by the appointing authority but the money comes out of the Government treasury.
In those circumstances, can it be rightly asserted that 1441 those employees are not the servants of Government? The analogy may not be perfect, because, in the present case, the appointment and dismissal of the employees of the Cash Department is the joint responsibility of the Bank and its Treasurers.
It has got to be so because the Treasurers are the guarantors of the fidelity and efficiency of the employees and the Bank has to exercise complete control over the day to day discharge of their functions because it is the Bank which is vitally and immediately concerned with the efficient and honest discharge of the duties of the assistants in the Cash Department, the efficient running of which is the most important of a bank 's functions.
It will further be noticed with reference to the terms of the agreement set out above that whereas the Treasurers and their nominees have to take their orders from the Bank Manager or other such functionary, there is no specific provision that those nominees shall discharge their day to day functions under the direct control of the Treasurers or that they will be subject to the immediate control of the Treasurers in the discharge of their daily duties and in the matter of the grant of leave of absence.
There could not be such a provision, as a dual control of that kind in the daily work of the employees would lead to a great deal of confusion and lack of discipline amongst the ministerial staff.
The employees of the Cash Department have of necessity to be under the direct control of the Bank Manager or of some other functionary appointed by the Bank.
It is the Bank which has undertaken the responsibility in the matter of their pay and prospects in the service and naturally therefore, such employees, even as other employees of the Bank, have to take their orders from the Bank.
It must therefore be held that the Treasurers are the servants of the Bank and that their nominees must equally be so.
The Appellate Tribunal held that on a reading as a whole of the clauses of the agreement aforesaid the appellant was an employee of the Treasurers and not of the Bank, It did not address itself pointedly 1442 to the question as to what was the exact relation between the Bank and the Treasurers.
It did not also consider the question as to what would be the position of the employees of the Cash Department vis a Vis the Bank if it were held that the Treasurers Id. themselves were the servants of the Bank and not independent contractors.
Before the Appellate Tribunal both parties appear to have concentrated their attention on the question as to whether the employees of the Cash Department were servants of the Bank or of the Treasurers.
In our opinion, that was not a correct approach to the determination of the controversy between the parties.
If the Treasurers ' relation to the Bank was that of servants to a master, simply because the servants were authorized to appoint and dismiss the ministerial staff of the Cash Department would not make the employees in the Cash Department independent of the Bank.
In that situation the ultimate employer would be the Bank through the agency of the Treasurers.
It was argued on behalf of the respondent that even if it were held that the Treasurers were the servants of the Bank and not independent contractors, the legal position of the employees of the Cash Department vis a vis the Bank would be the same, namely, that they will be in law the servants of the Treasurers.
In our opinion, there is no substance in that contention.
If a master employs a servant and authorizes him to employ a number of persons to do a particular job and to guarantee their fidelity and efficiency for a cash consideration.
, the employees thus appointed by the servant would be equally with the employer, servants of the master.
It is not always correct to say that persons appointed and liable to be dismissed by an independent contractor can in.
no circumstances be the employees of the third party.
This would be clear from the following observations of Lord Esher, M.R., in the case of Donovan vs Laing, Wharton & Down Construction,Syndicate(1): "It is true that the ' defendants selected the man and paid his wages, and these are circumstances which, if nothing else intervened, would be strong to show (1) (1893] at 632, 1443 that he was the servant of the defendants.
So, indeed, he was as to a great many things but as to the working of the crane he was no longer their servant, but bound to work under the orders of Jones & Co., and, if they saw the man misconducting himself in working the crane or disobeying their orders, they would have a right to discharge him from that employment".
Those observations have been approved in the latest decision of the House of Lords in the case of Mersey Docks & Harbour Board vs Coggins & Griffith (Liverpool) Ltd.(1).
The House of Lords distinguished that ruling on facts but did not depart from the general rule laid down in the earlier decision that the determinative factor is as to which party had control over the workers as to how they would do their job from day to day.
Lord Macmillan in his speech at p. 14 has observed as follows: "Many reported cases were cited to your Lordships but where,, as all agree, the question in each case turns on its own circumstances, decisions in other cases are rather illustrative than determinative.
So far as attempts have been made to formulate a criterion of general application, it cannot be said that these attempts have been very successful".
It would thus appear that the question as to whose employee a particular person was has to be determined with reference to the facts and circumstances of each individual case.
Lord Porter in the course of his speech in the reported case (supra) at p. 17 has observed as follows: "Many factors have a bearing on the result.
Who is paymaster, who can dismiss, how long the alternative service lasts, what machinery is employed, have all to be kept in mind.
The expressions used in any individual case must always be considered in regard to the subject matter under discussion but amongst the many tests suggested I think that the most satisfactory, by which to ascertain who is the employer at any particular time is to ask who is entitled to tell the employee the way in which he is to do the work upon which he is engaged".
(1) ; , 1444 As indicated above, in the present case the direction and control of the appellant and of the ministerial staff in charge of the Cash Department of the Bank was entirely vested in the Bank through its manager or other superior officer.
We have therefore no hesitation in differing from the conclusion arrived at by the Appellate Tribunal and in holding that the appellant was an employee of the Bank.
That being so, the Tribunal had the jurisdiction to make the directions it did in respect of the appellant.
The respondent did not at any stage of the proceedings challenge the orders of the Tribunal on its merits.
That conclusion being reached, there is no difficulty in upholding the orders of the Tribunal in respect of the appellant.
It is therefore not necessary to pronounce upon the other points raised by the parties.
The appeal is accordingly allowed wit costs throughout.
Appeal allowed.
| IN-Abs | The appellant was appointed head cashier in one of the branches of the respondent Bank by the Treasurers who were in charge of the Cash Department of the Bank by virtue of an agreement between them.
The question arose as to whether the appellant was an employee of the Bank.
(i) that the terms of the agreement clearly showed that the Treasurers were servants of the Bank and not independent contractors; and that (ii)as the direction and control of the appellant and of the ministerial staff in charge of the Cash Department of the Bank was entirely vested in the Bank, the appellant was an employee of the Bank.
If a master employs a servant and authorizes him to employ a number of persons to do a particular job and to guarantee their fidelity and efficiency for a cash consideration, the employees thus appointed by the servant would be, equally with the employer, servants of the master.
The question as to whose employee a particular person is has to be determined with reference to the facts and circumstances of each individual case, and among the many tests by which to ascertain who is the employer, the most satisfactory one is to ask who is entitled to tell the employee the way in which he is to do the work upon which he is engaged.
(1) (1924] I.L.R. (2) Cal.
297, 1428 Donovan vs Laing, Wharton & Down Construction Syndicate ([1893] and Mersey Docks & Harbour Board vs Coggins & Griffith (Liverpool) Ltd. ([1947] A.C.1), referred to.
|
ns Nos.
1524, 1537 1580 of 1973 and 74, 75, 254, 510 512 of 19702 ' 21 of 1971 and 1525 & 1581 1606 of 1973.
Petitions under article 32 of the Constitution of India.
A. K. Sen, Yogeshwar Prasad, section K. Bagga and section Bagga, for the petitioners (in W.Ps.
1524 and 1537 1580/73).
A. K. Sea, (in W.P. No. 74/70), Hardyal Hardy (in W.P. No. 75/70), Yogeshwar Prasad, section K. Bagga and section Bagga, for the petitioners in (W.P. Nos 74, 75, 254 and 510 512/70, 21/71 and 1525, 1581 1606/1973).
L. N. Sinha, Solicitor General and O. P. Rana, for respondents (in W.Ps.
1524, 1537 1580173).
O. P. Rana, for respondents (in W.Ps.
Nos. 74, 254/70, 21171, 1525, 1581 1606/73 and respondents nos.
1 & 3 in W.P. 75 and 510 512/70).
V. M. Tarkunde and E. C. Agarwala, for respondent No. 2 (in W. P. No. 75/70 and applicant/intervener in W.P. No. 75/70.
The Judgment of the Court was delivered by Goswami, J.
By the above writ applications under Article 32 of the Constitution the validity of the Uttar Pradesh Krishi Utpadhan Mandi Adhiniyam, 1964 (U.P. Act No. XXV of 1964 as amended by U.P. Act No. 10 of 1970) (briefly called the Act) and the rules made thereunder are challenged on the ground of violation of Article 14 and Article 19(1)(g) of the, Constitution.
The petitioners in all the above cases are traders or commission agents dealing in agricultural produce.
The following submissions are made on behalf of the petitioners (1) The constitution of the Market Committee under section 13 of the Act is highly prejudicial to their interests and of the traders in general since, it will have a perpetual majority of producers.
(2) To entrustment of licensing to such a Market Committee instead of to any impartial authority is unfair and an un .
reasonable restriction on the right to trade.
(3) The Act in the matter of grant of licences gives no guidance at all and even under rule 70(4) two vague criteria have been laid down in the matter of issue of licences under the Act.
(4) The petitioners are required to provide a storage space to the producers for their agricultural produce going to the market and this obligation is also an unreasonable res triction on the fundamental right of the petitioners.
379 (5) Rule 76 (1) is invalid and ultra vires section 40 of the Act and has also placed unreasonable restrictions on the right to carry on trade or business.
Before we deal with these submissions, we may turn out attention to the Act.
As the preamble shows the Act has to provide for the regulation of sale and purchase of agricultural produce and fox the establishment, superintendence, and control of markets therefore in Uttar Pradesh.
The statement of object and reasons gives a clear picture of the evils sought to be, remedied by this legislation and a portion therefrom may be extracted below : "The present chaotic state of affairs as, obtaining in agricultural produce markets is an acknowledged fact.
There are.
,innumerable charges,, levies.
and exactions which the agricultural producer is required to pay without having any say in the proper utilisation of the amount so paid by him.
In matters of dispute, between the seller and the buyer, the former is generally put at a disadvantage; by being given arbitrary awards.
The producer is also denied a large pa rt of his produce by manipulation and defective use of weights and scales in the market.
The Government of India and the various committees and commissions appointed to study the condition of agricultural markets in the country have also been inviting the attention of the State Government from time to time towards improving the conditions of these markets .
The Planning Commission stressed long ago that legislation in respect of regulation of markets should be, enacted and enforced by 1955 56".
It is also mentioned that legislation in the State was first proposed in 1938 but lapsed.
It also appears that most of the other states have already passed legislation in this respect.
It is, therefore, clear that the principal object of this Act is to come in aid of the producers who are generally ill organised and are by far and large the exploited party in the bargain between unequals.
Section 2 contains the definitions.
By section 2(a) " 'agricultural produce ' means such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisciculture, animal husbandry or forest as are specified in the schedule, and includes admixture of 2 or more of such items, and also includes any such item in processed form, and further includes gur, rab, shakkar, khandsari and jaggery".
By section 2 (f) " 'Committee ' means a Committee constituted under this Act".
By section 2(k) " 'Market Area ' means an area notified as such under section 6 or as modified under section 8".
By section 2(p) " 'producer ' means a person who, whether by himself or through hired labour, produces, rears or catches, any agricultural produce, not being a producer who also works as a trader, broker or Dalal, commission agent or Arhatiya or who is otherwise ordinarily engaged in the business, of storage of agricultural produce".
We are not concerned with the pro viso attached thereto.
By section 2(y) " 'trader ' means a person who in the ordinary course of business is engaged in buying or selling agricultural produce as a principal or as a duly authorised agent of one or more 380 principals and includes a person, engaged in processing of agricultural produce".
After notification by the State Government of its intention to declare a particular area as a Market Area under section 5 and after inviting objections and consideration of the same, the State Government under section 6 declares the whole or any specified portion of the area mentioned in the notification to be the Market Area in respect of such agricultural produce as may be specified.
Similarly under section 7, the Principal Market Yard and Sub Market Yards are declared.
Section 9(2) which is material for our purpose, may be quoted: "No person shall, in a Principal Market Yard or any Sub Market Yard, carry on business or work as a trader, broker, commission agent, warehouse man, weighman, palledar or in such other capacity as may be prescribed in respect of any specified agricultural produce except under and in accordance with the conditions of a licence obtained therefore from the Committee concerned".
The petitioners make a great grievance of this licensing provision by the Market Committee called the Mandi Samiti of the Market Area.
Section 13 provides for constitution of the Market Committee and provides for representation from different sources as detailed in (i) to (xi) thereunder.
The learned counsel draws our attention to clauses, (vii) and (vii a) of section 13(1) whereby ten representatives of the producers are included in the Committee.
It is pointed out by the learned Solicitor General and not contradicted by Mr. Sen that ' the Committee under section 13 consists of 23 members out of which ten are from the producers.
Section 16 provides for functions and duties of the Committee and, inter alia, under section 2(i) thereof "a Committee shall ensure fair dealings between the producers and persons engaged in the sale or purchase of specified agricultural produce.
" Under section 17, "A Committee shall, for the purposes of this Act, have the powers to (i) issue or renew licences under this Act on such terms and conditions and subject to such restrictions as may be prescribed, or, after recording reasons therefore, refuse to issue or renew any such licence; (ii) suspend or cancel licences issued or renewed under this Act".
Section 25 provides for appeals against the, orders of the Committee to the Director of Agriculture who is to decide the same in accordance with the rules.
Under section 32, the State Government also has powers of revision and may call for the records of the proceedings of the Committee and pass orders modifying, annulling or reversing the same.
Section 40 enables the State Government to make rules for carrying out the purposes of this Act.
The rules, inter alia, provide for matters relating to the functions, powers and duties of the Committee, licensing fee, or market fee which may be levied and realised by the Committee and their mode of recovery and the terms and conditions for assessment and renewal of licences under this Act [section 40 (2) ].
There is a schedule to the Act 381 which contains the description of the agricultural produce Under eight different heads.
Chapter VIII of the rules deals with transaction of business in Market Yards and the opening rule 70 provides for licensing by the Market Committees.
By sub rule(3) "any person desiring to hold licence under sub rule (1) shall make, in Form No. XI or Form No. XII, as the case may be, a written application for a licence to the Market Committee and shall pay the licence fees prescribed under rule 67".
Rule 70(4) (i) may now be quoted: "On receipt of such application together with the amount of fee prescribed under rule 67, the Market Committee may issue him the licence applied for,, if (a) it is satisfied that the applicant is solvent; (b) it is satisfied that the applicant is a desirable person to whom a licence may be granted; provided that the provisions of sub clause (a) shall not apply to weighmen, measurers, palledars, truck plyers and Thela plyers".
This rule will have to be read with section 17 quoted above.
By rule 73, the order of refusal, cancellation or suspension of a licence by, the Committee shall be communicated to the person concerned in the specified manner indicated therein.
Rule 76(1) which is impugned may be quoted : "Every consignment of specified agricultural produce brought for sale into the Principal Market Yard or any sub Market Yard shall be sold by open auction: Provided that nothing in this sub rule shall apply to a retail sale as may be specified in the bye laws of the Committee".
Some provisions of similar Acts of the States of Madras, Bombay and Gujarat had earlier been the targets of unsuccessful attack in this Court and hence the constitutional challenge in the present applications against the U.P. Act is necessarily on different ground,,.
[See M. C. V ' section Arunchala Nadar etc.
vs The State of Madras & others;(1) Mohammad Hussain Gulam Mohammad and Another vs The State of Bombay and another;(2) and Jan Mohammed Noor Mohammed Begban vs State of Gujarat and Another(3)].
We may now turn to the Submissions.
With regard to the first submission, as earlier noted, the grievance is not factually accurate.
Out of 23 members of.
the Committee only 10 are from the producers.
Therefore, there is no question of a perpetual majority of the producers in the Committee.
Besides under section 13(1)(vii), 8 producers are elected.
It may be even a legitimate expectation of the legislature that there may be reasonable likelihood that Producers of eight categories of agricultural produce mentioned in the schedule, (1) [1959] (Supp) (1) S.C.R. 92.
(2) ; (3) ; 382 may be represented.
Under section 13(1)(vii a), which was introduced by an amendment in 1970, two producers belonging to the scheduled castes are to be nominated by the State Government This provision is made in the interest of the People belonging to the scheduled castes who may not be able to.
get due representation in the elections.
We do not find any unreasonable features in the scheme of representation in the Committee under section 13.
This will be clear even from section 14 whereby the first Committee appoints suit able members "to represent different interests referred to in sub section (1) of section 13".
The first submission of the petitioners is, therefore, of no avail.
We may now take up consideration of the second and the third submissions which may be dealt with together.
It is submitted that the licensing of the traders should not be left in the hands of the Market Committee.
We find it difficult to appreciate how the performance of this duty by the Committee will at all prejudice the traders.
To say the least it is a hypothetical objection in this case, as, we understand, none of the petitioners have been refused a licence.
It is true that usually some governmental authority is charged with the duty of granting of licences under various local Acts.
That, however, does not prove that the duly cannot be properly and impartially exercised by the Committee representing various interests which are vitally interested in the trade of agricultural produce.
Whether in a particular case the action of the Committee is mala fide or otherwise, objectionable, may be a different matter and such a grievance can be properly dealt with.
That would, however, not make, the, provision invalid nor can it be said to place an unreasonable restriction on the right of the petitioners to trade.
It is further submitted that there is no guidance in the Act in the matter of grant of licence and the relevant rule 70(4)(1) prescribes only two vague criteria in the matter.
This submission fails to take note of the fact that the Committee which is entrusted with the duty of granting licences consists of people from different sources vitally interested in the marketing of agricultural produce.
The Committee consists also of representatives from local bodies, cooperative marketing societies Central Warehousing Corporation, State Warehousing Corporation, representatives of traders and commission agents, Government officials of whom one shall be a representative of the Agriculture Department and the other of Food and Supplies Department, and so forth.
It is, therefore, a fairly well represented Committee which is expected to know the object and purpose of the Act of which it is a creature.
One may legitimately expect that the members are well aware of the difficulties of the producers, interests of the traders and the intricacies of the trade.
There is sufficient guidance from the preamble and other provisions of the Act with which the members of the Committee owe their duty to be conversant For example under section 16 the Committee is charged with the duty of enforcing the provisions of the Act, the rules and the bye laws.
It has to exercise its powers and perform its duties and discharge its functions in accordance with the provisions of the Act and the rules.
38 3 Under sub section (2) of section 16, the Committee shall ensure fair dealings between the producers and the traders besides performing other functions.
Form No. XI in which a trader has to submit his application for a licence.
also gives various particulars from which the Committee would be able to consider his claim for a licence.
It will be ' seen that in this form the, applicant has to undertake to abide by the conditions of the licence and the provisions of the Act and the rules.
The condition of the licence which are noted in Form No. XIII would also give an indication of the obligations of the licensee.
All these would be known to the Committee.
At any rate, with the help of the Government officials in the Committee there is no reason to think that the work of the Committee will not function smoothly and that there will be any reason to apprehend that licences would be refused arbitrarily.
Even the scope for such an apprehension is sought to be done away with by providing a provision Provision of appeal against the decision of the Committee and also a further revision to the State Government.
There is a further limitation on the power of the Committee by insisting upon recording of reasons while refusing a licence.
It is, therefore, clear that a speaking order has to be.
passed when refusing a licence and it will have to justify that the licence is refused only on relevant considerations with regard to solvency and fitness in terms of the provisions.
of the Act.
It is submitted that the choice of the two criteria under rule 70(4) (i) is bad and there is no proper guidance in these criteria which are not capable of objective determination.
The two criteria laid down are solvency and desirability.
The applicant has to satisfy the Committee that he is solvent as opposed to insolvent that is bankrupt.
We are informed that the original Hindi version of the rule which is translated into English gives the equivalents as follows : "It is satisfied that the applicant is not a bankrupt (rindiwali) ".
"It is satisfied that the applicant is a proper (upoyukta) person to whom a licence may be granted".
Mr. Sen candidly admits that the criterion on the score of "bankruptcy" is well known and cannot be said to be vague or indefinite.
Hi, however, submits that the second criterion is not at all precise and definite.
Although perhaps a more expressive guidance could have been given, we have already observed that the Act itself provides sufficient guidance to the Committee in the matter of deciding whether a particular applicant is or is not a proper person to hold a licence and we cannot accede to the submission that the two criteria taken with the other guidelines from the provisions of the Act and the rules offer no proper guidance to the Committee in tic matter of grant of licence.
The second and the third submissions of the petitioners are, therefore, devoid of substance.
With regard to the fourth submission, it is sufficient to point out that under section 16(2)(vii) the Committee has to provide, inter 384 alia, accommodation for storage and such other facilities as may be prescribed.
Under rule 52(4) storing of the specified agricultural produce shall be subject to the payment of such storage fee and such other conditions as may be specified in the by laws.
That being the position, this may be even an interim measure pending arrangements by.the Committee, for proper storage.
Even otherwise the storage by the traders in the Market Yards will be always paid for under rule 52(4).
There is, therefore, no substance in the fourth submission of the petitioner.
With regard to the last submission regarding invalidity of rule 76(1), we are not satisfied that the same is ultra vires section 40 of the Act.
Section 40 empowers the State Government to make rules for carrying out the purposes of the Act.
Rule 76(1) is well within the rule making power of the State Government under section 40(2), clause (xxvii).
Section 9(2) restricts the right to carry on trade except under and in accordance with a licence.
Section 17 provides for issuing or renewal of licences subject to the restrictions under the rules.
Section 9(2) and section 17 are not challenged before us.
Rule 76(1) prescribes the mode of sale that is to say by open auction under the rule making power under section 40 read with clause (xxvii).
The rule is not ultra vires section 40 of the Act.
It is said that prohibiting private sales by confining only to sale by open auction puts an unreasonable restriction on the right to trade of the petitioners.
If section 9(2) and section 17 are not challenged as invalid, it is not understood how rule 76(1) which is within the rule making power can be said to be unreasonable.
In order that the producers obtain the best price for their commodity, sale by open auction is prescribed under rule 76(1) lo fulfil one of the important purposes of the Act.
Sale by auction is a well known mode of sale by which the producers, for whose interest this Act has been made, can obtain the best price for their commodities.
The definition of sale and purchase to which our attention has been drawn by the petitioners do not run counter to the provisions for auction sale under rule 76.
It cannot by any stretch of imagination be held to be an unreasonable mode in the entire scheme of the Act.
The legislature is intervening to see that the producers get the maximum pecuniary return possible in their transactions and, as a necessary concomitant, eliminated the mode of private sale by individual negotiations resulting in malpractices.
Besides by the proviso to rule 76(1) this restriction is not allowed to operate in the case of retail sales.
There is, therefore, no substance in the submission that rule 76(1) violates the fundamental right of the petitioners under Article 19 (1) (g) of the Constitution.
Mr. Sen particularly drew our attention to two decisions of this Court.
The first is given in Lala Hari Chand Sarda vs Mizo District Council and Anr.
(1) That was a case where the Executive Committee of the Mizo District Council refused to renew the temporary licence issued to the appellant therein who was a non tribal trader under section 3 of the Lushai Hills District (Trading by non Tribals) Regulation, 1953.
This Court by majority struck down section 3 as (1) ; 385 violative of Article 19(1) (g) of the Constitution.
This decision is clearly distinguishable from the present case.
In that case there was no right of appeal to any superior authority against a refusal to grant or renew a ]licence and the non tribal trader had no remedy whatsoever against such an order.
This Court also observed in that case that "a perusal of the Regulation shows that it nowhere provides any principle or standard on which the Executive Committee has to act in granting or refusing to grant the licence" (emphasis added).
The second decision, is in Harakchand Ratanchana Benthia and Ors. etc.
vs Union of India and Ors.(1) This was a case under the Gold (Control) Act and Mr. Sen drew our attention to the expression 'suitability of the applicant" in section 27(6)(e) of the Gold (Control) Act which was held to provide no objective standard or norm and as such was held to be constitutionally invalid.
This Court while dealing with the objection to section 27 of the Gold (Control) Act which relates to licensing of dealers held as follows : "Section 27(6)(a) states that in the matter of issue or renewal of licences the Administrator shall have regard to the number of dealers existing in the region in which the applicant intends to carry on business as a dealer, But the word 'region is nowhere defined in the Act.
Similarly section 27(6)(b) requires the Administrator to have due regard to the anticipated demand, as estimated by him for ornaments in that region, but the expression anticipated demand ' is vague and incapable of objective assessment and is bound to lead to a great deal of uncertainty.
In the same way 'the expression 'Suitability of the applicant in section 27(6 ) (e) and 'public interest" in section 27 (6) (g) do not provide any objective standard or norm.
Further, the requirement in the section imposing the same conditions for the renewal of the licence as for the initial grant is unreasonable, as it renders the entire future of the business of the dealer uncertain and subject to the caprice and arbitrary will of the administrative 'autho rities.
Therefore, clauses (a), (b), (e) and (g) of section 27(6) are constitutionally invalid".
In the instant case we have already examined the two criteria laid down under rule 70(4) (i) and have held that they do not place any unreasonable restriction on the right of the applicants to obtain a licence.
By rule, 70(4)(i)(b) the Committee has to be satisfied that the applicant is a fit and proper person (upoyukta) to whom a licence may be granted.
This is not the same thing as the suitability simpliciter which this Court had to deal with in the Gold (Control) Act case.
The decision is, therefore, clearly distinguishable.
In the result all the applications fail and are dismissed.
The parties will pay and bear their own costs.
V.P.S. Petitions dismissed.
(1) [1970] (1) S.C.R.479.
| IN-Abs | The Uttar Pradesh Krishi Utpadhan Mandi Adhiniyam, 1964 as amended by U.P. Acts 25 of 1964 and 10 of 1970.
was enacted to provide for the regulation of the sale and purchase of agricultural produce, to protect the producers from exploitation and for the establishment, superintendence and control of markets in U.P.
Under section 5, the State Government is empowered to declare a particular area as market area and under section 7.
the principal market yard and sub market yards are declared.
Section 7(2) provides that no person shall in a principal market yard or sub market yard carry on business as a trader, broker, commission agent etc., in respect of specified agricultural produce except in accordance with the conditions of a licence obtained from he concerned market committee.
Sec. 13 provides for the constitution of the market committee and for representation on the committee from different sources.
Under section 17.
the committee has power to issue, renew, suspend or cancellicences.
Section 25 provides for appeals against orders of the committeeto the Director of Agriculture and section 32 for revision by the State Government Under section 16(2)(vii), the committee has to provide accommodation for storage.
40 enables the ' State Government to make rules Rule 70(4)(1)provides that the Committee may issue a licence to an applicant if it is satisfied.
(a) that the applicant is solvent and (b) that the applicant is a desirable person.
Rule 76(1) provides that every consignment of specified agricultural produce brought for sale into the principal or sub market yard shall be sold by open auction.
The petitioners who were traders or commission agents, dealing in agricultural produce, challenged the validity of the Act, and the rules made thereunder on the ground of violation of articles 14 and19(1)(g).
They contended that : (1) that constitution of the committee is prejudicial to their interests since.
it will have a perpetual majority of producers, (2) the entrustment of licensing to such a committee is an unreasonable restriction on their right to trade, (3) there is no guidance in the matter of grant of licences, the criteria mentioned in r. 70(4) being vague, (4) the requirement to provide storage space for the producers by the petitioners is an unreasonable restriction, and (5) r. 76(1) is ultra vires section 40 and also places an unreasonable restriction on the petitioners.
Dismissing the petitions, HELD : (1) Under section 13, the Committee is to consist of 23 members and out of, them only 10 are from the producers.
Therefore the submission is factually inaccurate as there is no question of a perpetual majority of producers.
[381G H] (2) There are no unreasonable features in the scheme of representation in the committee.
Under 8. 13, 8 producers are elected who may represent the 8 categories of agricultural produce mentioned in the schedule and two producers are nominated from the schedule castes by the Government, because, they may not get due representation in the election.
The performance of the duty of licensing by such a committee cannot prejudice the petitioners.
In fact, none of the petitioners has been refused a licence.
Though usually some governments] authority is charged with the duty of granting licences under various Acts, that does not prove that the duty cannot be property and impartially exercised by a Committee representing various interests which are 377 vitally interested in the trade.
of agricultural produce.
If in a particular case.
the action of the Committee is mala fide ' or otherwise objectionable such grievance can be properly dealt with.
[381H 382E] (3) It is not correct to say that there is no guidance in the Act in the matter of grant of license and that the two criteria provided by rule 70(4)(1) are vague.
[382E F] (a) The Committee which is entrusted with the duty of granting licences consists of people from different sources vitally interested in the marketing of agricultural produce, as well as Government officials.
It is a well represented Committee which is expected to know the object and purpose of the Act of ' which it is a creature.
There is sufficient guidance from the preamble and other provisions of the Act with which the members of the Committee would be familiar and conversant, for example, section 16 of the Act and the particulars in Forms XI and XIII.
for the application of a licence and Conditions of a licence.
With the help of Government officials in the committee there is no reason to think that the Committee will not function smoothly or to apprehend that licence would be refused arbitrarily.
There is also a limitation on the power of the Committee in that the Act insists that the Committee should record its reasons while refusing a licence.
Further, there is provision of appeal against the decision of the Committee and a further revision to the State Government.
[382F 383D] (b) One of the two criteria mentioned in r. 70(4)(i).
is solvency and the criterion on the score or 'bankruptcy is well known and cannot be said to be vague or indefinite.
As regards the second criterion, namely, that the applicant should be a desirable person the Act itself provides sufficient guidance to the Committee in the matter of deciding whether a particular applicant is or is not a proper person to hold the licence.
[383F H] (4) The requirement to provide a storage space is only an interim measure pending arrangements by the Committee for proper storage as required by section 16.
Under r. 52(4) storing of the specified agricultural produce shall be subject to the payment of such storage fee and other conditions as may be: specified in the bye laws.
Since the storage by the traders in the market yards will always be paid for under the rule there is no substance in the contention that the requirement is unreasonable.
[384A B] (5)(a Rule 76(1) is not ultra vires section 40 Section 9(2) restricts the right to carry on trade except under and in accordance with the licence_ and section 17 provides for issuing or renewal of licences subject to the restrictions under the rules, and these sections are not challenged.
Section 40 empowers the State Government to make rules for carrying out the purposes of the Act, and under section 40(2) (xxvii), r. 76(1) only prescribes open auction as the mode of sale.
[384B D] (b) The rule does not violate the fundamental right of the petitioners under article 19(1)(g).
[384G] The definitions of sale and purchase in the.
Act do not run counter to the provisions relating to auction sale under, the rule and, it Could not be field to be an unreasonable mode considered in the entire scheme of the Act.
in order that the producers may obtain the best price for their commodity, sale by open auction is prescribed under the rule to fulfil one of the important purposes of the Act.
The legislature is intervening to see that the producers get the maximum pecuniary return possible in the transaction and as a necessary concomitant eliminated the made of private sale by individual negotiation resulting in malpractices.
Besides, by the Proviso to the rule the restriction is not allowed to operate in the case of retail sales.
[384D G] Lala Hari Chand Sarda vs Mizo District Council and all) .
and Harakchand Ratanchand Banthia and ors.
vs Union of India and ors.
; , distinguished.
|
Appeal No. 1991 of 1971.
From the Judgment and, Order dated the 29th March, 1971, of the Bombay High Court and Bombay in Appeal No. 87 of 1970.
V.M. Tarkunde and Rameshwar Nath for the appellant K.S. Ramamurthy and B.R. Agarwal for the respondent.
The Judgment of the Court was delivered by RAY, C. J.
This is an appeal by certificate from the judgment dated 29th March, 1971 of the High Court of Bombay.
The appellant filed this suit on 2 September, 1964 in the High Court of Bombay and claimed six months salary in lieu of notice and gratuity for 16 years of service.
In the year 1965 the appellant asked for discovery by the respondent of documents relating to pension scheme for foreign employees.
The application for discovery was dismissed in the month of November, 1965.
On 16 December, 1969 the appellant took out a Chamber Summons for amendment of the plaint.
The proposed amendments were twofold.
The first set of amendment related to averments in support of the claim for gratuity which had already been alleged in the plaint.
553 The second set of amendment related to averments in support of a claim for Rs. 850 per month by way of pension as and from 1 February, 1964 during the life time of the appellant.
By an order dated 19 January, 1970 the appellant was allowed to amend the plaint in respect of the claim for gratuity.
The appellant 's proposed amendment in support of the claim for pension was refused.
By summons dated 27 April, 1970 the appellant sought an amendment of.
the plaint claiming Rs. 68,000 as damages in relation to his right to pension.
By an order dated 6 July, 1970 the appellant was allowed to amend the plaint as prayed for.
The respondent preferred an appeal against the order dated 6 July, 1970.
The High Court by judgment dated 29 March, 1971 allowed the appeal and set aside the order dated 6 July, 1970 allowing the amendment.
The appellant repeated the contentions which had been advanced before the High Court.
First, it was said that no appeal could lie against an order of amendment because it was not a judgment within the meaning of clause 15 of the Letters Patent.
Secondly, it was said that an order allowing the amendment was a discretionary cider.
Therefore, the appellate court should not have interfered with the discretion.
Counsel for the appellant submitted that 'judgment ' means a decision finally adjudicating the rights between the parties.
It was emphasised that a judgment would be a decision on substantive rights of parties. 'Amendment ' was submitted to be a procedural right.
Counsel for the appellant relied on the decision in Dayabhai vs Murrugappa Chettiar I. L. R. 13 Rang.
457 and Manohar vs Baliram I.L.R. 1952 'Nag. 471 in support of the proposition that 'judgment ' means and is a decree in a suit by which the rights of the parties in the suit are determined.
The locus classics is the decision of the High Court of Calcutta in Justice of the Peace for Calcutta vs Oriental Gas Company 8 Bengal L.R. 433 where Sir Richard Couch, C. J. said "We think that 'judgment ' means a decision which affects the merits of the question between the parties by determining some right or liability.
It may be either final or preliminary, or interlocutory, the difference between them being that a final judgment determines the whole cause or suit, and a preliminary or interlocutory judgment determines only a part of it, leaving other matters to be determined.
" This Court in Asrumati Debi vs Kumar Rupendra Deb Raikot & Ors. ; dealt with the question as to whether an order of transfer of a suit filed in the Jalpaiguri Court to the High Court to be tried in its Extraordinary Original Civil Jurisdiction was a judgment within the meaning of clause 15 of the Letters Patent.
it was held that an order for transfer of a suit is not a judgment within the meaning of clause 15 of the Letters Patent as it neither affects the merits of the 554 controversy between the parties in the suit itself nor terminates or disposes of the suit on any ground.
This Court in Asrumati Debi 's case (supra) said that a judgment within the meaning of clause 15 of the Letters Patent would have to satisfy two tests.
First, the judgment must be the final pronouncement which puts an end to the proceeding so far as the court dealing with it is concerned.
Second, the judgment must involve the determination of some right or liability though it may not be necessary that there must be a decision on the merits.
In this context this Court referred to observation of the Full Bench of the High Court of Madras in Tuljaram vs Alagappa I.L.R.
The test formulated by the Madras decision is not the form of the adjudication but its effect on the suit or proceeding in which it is made.
The Madras High Court said "if the effect is to put an end to the suit or proceeding so far as the Court before which the suit or proceeding is pending is concerned, or if its effect, if it is not complied with, is to put an end to the suit or proceeding, the adjudication is a judgment".
It may be stated here that the Madras High Court spoke of 'judgment ' on an application in a suit.
The decision of the Madras High Court in Tuljaram 's case (supra) was on an order for transfer of a suit under clause 13 of the Letters Patent.
This Court also noticed the view expressed by the Madras High Court in Tuljaram 's case (supra) that adjudication on an application, which is nothing more than a step towards obtaining a final adjudication in the suit, is not a judgment within the meaning of the Letters Patent.
In Asrumati Debi 's case (supra) this Court noticed the argument advanced that if an order refusing to rescind leave to sue granted under clause 12 of the Letters Patent was a 'judgment ' under clause 15 of the Letters Patent there was no difference in principle between an order of that description and an order transferring the suit under clause 13 of the Letters Patent.
This Court did not express any opinion excepting observing that if leave under clause 12 of the Letters Patent was rescinded, the suit would come to an end and if an order was made refusing to rescind the leave the result would be on a vital point adverse to the defendant and it would go to the root of the suit and become final and decisive against the defendant so far as the Court making the order was concerned.
In finding out whether any decision is a judgment within the meaning of clause 15 of the Letters Patent each case must be looked into, in order to find out as to whether there is a decision determining the right or liability of the parties affecting the merits of the controversy between the parties.
It is in that light that this Court in Asrumati Debi 's case (supra) described the order refusing to rescind leave to be within the category of a judgment as laid down in the Calcutta cases though no final opinion was expressed as to the propriety of that view.
The present appeal concerns an application for amendment of the plaint.
The suit was filed in the year 1964.
The application for amendment of the plaint in regard to damages for the right to pension was made in the year 1970.
An amendment, if allowed ', would relate 555 to the date of the institution of the suit.
The respondent contended before the trial Court entertaining the application for amendment of the plaint that the amendment should not be allowed inter alia on the ground that the alleged claim was barred by limitation in 1970.
The High Court in the present case relied on the decision of the High Court at Calcutta in M.B. Sarkar & Sons vs Powell & Co. A.I.R. 1956 Cal. 630.
In that case an amendment was allowed on Chambers Summons substituting in place of the original defendant which was described as a firm a defendant converted into a company in that name.
The company so proposed to be substituted complained that the amendment took away from it a valuable right which had accrued to it by efflux of time, and, therefore, the amendment should not be allowed.
The contention of the defendant was not accepted by the learned Chamber Judge.
The High Court on appeal set aside the order.
It was not held to be a case of mis description of the defendant.
A mis description of a party impleaded can arise when the party really intended to be impleaded had always been the same and such intention appeared clearly from the body of the plaint in spite of the inaccurate mis description in the cause title.
In such a case, it would not be adding a new party or substituting a new party for the original one, but perfecting the identity of the party originally impleaded clearing or rectifying the inaccurate description.
When the same person, whether an individual or a legal entity, remains the defendant but only the name is altered, it would be a case of mis description.
Where a new legal entity is substituted, it was held in the M. B. Sarkar case (supra) that substitution of a company for a firm would be a change of a substantial character affecting the right of a party.
The effect of the amendment in the M. B. Sarkar case (supra) was to substitute a new party for the party originally impleaded and the consequence was to take away from the new party so substituted his defence of limitation that a suit brought on the date of the amendment would be barred by time.
Chakravartti, C.J. in the M. B. Sirkar case (supra) said that an order for amendment of the plaint there decided a vital question concerning the merits of the case and the rights of the newly impleaded party and therefore became a judgment within the meaning of clause 15 of the Letters Patent.
The right to claim that an introduction of a cause of action by amendment is barred by limitation is founded on immunity from a liability.
A right is an averment of entitlement arising out of legal rules.
A legal right may be defined as an advantage or benefit conferred upon a person by a rule of law.
Immunity in short is no liability.
It is an immunity from the legal power of some other person.
The correlative of immunity is disability.
Disability means the absence of power.
The appellant in the present case because of the limitation of the cause of action has no power to render the respondent liable for the alleged claim.
The respondent has acquired by reason of limitation immunity from any liability.
The views of the High Courts at Calcutta and Madras with regard to the meaning of 'judgment ' are with respect preferred to the meaning of 'judgment ' given by the Rangoon and Nagpur High Courts.
556 We are in agreement with the view expressed by the High Court at Calcutta in the M. B. Sirkar case (supra) as to when an order on an application for amendment can become a judgment with in the meaning of clause 15 of the Letters Patent.
If an amendment merely allows the plaintiff to state a new cause of action or to ask a new relief or to include a new ground of relief all that happens is that it is possible for the plaintiff to raise farther contentions in the suit, but it is not decided whether the contentions are right.
Such an amendment does nothing more than regulate the procedure applicable to the suit.
it does not decide any question which touches the merits of the controversy between the parties.
Where, on the other hand, an amendment takes away from the defendant the defence of immunity from any liability by reason of limitation, it is a judgment within the meaning of clause 15 of the Letters Patent.
The reason why it becomes a judgment is that it is a decision affecting the merits of the question between the parties by determining the right or liability based on limitation.
It is the final decision as far as the trial court is concerned.
In finding out whether the order is a judgment within the meaning of clause 15 of the Letters Patent it has to be found out that the order affects the merits of the action between the parties by determining some right or liability.
The right or liability is to be found out by the court.
The nature of the order will have to be examined in order to ascertain whether there has been a determination of any right or liability.
The appellant made an application in December, 1969 for amendment of the plaint to claim pension.
Those amendments were disallowed by the learned Chamber Judge.
Four months thereafter the appellant sought to amend the plaint by adding certain paragraphs and those amendments were in relation to the appellant 's alleged claim for pension.
The appellant submitted that the second application for amendment in regard to the claim for a mortised amount of damages in relation to pension was not the same as the first application.
It was said on behalf of the appellant that if the learned Judge allowed the application the appellate court should not have interfered with the discretionary order.
The amendment order is not purely of discretion.
Even with regard to discretionary orders the appellate court can interfere where the order is insupportable in law or is unjust.
The High Court considered the second application for amendment to be a new claim based on the new set of facts which became barred on the date of the application for amendment.
In exceptional cases an amendment has been allowed where the effect is to take away from a defendant a legal right which has accrued to him by lapse of time, because the court found that consideration of lapse of time is out weighed by the special circumstances of the case.
(See Charan Das vs Amir Khan 47 I.A. 255).
The High Court rightly found that there were no special circumstances to entitle the appellant to introduce by amendments such claim.
For these reasons, the judgment of the High Court is upheld.
The appeal is dismissed with costs.
V.P.S. Appeal dismissed.
| IN-Abs | The appellant filed the suit against the respondent in 1964, on the original side of the High Court, claiming six months salary in lieu of notice and gratuity.
An application for amendment of the plaint in regard to damages for the right to pension was made in 1970.
The respondent contended that the amendment should not be allowed on the ground inter alia that the alleged claim was barred by limitation in 1970.
The trial Court allowed the amendment, but in appeal under Cl. 15 of the Letters Patent, the order was set aside.
The High Court considered the application for amendment to be a new claim based upon a new set of facts which became barred on the date of the application for amendment.
In appeal to this Court, it was contended that: (1) the order of the trial Court was not a judgment and hence not appealable under Cl. 15, and (2) the order was a discretionary order and the appellate Court should not have interfered with the exercise of discretion.
Dismissing the appeal, HELD : (1) A judgment within the meaning of Cl.
15 would have to satisfy two tests, (a) it must be the final pronouncement which puts an end to the proceeding so far as the Court dealing with it is concerned; and (b) it must involve the determination of some right or liability though it may not be necessary that there must be a decision on the merits.
[554 B] In finding out whether any decision is a judgment within the meaning of Cl. 15, each case must be looked into in order to find out whether there is a decision determining the right or liability of the parties affecting the merits of the controversy between the parties.
It is not the form but the nature of the order that has to be examined in order to ascertain whether there has been a determination of any right or liability.
If an amendment merely allows the plaintiff to state a new cause of action or to ask a new relief or to include a new ground of relief all that happens is that it is possible for the plaintiff to raise further contentions in the suit, but it is not decided whether the contentions are right.
Such an amendment does nothing more than regulate the procedure applicable to the suit and does not touch the merits of the controversy between the parties.
Where, on the other hand, an amendment takes away from the defendant the defence of immunity from any liability by reason of limitation, it is a judgment within the meaning of Cl. 15.
The reason why it becomes a judgment is that it is a decision.
affecting the merits of the question between the parties by determining the right or liability based on limitation.
It is the final decision as far as the Court is concerned.
The respondent, in the present case, has acquired, by reason of limitation, immunity from liability, and the appellant, because of the limitation of the cause of action, has no power to render the respondent liable for the alleged claim.
[554 B C, G., 555F H,556A C] (2) The order of the trial Court is not one purely based on discretion, and even with regard to discretionary orders the appellate Court can interfere where the order is unsupportable in law or is unjust.
The High Court was right in holding that there we 're no special circumstances to entitle the appellant to introduce the claim by amendment.
[556F] Asrumati Debi vs Kumar Rupendra Deb Raikot & Ors.
[1953] section C. R. 1159, followed.
Justice of the Peace for Calcutta vs Oriental Gas Company, 8 Bengal L. R. 433, Tuliaram vs Alagappa 1.
L. R. 35 Mad.
J., M. B. Sirkar & Sons vs Powell & Co. A.I.R. 1956.
630, approved.
Charan Das vs Amir Khan 47 1.
A. 255 referred to.
Dayabhai vs Murugappa Chettiar I. L. R. 13 Rang.
457 and Manohar vs Bailram I.L. R. , overruled.
551 For the appellant: On the first point, an order allowing amendment is not a "Judgment" within the meaning of clause 15 of the Letters Patent.
Divergent views have been taken by various High, Courts as to the meaning of word "Judgment".
This question came before this Court also in the case of 'Asrumati devi ' (1953) SCR II 59 where a question arose whether an order for transfer of a suit under clause 13 of the Letters Patent (Calcutta High Court) is not a "Judgment" within the meaning of clause 15 of the Letters Patent; and this Court took the view that an order of this character could not be regarded as a 'Judgment ' but it did not determine the true meaning and scope of the word "Judg ment", nor did it resolve a wide divergence of judicial opinion on the subject.
An order to be a 'Judgment ' in Cl.
15 of the Letters Patent must either determine some right or liability which is in controversy in the suit either partially or wholly; or it should terminate the proceedings even without deciding any right or liability in controversy.
Any wider definition of the word 'Judgment ' will make all orders appealable irrespective of their nature and irrespective of the proceeding in which they are passed.
An interim order which does not determine any substantive right or liability in controversy (i.e. does not grant or refuse any part of the relief prayed for in a suit), but decides a procedural right, however important, is not a 'judgment '.
An order allowing the amendment does not decide any substantive right or liability.
It only permits a claim to be agitated and does not decide the claim and, therefore, the order of the single judge was not appealable.
Justice of the Peace for Calcutta vs The Oriental Gas Co. 8 Bengal L.R. 433, Tuljaram vs Alagappa Chelter I.L.R. 35 Mad., I;I.L.R. Rang. 457 and I.L.R. referred to.
On the second point, it is settled law that an appellate Court will not interfere with such an order passed by the trial Court in exercise of its discretion without exceeding the limits, of its power, unless it acted perversely or unless the view taken by it is clearly wrong.
The amendment sought for became necessary as on the true and full dis closure of the terms of Pension Rules, the Appellant was found to be entitled to damages in lieu of pension.
The principle of res judicata did not apply as the earlier order of the Single Judge allowing the first amendment application partly on 19 1 1970 did not deal with the claim for mortised damage now sought to be added.
For the Respondent: There is no need to go into the larger question because judged by the tests laid down by all the High Courts including the Nagpur High Court, the decision of the trial Court in the instant case allowing the amendment, is a judgment within the meaning of Cl. 15 of the Letters Patent.
By reason of the amendment of the plaint, the claim made in the amended plaint dates back to the date of the plaint.
The application for amendment was filed in April, 1970 and by that time, the claim for pension was clearly barred by limitation.
By allowing amendment, the valuable right which had accrued to the defendant to resist the claim for pension, has been lost the defendants cannot therefore, once the amendment is allowed raise the plea of limitation.
There is a clear negation of valuable right of 552 the defendant which is undoubtedly a determination of right or liability as between the two parties.
There is difference between the amendment which does not take away the right of the defendant to plead limitation and an amendment which affects the rights of the defendants to raise the plea of limitation 1946 Calcutta 630; 1946 Bom. 361; AIR 1972 Bombay 27 ; 1967 (2) M.L.J. (FB) referred to.
35 Madras at p. 9 lays down the law that the fact that the order is one allowing the amendment, is not decisive and that if in any proceeding, the defendants could have succeeded by the Court passing an order as prayed for, that itself is sufficient to make a decision a judgment and the fact that the defendant 's contention was negatived i.e. an order prayed by him was not passed; does not make the decision any the less a judgment under Cl.
15. 29 Bombay 249, 253 in ; , 1168.
70 Ca.
W.N. 670; , referred to.
By allowing the amendment, the right is conferred upon the plaintiff and it carries with it the fastening of liabilities upon the defendants.
The decision on a vital points adverse to the defendant which goes to the root of the matter and which becomes final and conclusive, so far as the court passing of the order is concerned, would amount to a Judgment because the order is to the effect that the plaintiff is entitled to make the claim negativing the right of the defendants which has accrued to him by lapse of time.
|
Appeal No. 2515 of 1973, (From the judgment and Decree dated the 11th/12th July, 1972 of the Gujarat High Court in L.P. A. No. 40 of 1969.) section T, Desai and H.S. Parihar for the appellant.
M.C. Bhandare, P. H. Parekh and Manju Jetley for respondent No. 1. 536 The Judgment of the Court was delivered by BEG, J.
This appeal, after certification by the Gujarat High Court of fitness of the case for it, I rises in the following circumstances: Uttamram Mayaram Thakar, a flourishing lawyer, made a will, on 10 6 1945 and died childless on 20 8 1946.
His widow, Bai Ruxmani, obtained, under the will, inter alia, certain shares the right and title to which are disputed before us.
On 6 3 1948, Bai Ruxmani executed a registered gift deed purporting to donate the disputed shares in various limited companies, of which details were given in the gift deed, to her brother, Vasudev Ranichandra Shelat, the appellant before us (hereinafter referred to as "Shelat").
On 18 4 1948, Bai Ruxmani also expired.
But, before she died, she had signed several blank transfer forms,apparently intended to be filled in by donee so as to enable him.
to obtain the transfer of the donated shares in the registers of the various companies and share certificates in his own name.
She had put her signatures in the correct places showing that she meant sign as the transferor of the shares.
The shares could not, however, be transferred in the registers of the various companies, in accordance with the relevant provisions of Company law, before the lady 's death.
Therefore, the respondent before us, Pranlal Jayanand Thakar, a nephew of the late Uttamram Mayaram Thakar, disputed the claim of the appellant Vasudev Ramchandra Shelat to these shares in an administration suit which came up before a learned Judge of the Gujarat High Court in second appeal together with other matters.
The learned Single Judge held that Shelat was entitled to the shares covered by the registered gift deed to which the blank transfer forms could be related but not to others said to have been orally gifted with which we are not concerned here.
The learned Judge having granted leave to file a Letter 's Patent Appeal, a Division Bench of the Gujarat High Court, which considered the rival claims, reversed the decision of the learned Single Judge even with regard to the shares covered by the registered gift deed on the ground that the gift was incomplete for failure to comply with the formalities prescribed by the Companies ' Act for "transfer" of shares.
It held that there was no equity in favour of Shelat so that he may claim a right to complete what was left incomplete by the donor in her lifetime even though there could be no doubt that Bai Ruxmani had intended to donate the shares to Shelat.
We think Mr. S.T. Desai, learned Counsel for the appellant Shelat, rightly pointed out that every material finding on questions of fact, given in favour of the appellant, was upheld by the Division Bench.
After indicating the terms of the gift deed, the Division Bench held: "Thus, it is undoubtedly true that the deed of gift discloses a clear and unequivocal intention on the part of Bai Ruxmani that Vasudev should become the owner of these shares and he should for all future time enjoy the fruits thereof.
it is a well settled position in law that unless the gift it completed as required by law, mere intention to make a gift cannot pass any title to the donee and does not make the 537 donee the owner of the property gifted by the donor.
The registered gift deed itself cannot create any transfer and so it was not competent to the donor to divest the title in her merely by the execution of the gift deed.
She was required to execute the regular transfer deeds or instruments of transfer in favour of Vasudev Shelat and hand them over to the donee, Vasudev Shelat, together with the share certificates.
" It went on to say: "The circumstances as they clearly emerge and the facts as found by the Courts below, go to show that the deed of gift was executed on March 6, 1948, and, at the same time, the re levant share certificates were handed over by the donor to the donee; and, sometime between March 6, 1948, when the gift deed was executed, and April 18, 1948, when Bai Ruxmani died blank transfer forms signed by Bai Ruxmani were handed over by Bai Ruxmani to vasudev Shelat, the donee.
" The appellant 's submissions, on facts found, may be summarised as follows: (1) As between the donor and the donee the transfer was complete with the registration of the gift deed; and, as there was a registered document, even delivery of share certificates to the donee was not necessary in view of Section 122 .
(2) Assuming, without conceding that the donor had to do something more than to execute a registered document, this too was done when the shares certificates and the signed "blank transfer" forms were handed over to the donee by the donor.
It did not matter if the name of the donee and other particulars are wanting in these blank forms.
All necessary particulars of shares involved were expressly mentioned in the gift deed which specifies and identifies each individual share meant to be donated.
The gift deed and the signed blank forms had to be read together.
The donor had done all that reasonably lay with in her power to complete the donation.
(3)The conduct of the donor, in handing over the share certificates to the donee and the blank transfer forms, read in the context of the expressly laid down intentions of the donor in the gift deed, raised the presumption of an implied authority to fill in the details and to submit to the companies concerned the forms given by the donor to Shelat before her death.
(4) There was no evidence whatsoever in the case to repel the irresistible inference of an implied authority given to the donee to fill in and submit the transfer forms so as to obtain the necessary entries in the registers of the various companies concerned.
(5) The Division Bench had, after giving all the necessary findings of fact in favour of the appellant, misdirected itself by resorting to the doctrine that there is no equity to complete an incomplete transaction, as there is when a bonafide purchaser for value comes before the Court.
538 There was no question of any equity involved here.
The simple question was one of fact.
Did the inference of an implied authority of the donee to fill in the forms and take other steps necessary to get his name entered in the registers of shareholders arise or not? Instead of considering and deciding whether such an inference arose, the Division Bench had failed to decide the real issue on the erroneous view that equity debars it from inferring an implied authority because the donee, unlike a bona fide purchaser for value, had paid nothing for the rights he could get from the donor.
All that could be urged on behalf of the respondent may be summed up as follows : (1) The facts found make out, at best, an intention of Bai Ruxmani to donate but not the completion of a donation required by law for divesting the donor of interest in the property under consideration which consisted of shares.
(2) Although shares are goods, as defined by the Sale of Goods Act, yet, they are 'goods ' of a special kind.
Their transfer is not completed merely by the execution of a registered document or by delivery but the correct mode of transfer is determined by the character of these "goods" Sec.
123 of the lays down only a general mode of transfer by gift for goods in 'general but not for the transfer by gift of shares which are a special type of 'goods ' capable of transfer only in accordance with a special mode prescribed by the Companies Act of 1913, which was applicable at the relevant time.
In other words, an adoption of the prescribed form of transfer is of the essence of a transfer for all purposes and not merely as between the shareholder and the company concerned.
(3) Sections 122 & 123 of the had to be read harmoniously with Sections 28 and 34 of the Companies Act, 1913.
(4) Since material portions of the transfer form given in regulation 19 of Table A of the first Schedule of the Companies Act of 1913 were never filled in, the doctrine of "substantial compliance" with the required form could not come to the aid of the appellant.
(5) The gift deed itself does not empower the donee to take any of those steps which remained to be taken to complete the 'transfer ', so that the doctrine of implied authority would be excluded by the ex.
press terms of the gift deed which not only do not confer any such authority Upon the donee but indicated that the donor was to take the necessary steps herself.
(6) Inasmuch as acceptance of the gift "during the life time of the donor" is a condition precedent to the validity of the gift as a transaction, and the appellant Shelat did not apply for the transfer of shares, so as to indicate his acceptance of the gift before the dono died, the purported donation was frustrated by reason of Sec.
122 of of the .
539 (7) Even if we were to assume that the facts proved disclosed that the appellant donee was armed with an implied authority to obtain a transfer, yet that authority not having been acted upon during the life time of the donor, lapsed with the donor 's death.
The result was that the donation, even if intended, was imperfect or infructuous in the eye of law and could not be perfected or completed.
Equity does not aid a merely purported donee who has given no consideration to obtain any right.
In other words, equitable considerations would not be irrelevant in deciding the question before us.
(8)Even apart from equity, under the law of agency, found in sec.
201 of our Contract Act, the Principal 's death terminates the agency, so that the doctrine of implied authority does not help the appellant.
(9) Section 202 of the Contract Act could not apply to a case where the subject matter of the alleged agency is the taking of steps to complete a transfer and not the rights which could only accrue after the necessary steps are taken.
Hence, the appellant donee could not be said to have an interest in the "subject matter of the agency" which is distinct from rights which could have arisen if the object of the agency had been fulfilled.
(10) Section 202 of the Contract Act could apply to a case where an agent has an actual or existing interest in the subject matter of the agency.
Even if the subject matter of the agency could be said to be "Property", consisting of shares, there could be no question of applying Section 202 of the Contract Act before an " 'merest" in the shares arose.
Such "interest" could only arise after a completed transfer.
(11) Section 202 of the Contract Act contemplated cases of termination of agency in ways other than death.
It meant that, so long as a Principal is alive, he could not terminate an agency so as to injure the interests of the agent in "the subject matter of the agency".
But, in the case of the death of the Principal, the relationship terminated ipso facto or automatically by death.
(12) A resort to the very concept of agency in this case presupposes that some interest of the Principal or the donor in the property said to be donated continued, or, in other words, the assumption behind it was that the donation of shares was not complete in the eye of law.
Its completion was not possible after the death of the donor.
We think that questions to be really decided in the case before us have tended to become needlessly clouded by references to statutory provisions and to doctrines or concepts which really operate in separate and distinct fields of their own.
It is true that the relevant provisions of the and the Companies Act must be interpreted harmoniously.
But, this certainly does not mean that a provision of one Act could be nullified by any provisions of the other Act.
It means that the provisions of the two Acts should be read consistently with each other so far as it is reasonably possible I to do SO.
540 We think that this end can be best achieved here by examining the objects and the subject matter, of each enactment and by viewing each relevant provision as a limb of an integrated whole meant to serve the underlying purposes.
In this way, their separable spheres of operation will be clarified so as to avoid possibilities of conflict between them or any unnecessary overflow of what really appertains to one field into another.
No doubt the is not exhaustive.
It does not deal with every kind of transfer of property which the law permits.
Nor does it prescribe the mode for every legally recognised transfer.
Nevertheless, it is an enactment meant for defining certain basic types of transfer and it lays down the requirements both of substance and of form for their legal recognition and effectiveness.
Section 5 of this Act gives a wide connotation to "transfer of pro perty".
All that it requires is that the transferor must be living at the time of the transfer recognised by the Act.
Section 6 of the Act lays down that "property of any kind may be transferred" subject to certain exceptions.
Shares in a company are certainly a form of property.
Section 28 of the Companies Act, 1913, says that they "shall be movable property, transferable in the manner provided by the articles of the company".
Both sides accept as correct the view of the Division Bench of the High Court that the shares are "goods" within the meaning of the Sale of Goods Act.
The point which, however, deserves to be noted here is that wide definition of "property" in Section 6 of the Transfer.
of Property Act includes not merely shares as transferable, movable property, but would cover, as a separable form of property, a right to obtain shares which may be antecedent to the accrual of rights of a shareholder upon the grant of a share certificate in accordance with the articles of association of company.
In M.P. Barucha & Anr.
vs V. Sarabhai & Co. '& Ors.(1) which was a case of handing over share certificates together with blank signed transfer forms, the Privy Council said (at p. 97 98): "But" further, there seems to their Lordships a good deal of confusion arising from the prominence given to the fact that the full property, in shares in a company is only in the registered holder.
That is quite true.
It is ture that what Barucha had was not the perfect right of property, which he would have had if he had been the registered holder of the shares which he was selling.
The company is entitled to deal with the shareholder who Is on the register, and only a person who is on the register is in the full sense of the the word owner of the share.
But the title to get on the register consists in the possession of a certificate, together with a transfer signed by the registered holder.
This is what Barucha had.
He had the certificates and blank transfers, signed by the registered holders.
It would be an upset of all Stock Exchange transactions if it were suggested that a broker who sold shares by general description (1) 53 Indian Appeals P. 92 @ P. 97 98.
541 did not implement his bargain by supplying the buyer with certificates and blank transfers, signed by the registered holders of the shares described.
Barucha sold what he had got.
He could sell no more.
He sold what in England would have been chooses in action, and he delivered chooses in action.
But in India, by the terms of the Indian Contract Act, these chooses in action are goods.
By the definition of goods as every kind of movable property it is clear that not only registered shares, but also this class of chooses in action, are goods.
Hence, equitable considerations not applicable to goods do not apply to shares in India.
" Thus, we find that, in Barucha 's case (supra), a distinction was made between "the title to get on the register" and "the full property in the shares in a Company., ' The first was held to have been acquired by mere delivery, with the required intention, of the share certificate and a blank form signed by the transferor.
The second is only obtained when the transferee, in exercise of his right to become a shareholder, gets his name on the register in place of the transferor.
This antecedent right in the person to whom the share certificate is given with a signed blank transfer form under a transaction meant to confer right or title upon him to become a shareholder, is enforceable so long as no obstacle to it is shown to exist in any of the articles of association of a company or a person with a superior right or title, legal or equitable does not appear to be there.
We think that Section 6 of the Justifies such a splitting up of rights constituting " property" in shares just as it is well recognised that rights of ownership of a property may be split up into a right to the "corpus" and another to the "usufruct" of the property and then separately dealt with.
122 of the defines a ",gift".
its substantial requirements are : (1) the donor must transfer "property", which is the subject matter of the gift, voluntarily and without consideration; (2) and, the donee must accept it during the life time of the donor or while the donor 's competence to give exists.
Section 123 of the prescribes the mode of transfer by gift.
It lays down that "the transfer may be effected either by registered instrument signed by the donor and attested by at least two witnesses or by delivery".
No special mode of delivery is specified.
On the other hand, it is indicated that the delivery "may be made in such a way as the goods sold are delivered".
In the case before us, the registered document was signed by the donor as "the giver" as well as by the donee as "the acceptor" of the gift, and it is attested by six witnesses.
In it, the donor specified and gave particulars of the shares meant to be gifted and undertook to get the name of the donee put on to the registers of the companies concerned.
The donor even said that she was, thenceforth, a trustee for the benefit of the donee with regard to the income she may get due to the fact that her name was still entered in the registers of the companies concerned as a shareholder.
The donor delivered the registered gift deed together with the share certificates to the donee.
We 542 think that, on these facts, the donation of the right to get share certificates made out in the name of the donee became irrevocable by registration as well as by delivery.
The donation of such a right, as a form of property, was shown to be complete so that nothing was left to be done so far as the vesting of such a right in the donee is concerned.
The actual transfers in the registers of the companies concerned were to constitute mere enforcements of this right.
They were necessary to enable the donee to exercise the rights of the shareholder.
The mere fact that such transfers had to be recorded in accordance with the company law did not detract from the completeness of what was donated.
We think the learned Counsel for the appellant rightly contended that, even in the absence of registration of the gift deed, the delivery of the documents mentioned above to the donee with the clear intention to donate, would be enough to confer upon the donee a complete and irrevocable right, of the kind indicated above, in what is movable property.
He relied upon : Kalyanasundaram Pillai vs Keruppa Mooppanar & Ors.(1); Venkatsubba Shrinivas Hegde vs Subba Rama Hegde;(2) Firm Sawan Mat Gopi Chand vs Shiv Charan Das(3).
The requirements of form or mode of transfer are really intended to ensure that the substantial requirements of the transfer have been satisfied.
They subserve an object.
In the case before us, the requirements of both Section 122 and Section 123 of the were completely met so as to vest the right in the donee to obtain the share certificates in accordance with the provisions of the Company law.
We think that such a right is in itself "property" and separable from the technical legal ownership of the shares.
The subsequent or "full rights of ownership" of shares would follow as a matter of course by compliance with the provisions of Company law.
In other words, a transfer of " 'property" rights in shares, recognised by the , may be antecedent to the actual vesting of all or the full rights of ownership of shares and exercise of the rights of shareholders in accordance with the provisions of the Company law.
The Companies Act of 1913 was meant "to consolidate and amend the law relating to trading companies and other associations".
It is concerned with the acts and proceedings relating to the formation, running, and extinction of companies, with rights, duties, and liabilities of those who are either members or officers of such companies, and of those who deal with companies in other capacities.
Its subject matter is not transfer of property in general.
It deals with transfers of shares only because they give certain rights to the legally recognised shareholders and imposes some obligations upon them with regard to the companies in which they hold shares.
A share certificate not merely entitles the shareholder whose name is found on it to interest on the share held but also to participate in certain proceedings relating to the company (1) 54 I. A. 89.
(2) ILR (3) AIR 1924 Lab.
543 concerned.
It is for this purpose that Section 34 of the Companies Act, 1913 enables the making of "an application for the registration of the transfer of shares in a Co. . either by the transferor or the transferee".
A share certificate is a prima facie evidence, under Sec. 29 of the Act, of the title to a share. 'Sec.
34 of the Act does not really prescribe the mode of transfer but lays down the provisions for "registration" of a transfer.
In other words, it presupposes that a transfer has already taken place.
The manner of transfer of shares, for the purposes of Company law, has to be provided, as indicated by Sec. 28, by the articles of the Company, and, in the absence of such specific provisions on the subject, regulations contained in Table 'A ' of the 1st Schedule of the Companies Act apply.
Table 'A ' of the 1st Schedule to the Companies Act of 1913 gives regulation 19 as follows "19.
Shares in the company shall be transferred in the following form, or in any usual or common form which the directors shall approve : 1, A. B. of in consideration of the sum of rupees paid to me by C. D. of (hereinafter called "the said transferee"), do hereby transfer to the said transferee the share (or shares) numbered in the undertaking called the Company, Limited, to hold unto the said transferee, his executors, administrators and assigns, subject to the several conditions on which I held the same at the time of the execution thereof, and I (the said transferee) do hereby agree to take the said share (or shares) subject to the conditions aforesaid.
As witness our hands the day of Witness to the signatures of, etc.
" Apparently, the form given here is only for sales.
In the case of a gift the more general provisions of regulation 18 would apply.
This regulation says : "The instrument of transfer of any share in the company shall be executed both by the transferor and transferee, and the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of members in respect thereof.
" We find from the gift deed that both the donor and the.
donee have signed the document, under two headings respectively : "giver of the gift" and "acceptor of the gift".
Hence, we think that the broadly indicated requirements of regulation 18 were also complied with by the contents 'of the gift deed.
It is immaterial that the gift deed deals with a number of items so long as the requirements of regulation 18 are fulfilled.
After all, the observance of a form, whether found in the or in the Companies Act, is meant to serve the need of the substance of the transaction which were undoub tedly shown to have been completely fulfilled here.
There is nothing in regulation 18 or anywhere else in our Company law to indicate that, 544 without strict compliance with some rigidly prescribed form the transaction must fail to achieve its purpose.
The subservience of substance of a transaction to some rigidly prescribed form required to be meticulously observed savors of archaic and outmoded jurisprudence.
Buckley on the Companies Acts (XIII Edn.
p. 813) was cited before us for the proposition that "non registration of a transfer of shares made by a donor does not render the gift imperfect".
Considerable argument was advanced by both sides on the correct interpretation of the leading English case mentioned there : Re Nose, Midland Bank Executor & Trustee Co. Ltd. vs Rose,(1) where Jenkins J., after an exhaustive discussion of the English case law on the subject, held that when a testator had done everything that lay in his power to divest himself of his Fights in preference shares "completion of the legal title by registration could only be the act of a third party which did not affect the efficacy of the gift of shares inter vivos".
The Court of Appeal upheld this decision in : In Be Rose V. Inland Revenue Commissioners.(2) It held that "the deceased was in the position of.
a trustee of the legal title in the shares for the transferees", pending the entry of the names of the donees in a company 's register and the issue of share certificates to them.
In the case before us, we find that Bai Ruxmani had actually stated in the gift deed that her position, vis a vis the donee, who had accepted the gift, was that of a trustee for the benefits received by her from the gifted shares until the completion of the legal formalities so that appropriate entries are made in ' the registers of companies concerned and fresh share certificates are issued to the donee.
We, therefore, think that this case helps the appellant.
In M/s.
Howrali Trading Co. Ltd. vs The Commissioner of Income tax, Calcutta(3), considering a case of blank transfers, Hidayatullah J., speaking for this Court, said (at p. 453) : "In such blank transfers, the name of the transferor is entered, and the transfer deed signed by the transferee, who, if he so chooses, completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share.
The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable.
of course, between the transferor and the transferee, certain equities arise even on the execution and handing over of a blank transfer ', and among these equities is the right of the transferee to claim the dividend declared and paid to the transferor who is treated as a trustee on behalf of the transferee.
These equities, however, do not touch the company, and no claim by the transferee whose name is not in the register of (1) (2) [1932] (1) Ch.
D. 499.
(3) [1959] Supp.
(2) SCR 448 @ 453.
545 members can be made against the company, if the transferor retains the money in his own hands and fails to pay to it to him.
" This case also makes a distinction between an antecedent right and title of the transferee under a blank transfer and the fully blossomed rights and title of such a transferee after the due registration of a transfer.
Another case cited before us was : R. Subba Naidu vs Commis sioner of Gift Tax, Madras,(1) where a distinction was made between a transfer of the antecedent right to the shares which operated with full force between a donor and the donee, "notwithstanding that, vis a vis the company, the donor continued to be holder of the shares in the absence of transfer of shares".
In other words, the fields of operation of the provisions of Sections 122 and 123 of the and the provisions of the Companies Act 1913 were different.
Each had different objects and legal consequences.
The Companies Act did not prevent the completion of a gift of the right to obtain the shares which could, in common parlance or loosely speaking, be spoken of as a gift of shares themselves even before the gift is acted upon so that the donee obtains share certificates in his own name.
The could not enable the donee to exercise the rights of a shareholder, vis a vis the company, until a transfer of shares is made in accordance with the Company law.
other cases cited on behalf of the appellant, which we will only mention without discussion, were 1.
Colonial Bank vs Hepworth(2); 2.
In Re.
Tahiti Cotton Company ex parte Sargent(3); 3.
In Re. Letheby & Christopher, Limited(4); 4.
In the matter of Bengal Silk Mills Co. Ltd.(5); 5.
The Bank of Hindustan Ltd. & Ors.
vs Kowtha Suryanara yana Rao & Ors.(6); 6.
Arjun Prasad &.Ors.
vs Central Bank of India Ltd. (7); 7.
Benode Kishore Goswani vs Ausutosh Mukhopadhya & Anr.(8).
Learned Counsel for the respondent cited the following passage from the Palmer 's Company Law (21st edition 1968, p. 334).
A transfer is incomplete until registered.
Pending registration, the transferee has only an equitable right to the shares transferred to him.
He does not become the legal owner until his name is entered on the, register in respect of these shares." (1) [1969] (Vol.
(2) (3) [1873] (17) Equity Cases 273@ 279.
(4) , (5) AYR @ 464.
(6) RR @ 1072.
(7) AIR 1956 Pat.
(8) 546 This statement of the law in England is correct.
The transferee, under a gift of shares, cannot function as a shareholder recognised by company law until his name is formally brought upon the register of a company and he obtains a share certificate as already indicated above.
indeed, there may be restrictions on transfers of shares either by gift or by sale in the articles of association.
Thus" we find in Palmer 's Company Law (at p. 336) : "There is nothing to limit the restrictions which a company 's articles may place on the right of transfer.
The articles may give the directiors power to refuse to register a transfer in any specified cases, for instance, where calls are in arrear, or where the company has a lien on the shares and some such provisions are usually inserted.
Thus article 24 provides that the directors may decline to register any transfer of a share (not being a fully paid share) to a person of whom they do not approve, and may also decline to register any transfer of shares on which the company has a lien.
But the articles in many cases go far beyond this.
They may prohibit, for example, the transfer of a share to any person who is not a member of a specified class, or provide, as they often do in private com panies, that before transferring to an outsider the intending transferor must first offer the shares to the other members, and give them a right of pre emption.
Such provisions, though permanent, do not contravene the rule against perpetuities.
" In the type of cases contemplated above, where there are special restrictions on the transfer of shares imposed by the articles of association, the difficulty or defect is inherent in the character of such shares.
In such cases, the donee or purchaser cannot get more than what the transferor possesses.
Therefore, in such cases, it is possible to hold that even the right and title to obtain shares, which we have viewed as separable from the legal right and title to function as a shareholder, is incomplete because of a defect in the nature of shares held due to some special restrictions on their transferability under the articles of association of the company concerned.
But, such is not shown to be the case at all with any of the shares which formed the subject matter of the gift in favour of Shelat.
Hence, in our opinion, cases which deal with inchoate rights to shares do not assist the respondent because at least a gift of the right to obtain the transfer of shares in the books of the companies concerned was shown to be complete on the terms of the gift deed of Bai Ruxmani coupled with the handing over of the share certificates and the subsequent signing of the blank transfer forms.
It was not a ease of a bare expression of an intention to donate.
The donor had done everything which she could reasonably be expected to do to divest herself of her rights in the shares donated.
Ireland vs Hart '(1) relied upon by the respondent, was a case in which a prior equitable title of a wife, for whom the husband was a (1) [1902] (1) C.D. p. 522 @ 529.
547 trustee, took precedence over the claim of a subsequent mortgagee.
This case was cited in Palmer 's Company Law as an instance of how delay in registration may endanger the claims of a transferee when some already existing prior equity comes to light In upholding the wife 's claim of a prior equitable right the Court said (at p. 529) : "It is established by Societe Generale de Paris vs Walker (11 App.
Case 20), Roots vs Williamson ; and Moore vs North Western Bank [1891(2) Ch.
599] that, where the articles are in the form in which they are in the present case, a legal title is not acquired as against an equitable owner before registration, or at all events until the date when the person seeking to register has a present absolute and unconditional right to have the transfer registered.
I am not called upon to define the meaning of a present absolute and unconditional right, but, as it appears to me, I am not sure that anything short of registration would do except under very special circumstances.
At all events, I am of opinion that in this case, prior to the date of the injunction, the defendant Hart had not a 'present absolute and unconditional right ' to the registration of the transfer of these shares, and that the prior equitable right of the plaintiff, Mrs. Ireland, must prevail." Thus, what was disputed there was the right to obtain registration of a transfer of shares.
The husband 's power to mortgage was itself circumscribed by his position as a trustee.
It was also pointed out in Palmer 's Company Law (at p. 334) "It has never been clearly decided in what circumstances the `present, absolute, unconditional right to have the transfer registered ' to which Lord Selborne refers arises.
It is thought that in many instances the test is that indicated by Jenkins J. in Re. Rose. 'I was referred on that to the well known case of Milroy vs Lord and also the recent case of Re. Fry, Chase National Executors & Trustees Corpn.
vs Fry.
Those cases, as I understand them, turn on the fact that the deceased donor had not done all in his power, according to the nature of the property given, to vest the legal interest in the property in the donee.
In such circumstances it is of course, well settled that there is no equity to complete the imperfect gift.
If any act remained to be done by the donor to complete the gift at the date of the donor 's death the court will not compel his personal representatives to do that act and the gift remains incomplete and fails.
In Milroy V. Lord the imperfection was due to the fact that the wrong form of transfer was used for the purpose of transferring certain bank shares, The document was not the appropriate document to pass any interest in the property at all.
In Re Fry the flaw in the transaction, Which was a transfer or transfers of shares in a certain company, 548 was failure to obtain the consent of the Treasury which in the circumstances surrounding the transfers in question was necessary under the Defence (Finance Regulations) Act 1939, and, as appears from the head note, what was held was that the donor 's executors ought not to execute confir matory transfers.
In this case, as I understand it, the testator had done everything in his power to divest himself of the shares in question to Mr. Hook.
He had executed a transfer.
It is not suggested that the transfer was not in accordance with the company regulations.
He had handed that transfer together with the certificates to Mr. Hook.
There was nothing else the testator could do.
Therefore it seems to me that the present case is not in pari materia with the two cases to which I have been referred.
The real position, in my judgment, is that the question here is one of construction of the will.
The testator says "if such preference shares have not been transferred to him previously to my death.
" The position was that, so far as the testator was concerned, they had been so transferred.
" Respondent 's learned Counsel also relied on Re Fry, Chase National Executors & Trustees Corpn.
Ltd. vs Fry & Ors.(1) which has been referred to by Jenkins J. in the passage quoted above.
In that case, apart from other distinguishing features, the flaw in the purported transfer was that it contravened the Defence (Finance Regulation) Act, 1939, which prohibited an acquisition of interest in the shares without a licence from the Treasury.
Hence, the purported transfer was really illegal.
No such illegality is shown to exist in the case before us.
Respondent 's learned Counsel cited Amarendra Krishna Dutt vs Monimunjary Debi, (2) where, after a husband had executed a document in favour of his wife, the parties had done nothing to get the transfer registered for nearly 2 years during which the dividend was received sometimes by the wife and sometimes retained by the husband with the permission or implied consent of the wife.
The Court held that the purported gift being an intended "transfer" only could not operate as a "declaration of trust".
Another ground for the decision was that "the disposition of the shares failed as being imperfect voluntary gift".
Here, the Calcutta High Court purported to follow Milroy vs Lord, (3) and, Richards vs Delbridge(4).
No such facts are present in the case before us.
Moreover, we seriously doubt the correctness of this decision of the Calcutta High Court.
It seems to conflict with the law declared in the cases cited by the appellant which we approve.
Another case relied upon by the respondent was: The Bank of Hindustan Ltd. V. Kowtha Suryanarayana Rao & Ors.
(supra), where the Court refused,.
to direct rectification of a register of member s (1) (2) ILR (3) ; (4) 1874 LR.
18 Eq.
549 because the articles of association vested an absolute discretion in the company to recognise or refuse to recognise a transfer.
The Company 's consent to a transfer had been refused because the company did not accept the correctness of the form of transfer deeds.
In other words, this was a case in which the provisions of articles of association stood in the way of rectification of the register.
Such is not the case before us.
The result is that We do not think that the respondent has made out a case for defeating the clearly expressed intentions of the donor coupled with the authority with which the donee was armed by reason of the signed blank transfer forms.
We think that the implied authority was given with regard to a subject matter in which Shelat had acquired an interest.
On a correct interpretation of the gift deed and the other facts mentioned above, we are of opinion that the right to obtain a transfer of shares was clearly and completely obtained by the donee appellant.
There was no question here of competing equities because the donee appellant was shown to have obtained a complete legal right to obtain shares under the gift deed and an implied authority to take steps to get his name registered.
This right could only be defeated by showing some obstacle which prevented it from arising or which could defeat its exercise.
No such obstacle having been shown to us to exist, the rights of the donee appellant would prevail as against any legal rights which could have accrued to others if the donee had not already acquired the legal right which, as held by us above, had become vested in him.
We, therefore, allow this appeal with costs and set aside the judgment and decree of the Division Bench of the High Court and restore that of the learned Single Judge.
| IN-Abs | By a registered deed, a donor gifted to the appellant shares in various limited companies.
Before her death the donor had signed several blank transfer forms to enable the done to obtain transfer of the shares in the register of companies and share certificates in his name.
She had signed at the correct places showing that she meant to sign transfer of shares but the transfer could not be effected before the donor 's death.
The respondent claiming the shares filed an administration suit.
A single Judge of the High Court held that the appellant was entitled to shares covered by the gift deed to which blank transfer forms could be related.
A division bench of the High Court reversed the decision of the Single Judge on the ground that the gift was incomplete for failure to comply with the formalities prescribed by the Indian Companies Act, 1913 for transfer of shares.
It further held that there was no equity in favour of the appellant so that he may claim the right to complete what was left incomplete by the donor in her life time.
On appeal it was contended in this Court (1) that since the donor had signed the blank transfer forms and handed them over to the done, the gift deed and the signed blank forms had to be read together and (2) that the transfer was complete with the registration of the gift deed and even delivery of share certificates to the done was not necessary in view of section 122 of the .
Allowing the appeal, HELD:(1) The respondent has not made out a case for defeating the clearly expressed intentions of the donor, coupled with the authority with which the donor was armed by reason of the signed blank transfer forms.
On a correct interpretation of the gift deed and other material the right to obtain a transfer of shares was clearly and completely obtained by the donee appellant.
There was no question of competing.equities because the donee appellant was shown to have obtained a complete legal right to obtain shares under the gift deed and an implied authority to take steps to get his name registered.
[549B D] The fact that the relevant provisions of the and the Companies Act must be interpreted harmoniously does not mean that a provision of one Act could be nullified by any provision of the other Act.
It means that the provision of the two Acts should be read consistently with each other so far as it is reasonably possible to do so.
This end can be best achieved by examining the objects and the subject matter of each enactment and by viewing each relevant provision as a limb of an integrated whole meant to serve the underlying purposes.
In this way their separable spheres of operation will be clarified so as to avoid possibilities of conflict between them or any unnecessary overflow of what really appertains to one field into another.
[539H 540B] (2) The is an enactment meant for defining certain basic types of transfers and lays down the requirement both of substance and of form for their legal recognition and effectiveness.
Section 5 of the Act gives a wide connotation to "transfer of property".
Section 6 of the Act lays down that "property of any kind may be transferred" subject to certain exceptions.
Shares in a company are certainly a form of property.
Section 28 of the Companies says that they "shall be movable property, transferable in the manner provided by articles of the Company".
A wide definition of "property" in section 6 of the includes not merely shares as transferable, movable property.
but would cover as a separate form of property a right to obtain shares which may be antecedent to the accrual of rights of a shareholder upon the grant of a share certificate in accordance with the articles of association of a company.
[540B E] There is a distinction between "the title to get on the register" and "the full property in the shares in a company".
The first is acquired by mere delivery, with the required intention of the share certificate and a blank form signed by the transfer.
The second is only obtained when the transferee, in exercise of his right to become a shareholder, gets his name on the register in place of the transferor.
This antecedent right in the person to whom the share certificate is given with a signed blank transfer form under a transaction meant to confer right or title upon him to become a shareholder is enforceable so long as no obstacle to it is shown to exist in any of the articles of association of a company or a person with a superior right or title, legal or equitable, does not appear to be there.
Section 6 of the T.P. Act justifies such a splitting up of rights constituting property in shares just as it is well recognised that rights of ownership of property may be split up into a right to the "Corpus" and another to the "usufruct" of the property and then separately dealt with.
[541C E] M.P. Barucha & Anr.
V. V. Sarabhai & Co. & Ors.
53 Indian Appeals P. 92 @ 97 98, relied on.
Section 122 of the defines a "gift".
Section 123 of the T. P. Act prescribes the mode of transfer by gift.
No special mode of delivery is specified in the section.
On the other hand it is indicated that the delivery "may be made in such a way as the goods sold are delivered".
[541E G] In the instant case the registered document was signed both by the donor and donee and is attested by witnesses.
The donor specified and gave particulars of the shares meant to be gifted.
The donor delivered the registered gift deed together with the share certificates to the donee.
On these facts the donation of the right to get share certificates made out in the name of the donee became irrevocable by registration as well as by delivery.
The actual transfers in the registers of the companies concerned were to constitute mere enforcement of this right.
They were necessary to enable the donee to exercise the rights of the shareholder.
The mere fact that such transfers had to be recorded in accordance with the Company Law did not detract from the completeness of what was donated.
[541G 542B] The broadly indicated requirements of regulation 18 of Table A of 1st Schedule to the Companies Act, 1913 were also complied with by the contents of the gift deed.
It is immaterial that the gift deed deals with a number of items so long as the requirements of Regulation 18 are fulfilled.
The observance of a form whether found in the or in the Companies Act is meant to serve the needs of the substance of the transaction which were undoubtedly shown to have been completely fulfilled here.
There is nothing in Regulation 18 to indicate that without strict compliance with some rigidly prescribed form, the transaction must fail to achieve its purpose.
The subservience of substance of a transaction to some rigidly prescribed form required to be meticulously observed, savors of archaic and outmoded jurisprudence.
[543G 544A] Re Nose, Midland Bank Executer & Trustee Co. Ltd. vs Rose.
, Re Rose, Rose vs Inland Renvenue Commissioners, , M/s.
Howrah Trading Co. Ltd. vs The Commissioner of Income tax, Calcutta, [1959] Supp.
(2) SCR 448 @ 453 referred to.
|
Appeal No. 1955 of 1970.
Appeal by Special Leave from the judgement & other dated the 5th November, 1969 of the Punjab & Harayana High Court in Civil Write No. 309 of 1969.
R. K. Garg, section C. Agarwala and V. J. Francis, for the appellant.
775 V. C. Mahajan and 0.
P. Shorma, for the respondents.
The Judgment of the Court was delivered by RAY, C.J.
This is an appeal by special leave from the judgment dated 5 November, 1969 of the High Court of Punjab and Haryana.
The only person is whether the order of termination of the service of the appellant who was a probationer is in violation of Rule 9 of the Punjab Civil Service (Punishment & Appeal) Rules, 1952.
The appellant was selected by the Public Service Commission as a direct recruit on 20 May, 1965.
He was appointed on 26 May, ' 1965.
He joined as a probationer.
The period of probation was two years.
Rule 8(b) of the Punjab Police Service Rules 1959 states that the services of a member recruited by direct appointment may be dispensed with by the Government on his failing to pass the final examination at the end of his period of training, or on his being reported on during or at the end of his period of probation, as unfit for appointment.
The order terminating the services of the appellant was as follows: The President of India is pleased to dispense with the service of Shri Hari Singh Mann, Probationery Deputy Superintendent of Police, Amritsar on the expiry of his extended period of probation with effect from 2 2 1969(A.N.) under rule 8(b) of the Punjab Police Service Rules 1959, having considered him unfit for appointment to the State Police Service.
The period from 20 5 68 to 2 8 68 which has been treated as leave of the kind due has been excluded from the period of trial (Probation).
" The two contentions which have been advanced before the High Court were repeated here.
First, the order of termination was passed on 30 January, 1969 when the petitioner by reason of expiry of three years stood confirmed on 19/20 November, 1968.
Second the order of termination was one of punishment and the appellant should,therefore, under Rule 9 of the Punjab Civil Service (Punishment and Appeal) Rules have been given opportunity to show cause against the order of termination.
Under the aforesaid (Police Service) Rule 8(b) proviso, the Government could extend the period of probation by not more than one year.
The appellant was appointed on 20 May, 1965 on two years probation.
On 1 July, 1967, there was an order extending the period of probation by one year.
On 20 May, 1968, there was an order terminating the services of the petitioner.
on 20 July.
1968 there was an order revoking the order of termination and extending the period of probation for six months from 20 May, 1968.
The order of termination was on 30 January, 1969.
The appellant was on leave from 20 May, 1968 to 2 August, 1968.
The 776 Government excluded the period of leave from the period of probation.
The object of extending the period of probation is to find out whether the appellant was a fit person.
The appellant could not be confirmed till the period of probation to find out the fitness of the appellant expired.
It cannot therefore be held that the appellant stood confirmed on 19/20 November, 1968 before the period of probation expired in January, 1969.
The appellant relied on Rule 9 of the Punjab Civil Services (Punishment and Appeal) Rules, 1952.
Rule 9 is as follows "Where it is proposed to terminate the employment of a probationer, whether during or at the end of the period of probation, for any specific fault or on account of the un satisfactory record or unfavourable reports implying the unsuitability for the service, the probationer shall be ,apprised of the grounds of such proposal, and given an opportunity to show cause against it, before orders are passed by the authority competent to terminate the appointment".
If (Punishment) Rule 9 applies the services of the appellant could not be terminated without complying with the previsions thereof.
The appellant contended that the order of termination stated that the appellant was considered unfit for appointment and therefore it amounts to punishment to attract rule 9.
The appellant extracted a statement from the affidavit of the Inspector General of Police in answer to the appellant 's petition in the High Court that the appellant 's record during the period of probation was unsatisfactory Reliance is placed on rule 9 where it is said that if the termination of the Services of a probationer be on account of unsatisfactory record he shall be given an opportunity to show cause against it.
The respondent relied on rule 11 of the Punjab Police Service Rules where it is stated that in matters relating to discipline, penalties 'and appeals, members of the Service shall be governed by the Punjab Civil Services (Punishment and Appeal) Rules.
Therefore, it is said by the respondent that Rules 8 and 11 of the Punjab Police Service Rules show that termination of probation which is dealt with in rule 8 is different from matters relating to penalties which are dealt with in rule II of the Punjab Police Service Rules.
Termination on account of unsatisfactory record will attract rule 9 of the Punishment Rules.
It is obvious that at the time of confirmation fitness is a matter to be considered.
The order terminating the services is unfitness for appointment at the time of confirmation, it is not passed on the ground of any turpitude like misconduct or inefficiency.
To hold that the words "unfit to be appointed" are a Stigma would rob the authorities of the power to judge fitness for work or suitability to the post at the time of confirmation.
777 Termination of services on account of inadequacy for the job or for any temperamental or other defect not involving moral turpitude is not a stigma which can be called discharge by punishment.
Fitness for the job is one of the most important reasons for confirmation.
The facts and circumstances do not show that there is any stigma attached to the order of termination.
For these reasons, the appeal fails and is dismissed.
Parties will pay and bear their own costs.
V.M.K. Appeal Dismissed.
| IN-Abs | The appellant was appointed on 20 May, 1965, on two years ' probation.
On 1 July, 1967 there was an order extending the period of probation by one year.
On May 20, 1968, there was an order terminating the services of the petitioner.
On July 20, 1968 there was an order revoking the order of termination and extending the period of probation for six months from 20th May, 1968.
The order of termination was on Jan. 30, 1969.
This order recited that, having considered him unfit for appointment to the State Police Service the services of the appellant are dispensed with on the expiry of his extended period of probation.
Two contentions were raised by the appellant in the High Court.
First, the order of termination was passed on Jan. 30, 1969, when the petitioner.
by reason of expiry of 3 years stood confirmed on 19/20 November, 1968 and Second, the order of termination was one of punishment and the appellant should have been given an opportunity to show cause against the order of termination under Rule 9 of the Punjab Civil Service (Punishment and Appeal) Rules, 1952.
These contentions were rejected by the High Court.
Hence the appeal to this Court by Special Leave.
Dismissing the appeal, HELD: The object of extending the period of probation is to find out whether the appellant was a fit person.
The appellant could not be confirmed, till the period of probation expired.
It cannot, therefore, be held that the appellant stood confirmed on 19/20 November, 1968 before the period of probaition expired in January, 1969.
[776A B] (2) Termination on account of unsatisfactory record will attract rule 9 of the Punishment Rules.
Fitness was a matter to be considered at the time of confirmation.
The order terminating the services is unfitness for appointment and not on the ground of any turpitude to attract Rule 9 of the Punishment Rules, 1952.
To hold that the words "unfit to be appointed" mentioned in the order of termination, are a stigma, would deprive the authorities to judge fitness 'for work or suitability to a post at the time of confirmation.
Termination of services on account of inadequacy for the job or for any tompramental or other defect not involving moral turpitude is not a stigma which can be called discharge by punishment.
Fitness for the job is one.
of the most important reasons for confirmation.
The facts and circumstances do not show that there was any stigma attached to the order of termination and therefore, Rule 9 of the Punjab Civil Service (Punishment & Appeal) Rules, 1952 is not attracted in the present case.
[7760 777B]
|
Appeal No. 1748 of 1967.
From the Judgment and order dated the 6th January 1961 of the Mysore High Court at Bangalore in.
Second Appeal No. 129 of 1956.
section C. Malik A. section K. Rao arid M. R. K. Pillai for the appellant.
K. Rajendra Chaudhuy, for the respondents Nos. 1 8.
The Judgment of the Court was delivered by ALAGIRISWAMI, J.
This is, an appeal by certificate against the judgment of the High Court of Mysore in a second appeal.
it, arises out 971 of a suit filed by respondents 1 and 2 (who,will hereafter be referred to as plaintiffs) for a declaration that the sale held in execution of the decree obtained by the appellant (who was the 9th defendant in the, suit) in O. section No. 31 of 1937 38 against their father and other members of their family was void ab initio.
O. section No. 31 of 1937 38 had been filed by the present appellant on, the basis of a promissory note executed as already mentioned by the father of the plaintiffs and other members of that family.
In execution all the sixteen items of property belonging to the family were sold.
The sale was in pursuance of an attachment before the judgment made on 25th September 1937.
The suit was subsequently decreed.
In the suit the only plea taken was that the defendants were agriculturists entitled to the benefit of the Mysore: Agriculturists Relief Act 1928.
The plaintiffs filed the suit for a mere declaration because they continued in possession of the properties which had been sold in execution and purchased by defendants 10 and, 11 in the suit and subsequently purchased by the appellant.
The Trial Court decreed the suit.
It should be mentioned that the suit was filed on 14 5 1952.
The plaintiffs were born respectively in.
the years 1944 and 1950.
On appeal the District Judge hold that the sale was void but allowed the appeal on the ground that the plaintiffs were not born on the date of the sale.
A Division Bench I of the Mysore High Court allowed the Second Appeal and restored the judgment of the Trial.
Court.
The main question for decision as to whether the execution sale was void ab initio depends on the interpretation to be placed on section 14.of the Mysore Agriculturists ' Relief Act which roads as follows:.
(1) Except as otherwise provided in subsections (2), (3), and (4) no agricultural land belonging to an agriculturist shall be attached or sold in execution of any decree or order passed after this Act comes into force, unless it has been specifically mortgaged for the payment of the debt to which such decree or order relates and the security still subsists, For the purposes of any such attachment or sale as aforesaid standing crops shall be deemed to be movable property.
(2) The Court may at the time of passing a decree for money directing payment by instalments or at any time during the course of execution of such decree direct the judgment debtor for sufficient cause to furnish security for the amount of the decree and if he fails to furnish the security required order the attachment of any agricultural land belonging to the judgment debtor.
(3) The procedure in respect of attachments ordered under subsection (2) shall be as far as may be in accordance with the procedure relating to attachment before judgment under Order XXXVIII of the Code of Civil Procedure 1908.
972 (4) No agricultural land ordered to be attached under sub section (2) shall be sold in pursuance of such attachment unless the judgement debtor is in arrears in respect of two or more instalments under the decree.
We are, in agreement with the view taken by the Courts below and the High Court that the attachment before judgement made in this case was not a valid one and therefore the sale in pursuance of that attachment was void.
We are unable to accept the argument on behalf of the appellant that s, 14 does no more than lay down the same procedure as Order 38 of the Code of Civil Procedure and therefore the attachment was valid.
Sub section
(1) of section 14 lays down that no agricultural land belonging to an agriculturist shall be attached or sold in execution of any decree or order unless it has been specifically mortgaged for the payment of the debt to which such decree or order relates.
The suit :filed by the appellant O.S. No. 31 of 1937 38 was not on the foot of a mortgage and therefore the sale effected in execution of the decree obtained by the appellant is clearly against the provisions of sub section
Sub section (2) permits an attachment only in execution of a decree and, therefore, there is no substance in the argument on behalf of the appellant that the attachment effected before judgment at the instance of the appellant is similar to an, attachment before judgment tinder Order 38 of the Code of Civil Procedure.
We are in agreement with the learned Judges of the High Court that the view taken by the District Judge that as the plaintiffs were not born on the date of the sale they cannot challenge its validity is wrong.
A void sale, as we have already held the sale in execution of the decree obtained by the appellant in this case to be, confers no title on the auction purchaser and, therefore, the joint family to which the properties belonged continued to be the owners of that property and did not lose their title there to.
The plaintiffs got a right to the property as soon as they were born, not by way of succession but by right of birth.
Therefore, plaintiffs were certainly entitled to file a suit questioning the sale.
The only other argument on behalf of the appellant, which was advanced before the High Court and rejected by it and was also put forward before us, was that the plaintiffs ' suit was barred by constructive res judicata.
It appears that the appellant filed a suit O.S. No. 535 of 1944 45 for partition of items 1 15 against defendants 1 and 2 and the widow and son of another of the original judgment debtors, as also defendants 3 and 4.
To that suit the plaintiffs were not parties.
Plaintiff No. 2 was not even born then.
There Was another suit, O.S. 973 No. 47 of 1942 43 filed by the 11th defendant in respect of item 16.To that suit also the plaintiffs were not parties.
As neither plaintiff was born at the time of O.S. No. 47 of 1942 43, they having been born on 22 9 1944 and 19 9 1950, and the second plaintiff was not born at the time O.S. No. 535 of 1944 45 was filed, and the first plaintiff though born Was not made a party there can be no question of res judicata as against them.
They are not representatives of their father as contemplated in section 11 of the Code of Civil Procedure.
It also appears that the earlier suits were filed before the Munsiff 's Court and were,.
therefore, not decided by a court of competent jurisdiction as the present suit has been filed in the Subordinate Judge 's Court.
We are, therefore, satisfied that the appellant cannot succeed in his plea of res judicata.
The appeal is, therefore, dismissed.
The appellant will pay the costs of respondents 1 and 2.
| IN-Abs | Under s.14(1) of the Mysore Agriculturists Relief Act 1928 no agricultural land belonging to an agriculturalist shall be attached or sold in execution of any decree or order unless it has been specifically mortgaged for the payment of the debt to which such decree or order relates, The appellant filed a suit on a promissory note executed by the father of the respondents.
There was an attachment before judgment, and after decree was passed, the properties belonging to the family were sold in execution.
The res pondents were born thereafter.
They filed a suit contending that the sale of the properties in execution of the appellant 's decree was void ab initio under the Act.
The trial Court decreed the suit but the first appellate court allowed the appeal on the ground that as the respondents were not born on the date of the sale they could not challenge its validity.
The High Court restored the judg ment of the trial court.
Dismissing the appeal to this Court.
HELD ; (1) The attachment before judgment was not valid and therefore the sale in pursuance of that attachment was void.
The suit filed by the appellant was not on the foot of a mortgage and therefore the sale in execution of the appellant 's decree is against the provisions of section 14(1).
The contention that section 14(2) does no more than lay down the same procedure as 0.
38, C.P.C., and therefore the attachment is valid, is not correct.
Section 14(2) permits an attachment only in execution of a decree.
[972 B E] (2) The respondents were entitled to file the suit questioning the sale.
A void sale held in execution of a decree confers no title on the auction purchaser.
Therefore the joint family to which the properties belonged did not lose their title, but continued to be owners, and the respondents got a right to the property as soon as they were born by right of birth.
[972 E G] (3) The suit was not barred by res judicata because : (a) to the earlier suits referred to the respondents were not made parties; and (b) those suits were filed in the Munsiff 's court and were therefore not decided by a court of competent jurisdiction as the present Suit was filed in the Subordinate judge 's court.
The respondents were also not representatives of their father as contemplated in section 11, C.P.C. [972 H 973 C]
|
ppeals Nos.
2064 of 1973 and 64 65, 163 164 and 189 of 1974.
Appeals from the Judgment and Order dated the 19th November, 1973 of the Kerala High Court in O. F. No. 2821 of 1973 etc.
T. section Krishnamourthy Iyer (In C. A. No, 2064 of 1973) and N. Sudharakan for the appellants.
M. M. Abdul Khader and K. M. K. Nair, for the respondents.
The Judgment of the Court was delivered by RAY, C. J.
These appeals are by certificate from the judgment dated 19 November, 1973 of the High Court of Kerala.
These appeals challange the validity of the notification dated 26 July, 1973 issued by the State Government under Rule 114(2) of the Defence of India Rules, 1971 hereinafter referred to as the Rules.
Rule 114(2) is as follows : "If the Central Government or the State Government is of opinion that it is necessary or expedient so to do for securing the defence of India and civil defence, the efficient conduct of military operations or the maintenance or increase of supplies and services essential to the life of the community or for securing the equitable distribution and availability of any article or thing at fair prices, it may, by order, provide for regulating or prohibiting the production, manufacture, supply and distribution, use and consumption of articles or things and trade and commerce therein or for preventing any corrupt practice or abuse of authority in respect of any such matter".
The impugned notification is as follows: "No. 19768/E2/73/ID Dated Trivandrum, 26th July, 1973.
S.R.O. No. 474/73: Whereas use of machinery for the extraction of fibre from coconut husk increased considerably in the districts of Trivandrum, Quilon and Alleppey in recent times; And whereas mechanisation in the production of such fibre results in very high consumption of coconut husks and the consequent enhancement of the price of such husks; And whereas duo to the very high consumption of coconut husks for the production of fibre by using machinery and L251 Sup CI/75 98 the enhancement of the price of such husks, sufficient quantity of such husks are not available at fair prices in the said districts for use in the traditional sector; And whereas the Government are of opinion that for securing the equitable distribution and availability at.
fair prices of coconut husks in the said districts for production of fibre in the traditional sector it is necessary to prohibit the use of a machinery in those districts for the production of such fibre; Now, therefore, in exercise of the powers conferred by Sub Rule (2) of Rule 114 of the Defence of India Rules, 1971, the Government hereby prohibit the production of fibre coconut husks by the use of the machinery in the said districts.
By order of the Governor".
The appellants are owners of Small Scale Industrial Units.
They employ mechanised process for decortication of retted coconut husks.
The main processes involved in the manufacture of coir yarn are these: First is retting of green husks.
The green husks are covered with leaves and mud.
The retted husks are then pounded or beaten.
The fibre and pith then separate.
The fibre is extracted, cleaned and dried.
Next comes spinning either with the help of ratt or by hand.
Ratt is a mechanical contrivance.
The final stage is bundling of coir yam for marketing.
Government declared defibring of coconut husks by mechanical means as a small scale industry eligible for financial assistance under the Small Scale Industries Development Scheme.
Most of the appellants availed themselves of loans under the Scheme.
The appellants alleged in the petitions before the High Court that ',be cost involved in installing machinery in a proper building for the purpose would range from Rs. 22,000 to Rs. 35,000.
The appellants challenged the notification on the ground that the formation of opinion by the State Government for the purpose of exercise of power under sub rule (2) of Rule 114 of the Rules is a justiciable issue and that the court should call for the material on which the opinion has been formed and examine the same to find out whether a reasonable man or authority could have come to the same conclusion that in its opinion for securing the equitable distribution and availability of retted husks at fair prices, a regulation or prohibition of the manufacture of fibre from retted husks by mechanical means is necessary.
The appellants allege that the reasons given in the notification as justifying the imposition of the total ban on the use of machinery for defibring husks are wholly erroneous and prima facie no reasonable person will consider them as justifying the said ban.
The appellants also allege that there is no application of the mind of the authority to any genuine materials or to any relevant considerations in the exercise of the drastic power vested in the authority under Rule 114(2) of the Rules.
99 The High Court held that the appellants did not establish by material that the opinion formed by the State Government could not stand.
There is no principle or authority in support of the view that whenever a public authority is invested with power to make an order which prejudicially affects the rights of an individual whatever may be the nature of the power exercised, whatever may be the procedure prescribed and whatever may be the nature of the authority conferred, the proceedings of the public authority must be regulated by the analogy of rules governing judicial determination of disputed questions (See Sadhu Singh vs Delhi Administration)(1).
Where powers are conferred on public authorities to exercise the same when "they are satisfied" or when "it appears to term" or when "in their opinion" a certain state of affairs exists; or when powers enable public authorities to take "such action as they think fit" in relation to a subject matter, the Courts will not readily defer to the conclusiveness of ' an executive authority 's opinion as to the existence of a matter of law or fact upon which the validity of the exercise of the power is predicated.
Where reasonable conduct is expected the criterion of reasonableness is not subjective, but objective.
Lord Atkin in Liversidge vs Anderson (2) said "If there are reasonable &rounds, the judge has no further duty of deciding whether he would have formed the same belief any more than, if there is reasonable evidence to go to a jury, the judge is concerned with whether he would have come to the same verdict".
The onus of establishing unreasonableness, however, rests upon the person challenging the validity of the acts.
Administrative decisions in exercise of powers even conferred in subjective terms are to be made in good faith on relevant considerations.
The courts inquire whether a reasonable man could have come to the decision in question without misdirecting himself on the law or the facts in a material respect.
The standard of reasonableness to which the administrative body is required to conform may range from the court 's own opinion of what is reasonable to the criterion of what a reasonable body might have decided.
The courts will find out whether conditions precedent to the formation of the opinion have a factual basis.
In Rohtas Industries Ltd. vs section D. Agarwala & Anr.(3) an order under section 237(b) (i) and (ii) of the Companies Act for investigation of the affairs of the company was challenged on the ground that though the opinion of the Government is subjective, the existence of the circumstances is a condition precedent to the formation of the opinion.
It was contended that the Court was not precluded from going behind the recitals of the existence of such circumstances in the order, but could determine whether the circumstances did in fact (1) ; (2) ; , 228 229.
(3) ; 100 exist.
This Court said that if the opinion of an administrative agency is the condition precedent to the exercise of the power, the relevant matter is the opinion of the agency and not the grounds on which the opinion is founded.
If it is established that there were no materials at all upon which the authority could form the requisite opinion, the Court may infer that the authority passed the order without applying its mind.
The opinion is displaced as a relevant opinion if it could not be formed by any sensible person on the material before him.
It is appropriate to refer to the Report of the Committee appointed by the State Government to hold enquiries and advise the Government in respect of revision of minimum wages fixed for employment in Coir Industry.
The Committee was constituted in the year 1969.
The Committee gave its final report on 25 January, 1971.
The Report is published by the Government of Kerala in 1971.
The findings of the Committee are these.
With the help of high powered machines, fibre from husks on 1,000 coconuts could be extracted in 25 to 30 minutes.
10 workers would be required for effective attending to that work.
10 workers in 8 hours on an average could defibre husks of about 12000 coconuts.
30 workers would be required to remove the skins of the retted husks.
In the usual course, 120 workers would have to be employed for beating husks of 12000 coconuts by hand.
In short, by the introduction of a single high powered machine, 80 persons would lose their employment.
The Committee felt that under the circumstances when employment is acute especially in that State, it is not practicable to encourage mechanisation for fibre production till alternative so of employment is developed.
Therefore, it is a wise course to regulate the expansion of the use of machi nery with high productive capacity in order to retain the labour force already working in this field.
One high powered machine does the work of about 90 workers employing only 10 workers to operate it.
The fibre extracted with the help of machinery is not used for the production of coir yam by a majority of employers in North Malabar area.
The fibre is sold to outside agencies in Coimbatore, Salem etc.
and not used for spinning coir yam.
The Committee recommended that the Government might appoint a separate committee to study the various problems on account of mechanisation in the industry and make suitable recommendations in that behalf.
A Study Group was appointed to make a report on mechanisation in Coir Industry in Karela.
The report of the Study Group is dated 13 April, 1973.
It is published by the State Planning Board in May, 1973.
The Study Group at pages 33 and 34 of the Report stated as follows.
In a country like ours where unemployment and underemployment loom large, any situation which brings in unemployment is not to be favored.
Where again exceptional benefits are to flow in as a result of mechanisation, and by thoughtful.
and timely state action the painful effects resulting from mechanisation could be checkmated 101 it is not always desirable to persist with age old methods.
Coir Industry brings employment or partial employment to an area where there s chronic unemployment and under employment.
Any kind of mechanisation is bound to cause some displacement of people.
But human values should be given the highest priority and any measure which brings suffering to those engaged in an industry cannot be ac ceptable.
Mechanisation can bring steady employment to the few.
It would also promote better remuneration.
The only difficulty is that it an take in lesser number of persons.
The Study Group suggested that a composite plan should be thought on these lines.
The Coir Industry should be woven into the pattern of area development or regional development which win bring prosperity not only to the coir industry but also to many other ancillary industries and avocations.
The objective should be to provide at least 300 days ' work in a year at reasonable wages to an those engaged in the coir industry.
The Study Group recommended that the pace of mechanisation should be such that none should be thrown out of employment, and for those who are displaced, alternative work is to be found in the general development that is envisaged in the all round development plan which should think of not only the coir industry but also the other industries and avocations possible to be introduced in an area.
It is in evidence that mechanisation progressed at a fairly high rate in the three districts of Trivandrum, Quilon and Alleppey.
Out of 414 mechanised units in the whole of the Kerala State consisting of 11 districts, 283 are in these three districts alone.
There, is a heavy concentration of mechanised units in the three districts.
The figure given is that only 10 workers are required for defibring husks of 12000 coconuts a working day of 8 hours by the use of machines as against 120 workers by the process known as hand method.
The mechanical work is done quickly to consume coconut husks in very large quantities.
There has been large scale unemployment of labour engaged in the traditional method and there is serious unrest in the area.
The State Government found in the context and background of the Reports and materials that the use of machinery for the purpose of extraction of fibre from husks in the, region other than Trivandrum, Quilon and Alleppey Districts has not affected the supply and availability at fair prices of husks for extraction of fibre in the traditional sector as in the case of the districts of Trivandrum, Quilon and Alleppey.
The situation in other 8 districts, according to the State, does not require action under Rule 114 of the Defence of India Rules.
Price increase of husk in these 8 districts was not comparable with that in the districts of Trivandrum, Quilon and Alleppey.
The Government, therefore, was of opinion that for securing the equitable distribution and availability at fair prices of coconut husks for production of fibre in the traditional sector in the remaining 8 districts of the State it is not necessary in the prevailing circumstances to prohibit the use of machinery in the remaining 8 districts for the production of fibre.
102 The appellants also contended that section 3(2)(21) of the Defence of India Act does not support Rule 114 and secondly section 38 of the Defence of India Act is violated.
Section 3 (2) (21) of the Defence of India Act confers power on the authority to make orders providing inter alia for the control of trade or industry for the purpose of regulating or increasing the supply of, or for maintaining supplies and services essential to the life of the community.
Rule 114 is in complete consonance with the powers conferred under the aforesaid section 3(2)(21).
Section 38 of the Defence of India Act states that any authority or person acting in pursuance of this Act shall interfere with the ordinary avocations of life, and the enjoyment of property as little as may be consonant with the purpose of ensuring the public safety and interest and the defence of India and civil defence.
It is a matter of policy for the State Government to decide to what extent there should be interference in relation to the enjoyment of property.
The public interest is of paramount consideration.
In the present case the steps taken are in the larger interests of labour engaged in the coir industry.
The preeminent question is that it is an emergency legislation.
In emergency legislation the causes for inducing the formation of the opinion are that coir is one of the most labour intensive industries in Kerala and it is estimated that more than 4 1/2 lakhs of worker , are employed in the various process of coir industry like getting, hand spinning, spindle spinning and manufacture of coir mats and matting and that about 10 lakhs of people depend upon this industry for their sustenance.
Mechanisation in Coir Industry has been taking place in different parts of the State.
The non mechanised sector of this industry is so labour intensive that mechanisation of fibre production is strongly opposed by workers because mechanisation results in very high consumption of coconut husks by the mechanised units and the consequent enhancement of price of husks and the non availability of sufficient quantity of husks at fair price for use in the traditional sector, viz., hand beating of husks.
There have been serious tensions including law and order situations.
Because of the very high consumption of coconut husks for the production of fibre by using machinery and the enhancement of the price of such husks, sufficient quantity of such husks are not available at fair prices in the Districts of Trivandrum, Quilon and Alleppey for use in the traditional sector.
Therefore for securing the equit able distribution and availability at fair prices of coconut husks in the said three districts for production of fibre in the traditional sector.
it is necessary to prohibit use of machinery in these three districts.
The State Government found on materials that use of machines.
affected the availability of retted coconut husks for equitable distribution at fair prices.
The notification is on the consideration of relevant and useful material.
The opinion of the State Government cannot be said to be based on any matter extraneous to the scope and purpose of the relevant provisions of the statute.
The materials sup porting the subjective satisfaction indicate that there are reasonable grounds for believing that the prescribed state of affairs exists and course of action is reasonably necessary for the given purpose of equitable distribution of coconut husks at fair prices.
103 The notification is issued after due care and caution on the basis of reliable and sufficient data obtained by proper investigation and enquiries.
The Government took notice of section 38 of the Defence of India Act.
The Government became satisfied about the public interest.
The notification does not interfere with the avocations and enjoyment of property any more than is necessary for those purposes of equitable distribution of husks at fair price to the traditional sector.
An argument was advanced that the notification offended Article 14.
The course of action which the State adopted is that it became necessary to prohibit the use of machinery in the districts of Trivandrum, Quilon and Alleppey in the traditional sector.
It appears that out of 414 mechanised units in the State 283 units are in the Southern region of Kerala State consisting of Trivandrum, Quilon and Alleppey and the balance 131 mechanised units are in the remaining 8 districts of the State.
The use of machinery for the purpose of extraction of fibre from husks in the region other than Trivandrum, Quilon and Alleppey districts has not at present affected the sup and availability at fair prices of husks for extraction of fibre in the traditional sector as in the case of the three Districts.
The situation in the 8 districts does not require action at the present moment.
The classification is reasonable.
It bears a nexus to the objects sought to be achieved by the impugned notification.
In order to secure equitable distribution and availability at fair prices of coconut husks in the remaining 8 districts of the State for production of fibre in the traditional sector, it is not necessary in the prevailing conditions to prohibit the use of machinery in the remaining 8 districts.
It was also submitted that the notification offended Article 301.
Article 302 states that the State can impose restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India.
It was said that the Defence of India Act is not a law made by Parliament, imposing restrictions is contemplated under Article, 302.
The Defence of India Act has been passed by Parliament.
The Rules under the Act have legislative sanction.
The restrictions are imposed in the interest of the general public.
The restrictions are reasonable in the interest of the industry and public.
For the foregoing reasons the judgment of the High Court is upheld.
The appeals are dismissed.
In view of the fact that the High Court directed the parties to bear their own costs we also direct that the parties will pay and bear their own costs.
V.P.S. Appeals dismissed.
| IN-Abs | The appellants, who are owners of Small Scale Industrial Units, employ mechanised process for decortication of retted coconut husks.
The respondent State issued a notification in July 1973, under r. 114(2) of the Defence of India Rules,, 1971, imposing a total ban on the use of machinery for defibring husks in the district of Trivandrum, Quilon and Alleppey.
The appellants, who were affected by the notification, challenged the validity of the notification.
The High Court dismissed the petition.
In appeal to this Court, it was contended : (1) that section 3(2)(21) of the Defence of India Act does not authorise r. 114; (2) that the formation of opinion by the State Government for the exercise of power under the rule is a justiciable issue, that the court should call for the material on which, the opinion had been formed, and examine it to find out whether a reasonable man or authority could have come to the conclusion that for securing equitable distribution and availability of retted husks at fair prices a regulation or prohibition of the manufacture of fibre by mechanical process was necessary; (3) that the reasons given in the notification imposing a total ban on the use of machinery were not justified; (4) that there was no application of the mind by the authority to any genuine materials or relevant considerations while exercising the power; (5) that section 38 of the Defence of India Act requires that, consonant with the purpose of ensuring the public safety, defence of India and Civil defence, there should be minimum interference by an authority or person, acting in pursuance of the Act with the ordinary avocations of life and enjoyment of property; (6) that the notification offended article 14; and (7) that it violated article 301, of the Constitution.
Dismissing the appeal, HELD : (1) Rule 114 is in complete consonance with the powers conferred, under section 3(2)(21).
[102 B] (2) Where powers are conferred on public authorities to exercise the same when "they are satisfied" or when "it appears to them," or when "in their opinion" a certain State of affairs exists, or when powers enable public authorities to take "such action as they think fit" in relation to a subject matter, the courts will not readily defer to the conclusiveness of an executive authority 's opinion as to the existence of a matter of law or fact upon which the validity of the exercise of the power is predicated.
Administrative decisions in exercise of powers conferred in subjective terms are to be made in good faith and on relevant considerations.
The courts can inquire whether a reasonable man could have come to the decision in question without misdirecting himself on the law or the facts in a material respect.
The standard of reasonableness to which the administrative body is required to conform may range from the court 's opinion of what is reasonable to the criterion of what a reasonable body might have decided; and courts will find out whether conditions precedent to the formation of the opinion have a factual basis.
But the onus of establishing unreasonableness rests upon the person challenging the validity of the acts.
[99 C D. E G] (3) The Committee appointed by the State Government in connection with, the revision of minimum wages in the coir industry reported that when unemployment is acute in the State it is not practicable to encourage mechanisation for fibre production till alternative sources of employment are developed, and 94 recommended that the Government might appoint a separate committee to study the various problems resulting from mechanisation in the industry.
Accordingly, a study group was appointed and that group reported that coir industry brings employment or partial employment to an area where there is chronic unemployment and under employment, and hence, any kind of mechanisation is bound to cause displacement of people.
The study group therefore suggested a composite plan by which the coir industry should be woven into the pattern of area development or regional development which will bring prosperity not only to the coir industry but also to many other ancillary industries and avocations, that the pace of mechanisation should be such that none should be thrown out of employment, and that for those who are displaced alternative work is to be found in the general development that is envisaged.
The State Government found that out of 414 mechanised units in the State, 282 units were in the three districts of Trivandrum, Quilon and Alleppey and that the balance were in the remaining eight districts of the State, and that the use of machinery for the purpose of extraction of fibre from husks in regions other than Trivandrum, Quilon and Alleppey districts had not affected the supply of and availability at fair prices of husks for extraction of fibre in the traditional sector.
The Government therefore, was of the 'opinion that it was necessary to prohibit the use of machinery only in those three districts, but that it was not necessary to prohibit the use of machinery for the production of fibre in the other eight districts.
[100 F 101 H] (4) It is a matter of policy for the State Government to decide to what extent there should be interference in relation to enjoyment of property.
Public interest is of paramount consideration and in, the present case the steps taken were in the larger interests of labour engaged in the coir industry.
The notification was based on a consideration of relevant and useful material. 'The opinion of the State Government could not be said to have been based on any matter extraneous to the scope and purpose of the relevant provisions of the statute.
The materials supporting the subjective satisfaction indicate that there were reasonable grounds for believing that the prescribed state of affairs existed and a course of action was reasonably necessary for the given purpose of equitable distribution of coconut husks at fair prices.
[102 C H] (5) The Government took notice of section 38 of the Defence of India Act and was satisfied about the public interest.
Further, the notification does not interfere with the avocations and enjoyment of property any more than is necessary for the purposes of equitable distribution of husks at fair prices 'to the traditional sector.
[103 A B] (6) The classification, in the circumstances, of the districts.
is reasonable and bears a nexus to the objects sought to be achieved by the impugned notification.
[103 D] (7) The Defence of India Act has been passed by Parliament and the Rules under the Act have legislative sanction.
The restrictions imposed by them are in the interest of general public and are authorised under Article 302, Therefore, there is no violation of article 301.
[103E G] Sadhu Singh vs Delhi Administration ; , Rohtas Industries vs section D. Agarwala ; , and Liversidge v Anderson ; , 228 229, referred to.
ARGUMENTS For the appellants : The Notification Annexure A, is justiciable.
The court is not deprived of jurisdiction to examine the validity of the order.
The grounds mentioned in Annexure A notification are irrelevant and there is no real and proximate connection between the ground given and the object which the Government has in view.
The State Government never applied its mind to the matter and the Notification is malafide in the sense that the statutory power has been exercised for some indirect purpose not connected with the object of the statute or the mischief it seeks to remedy.
(1) Jaichand Lall Sethia vs State of Bengal [1966] Suppl.
S.C.R. 464.
95 It is open to court to enquire whether grounds really existed which would have created that satisfaction on which alone the order could have been made in the mind of a reasonable person.
Though the satisfaction of the Government is subjective and its power is discretionary its exercise depends upon the honest formation of an opinion that in order to secure equitable distribution and availability at fair prices of husks for use for production of fibre in the traditional sector it is necessary to ban production of fibre by machines.
The existence of these circumstances is a condition precedent and must be demonstrable.
It is therefore open to the Court to examine the existence of such circumstances.
The Barium Chemicals Ltd. vs The Company Law Board , 357, Rhotas Industries Ltd. vs section D. Agarwala ; Rose Clutnis vs Papddo Poullous , Ridge vs Baldwin , 73.
There has been no application of the mind to all the relevant factors justifying total ban being imposed with reference to reliable data and materials in issuing the Notification and therefore the action is mala fide.
The action is not an action which is genuinely intended to implement the intention of the Defence of India Act or the rules and is not based on any enquiry or investigation or data made available to the Govt.
before such action was taken.
Nor was it made after any consultation or after reference to materials published by expert bodies like the State Planning Commission, the Coir Board, the Coir Advisory Committee appointed from time to time, nor based upon literature of a reliable nature published by such bodies aforesaid.
That being so, the notification is ultra vires the Defence of India Act and the rules and for a purpose extraneous to the intention of the Defence of India Act.
The purpose for which the notification has been issued is served by the Coconut Husks Control Order, dated 29 9 1973 and the notifications issued under the Order.
The above Order was issued by the Central Government in exercise of the powers conferred by section 3 of the Essential Commodities Act, Act (10 of 1953).
Two Notifications fixing the fair prices of the retted coconut husks were issued by the special officer for coir (Licensing Officer) constituted under cl. 4 of the Kerala Coconut Husks Control Order 1973.
There is no material before the Government to conclude that the price of coconut husks increased only because of mechanisation.
On the basis of section 38, Defence of India Act, the notification is beyond the needs of the situation.
It is obligatory on the Government to have examined the several alternative remedies to make available husks to the traditional sector without banning manufacture of fibre by machines.
The notification contravenes article 301 of the Constitution which guarantees that trade, commerce and inter course throughout the territory of India shall be free.
District Collector of Hyderabad vs M/s. Ibrahim & Co. Article 301 guarantees freedom of trade not only from geographical barriers but also from restrictions imposed on an individual to carry on trade or business, other than a regulatory measure.
; (233).
It is not open to the Parliament to delegate the power under article 302.
The law passed under article 302 has to be in the interest of the public.
There is nothing in the Defence of India Act to indicate that Parliament has imposed restrictions in the interest of public within the meaning of the Article.
If there is no provision in the Act, the power under article 302 cannot be delegated by rules to the Central Government or the State Government.
96 VII.
The Notification banning the machinery of defibering husks is violative of the fundamental rights of the petitioners under article 14.
It is highly discriminatory as its operation is confined to the 3 districts of Trivandrum, Quilon and Alleppey.
Owners of defibering machinery in other Districts are all similarly situated like the petitioners.
For the respondent : (1) Ext.
P. 1 order being issued in exercise of power conferred by law made by Parliament i.e. Defence of India Act 1971 & Defence of India 1971 there can be no violation or infringement of Fundamental Rights and other Constitutional rights.
As a measure of emergency legislation "the words in the opinion of" in Rule 114(2) should be given the same width of meaning as in "satisfied" in Rule 30 Defence of India Rules 1962 as expounded by this Hon 'ble Court in decisions namely. , 469 470. , 718, 719, 740.
These decisions show that the Courts are only entitled to look into the matter which if in terms of the Rule, then Court is bound to stay its hands and that the recital will be accepted in the absence of any inaccuracy.
It is open to the Court to satisfy itself, as to the accuracy of the recital only if the order suffers from any lacunas.
The meaning given to the expression, "the reason to believe" are in the sentence as explained above in the context of emergency although the meaning given to these expressions will be in the sense ruled by this Court in Bariunam, Chemicals case and Rohtas Industries case when these expressions occur in peaceful legislations.
For the Construction of these words in the context of emergency see ; , 718. ; , 132.
; , 122.
; , 128.
, 247.
; , 239, 251 252, 253, 256 257, 263, 239.
wade and Phiulip Constitutional Law, 1970 pp.
631, 632.
Smith Judicial Control and Administrative Action PP.
275, 276.
Waynes Legislative Executive and Judicial Powers 1970 4th Edn p. 213.
Halsbury 's Laws of England 4th Edn.
Vol I, p. 23. ; , 73. , 34 (e to g).
, 967 968 (h to a) at 970 (J) P. 972 (h) p. 973 982 (g h) P. 983 (a).
Assuming that the ratio of Barium Chemicals Case and of Rohtas Case ; is applicable to the notification it is submitted the materials furnished in paras 4 to 9 of the Counter affidavit are sufficient to sustain it.
The machines consume enormous quantity of coconut husks starving out the traditional section.
The owners of machinery are able to corner large quantity of husk at exorbitant pi ices to the detriment of traditional sector because of the large saving in wages resulting from the displacement of labour by mechanisation.
Due Compliance of section 38 is to be presumed.
; ; , 132.
|
Appeals Nos.
1816 & 1817 of 1968.
Appeal from the Judgment & Order dated the 30th March, 1967 of Orissa High Court in F.As.
Nos, 44 & 45 of 1963, Writ Petition No. 372 of 1974 140 Petition under Article 32 of the Constitution of India Civil Appeal No. 336 of 1970 Appeal by Special Leave from the Judgment and order dated 28th March 1969 of the Mysore High Court in W.P. No. 226 of 1967.
Lal Narain Sinha, Sol.
Gen. of India, A. K. Basu and D. N. Gupta, for the Appellant (In CA.
No. 1816/68) and Petitioner in W.P. No. 372/74); A. K. Basu & D. N. Gupta, for the Appellant (In CAS.
1817/ 68); V. M. Tarkunde, Santosh Chatterjee and R. N. Sachthey, for the Respondents (In CAs.
1816 1817/68 & W.P. No. 372/74); Soli J. Sorabjee, Obed Shenio, P. C. Bhartari, Ravinder Narain & K. J. John, for Intervener No. 1; section P. Nayar for Intervener No. 2; section T. Desai, B. P. Maheshwari and Suresh Seth, for Intervener No. section T. Desai, B. P. Maheshwari & Suresh Seth for the Appellant (In CA No. 336/70).
M. Veerappa, for the respondent (In C.A. No. 336/70).
The Judgment of the Court was delivered by JAGANMOHAN REDDY, J.
These appeals raise a common question :as to whether Dumpers, Rockers and Tractors are motor vehicles within the meaning of the relevant State Motor Vehicles Taxation Acts, and are accordingly taxable thereunder.
Apart from these appeals, Bolani Ores Ltd. Appellant in Civil Appeal No. 1816 of 1968 has filed a writ petition challenging the constitutional validity of the Bihar and Orissa Motor Vehicles Taxation Act, 1930.
The question raised in the writ petition will only arise for determination, if the judgment of the High Court of Orissa is held to be valid otherwise the question of the constitutional validity of the Bihar and Orissa Motor Vehicles Taxation Act (hereinafter referred to as 'the Taxation Act ') does not fall for determination as that would be purely academic.
The two Civil Appeals Nos.
1816 of 1968 and 1817 of 1968 arise out of two suits One filed by Bolani Ores Ltd. and the other by Orissa Minerals Development Company Ltd., respectively, for a declaration that the machineries in their possession which were described in the respective Schedules to the plaints were not liable for registration under section 22 of the Indian Motor Vehicles Act hereinafter referred to as 'the Act ', and cannot, therefore, be taxed under section 6 of the Taxation Act.
In the suit filed by Bolani Ores Ltd., 8 types of machinery were involved : (1) Shovels, (2) Drill Master, (3) Caterpillar Bulldozers, (4) Rockers, (5) Dumpers, (6) Motor Grader, (7) Tractors and (8) Fargo Truck fitted with serving tank for diesel oil etc.
The 'Trial Court held that all the items of machinery as above mentioned, except item (6) i.e. Motor Grader, came within the definition of a 141 motor vehicle ' given in section 2 (18) of the Act, and were therefore liable for registration under section 22 of the Act as well as payment of taxes under the Taxation Act.
Against this decision, First Appeal No. 44 of 1963 was filed in the Orissa High Court.
The State did not file any cross appeal against the declaration that item (6) was not taxable.
The High Court was of the view that unless it is shown that the vehicle is of a special type adapted for use only in factories or enclosed premises and incapable of running on any other type of roads or public roads, the vehicles were motor vehicles.
It was conceded during the hearing on behalf of the appellant that type (8) Fargo Truck clearly comes within the definition of motor vehicle and likewise the Advocate General conceded that type (2) Ingersoll Hand Drill Master cannot be held to be a Motor Vehicle.
The High Court accordingly modified the order of the Trial Court in respect of the types in items (1), (2) and (3).
It held that these three types as well as the Motor Grader in item (6) already held by the Trial Court not to be a motor vehicle, were not liable for registration under section 22 of the Act, nor would they be subject to payment of tax under the Taxation Act.
In the suit filed by Orissa Mineral Development Company Ltd., out of which First Appeal No. 45 of 1963 arose, the plaintiff sought a declaration that nine types of machinery which it owns were not liable for registration under the Act : Item (1) & (2) being Dumpers, (3)& (3A) Tractors (4) Caterpillar Trax Cavetror, (5) & (6) Caterpillar Bull dozers: (7) & (8) Scrapers and (9) Shovel.
The Trial Court found on evidence that items (4) to (9) had a sort of crawler mechanism and were not adapted for regular use on the roads.
This fact was also admitted by the opposite party.
Accordingly it held that the vehicles in these Items did not come within the ambit of the definition of. 'motor vehicle ' under section 2(18) and were not liable for registration under section 22 of the Act.
The case of Dumpers and Tractors items (1) to (3) and (3A), however, was held to stand on a different footing, as these vehicles were adapted for being used on roads for transporting the goods of the plaintiffs though it may be within its own field of operation.
The reasons for bringing such vehicles and the tractors within the purview of section 2(18) of the Act were discussed at some length, and accordingly it was held in both the suits that the vehicle indicated in the respective suit were liable for registration under section 22 of the Act and for payment of the requisite tax under the Taxation Act.
In these appeals intervention of M/s. Chougle & Co., M/s N.C.D.C. Ltd. and 'M/s. Dalmia Cement Ltd. who allege that proceedings taken by them are pending in Courts, was permitted and they are represented by the learned Advocates Soli J. Sorabji, section P. Nayar and section T. Desai respectively.
Civil Appeal No. 336 of 1970 is in respect of the Mysore Motor Vehicles Taxation Act hereinafter called 'the Mysore Act '.
The appellants in this appeal filed a petition under article 226 of the Constitution in the High Court of Mysore challenging the demand by the Regional Transport Officer to get the Dumpers registered under the Act failing which they would be committing an offence entailing penal 142 consequences.
The High Court of Mysore, while dismissing the petition, held that the Dumpers can be used for carrying loads even outside the mining area or any other enclosed premises, like any other 'goods vehicle ' which is required to be registered under the Act.
According to it, what would take the vehicle out of the category of 'motor vehicles ' under the Mysore Act is that they must be such as "are capable of use in any other place for the purpose of transport of goods or passengers", which, in its view, was not "the same thing as saying that if the vehicle is not put to use elsewhere, or used for a special purpose, it must be exempted from registration under section 22 of the Act.
" It further observed : "The test of purpose, as argued by the learned counsel, does not also, in our view fall clearly within the purview of the statutory "exemption in section 2(18) of the Act.
On the other hand, what is enjoined is that its very design and manufacture must be such as would confine its capability for use only in a factory or enclosed premises," Referring to the case of M/s. Bolani Ores Ltd. vs State of Orissa, (1) the interpretation placed by the Orissa High Court on the judgment of the Supreme Court in The State of Mysore vs Syed lbrahim(2) was not accepted.
On this aspect of the Mysore High Court observed : "But, it may also be noted that in the decision of the Supreme Court, above referred to, what was in question was whether the owner of a Motor Car, which was used for transporting passengers for hire was liable for prosecution under section 42(1) of the Act.
The exemption under section 2(18) did not fall for consideration in the said decision.
It was in this context that the Supreme Court laid down that if a Motor Vehicle is used as a transport vehicle, the owner who so uses it or permits it to be so used is required to obtain the necessary permit.
It is the use of the vehicle for carrying passengers for hire or reward which determines the application of section 42(1) of the Act.
" The_High Court, however, agreed with the test laid down by the Orissa High Court for determining what under the is a 'motor vehicle '.
The decision in these appeals hinges on the view we take of what a 'motor vehicle ' is for the purpose of section 2(c) of the Taxation Act under which the motor vehicle has the same meaning as in the , and whether the subsequent amendment of the definition in section 2(18) of the Act by the Motor Vehicles (Amendment) Act, will govern the definition of 'motor vehicle ' for the purposes of the Taxation Act.
Section 6 of the Taxation Act imposes on every motor vehicle a tax at the rate specified in the Second Schedule to the Act.
The question, therefore, arises as to what is a 'motor vehicle ' for the purposes of the Taxation Act.
It may be pointed out that section 2(c) of the Taxation Act, prior to its amendment in 1940, defined a 'motor vehicle ' as meaning any vehicle propelled, or which may be propelled, on a road by electrical or mechanical power either entirely (1) A.
I.R.1958 Orissa 1.
(2) 3.
143 or partially.
In 1939 the of 1914 was repealed and a new Act substituted in its place.
The 1914 Act defined 'motor vehicle ' as including "a vehicle, carriage or other means of conveyance propelled, or which may be propelled, on a road by electrical or mechanical power either entirely or partially." The Orissa Act, therefore, initially adopted the definition in the Taxation Act, which was in consonance with the , as it then stood.
The definition of 'motor vehicle ' under section 2(18) of the Act having been redefined, the Taxation Act by the Orissa Amendment Act 2 of 1940 adopted that definition for the purposes of taxation.
The preamble to this amendment stated that the amendment was made for the purpose of avoiding repugnancy in the .
The Orissa Amendment Act of 1943 reenacted provisions of sections 2 to 8 of the said Act, as the Amendment Act 2 of 1940 was due to expire on November 23, 1943.
Section 2(18) of the Act was, however, amended by Act 100 of 1956 but there was no corresponding amendment in the definition of section 2(c) of the Taxation Act.
It is, therefore, contended that the amended definition is inapplicable 'Lo the Taxation Act, but it is only the definition of a 'motor vehicle ' as it existed under the Act prior to the amendment that has to be read in section 2(c) of the Taxation Act, inasmuch as the purpose and intendment of the Legislature was only to incorporate the definition as it existed at the time when the Taxation Act was amended in 1943.
If it was otherwise, following the legislative practice adopted earlier by the Orissa Legis lature, the definition of a 'motor vehicle ' would have been suitably amended in order to avoid any repugnancy with the amendment.
Apart from this contention, it is also submitted that under the definition as it existed prior to the amendment or subsequent thereto dumpers, rockers and tractors are not 'motor vehicles ', because they are not adapted for use on the road.
Before we deal with this question it is necessary to note the preliminary objection raised by the learned Advocate for the State of Orissa that the appellants should not be permitted to raise this question as it was not pleaded or urged either before the Trial Court or before the High Court, nor is there any evidence to determine the question whether the vehicles, on which the levy of the impugned tax is held to be valid, are used solely upon the premises of the owners.
It is submitted that the contention is contrary to what is stated in the plaint and that it is also not covered by any of the issues under which the question as to whether the premises in which the plaintiffs operate are the exclusive premises of the plaintiffs, nor is there any evidence as to whether the area where the vehicles operate is the exclusive area of the plaintiffs.
In our view, the preliminary objection has no validity, because, firstly, in para 2 of the plaint it is definitely pleaded : "That for the specific purpose of mining operations within their leasehold areas, they possess Caterpillar Bulldozers Model D.S. Letourneau Westinghouse Dumpers and Euclid Dumpers Motor Grader Tractors.
Fargo Truck" etc.
"These machines are mechanically propelled but are neither intended nor adapted for use on public roads nor are ever used by the plaintiffs on public roads or public places." Secondly, 144 the relief asked for is that the machines in possession of the plaintiffs as described above for the purpose of working in the mines and removing over burdens are not liable for registration and consequent payment of taxes under the Taxation Act.
Thirdly, the written statement clearly comprehends what the plaintiffs ' case is.
It is categori cally stated in para 4 that "the various types of machines enumerated in para 2 of the plaint being mechanically propelled vehicles come within the definition of motor vehicles as contained in section 2(18) of the Act since they do not come under the exceptions provided therein.
It is incorrect to say that these vehicles are neither intended nor adapted for use on public roads, nor are ever so used by the plaintiffs on public roads or public places.
On the contrary the places where the aforesaid machines are operating are public places within the meaning of section 2(24) of the since the public are granted the right of access to the same for transacting day to day business.
" Fourthly, issues Nos. 4 and 5, viz. "Are the suit vehicles not 'motor vehicles ' within the provisions of ?" and "Are the suit vehicles liable for registration and taxation? respectively give scope for the question now raised.
Lastly, the evidence also which has been led by the plaintiffs, and to which we shall have occa sion to refer later entitles the appellants to raise this question.
For these reasons, we reject the preliminary objection.
It is now necessary to compare the two definitions of 'motor vehicle ' under section 2(18) of the Act both before and after the amendment by Act 100 of 1956.
We, therefore, give below both these definitions Section 2 (18) before amendment.
motor vehicle" means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or used solely upon the premises of the owner.
Section 2 (18) after amendment by Act 100 of 1956 "motor vehicle" means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special, type adapted for use only in a factory or in any other enclosed premises.
it will be observed from a comparison of the two definitions that the vehicles which have been taken out of the category of a 'motor vehicle ' are different in these two definitions.
Before the amendment a motor vehicle though a motor vehicle within the meaning of the first part of the definition is nonetheless not so, because of its specified user, i.e. if it is used solely upon the premises of the owner.
These vehicles under section 6 of the Taxation Act read with section 2(c) thereof would not attract liability to tax.
But after the amendment though a motor vehicle may be adapted for use upon roads, nonetheless in order to be taken out of the category of the definition it had to be further adapted, namely, it should be a vehicle of a special type adapted for use only in a factory or in any other enclosed premises.
In other 145 words, a motor vehicle of a special type adapted as stated in the post amendment definition would be such as would not be considered to be adapted for use upon roads.
The position is the same with respect to the Motor Vehicles Taxation Acts of other States also.
We have seen the Mysore Motor Vehicles Taxation Act, 1957, which though does not define "motor vehicle" ' as such, nonetheless under section 2(j) states that words and expressions used but not defined in the Act shall have the meanings assigned, to them in the .
It also says that the Mysore General Clauses Act, 1899 (Mysore Act III of 1899) shall apply for the interpretation of the Act, as it applies for the interpretation of a Mysore Act. 'Section 3 is the taxing provision which provides that a tax at the rates specified in Part A of the Schedule shall be levied on all motor vehicles suitable for use on roads, kept in the State of Mysore.
In the Andhra Pradesh (Andhra Area) Motor Vehicles Taxation Act, 1931, section 2(i) states that the expressions mentioned in clauses (a) to (f), of which clause (d) refers to 'motor vehicle ', shall have the meanings assigned to them in the .
It is also pertinent to mention that the Andhra Pradesh (Andhra Area) Motor Vehicles Taxation Act by section 2(v) defines a 'public road ' and by section 4 which is the taxing provision it is provided that the State Government may, by notification in the Official Gazette, from time to time direct that a tax shall be levied on every motor vehicle using any public road in the Andhra area of the State of Andhra Pradesh.
The Madras Act uses the same language as that of the Andhra Pradesh (Andhra Area) Act.
It appears that using any public road in the Presidency of Madras was first substituted for the words "kept or used in the Presidency of Madras" by section 3 (1) of the Madras Motor Vehicles Taxation (Amendment) Act, 1932 (Madras Act V of 1932).
The Bombay Motor Vehicles Tax Act, 1958 follows the same pattern as the Mysore Act and though it does not define a 'motor vehicle ', yet, by section 2(10) it provides that other words and expressions used, but not defined, in the Act shall have the meanings respectively assigned to them in the .
The Bengal Motor Vehicles Tax Act, 1932, also is similar as that of the Bombay Act inasmuch as s.2(5) thereof states that words and expressions used, but not defined, in the Act shall have the same meaning as in the .
In all these cases the common question would be whether the definition of a 'motor vehicle ' as it existed before the Amendment Act of 1956 is the same as in section 2(c) of the Taxation Act or does the definition in section 2(c) of the Taxation Act mean that the motor vehicle as defined in the Act from time to time is to be adopted for the purpose of section 2(c) of the Taxation Act.
In so far as the larger question is L251 Sup.
CI/75 146 concerned, as,to Whether dumpers, rockers and tractors are motor vehicles at all within the meaning of the first part of the definition of 'motor vehicle ' in section 2 (18) of the Act, which is the same before and after the amendment, it is contended that these vehicles are :not suitably adapted for use upon roads, which according to the learned Advocates mean the public roads or roads, to which the public has a right of access.
The Motor Vehicles Taxation Acts are enacted in exercise of the powers conferred on the State Legislatures under entry 57 of List II of the Seventh Schedule to the Constitution, while the is enacted by the Parliament in exercise of the 'concurrent legislative power in entry 35 of List III of the Seventh Schedule to the Constitution.
Entry 57 of List II empowers legislation in respect of taxes on vehicles, whether mechanically propelled or not,suitable for use on roads, including tramcars subject to the provisions of entry 35 of List III.
The power exercisable under entry 57 is the power to impost taxes which are in nature of regulatory and compensatory measures.
The regulatory and compensatory nature of the tax is that the taxing power should be exercised to impose taxes on motor vehicles which use the roads in the State or are kept for use thereon either throughout the whole area or parts thereof and are sufficient to make and maintain such roads : See The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan and others.(1) In this case, the earlier decision in Atiabari Tea Company Ltd. vs The State of Assam and others (2) was considered.
Since the taxing statute is a regulatory or compensatory statute, it is contended that the provisions of sections 6B, 7, 9A of the Taxation Act relate only to the actual use of the public road.
It is pointed out that section 6 of the Taxation Act does not place the burden of taxation on the registered owners of the motor vehicles, but only on the persons who keep the motor vehicles for use which would mean use their on the public roads.
If no such use of public roads is made or the vehicles are not such as can be used on the public roads, then no tax could be levied under the Taxation Act.
Reference in the Taxation Act to the registered owners is, it is submitted, meant only for the purpose of enabling refund of tax paid but not payable in terms of the Act, or section 7 of the Taxation Act.
Under Entry 35 of the Concurrent List, the Parliament as well as the State Legislatures can legislate in respect of only mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied.
It has no power to deal with vehicles which are not mechanically propelled though under the Taxation Act these non mechanically propelled vehicles which are suitable for use on roads can also be taxed even without their being registered under the Act.
It will thus be seen that while entry 57 of List II is solely concerned with taxes on vehicles whether mechanically propelled or not, entry 35 deals with also the principles on which taxes on such vehicles are to be levied.
Taxes on vehicles cannot the liability to pay taxes at the rates at which the taxes are to be levied.
On the other hand, the expression 'principles of taxation ' denote rules of guidance in the matter of taxation.
The ambit and amplitude of these two legislative entries in the respective Lists was dealt with in State of Assam & Others (1) [1963] 1 section C. R. 491.
(2) ; 147 vs Labanya Probha Debi,(1) where Suba Rao CJ., speaking for the.
Constitution Bench of this Court observed at p. 614 "The two entries deal with two different matters though allied ones one deals with taxes on vehicles and the other with the principles on which such taxes are to be levied.
when two entries in the Constitution, whether in the same List or different Lists, deal with two subjects, if possible, an attempt shall be made to harmonize them rather than to bring them into conflict.
Taxes on vehicles in their ordinary meaning connote the liability to pay taxes at the rates at which the taxes are to be levied.
On the other hand, the expression " principles of taxation" denotes rules of guidance in the matter of taxation.
We, therefore, hold that the Amending Acts do not come into conflict with the existing law in respect of any principles of taxation, but only deal with a subject matter which is exclusively within the legislative competence of the State Legislature.
" It is contended that having regard to the nature of the vehicles question they are particularly suitable for the functions they are performing and unsuitable for the roads on which they would be only a source of damage, inconvenience, danger and uneconomical compared with the other vehicles usually utilised for transport of goods.
Accordingly it is submitted that : (1) the present case should be determined with reference to the definition of 'motor vehicle ' read without the amendment in the Act, as such vehicles operating solely within the appellants ' premises should not be liable to tax; (2) the vehicles not being suitable for public roads would not be either registered or taxed whether before or after 1956.
Both for the purposes of registration and taxation the common question arises, viz., whether the vehicles in question are adapted for use upon roads, which, it is submitted, are public roads or roads to which public have a right of access.
If they are not, then they are not 'motor vehicles ' within the meaning of either the Act or the Taxation Act; (3) the concept 'adapted for use on roads ' must lie within the ambit of the expression used by the Constitution; otherwise it would be unconstitutional.
It must, therefore, follow that the definition can only refer to vehicles which are reasonably suitable for the road in the sense that an average man could think that plying of the vehicles on the road would be one of the normal uses of the vehicles.
That alone would be a test of suitability; and (4) for the interpretation of section 22 of the Act it would be permissible and even obligatory to examine the section not in isolation but in the light of the object and scheme of the Act and the regulatory provisions regarding the licensing of drivers, issuing of permits, provisions for compulsory registration and other regulatory provision are confined to the vehicles on the public roads.
The provisions of section 22 are definitely to advance the objects of the Act and to effectuate the regulatory provisions.
By the very language the principal purpose is to insist upon registration in respect of vehicles plying in public places.
Further, the (1) ; 148 expression must be interpreted to advance the object of the Act exactly as the other para of section 22 does.
In this view the expression "purpose of carrying passengers or goods" cannot mean the personal use of the owner.
A person himself cannot be the passenger and goods, and as such it must not be interpreted disjunctively.
It is a single expression "passenger or goods".
It is conceivable that this alternative part of the section is only to ensure that in connection with the journey on a public road even if a motor vehicle goes into a place which will not be strictly a public place like hotel or inside a railway, such as in a Railway Station, or even inside the premises of a bus depot, hospitals, etc.
provisions for compulsory registration should be applicable.
The judgment of the High Court is assailed on the ground that while formulating the test to determine whether a vehicle is adapted for use on the roads it has evidently equated compatibility with suitability, because at certain places it has laid down the test in terms of compatibility and at other places in terms of suitability.
This is clearly illustrative by its decision regarding 'tractor '.
A tractor without a tailor can neither carry passengers nor goods.
In the instant case, it is said that the tractor cannot ply in a public place, nor does it ply in any other place for carrying passengers or goods.
It could not evidently fall within section 22 of the Act.
Though this is so, the High Court says that because it can be adapted by attaching a tailor, it comes within section 2(18), forgetting that what we are concerned with is a tractair without a tailor which is actually used to supply compressed air to certain plants or machines, which clearly shows that the High Court did not have a correct concept of "adapted for use on road".
Shri Soli Sorabji on behalf of the interveners has more or less adopted a similar line of argument and has referred us to the several dictionary meanings of the word 'adapted '.
He has also referred to the English cases on this question and submitted that no vehicle cam be taxed unless it possesses the attribute of being "suitable for use on roads".
The expression "adapted for use on roads" must be construed as suitable for use on roads in the light of entry 57; otherwise, the legislation would be ultra vires the said entry, and consequently such a construction should be avoided by courts.
He further submitted that the Orissa High Court has misconstrued the judgment of the, Supreme Court in State of Mysore vs Syed Ibrahim,(1) where the observations were made with reference to the definition of "a public service vehicle" as defined in section 2(25) of the Act, under which user by itself was sufficient to bring the vehicle within its purview.
He has referred us to sections 47(f), 55(f), 71(2), 74, 75(1) and (3) and 77 of the Act in support of his proposition that having regard to the general object, purpose and the policy underlying the Act the expression "roads" must mean public roads and not private roads.
If so, the dumpers, rockers and tractors etc.
which do not ply or are not suitable for plying on public roads cannot be either registered under the Act or taxed under the Taxation Act.
Mr. Tarkunde for the State of Orissa submits that every motor vehicle registered under the Act is liable to pay tax under the Taxation Act and since dumpers, rockers and tractors are by their nature (1) ; 149 adapted for use on the roads they are registerable, and they have to be registered and are liable for payment of tax under the Taxation Act.
There has been a good deal of argument on both sides on the meaning of the expression "adapted for use upon roads".
We have been referred to certain English decisions which deal with the meaning of the word 'adapted ' in the English Road Traffic Act, 1960.
While the definition of 'motor vehicle ' in the Act describes it as a mechanically propelled vehicle adapted for use upon roads, the English Road Traffic Act describes it as a mechanically propelled vehicle "intended or adapted for use on roads".
Even the earlier English Road Traffic Act, 1930, had used the words "intended or adapted for use on roads", while making Part I applicable to motor vehicles.
In Daley and others vs Hargreaves(1) the Queen 's Bench Division took the view that as there was no evidence sufficient to show that the dumpers were "intended or adapted for use on roads" within the meaning of section 36 of the Road and Rail Traffic Act., 1933, and section 1 of the Road Traffic Act, 1930, and the case being indistinguishable in substance from the Scottish decision in MacDonald vs Carmichael(2) which the Court would follow for conformity, it had not been established that dumpers were motor vehicles to which the regulations applied.
In MacDonald 's case(2) it was held that the dumpers were solely used in connection with road construction and were not constructed to carry goods on an ordinary highway.
They were so constructed as to be capable of, and were in fact occasionally used for, carrying road making material along short stretches of the public highway in the vicinity of the work of reconstruction.
The ratio of that decision was applied to the Daley 's case,(1) where Salmon, J. observed at p. 555 : "In my judgment, the true effect of the Court of Justiciary 's decision was that the very limited use of the dumpers on the road in that case did not establish, that they were "intended or adapted for use on the road", within the meaning of those words in the Road traffic Act, 1930, section 1." Lord Parker, C.J., though agreeing reserved his opinion by emphasising that it must not be taken as the result of this decision that dumpers of the type used in this case were not motor vehicles intended or adapted for use on the road.
He indicated that he had agreed with Salmon, J., merely because there was no proof in that case that the dumpers used were motor vehicles.
While dealing with the English cases it must not be forgotten that the definition of "motor vehicle" in the Road Traffic Act imports the element of intention into the definition for ascertaining whether a vehicle is a motor vehicle.
In Maddox V. Storer,(3) Lord Parker, C.J., was construing the word "adapted" when used disjunctively with "constructed".
He observed at p. 456 : "One can get illustration after illustration, on looking at the Act itself, where "adapted," when used disjunctively with (1) (2) (3) 150 "constructed" must mean a physical alteration, and, as it seems to me, other cases where the word "adapted" alone is used and where it must be given the adjectival meaning of be ' fit and apt for the purpose." But where the word "adapted" alone has been used such as in subparagraph (2) of paragraph 1 of the First Schedule to the Road Traffic Act, 1960, he was of the view that it was wholly inapt to mean "altered so as to make fit".
He asked "How do you alter a motor car so as to make it fit to carry not more than seven passengers" ? It is clearly there standing on its own, susceptible only of meaning "fit and apt for the purpose." In Burns vs Currell(1) also Lord Parker delivered the judgment.
He referred to the decision in Daley, MacDonald Maddox (supra) observed at p. 440 thus : "But to define exactly the meaning of the words "intended or adapted" is by no means easy.
I think that the expression "intended", to take that word first, does not mean "intended by the user of the vehicle either at the moment of the alleged offence or for the future".
I do not think it means the intention of the manufacturer or the wholesaler or the retailer;" After referring to Salmon, J. 's observations in Daley 's case (supra) and the suggestion that the word "intended" might be paraphrased as "suitable or apt" Lord.
Parker pointed out that it may be merely a difference of wording, but he preferred to make the test whether a reasonable person looking at the vehicle would say that one of its users would be a road user, and then he dealt with the meaning of the word "adapted" and observed at p. 441 : "So far as the other word, "adapted," is concerned, as was pointed out in Maddox vs Storer (1963)1 Q.B. 451the word "adapted" is used throughout the Road Traffic Act, 1960, in a number of different contexts.
Sometimes It is used as an alternative to "constructed" "constructed or adapted," and it seems clear, and indeed it has been so held for a very long time, that "adapted" there means altered.
On the other hand, as it was pointed out in Maddox vs Storer, it is used in other contexts in this Act, in particular when it stands alone, as clearly meaning "apt" or "fit", in other words in an adjectival sense.
Here in this context of intended or adapted my own view is, though I think it is perhaps unnecessary to decide it in this case, that "adapted," used disjunctively with "intended" and not with the word "constructed," is used in its adjectival sense.
" The decisions rendered on the definition of 'motor vehicle ' under the English Road Traffic Act are of little help, because that definition (1) 151 has reference to the words "intended or adapted" while the element of intention has no relevance under the Act, where the word "adapted" alone is used.
It has been urged before us that since the learned thief Justice Lord Parker had referred to the meaning of the words "intended" and "adapted" separately in the context of the English Road Traffic Act, we should take assistance from his observations.
It appears to us that where two words of different import are used which in the context, of the scheme of the Act and its purpose play an important part, to ask us to take the meaning given of one of the words and import it as the meaning for the purposes of the Act even when the same word is used, is perhaps to place us in a similar predicament as that of the gentleman who when asked to expound on Chinese metaphysics, not knowing how to begin looked up the article on China in the Encyclopedia Britannica and also on metaphysics and combined the two into Chinese metaphysics.
As usual references have been made to the Dictionaries but quite often it is not possible to hold a dictionary in one hand and the statute to be interpreted in the other for ascertaining the import and intent of the word or expression used by the Legislature.
The shade of meaning of a word, its different connotations and collocations which one finds in a dictionary does not relieve us of the responsibility of having to make the ultimate choice of selecting the right meaning We choose that meaning which is most apt in the context, colour and diction in which the word is used.
The use of a dictionary ad lib without an analysis of the entire Act, its purpose and its intent, for ascertaining the meaning in which the Legislature could have used the word or expression may not lead us to the right conclusion.
With this caution before us for avoiding any of the aforesaid methods which might lead to a possible incongruity, we will examine the different facets to which our attention has been drawn.
The meaning of the word "adapted" in section 2(18) of the Act is itself indicated in entry 57 of List II of the Seventh Schedule to the Constitution, which confers a power on the State to tax vehicles whether propelled mechanically or not and uses the word "suitable" in relation to its use on the roads.
The words "adapted for use" must therefore be construed as "suitable for use".
At any rate, words "adapted for use" cannot be larger in their import by including vehicles 'Which are not " suitable for use ' on roads.
In this sense, the words "is adapted" for use have the same connotation as "is suitable " or" is fit" for use on the roads.
The question would then arise, are dumpers, rockers and tractairs suitable or fit for use on roads ? It is not denied, that these vehicles are on pneumatic wheels and can be moved about from place to place with mechanical power. 'The word "vehicle" itself connotes that it is a contrivance which moves.
A vehicle which merely moves from one place to another need not necessarily be a motor vehicle within the of a.2(18) of the Act.
It may move on iron flats made into a chain such as a caterpillar vehicle or a military tank.
Both move from one place to another but are not suitable for use on roads.
It is not that they cannot move on the roads but they are not adapted, made fit or suitable for we on roads.
They would, if used, dig and 152 damage the roads.
It is contended that the dumpers or rockers are very heavy and though they can move on roads they would damage the roads and, therefore, they are not suitable for use on roads.
To substantiate this proposition the appellants have produced before us certain notifications issued by the State of Orissa under which vehicles beyond a certain laden.
weight are prohibited from plying on the roads.
It was rightly pointed out by the learned Advocate for the State of Orissa that there are only some of the roads on which vehicles heavier than what is indicated in the notification cannot be permitted.
But that is not to say that all vehicles which exceed a particular weight are not adapted for use upon roads and are, therefore, not motor vehicles.
A dumper in the Mysore case according to the manufacturer 's own specifications is suitable for roads and is described thus : " The dumper will carry: bulk goods, building materials, mining products, agricultural and forestry products, earth, stones, bricks, concrete, mortar, etc.
The structure is of simple design and easy to handle.
Tripping is performed by releasing the locking device retaining the tipping body.
The dumper requires no more than a few seconds for the emptying of its tipping body and gives no trouble to the driver when being operated on uphill or downhill roads, With its load unbalanced, or when the load refuses to slide out easily.
Quickness and ease characterise the operation of the dumper and the clumsy manoeuvring can be dispensed with.
In narrow lanes or rough roads where turning would be impossible or undesirable, the seat is turned and will face driving direction.
" It is also averred in the plaint in the suit filed by the appellant Bolani Ores Ltd. that Euclid Dumpers are used for transporting ore from the mining faces to the crushing and screening plant or from head mine stockpile to near railway siding.
Rockers also seem to be similar to dumpers.
But in this case rockers are heavier than dumpers.
In so far as the tractairs are concerned, attachments are fitted for the purpose of supplying compressed air to Jack Hammer Drills which are used to drill holes in the ore body so that explosive charges may be inserted in them to break the ore into manageable sizes.
In respect of all these three types of vehicles it cannot be said that they are not adapted for use upon roads.
That they are not so used or are confined for use to only places other than roads or public places is a different matter, because whether they have to be registered under the Act or are liable for payment of tax under the Taxation Act will depend upon the provisions of the respective Acts.
In so far as the Act is concerned, we must bear in mind that it is essentially an Act to regulate transport , The statement of objects and 153 reasons given for the 1939 Act, in so far as it is relevant for our purpose states thus "It has been recognised now for some years past that the Indian Motor Vehicles Act, 1914 which was framed to suit conditions at an early stage of development of motor transport, is no longer adequate to deal with conditions brought about by the rapid growth of motor transport in the past two decades.
In the interest alike of the safety and convenience of the public and of the development of a so called system of transport, much closer control is required than the present Act permits, and it is necessary to take powers to regulate transport.
" A perusal of the provisions of the Act, in the light of the objects and reasons, would justify the conclusion that it is not necessary for every vehicle registered under the Act to be also liable for payment of tax under the Taxation Act.
It may be that a vehicle is registerable under the Act but not liable for tax under the Taxation Act.
For instance section 22 of the Act provides : "No person shall drive any motor vehicle and no owner of a motor vehicle shall cause or permit the vehicle to be driven in any public place or in any other place for the purpose of carrying passengers or goods unless the vehicle is registered. " Similarly under section 3 of the Act "No person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to himself authorizing him to drive the vehicle, and no person shall be drive a motor vehicle as a paid employee or shall so drive a transport vehicle unless his driving licence specifically entitles him so to do." A 'motor vehicle ' under section 2(18) has been defined as any mechanically propelled vehicle adapted for use upon roads.
Having regard to the context of the definition of "public place" in section 2(24) of the Act, the regulatory character of the Act, and the use of the word 'road ' used in a public Act, road would mean a "public road" which word as already noticed has been used will the Andhra Pradesh (Andhra Area) Motor Vehicles Taxation Act.
The word "public place" has been defined in section 2(24) as meaning "a road street, way or other place "whether a thoroughfare or not, to which the public have a right of access".
If the public have no right of access to any place which is not a road, street, way or thoroughfare it will not be a public place.
A motor vehicle which is not adapted for use upon roads to which the public have no right of access is not a motor vehicle within the meaning of section 2(18) of the Act.
But where a vehicle is adapted for use on a road which is neither more nor less than that it is made suitable or fit for use upon road, i.e. public roads, it is a motor vehicle, and if such a motor vehicle is a goods vehicle under section 2(8) which means a vehicle which is not only suitable or fit for use upon roads but is "constructed or adapted for use for the carriage of goods" or where it is not so constructed or adapted when used for the carriage of goods solely or in addition to passengers, car is a public service vehicle within the meaning of section 2(25) of the Act, namely " an motor vehicle used or adapted to be used for the 154 carriage of passengers for hire or reward it has to be registered under section 22 and can only be driven by a person who holds a licence under section 3 of the Act.
Where a vehicle is adapted for use upon roads and though it is not driven on the Public roads or in a public place even then if it carries goods car passengers which may not be for hire or reward or the passengers may be friends or relatives of the owner or the goods may belong to the owner and plying in a place to which the public has, as a matter of right, no access, it nonetheless cannot be driven without its being registered or without the driver holding a licence to drive such a vehicle.
In so far as the Act is concerned, having regard to the fact that the dumpers and rockers are motor vehicles which are not taken out of that category, as was the case before the amendment, they have to be registered after the amendment and can only be driven by persons holding a valid licence.
The tractair though it may be a motor vehicle within the definition of that term is neither a goods vehicle nor a vehicle which carries passengers nor is it being driven in a place to which public have as a right access.
As it does not perform any of the aforesaid functions or uses it is not a vehicle which has to be registered nor has it to be driven only by a person who holds a licence.
The question then remains as to whether these vehicles though registrable under the Act are motor vehicles for the purpose of the Taxation Act.
It has already been pointed out that before the amendment vehicles used solely upon the premises of the owner, though they may be mechanically propelled vehicles adapted for use upon roads were excluded from the definition of 'motor vehicle '.
If this definition which excludes them is the one which is incorporated by reference under section 2 (c) of the Taxation Act, then no tax is leviable on these vehicles under the Taxation Act.
Shri Tarkunde for the State of Orissa contends that the definition of 'motor vehicle ' in section 2(c) of the Taxation Act is not a definition by incorporation but only a definition by reference, and as such the meaning of 'motor vehicle for the purpose of section 2(c) of the Taxation Act would be the same as defined from time to time under section 2(18) of the Act.
In ascertaining the intention of the Legislature in adopting the method of merely referring to the definition of 'motor vehicle ' under the Act for the purpose of the Taxation Act, we have to keep in mind its purpose and intendment as also that of the Motor Vehicles Act.
We have already stated what these purposes are and having regard to them the registration of a motor vehicle does not automatically make it liable for taxation under the Taxation Act.
The Taxation Act is a regulatory measure imposing, compensatory taxes for the purpose of raising revenue to meet the expenditure for making roads, maintaining them and for facilitating the movement and regulation of traffic.
The validity of the taxing power under entry 57 List II of the Seventh Schedule read with article 301 of the Constitution depends upon the regulatory and compensatory nature of the taxes.
It is not the purpose of the Taxation Act to levy taxes on vehicles which do not use the roads or in any way form part of the flow of traffic on the roads which is required to be regulated.
The regulations under the Motor Vehicles Act for registration and prohibition of certain categories of vehicles being driven by persons 155 who have no driving licence, even though those vehicles are not plying can the roads, are designed to ensure the safety of passengers and goods etc.
and for that purpose it is enacted to keep control and check on the vehicles.
Legislative power under Entry 35 of List III (Con V current List) does not bar such a provision.
But Entry 57 of List II is subject to the limitations referred to above, namely, that the power of taxation thereunder cannot exceed the compensatory nature which must have some nexus with the vehicles using the roads viz. public roads.
If the vehicles do not use the roads, notwithstanding that they are registered under the Act, they cannot be taxed.
This very concept is embodied in the provisions of section 7 of the Taxation Act as also the relevant sections in the Taxation Acts of other States, namely, that where a motor vehicle is not using the roads and it is declared that it will not use the roads for any quarter or quarters of a year or for any particular year or years, no tax is leviable thereon and if any tax has been paid for any quarter during which it is not proposed to use the motor vehicle on the road, the tax for that quarter is refundable.
If this be the purpose and object of the Taxation Act, when the motor vehicle is defined under section 2(c) of the Taxation Act as having the same meaning as in the Motor Vehicle Act, 1939, then the inten tion of the Legislature could not have been anything but to incorporate only the definition in the Motor Vehicles Act as then existing, namely, in 1943.
as if that definition was bodily written into section 2(c) of the Taxation Act.
If the subsequent Orissa Motor Vehicles Taxation (Amendment) Act, 1943, incorporating the definition of motor vehicle ' referred to the definition of 'motor vehicle, under the Act as then existing, the effect of this legislative method would, in our view, amount to an incorporation by reference of the provisions of section 2(18) of the Act in section 2(c) of the Taxation Act.
Any subsequent amendment in the Act or a total repeal of the Act under a fresh legislation on that topic would not affect the definition of 'motor vehicle ' in section 2(c) of the Taxation Act.
This is a well accepted interpretation both in this country as well as in England which has to a large extent influenced our law.
This view is further reinforced by the use of the word has in the expression "has the same meaning as in the " in section 2(c) of the Taxation Act, which would perhaps further justify the assumption that the Legislature had intended to incorporate the definition under the Art as it then existed and not as it may exist from time to time.
This method of drafting which adopts incorporation by reference to another Act whatever may have been its historical justification in England, in this country does not exhibit an activities draftsmanship which would have adopted the method of providing its own definition.
Where two Acts are complimentary or interconnected, legislation by reference may be an easier method because a definition given in the one Act may be made to do as the definition in the other Act both of which being enacted by the same Legislature.
At any rate, Lord Esher, M.R., dialing with legislation by incorporation, in In re.
Wood 's Estate state(1) said at p. 615: If a subsequent Act brings into itself by reference some of he clauses of a former Act, the legal effect of that, as has (1) 156 often been held, is to write those sections into the new Act just as if they had been actually written in it with the pen, or printed in it, and, the moment you have those clauses in the later Act, you have no occasion to refer to the former Act at all.
" The observations in Clarke vs Bradlaugh(1) are also to the same effect.
Brett, L.J., in that case had said at p. 69 : ". . there is a rule of construction that, where a statute is incorporated by reference into a second statute, the repeal of the first statute by a third statute does not affect the second." In Secretary of State for India in Council vs Hindusthan Co operative Insurance Society Ltd.(2) the Privy Council was considering a case where the incorporation effected in the statute, viz., the Calcutta Improvement Trust Act, 1911 referred to by their Lordships as the "Local Act" was in express terms and in the form illustrated by 54 and 55 Vict., Ch. 19.
The "Local Act in dealing with the acquisition of land for the purposes designated by it, made provision for the acquisition under the Land Acquisition Act, and the provisions of the Land Acquisition Act were subjected to numerous modifications which were., set out in the Schedule, so that in effect the "Local Act" was held to be the enactment of a Special Law for the acquisition of land for the special purpose.
It was in the context of these and several other provisions which pointed to the absorption of certain of the provisions of the Land Acquisition Act into the "Local Act" with vital modifications that Privy Council observed at p. 266 "But their Lordships think that there are other and perhaps more cogent objections to this contention of the Secretary of State, and their Lordships are not prepared to hold that the sub section in question, which was not enacted till 1921, can be regarded as incorporated in the Local Act of 1911.
It was not part of the Land Acquisition Act when the Local Act was passed, nor in adopting the provisions of the Land Acquisition Act is there anything to suggest that the Bengal Legislature intended to bind themselves to any future additions which might be made to that Act.
It is at least conceivable that new provisions might have been added to the Land Acquisition Act which would be wholly unsuitable to the Local code.
Nor again, does Act XIX of 1921 contain any provision that the amendments enacted by it are to be treated as in any way retrospective, or are to be regarded as affecting any other enactment than the Land Acquisition Act itself.
Their Lordships regard the local Act as doing nothing more than incorporating certain provisions from an existing Act, and for convenience of drafting doing so by reference to that Act, instead of setting out for itself at length the provisions which it was desired to adopt." (1) [1881] 8 Q. D. D. 63.
(2) L. R. 58 I. A. 259.
157 It was further observed at p. 267 : "In this country it is accepted that where a statute is incorporated by reference into a second statute, the repeal of the first statute does not affect the second : see the cases collected in Craies on Statute Law, 3rd edn.
pp. 349, 350.
This doctrine finds expression in a common form section which regularly appears in the amending and repealing Acts which are passed from time to time in India.
x x x x x The independent existence of the two Acts is therefore recognized; despite the death of the parent Act, its offspring survives in the incorporating Act.
Though no such saving clause appears in the General Clauses Act, their Lordships think that the principles involved is as applicable in India as it is in this country.
It seems to be not less logical to hold that where certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act, which is not expressly made applicable to the subsequent Art, can be deemed to be incorporated in it, at all events if it is possible for the subsequent Act to function effectually without the addition." This Court in The Collector of Customs, Madras vs Nathelle Sampethu Chetty and Another(1) considered the Privy Council decision in the Hindusthan Co operative Insurance Society Ltd. (2) and distinguished that case and held the principle inapplicable to the facts of that case.
In State of Bihar vs section K. Roy(2) this Court was considering the definition of "employer" in section 2(e) of the Coal Mines Provident Fund and Bonus Schemes Act, 1948, Where that expression was defined to.
mean "the owner of a coal mine as defined in clause (g) of section 3 of the Indian Mines Act, 1923".
The Indian Mines Act, 1923, had been repealed and substituted by the (Act 35 of 1952).
In the latter Act the word "owner" had been defined in cl.
(1) of section 2.
The question was whether by virtue of section 8 of the General Clauses Act, the definition of the word "employer" in cl.
(e) of section 2 of the Coal Mines Provident Fund and Bonus Schemes Act should be construed with reference to the definition of the word "owner" in cl.
(1) of section 2 of Act 35 of 1952, which repealed the earlier Act and reenacted it.
It may be mentioned that according to section 2(1) of Act 35 of 1952 the word "owner", when used in relation to a mine, means " any person who is the immediate proprietor or lessee or occupier of the mine or of any part thereof and in the case of a mine the business whereof is being carried on by a liquidator or receiver, such liquidators receiver. . .
The expression "coal mine" is separately defined in cl.
(b) of section 2 of the Coal Mines Provident Fund and Bonn&, (1) ; , at pp.
830 833.
(2) L.R. 58 I.A. 259.
(3) [1966] Supp.
S.C.R. 259.
158 Schemes Act, 1948.
Ramaswami, J., speaking for the Court observed at p. 261 : "As a matter of construction it must be held that all works, machinery, tramways and sidings, whether above or below ground, in nor adjacent to a coal mine will come within the scope and ambit of the definition only when they belong to the coal mine.
In other words, the word "or" occurring before the expression "belonging to a coal mine" in the main definition has to be read to mean "and".
" This case, as well as the decision in New Central Jute Mills Co. Ltd. V. The Assistant Collector of Central Excise, Allahabad & others,(1) are distinguishable on the facts and legislation which this Court was considering.
In the New Central Jute Mills Co. Ltds.(1) case, the Privy Council decision in the Hindusthan Co operative Insurance Society Ltd. 's case (supra) was referred to and distinguished.
It is, however, contended by the learned Solicitor General that both in Nathella Sampathu Chetty 's case (supra) as well as the New Central Jute Mills Co. Ltd. 's case(1) this Court was considering the effects of the two Acts which were made by Parliament by central legislation and it is, therefore, not strictly a case of incorporation because the Central Legislature is deemed to have, while making the latter enactment, kept in view the provisions of the former Act.
In our view this may not be conclusive.
in Ram Sarup vs Munshi and Others(2) a judgment of the Bench of five Judges of this Court held that the repeal of the Punjab Alienation of Land Act, 1900, had no effect on the continued operation of the Punjab Preemption Act, 1913, and that the expression "agricultural land ' 'in the later Act had to be read as if the definition of the Alienation of Land Act had been bodily transposed into it.
After referring to the observations of Brett, L.J., in Clarke 's case (supra), Rajagopala Ayyangar, J., speaking for the court observed at pp. 868869 : "Where the provisions of an Act are incorporated by reference in a later Act the repeal of the earlier Act has, in general, no effect upon the construction or effect of the Act in which its provisions have been incorporated.
x x x x x x In the circumstances, therefore, the repeal of the Punjab Alienation of Land Act of 1900 has no effect on the continued operation of the Preemption Act and the expression ' agricultural land ' in the later Act has to be read as if the definition in the Alienation of Land Act had been bodily transposed into it.
" The above decision of this Court is more in point and supports our conclusion.
In our view, the intention of Parliament for modifying the has no relevance in determining the intention of the Orissa Legislature in enacting the Taxation Act.
Apart from (1) (2) ; 159 this aspect the power; of, taxation as we, have said earlier, is not in the Concurrent List III but in List II and construed as a taxation measure we cannot extend the, ambit, of it by mere implication.
As we said it is possible for both the Acts to co exist even after the definition of 'motor vehicle ' in the Act has been amended.
It is, therefore, clear that the definition of 'motor vehicle as existing Prior to 1956 Amendment would alone be applicable as being incorporated in the Taxation Act.
Mr. Tarkunde has referred to section 6 of the in support of his contention that after the amendment,the amended definition would apply to the Taxation Act.
But we do not think that there is any justification for this,submission.
Section 6 of the , specifically refers to that Act, or any Central Act or Regulation made after the commencement of the and states that if these Acts repeal any enactment, hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not affect the matters specified in clauses (a) to (e) of that section.
Since the Taxation Act is a State Act neither section 6 nor section 6A of the has any relevance.
That Act has to be interpreted in the light of the Orissa and since there is no question of any amendment or any repeal of any of the Orissa Acts affecting the Taxation Act, section 7 of the Orissa has also no relevance.
If so the question is whether these vehicles were used solely upon the premises of the owner.
On this aspect, there can be no doubt, because there is evidence to show that dumpers, rockers and tractaires (tractors with air compressed attachment) are exclusively used on the premises of the owners.
In Civil Appeal No. 1816 of 1968 P. W. 1 Assistant Superintendent of Mines, Bolani Ores Ltd., stated that there is no public road within their leasehold premises.
No member of public is allowed to enter into leasehold premises without due permission obtained before hand.
They have check gates on the approach road to their leasehold.
All the machines are within leasehold and never outside it.
In cross examination, no doubt he admitted that the leasehold has no fence.
He, however, stated that there is an official approach road to the plant.
He also stated in cross examination that there is a gate book, gate register and a security guard.
From this evidence it is clear that though there is no fence, there are check gates, and the public are not allowed to enter into the leasehold without prior permission and the machines are used within the leasehold premises.
The mere fact that there is no fence does not mean that the leasehold premises are not enclosed premises.
It is obvious that no one can get into the leasehold premises without having to go through the gate for which gate book, gate register and security guard are provided.
In Civil Appeal No. 1817 of 1968 Orissa Mineral Development Company 's case, P. W. 1 stated in his evidence that the dumpers in the schedule were to carry ores from the place of excavation in the railway wagon within the mining area.
The members of the public have no right to enter into it.
There are check gates and guards.
160 P. W. 2 stated in his evidence that the suit vehicles were used at the place of mining operations.
The members of the public have no access to the mining area.
There were ten to twelve guards around the mining area and there were also guards at the gates of the approaching road.
The guards were to prevent the unauthorised persons to enter into the mining area and there was a duty chart of those guards.
No doubt, P. W. 4 stated in his evidence that the area within which the machines were used was neither fenced nor walled around.
Similarly in Civil Appeal No. 336 of 1970 in the case of Dalmia Cement Bharat Ltd it has been stated in the reply affidavit in paragraph 4 that a "trench 4 'X4 'x2 ' is dug alround the mining area so as to prevent free ingress and egress to the mining area.
Certain pit areas are fenced with barbed wire.
In fact to avoid accidents, particular area where dumpers are being used have necessarily to be fenced.
This is required under the Mining Act and Rules framed thereunder.
" In reply to paragraph 4 it has been stated by the respondent that the allegations of the deponent in paragraph 4 of his affidavit except the allegation that the mining area is a well defined and enclosed area are substantially correct.
From the very nature of the area operated by these three companies it is obvious that the machines which are the subject matter of these appeals must be working in their respective mining areas.
The mere fact that there is no fence or the barbed wire around, the leasehold premises is not conclusive.
There is evidence to show that the public arc not allowed to go inside without prior permission, there are gates and a check on ingress and egress is kept by guards who also ensure that no unauthorised persons have access to the mining area, all of which indicate that the respective mining areas are enclosed premises within the meaning of the exceptions under section 2(c) of the Taxation Act.
In the result Civil Appeal 336/70 is dismissed with cost and other appeal , are partly allowed and it is held that dumpers and rockers though registrable under the Act are not taxable under the Taxation Act as long as they are working solely within the premises of the respective owners.
So far as the tractairs are concerned they are neither registerable under the Act nor taxable under the Taxation Act.
The appellants will get proportionate costs.
As we have held that these machines are not taxable the question about the constitutional validity of the Taxation Act challenged by Writ Petition No. 372 of 1974 filed by Bolani Ores Ltd. would become academic and need not be considered.
The writ petition is accordingly dismissed but without costs.
P.B.R. C.A.336/70 and W.P. 372/74 dismissed C. A. 1816 1817/68 partly allowed.
| IN-Abs | The appellants who owned Dumpers, Rockers and Tractors claimed that these machines were not liable for registration under section 22 of the Indian and as such were not taxable under section 6 of the Bihar and Orissa Motor Vehicles Taxation Act, 1930.
The trial court held that the machinery were motor vehicles within the meaning of section 2(18) of the and were therefore liable for registration under that Act and so to payment of tax under the Taxation Act.
The High Court held that unless it was shown that the vehicles were of a special type adapted for use only in factories or enclosed premises and incapable of running on any other type of roads or public roads the vehicles were motor vehicles and that the three types not being motor vehicles were not liable for registration under section 22 of the Act nor were they subject to payment of tax under the Taxation Act.
Section 2(c) of ' the Taxation Act adopted the definition of motor vehicle contained in the Motor Vehicles Act, 1914.
The Motor Vehicles Act, 1914 was repealed and replaced by the .
The definition of motor vehicle in section 2(18) of the having been redefined the Taxation Act, by the Orissa Amendment Act 2 of 1940 adopted that definition for the purpose of taxation.
The Orissa Amendment Act, 1943 reenacted provisions of sections 2 to 8 of the Taxation Act as the Amendment Act 2 of 1940 was due to expire.
Section 2(18) of the was amended by Act 100 of 1956.
But there was no corresponding amendment in the definition of section 2(c) of the Taxation Act.
It was contended in this Court that under the definition of motor vehicle as it existed prior to amendment or subsequent thereto dumpers, rockers and tractors were not motor vehicles because they were not adapted to use on the road and (2) the definition of motor vehicle in section 2(c) of the Taxation Act is not a definition by incorporation but only a definition by reference and as such the meaning of motor vehicle for the purpose of section 2(c) of the Taxation Act would be the same as defined from time to time under sections 8(2) to 18 of the .
HELD : Dumpers and rockers though registrable under the are not taxable under the Taxation Act as long as they are working solely within the premises of the respective owners.
So far as the tractairs are concerned they are neither registrable under the nor taxable under the Taxation Act.
[160 F] A motor vehicle which is not "adapted for use" upon roads to which public have no right of access is not a motor vehicle within the meaning of section 2(18) of the Act.
The words "is adapted for use" have the same connotation as "is suitable" or "is fit" for use on the roads.
The meaning of the word adopted" in section 2(18) of the Act is itself indicated in entry 57 of List If of the 7th Schedule to the Constitution which confers powers on the State to tax vehicles whether propelled mechanically or not and uses the words "suitable" in relation to its use on the roads.
The words "adapted for use" must.
therefore, be constructed as "suitable for use".
The words "adapted for use" 139 cannot be larger in their import by including vehicles which are not "suitable for use" on roads.
A perusal of the provisions of the Act would justify the conclusion that it is not necessary for other vehicles registered under the Act to, be also liable for payment of tax under the Taxation Act.
[153 G A; 151 F G] Daley and others vs Hargreaves , MacDonald vs Carmichael , Maddox vs Storer and Burns vs Currell , referred to.
(2) The power of taxation under Entry 57 List II cannot exceed the compensatory nature which must have some nexus with the vehicles using the public roads.
If the vehicles do not use roads notwithstanding that they are registered under the Act they cannot be taxed.
If this be the Purpose and object of the Taxation Act, when the motor vehicle is defined under section 2(c) of the Taxation Act as having the same meaning as in the then the intention of the legislature could not have been anything but to incorporate only the definition in the as it existed in 1943, as if that definition was bodily written into section 2(c) of the Taxation Act.
If the subsequent Orissa Motor Vehicle Taxation (Amendment) Act 1943 incorpo rating the definition of "motor vehicle" referred to the definition of "motor vehicle" under the Act as then existing the effect of this regulative method would amount to an incorporation by reference to the provisions of section 2(18) of the Act in section 2(c) of the Taxation Act.
Any subsequent amendment in the Act or a total repeal of the Act under a fresh legislation on that topic would 'not affect the definition of "motor vehicle" in section 2(c) of the Taxation Act.
[155 B; D E] The use of the word 'has ' in the expression "has the same meaning as in the Motor Vehicle Act, 1939" in section 2(c) of the Act would justify the assumption that the legislature had intended to incorporate the definition under the Act as it then existed and not as it may exist from time to time, [155 F] In re.
Woa 's Estate (1886)31 Ch.
D.607, Clarke vs Bradlaugh (1888)8 Q.B.D. 63, Secretary of State for India in Council vs Hindusthan Co operative Insurances Society Ltd. L.R. 58 I.A. 259, State of Bihar vs section K. Ray [1966] Supp.
S.C.R. 259 and Ram Sarup vs Munshi and Others ; , referred to.
The definition of motor vehicle as existing prior to the 1956 amendment of the would alone be applicable as being incorporated in the Taxation Act.
The intention of Parliament for modifying the has no relevance in determining the intention of the Orissa Legislature in enacting the Taxation Act.
The power of taxation is not in the concurrent List but in List It and construed as a taxation measure the ambit of it cannot be extended by mere implication.
It is possible for both the Acts to Co exist even after the definition of "motor vehicle" in the Act has been amended.
[159 B; 158 H] In the instant case there is evidence to show that the dumpers, rockers and tractairs are exclusively used on the premises of the owners.
[159 E] The machines which are the subject matter of these appeals must be working in their respective mining areas.
The mere fact that them is no fence or barbed wire around the leasehold premises is not conclusive.
There is evidence to show that the public are not allowed to go inside without prior permission, there are gates and a check on ingress and egress is kept by guards who also ensure that no unauthorised persons have access to the mining area.
[160 DE]
|
inal Appeals Nos. 10 & 11 of 1971.
Appeals by Special Leave from the Judgment & Order dated the 19th February; 1970 of the Allahabad High Court in Criminal Appeals Nos. 20, 194 and 582 of 1969.
O.P. Rana for the appellant.
J. P. Goyal, for respondent Nos. 3 5 (In Crl.
A. No. 10/71) and respondents (In Crl. A. No. 11 of 1971).
The Judgment of the Court was delivered by CHANDRACHUD, J.
Eighteen persons were tried by the, Additional Sessions Judge, Agra, for various offences arising out of the murders of five persons : Gajraj Singh, Bhairon Singh, Budh Singh, Pancham Singh and Amar Singh.
The learned Judge acquitted eight persons and convicted the remaining ten.
Nine out of these ten were convicted under sections 302 and 201 road with section 149 of the Penal Code.
Seven out of these nine were sentenced to death and the remaining two to imprisonment for life.
The tenth to be convicted was held guilty under section 201 read with section 149 and was sentenced to imprisonment for seven years.
In appeals filed by the accused, the High Court of Allahabad substantially modified the judgment of the trial court.
It convicted only one accused, Dev Chand, under section 302 and upheld the sentence of death imposed on him by the trial court.
It also upheld his conviction and sentence under section 201 read with section 149.
The conviction and sentence of eight of the accused under section 302 read with section 149 was set as ', 'de by the High Court.
it however, upheld the conviction and sentence of five out of those under section 201 read with section 149.
These appeals by special leave are filed by the.
State of Uttar Pradesh against the judgment of the High Court acquitting eight out of the nine accused who were convicted by the trial court under section 302 read with section 149.
Thus, the main questions to be considered in this appeal are whether the respondents were members of an unlawful assembly, whether the common object of that assembly was to commit the murder of the five persons and whether the respondents or any of them can be held variously liable for those murders.
12 255 Sup C 1/75 420 The incident leading to the prosecution of the respondents occurred on November, 5, 1967 at Pilwa, District Agra, 'LJ.P.
There were disputes between the villagers regarding the right to take water from a tube well as the revenue authorities were unable to fix the turns for taking water, Mahipat Singh the absconding accused was appointed as a Thokdar to regulate the distribution of water.
On or about November 1, 1967 the deceased Gajraj Singh cleared the channel leading to his field in an attempt to take water from the well.
The Thokdar, Mahipat Singh, asked Gajraj Singh to postpone taking the water until he himself had finished his turn.
Two days before the incident, Mahipat Singh told Gajraj Singh that he could take water for irregating his field from the eve of Saturday the 4th November.
Gajraj Singh accordingly started irrigating his field on Saturday but Mahipat Singh objected once again.
Gajraj Singh and his companions affirmed their intention to take water at all costs whereupon Mahipat Singh is alleged to have left the field uttering some threats.
A little after sunrise on the next day, the 5th November, an armed group of over twenty persons including the respondents went to Gajraj Singh 's field.
Mahipat Singh ordered his companions to divert the water from the field of Sarnam Singh who, it seems, was taking water from the well after Gajraj Singh had finished irrigating his field.
On an objection being raised by Gajraj Singh and his companions, the accused are alleged to have opened fire as a result of which at least four out of five persons died instantaneously.
Those four are Gajraj Singh, his brother Bhairon Singh, his nephew Budh Singh and a person called Pancham Singh.
Amar Singh, the son of Gajraj Singh, was also injured by a gun shot, but according to the persecution he survived for some time, The dead bodies of four victims were then dragged by the accused over a distance of about a furlong.
Amar Singh was forced to walk the distance.
At a spot near a cattle shed, six of the accused who were armed with Gandasas beheaded Amar Singh and severed his arms and legs.
Thereafter, they decapitated the four dead bodies and severed their limbs.
They smashed two nearby huts, collected a little wood, asked one Nanney Khan (since acquitted) to lend petrol from his jeep, sprinkled the petrol on the wood and after setting fire there to threw the five dead bodies into the fire.
The severed heads were carried away as souvenirs.
So gruesome is the manner of murder.
The prosecution led the evidence of two eye witnesses Punjab Singh (P.W. 1) and Sant Ram (P.W. 2).
While Amar Singh was being hacked to death, Punjab Singh asked Sant Ram to give information of the incident to a member of the Armed Constabulary who was posted at Noorpur, a distance of 3 miles.
Punjab Singh himself went to the Firozabad police station and lodged the First Information Report at about 8 a.m. After receiving the report from Sant Ram, a Head Constable of the Armed Constabulary rushed to the place of occurrence with three other Constables and found the dead bodies burning.
He extinguished the fire and recovered parts of the bodies from the fire.
421 Out of the twenty four accused named in the First Information Report, six had absconded.
The remaining eighteen were put up for trial with the result stated earlier.
We see great difficulty in understanding the approach and reasoning of the High Court.
The High Court accepted the evidence of motive and held that the village was divided into two factions, one headed by the deceased Gajraj Singh and the other by Mahipat Singh.
The High Court also found, specifically, that on the morning of November 5, 1967 the party of the accused, under the leadership of Mahipat Singh, went to the field of Gajraj Singh "armed with gun and other weapons".
According to the High Court, considering the number of persons who were murdered, the distance over which the dead bodies were dragged and the manner in which those bodies were thrown into the fire, there could be no doubt "that the actual number of accused who took part in the incident must have been considerably more than five".
On the basis of these findings the High Court proceeded to consider whether the accused could be said to be members of an unlawful assembly.
It answered this question in the negative on the ground that Mahipat Singh and his partymen had gone with guns and Gandasas to Gajraj Singh 's field in order to prevent Gajraj Singh from taking the water of the well and not for the purpose of committing the murders.
This is how the High Court explains its point of view: "As Gajraj Singh and his partymen were waiting in fields armed with spears and Lathis, so Mahipat Singh and his party men had also equipped themselves with guns and other weapons.
But it could not be assumed that they had themselves collected there to commit murders and therefore, were members of an unlawful assembly.".
The High Court seems to have thought that as a Thokdar Mahipat Singh could regulate the distribution of water and was entitled to enforce his authority in such manner and by such means as he thought proper.
In coming to this conclusion the High Court fell into a grave error.
Section 141, Penal Code, provides by its Fourth Paragraph that an assembly of five or more persons is designated as an "unlawful assembly" if the common object of the persons composing it is, inter alia, to deprive any person of the use of water or to enforce any right or supposed right, by means of criminal force.
The High Court found that Ma Mahipat Singh and his followers went to Gajraj Singh 's field with guns and Gandasas in order to enforce the right of Mahipat Singh to regulate the distribution of well water.
Mahipat Singh may be assumed to have an unqualified right to regulate the distribution of water but when he collected a gang of twenty odd people and marched to Gajraj Singh 's field to enforce that right, real or supposed he was clearly collecting an unlawful assembly.
The only question which the High Court had then to consider was as to what was the object of that unlawful assembly.
422 The High Court did advert to this question but it again fell into the error of supposing that if there was "a regular confrontation" between the rival factions, it could not be said that the common object of the unlawful assembly was to commit the murders.
On this aspect the High Court has expressed its view thus: "They no doubt went heavily armed in order to use force if necessary to carry out their common object.
After they carried out their common objects, it appears, there was con frontation between the parties which led to the main incident resulting in the five deaths.
" If the accused went to Gajraj Singh 's field heavily armed and if they were determined to carry out their object by the use of criminal force, it is difficult to appreciate how it could be 'said that the limited object of the assembly was to redivert the water from the field of Gajraj Singh.
Evidently, the attention of the High Court was not drawn to the Explanation to section 141, Penal Code, by which "An assembly, which was not unlawful when it assembled, may subsequently become an unlawful assembly".
Assuming for the sake of argument that there was some slender justification for the view that the assembly was initially not actuated by an unlawful object, it is impossible to agree that the assembly did not even subsequently become an unlawful assembly.
The savage shooting, the decapitation, the consignment of dead bodies to the fire and the flight back with the severed heads as trophies, are circumstances too glaring to justify the merciful findings of the High Court that the five murders arose out of a confrontation, that the common object of the assembly was not to commit the murders and that therefore none of the accused can be held vicariously liable for the acts committed by the other members of the assembly.
The High Court missed the essence of section 149.
That section has two facets.
Every member of an unlawful assembly is by that section rendered liable for the offence committed by any member of the assembly in prosecution of its common object.
That fixes vicarious liability of the members of an unlawful assembly for acts done in prosecution of the common object of the assembly.
But such liability is not limited to the acts done in prosecution of the common object of the assembly.
It extends even to acts which the members of the assembly "knew to be likely to be committed in prosecution of that object.
" The High Court having found that the common object of the assembly was to re divert the water by use of force, if necessary, and that Mahipat Singh and his followers had armed themselves with guns and Gandasas for carrying out that object, the conclusion was unavoidable that the members of the assembly knew that the prosecution of even the limited object of the assembly was likely to result in the murder of the opposition.
This latter aspect was overlooked by the High Court.
There can thus be no doubt that Mahipat Singh and such of the respondents whose presence is established formed an unlawful as, embly, that the common object of the unlawful assembly was to commit the murders of Gajraj Singh and his men, that even assuming that the 423 common object was to re divert the water, if necessary by the use of force, the members of the assembly knew that in prosecution of such an object, murders of the opponents were likely to be committed and therefore, every member of the unlawful assembly would be vicariously liable for the acts committed by any member of that assembly.
Three of the respondents: Niwedan Singh, Bhikham Singh and Nawab Singh have been convicted by the High Court under section 201 read with section 149 on the basis of evidence showing that they beheaded the victims, severed their limbs and threw their bodies in the raging fire.
Two more, Karam Singh and Arjun Singh, have been convicted similarly as their presence was clearly established.
The former had a spear injury on his chest while the clothes of the latter were stained with human blood.
If these accused were members of the unlawful assembly and had taken a leading part either in the first or the final stage of the incident, they cannot escape their liability for the quintuple murders.
There was but one unlawful assembly and its members were animated by a unity of purpose.
Some fired the fatal shots, some severed the limbs of the victims, some threw the dead bodies into the fire and some led the victory march parading the heads of victims as prizes.
But whether one did this or that act, there was identity of interest among the members of the unlawful assembly and they were actuated by a common object.
Their varying participation in the different stages of the incident was directed at achieving the common object first the murders and then the destruction of evidence establishing the murders.
The steps and therefore the acts in prosecution of the common object were manifold, but the incident was one.
The High Court has itself found that : "all those who took part in the incident along with Dev Chand, Karan Singh, Arjun Singh and the Gandasa men also took part in taking the dead bodies to the field of Bedari and tried to do away with the evidence of the murders by removing the heads and burning the dead bodies.
" We are unable to appreciate how in view of this finding the High Court could say in the very next sentence that their conviction "under section 302 read with section 149, I.P.C., has to be set aside".
This part of the High Court 's judgment therefore requires to be reversed.
In addition to their conviction under section 201 read with section 149 and for the other minor offences, the five respondents mentioned above shall stand convicted under section 302 read with section 149, Penal Code.
As regards sentence, a plausible distinction may be, made between the cases of Niwedan Singh, Bhikham Singh and Nawab Singh oil the one hand and of Karan Singh and Arjun Singh on the other.
The three first named are proved to have been armed with Gandasas.
The High Court has found in agreement with the view taken by the trial court that there was "reliable corroboration" to the evidence of the eve witnesses in regard to the part played by these three persons They decapitated the dead bodies and threw the dismembered bodies 424 into the fire.
Decapitation of a dead body is of course not murder, for section 300 of the Penal Code shows that only 'homicide ' though culpable homicide, can be murder.
But considering the grisly behaviour of these three respondents there can be no doubt that they were the more prominent members of the unlawful assembly and without their active participation the assembly could not have achieved its common object.
We therefore restore the order of the Sessions Court imposing the sentence of death and the other concurrent sentences on Niwedan Singh, Bhikham Singh and Nawab Singh.
Karan Singh and Arjun Singh were undoubtedly members of the unlawful assembly but the evidence is not clear enough to show how they were armed or if at all.
The Sessions Court was therefore justified in imposing the lesser sentence of life imprisonment on them.
We confirm that sentence and the other concurrent sentences imposed on them by the Sessions Court.
As regards the remaining three respondents, Mahendra Singh, Malkhan Singh and Bachan Singh, the High Court appears to have felt considerable doubt about their presence.
Some of the absconding accused were also armed with guns and the evidence is not clear either regarding the presence of these three accused or about the acts alleged to have been committed by them.
The two eye witnesses were so placed that they may not have been in a position to notice that Mahendra Singh, Malkhan Singh and Bachan Singh came along with Mahipat Singh and others or that they were armed with guns.
Left to ourselves, a different view of the evidence may not be ruled out but that is not enough justification for interfering with the order of acquittal passed by the High Court.
The :finding of the High Court in regard to the three respondents cannot be characterized as perverse or against the weight of evidence.
We therefore confirm the order of acquittal passed by the High Court in their favour.
In the result, Criminal Appeal No. 10 of 1971 is partly allowed.
The acquittal of respondents 1 to 3 therein (Mahendra Singh, Malkhan Singh and Bachan Singh) is confirmed.
Respondents 4 to 6 therein (Niwedan Singh, Bhikam Singh and Nawab Singh) are sentenced to death for the offence under section 302 read with section 149, Penal Code.
The sentences imposed on them by the Trial Court for other offences shall run concurrently.
Criminal Appeal No. 11 of 1971 is allowed to the extent that the respondents therein, Karan Singh and Arjun Singh, are sentenced to imprisonment for life for the offence under section 302 read with section 149, Penal Code.
The other sentences imposed on them by the Trial Court shall run concurrently with the sentence of life imprisonment.
V.P.S. Appeals partly allowed.
| IN-Abs | Eighteen persons were charged with various offences arising out of five murders.
The trial court found, that there was dispute between the party of the accused and the party of the deceased regarding the right to take water from a tube well; that one of the accused party was appointed as Thokdar to regulate the distribution of water; that on the day of the occurrence the accused party consisting of over 20 armed persons, went to the field and the Thokdar ordered big companions to divert the water from the field of one of the members of the deceased party ; that on an objection being raised by members of the deceased party the accused opened fire as a result of which four persons died instantaneously and a fifth was injured, that the four dead bodies were then dragged to some distance, the injured person was forced to ,walk, the dead bodies were decapitated and limbs severed, the injured person was hacked to death, a fire was it, and the five dead bodies were thrown into the fire; and that the severed heads were carried away by the accused as trophies.
On these findings the trial court convicted nine accused for offences under sections 302 and 201 read With section 149 I. P. C., another accused under section 201 read with section 149 I. P. C., and acquitted the other eight.
On appeal, the High Court, on the basis that the Thokdar could regulate the distribution of water and was entitled to enforce his authority in such manner and by such means as he thought proper, held, that the common object of the assembly was to redivert the water if necessary by use of force and that the Thokdar and his followers had armed themselves with guns and other weapons only for carrying out that object and not for the purpose of committing murder, and that therefore, they did not form an unlawful assembly.
The High Court accepted the evidence of motive and found that the actual number of persons who took part in the incident must have been considerably more than five and that all those who took part in the incident also took part in dragging the dead bodies and in the attempt to do away with the evidence of murder, but convicted only one out of the nine persons convicted by the trial court for murder, and convicted five others for offences under section 201 read with section 149 I. P. C. in the appeal to this Court, HELD : (1) Under section 149, every member of an unlawful assembly.
is liable for the offence committed by any member of the assembly in prosecution of its common object.
Such vicarious liability is not limited to the acts done in prosecution of the common object of the assembly, but extends even to acts which the members of the assembly knew to be likely to be committed in prosecution of that common object.
On the findings of the High Court the assembly was undoubtedly an unlawful assembly as provided by section 141, fourth paragraph, I. P. C.
Under the Explanation to g. 141, an assembly which was not unlawful when it assembled may subsequently become an unlawful assembly.
The conclusion is also unavoidable that the members of the assembly knew that the prosecution of even the limited object of the assembly was likely to result in the murder of the members of the opposite party.
If the accused were members of the unlawful assembly and had taken a leading part either in the first or the final stage of the incident they cannot escape their liability for the five murders.
There wag but one unlawful assembly and its members were animated by a unity of purpose.
Whether one did this or that act, there was identity of interest among the members of the unlawful assembly and they were actuated by a common object.
Hence the five accused, who were convicted by the High Court of the offences under section 201 read with section 149 should also be convicted under g. 302 I. P. C. read with, section 149.
[421 H 423 E] 419 (2)As regards sentence, three of them bad taken part in the decapitation and throwing the dismembered bodies into the fire.
They were the more prominent members of the unlawful assembly and without their active participation the assembly could not have achieved its common object.
in respect of them, the sentence of death imposed by the trial Court must, therefore, be restored.
As regards the other two, there was no evidence as to how they were armed and therefore the trial Court was as justified in imposing the lesser sentence and that sentence should be confirmed.
[423 F 424 C] (3)As regards the three others convicted by the trial court and acquitted by the High Court it is possible to take a view different from that of the High Court but that would not justify the setting aside of the High Court 's order of acquittal, when the finding of the High Court could not be said to be perverse or against the weight of evidence.
[424 C E]
|
Appeals Nos. 1179 1782 of 1970.
From the Judgment & Order dated the 7th March, 1969 of the Andhra Pradesh High Court in Writ Petition Nos.
1042 1045 of 1964.
section C. Manchanda, B. B. Ahuja and R. N. Sachthey, for the Appellant (In all the Appeals).
section V. Gupte, Anwarulla Pasha, J. B. Dadachanji, A. Subba Rao and Anjali K. Varma, for the Respondents (In all the Appeals).
M. N. Phadke, A. V. Rangam, Gopal Nair and A. Subhashini, for the Interveners (In all the Appeals).
The Judgment of the Court was delivered by GUPTA, J.
These are four appeals by certificate from a common Judgment of the High Court of Andhra Pradesh at Hyderabad by which the High Court directed the appellant, Income Tax Officer, Income Tax cum Wealth Tax Circle 11, Hyderabad to refrain from proceeding against the respondent under sec.
147 (a) of the Income Tax Act, 1961.
The appellant had served on the respondent, Nawab Sahib Mir Osman Alikhan Bahadur, H. E. H., the Nizam of Hyderabad, notices under sec.
148 of the income Tax Act, 1961 stating that he had reasons to believe that income of the respondent chargeable to tax for the assessment years 1955 56, 1956 57, 1957 58 and 1958 59 had escaped assessment within the meaning of sec.
147 of the Act and proposing to reassess the income for the said assessment years.
The respondent challenged the validity of the proceedings under sec.
147 sought to be initiated by filing four writ petitions in the High Court of Andhra Pradesh at Hyderabad.
The High Court by the impugned Judgment allowed all the four petitions and prevented the Income Tax Officer from proceeding further under sec.
147 of the Income Tax Act, 1961.
In these appeals the appellant questions the correctness of the High Court 's decision.
The material facts are briefly these.
Assessments for the aforesaid four years were completed respectively on March 18, 1958, March 19, 1958, July 20, 1958 and March 28, 1961 under the income Tax Act of 1922.
After the returns in respect of the said years were filed, the Income Tax Officer called upon the respondent to state his relationship with four ladies by putting three queries to him.
The queries were as follows: "(a) The rites and ceremonies attendant on legal marriages, according to Muslim law and how they were observed in the case of each of the four ladies viz., Dulhan Pasha Begum Saheba, Mazharunnisa Begumsaheba, Laila Begum Saheba and jani Begum Saheba.
(b) What legal status is accorded to the children of Mazharunnisa Begum Saheb, Laila Begum Saheba and Jani Begum Saheba, vis a vis, the children of the late Dulhan Pasha Be gum Saheba? 466 (c) Any other factors from the point of view of the religion which distinguished the status of late Dulhan Pasha Begum Saheba from the other three ladies.
" It appears that on May 1, 1950, August 6, 1950 and December 29, 1950 the respondent had executed three trust deeds, described respectively as Family Trust, Miscellaneous Trust and Family Pocket Money Trust, for the benefit of Mazharunnissa Begum, Laila Begum, Jani Begum and the minor children of the last two.
in the aforesaid trust deeds the three ladies were described as wives of the respondent who was also referred to as the father of their minor children.
In one of these documents, viz., the family Pocket Money Trust Deed, the description of Laila Begum and Jani Begum as wives was preceded by the expression "ladies of position".
Under sec.
16 (3) of the income Tax Act of 1922, in computing the total income of any individual for the purposes of assessment, the income of the wife or minor child of the assessee arising from assets transferred by the husband to the wife or the minor child otherwise than for adequate consideration was to be included.
There is no dispute that these trust deeds were before the Income Tax Officer before he completed the assessments for the said four years.
On September 9, 1957 Shri C. B. Taraporewala, Financial Adviser and General Power of Attorney Agent of the respondent, filed a statement before the Income Tax Officer in reply to these queries.
In this reply it was stated that the late Dulhan Pasha Begum Saheba was the only legally wedded wife of the respondent, that with the other three ladies the respondent had not gone through the essential formalities of a valid marriage under Mohanunedan Law, that these three ladies who occupied high social position and who were received in his palace were "ladies of position" and in view of the special favours bestowed upon them they were referred to as wives in the said three trust deeds though in the strict legal sense the description was incorrect and the children of these ladies were not tile legitimate children of the respondent and had no legal status as such.
This explanation apparently satisfied the income Tax officer because in assessing the total income of the respondent for the said four years he did not include the income of these three ladies and their minor children arising out of the trust properties.
It is also admitted that the beneficiaries of the trusts were separately assessed on the income derived from the trusts along with their individual income.
On March 13, 1964 the notices under sec.
148 of the Income Tax Act, 1961 were issued seeking to reopen the assessments under sec.
147 of the Act.
After some correspondence with the income Tax Officer, the authorized representatives of the respondent, M/s. section G. Dastgir and Company, Chartered Accountants, filed supplemental returns for the aforesaid four years "without prejudice" to the respondent 's right to question the valid it of the notices.
The supplemental returns merely affirmed the original returns filed by the respondent.
By his letter dated April 15, 1964 addressed to M/s. Dastgir and Company, the Income Tax officer stated the reasons for reopening the 467 assessments under sec.
147(a).
Referring to two subsequent trusts named Fern Hill and Race View created by the respondent on March 21,1957 and December 5, 1957 respectively, it was stated that the material facts relating to these two documents were not brought to the notice of the Department in the course of the original assessment pro ceedings.
Fern Hill Trust was created for the benfit of the children of Laila Begum and Race View Trust for the benefit of Jani Begum and her son Imdad Jah Bahadur. 'in the Fern Hill Trust Deed Laila Begum was described as wife of the respondent and her children as the children of the respondent by her.
Similarly in the Race View Trust Deed Jani Begum was described as wife of the respondent and lmdad Jah Bahadur as his son by her.
According to the Income Tax Officer the facts that Laila Begum and Jani Begum were described as wives and their children as the children of the respondent in the Trust Deeds executed in 1957 indicated that "certain material facts relevant for the assessment years were not disclosed to the Department, that the statement given by the Financial Adviser is.
untrue and that thereby income chargeable to tax has been under assessed".
In his letter the Income Tax Officer also referred to sec.
268 of Mulla 's Principles of Mohammedan Law which enumerates the circumstances from which marriage will be presumed in the absence of direct proof and stated that the respondent having acknowledged the three ladies as his wives and their children as his children in the Trust Deeds executed in 1950 and 1957 all the circumstances mentioned in see.
268 were present.
The letter concluded by saying that it was established that the ladies and their children were the legal wives and legitimate children of the respondent.
The common counter affidavit affirmed by the Income Tax officer in answer to the writ petitions was on similar lines to the aforesaid latter.
Admittedly Fern Hill and Race View Trust Deeds executed in 1957 were not produced before the Income Tax officer when he made the original assessments for the four years in question.
in the counter affidavit it was alleged that these two Trust Deeds were "material and primary facts necessary for completing the assessments of the petitioner assessee for the relevant assessment years" and it was submitted that if the said two documents had been disclosed at the time of the original assessments, the income Tax Officer "would have certainly arrived.
at the conclusion" that he came to in his letter dated April 15, 1964.
Clause (a) of Sec. 147 of the Income Tax Act, 1961 under which the assessments were sought to be reopened, so far as it is relevant for the present purpose, provides that if the Income Tax Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his; assessment for any year, income chargeable to tax has escaped assessment for that year, he may assess or reassess such income for the assessment year concerned.
The High court held.
that the reasons assigned for reopening the assessments did not fall within the scope of omission or failure on the part of the assessee to disclose fully and truly all material facts, that all the material facts were before the Department 15 255 Sup.
Cl/75 468 when it made the assessments in question and the trusts created in 1957 did not "throw a different light on the matters already disclosed".
The question is whether the existence of the two trust deeds executed by the respondent in 1957 was a material fact necessary for his assessment for the relevant assessment years.
The fact that the three ladies and their children have been described in these two documents as wives and children of the respondent would have been material if the description were anything new that the Income Tax Officer happened to discover for the first time.
The three trust deeds of 1950 also contained the same description of these ladies and their children and the Income Tax Officer accepted the statement made by respondent 's Financial Adviser Shri G. B. Taraporewala seeking to explain why the ladies had been described as wives therein.
It is true that the trust deeds of 1957 were not produced at the time of the original assessment but we do not see what difference production of these two additional documents could have made which contain the same description of the ladies.
Neither the letter addressed to the respondent 's authorised representatives, M/s. section G. Dastgir and Company, by the Income Tax Officer on April 15, 1964 nor the counter affidavit filed in the High Court explains this point.
The documents of 1957 conform to those of 1950 in material particulars; the trust deeds of 1957 only repeat what the deeds of 1950 had disclosed.
Non production of the documents executed in 1957 at the time of the original assessments cannot therefore be regarded as non disclosure of any material fact necessary for the assessment of the respondent for the relevant assessment years.
The High Court was right in holding that the Income Tax officer had no valid reasons to believe that the respondent had omitted or failed to disclose fully and truly all material facts and consequently had no jurisdiction to reopen the assessments for the four years in question.
Having second thoughts on the same material does not warrant the initiation of a proceeding under sec.
147 of the Income Tax Act, 1961.
Mr. Manchanda, learned counsel for the appellant, took us through several sections of Mulla 's Principles of Mohammedan Law including sec.
268 and submitted that in the circumstances of the case it must be presumed that the three ladies were the legally wedded wives of the respondent.
The law has not changed since the original assessments were made and it was open to the Income Tax Officer to make that presumption at the time.
If he should have but did not do so then, he cannot avail of sec.
147 to correct that mistake.
In any event, we are not called upon in this proceeding to record a finding on the question whether in fact the ladies were respondent 's legally wedded wives.
We are concerned only with the question whether the condition precedent to the exercise of jurisdiction under sec.
147 exists in this case; we have found that it does not.
Mr. Manchanda also contended that the High Court exercising jurisdiction under article 226 of the Constitution had no power to investigate whether on the material before him the Income Tax Officer was justified in proceeding under sec.
147 of the Income Tax Act, 1961.
He relied, among others, on the following decisions in support 469 of his contention: section Narayanappa and others vs Commissioner of Income Tax, Bangalore, (1) Kantamani Venkata Narayana and Sons vs First Additional Income Tax Officer, Rajahmundry, (2) Commissioner of Income Tax, Gujarat vs A. Raman & Co. (3) and of course, Calcutta Discount Co. Ltd. vs Income tax Officer, Companies District I Calcutta, (4) We do not think that these decisions help him.
In this case, the decision of the High Court is not that the material before the Income Tax Officer was insufficient or that he had failed to draw the correct conclusion from the material before him but that no fresh material had come to light justifying reopening of the assessments.
The authorities to which Mr. Manchanda referred point out that the expression "reason to believe" occurring in sec.
147 of the Income Tax Act, 1961 or the corresponding sec.
34 of the Act of 1922 does not mean a purely subjective satisfaction on the part of the Income Tax Officer, the reasons for the belief must have a rational connection or a relevant bearing to the formation of the belief, and that the High Court under article 226 of the Constitution has power to set aside a notice under sec.
147 of the Act of 1961 or sec.
34 of the Act of 1922 if the condition precedent to the exercise of jurisdiction under these sections does not exist.
In the result, these appeals fail and are dismissed with costs.
One hearing fee.
An application for intervention in these appeals made by three persons claiming to be sons of the respondent was not ultimately pressed; no order is therefore called for on this application.
Appeals dismissed.
| IN-Abs | In 1950, the respondent had executed three trust deeds for the benefit of three ladies who were described as his wives, and himself, as the father of their minor children.
After the returns in respect of the assessment year 1955 56, 1956 57, 1957 58 and 1958 59 were filed by the respondent, the Income tax Officer, who had the three trust deeds before him called upon the respondent for information regarding his relationship to those three ladies as well as his relationship to a fourth lady.
A statement was filed, on behalf of the respondent, before the Income tax Officer, wherein it was stated that only the fourth lady was his legally wedded wife, that the other three were merely referred to as the wives, and that their children were not the legitimate children of the respondent.
The Income tax Officer, in assessing the total income of the respondent did not include, under section 16(3) of the 1922 Act, the income of those three ladies and their minor children arising out of the trust properties.
In fact, he assessed them separately with respect to their income from the trust properties.
In 1964 the Income tax Officer issued notices under section 148 of the 1961 Act seeking to reopen the assessments under section 147 on the ground that there were two other trust deeds of 1957, which were not produced before the I. T. 0.
in which also two of the ladies were acknowledged as the wives of the respondent and their children as his children and that their marriage should be presumed because of the acknowledgement.
The respondent there upon challenged the validity of the proceedings and the High Court allowed his petition.
Dismissing the appeal to this Court, HELD : (1) Section 147(a) provides that if the Income tax Officer has reason to believe that by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for any year, income chargeable to tax has escaped assessment for that year, he may assess or reassess such income for the assessment year concerned.
The fact that the ladies and their children had been described in the 1957 documents as wives and children of the respondent would have been material if the description were any thing new that the Income tax Officer happened to discover for the first time.
But the 1950,deeds also contained the same description.
The non production of the 1957 documents at the time of the original assessment cannot therefore be regarded as non disclosure of any material fact necessary for the assessment of the respondent for the relevant assessment years.
Having second thoughts on the same material does not warrant the initiation of a proceeding under section 147.
[467G H; 468B; D E] (2) The law has not changed or since the original assessments were made and it was open to the Income tax Officer to have made the presumption that the ladies were the wives at the time when he made the assessment.
He cannot avail of section 147 to correct his mistake.
[468F G] (3) The expression 'reason to believe ' occurring in section 147 of the 1961 Act or the corresponding section 34 of the 1922 Act, does not mean a purely subjective satisfaction on the part of the Income tax Officer.
The reasons for the belief must have a rational connection or relevant bearing to the formation of the belief.
Therefore, the High Court, under article 226, has power to set aside a notice under section 147 of the 1961 Act or section 34 of the 1922 Act, if the condition precedent to the exercise of the .jurisdiction under those sections did not exist.
[469C D]
|
Appeal No. 74 of 1952.
Appeal by Special Leave from the Judgment and Decree dated the 10th November 1948 of the High Court of Judicature at Bombay in Appeal from Original Decree No. 274 of 1945 arising out of the decree dated the 17th March 1945 of the Court of Revenue Judge, Bombay in Suits Nos. 7 and 23 of 1943.
C. K. Daphtary, Solicitor General for India (Porus A. Mehta, with him), for the appellant.
M. C. Setalvad, Attorney General for India and Jamshedji Kanga,, (R. J. Kolah and Rajinder Narain, with them), for the respondents.
February 28.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
The point for decision in this appeal is as to the liability of certain lands situated within the City of Bombay to be assessed to revenue under the Bombay City Land Revenue Act No. II of 1876.
These lands were originally known as Foras lands, and the rights of the occupants of 1313 those lands were settled by Bombay Act No. VI of 1851, called the Foras Act.
What these rights are, is a matter in controversy between the parties, and will be presently considered.
Between 1864 and 1867 the Government acquired these lands for the purpose of the B.B. C.I. Railway under the provisions of Land Acquisition Act No. VI of 1857.
On 22 11 1938 these lands, being no longer required for the purpose of the Railway, were sold by the Governor General to Lady Pochkhanawalla and others as joint tenants under a deed, Exhibit A.
On 28 3 1939 the survivor of the purchasers under Exhibit A conveyed the lands in trust under Exhibit B, and the respondents are the trustees appointed under that deed.
In April 1942 the appellant acting under the provisions of Bombay Act No. II of 1876, issued notices to the respondents proposing to levy assessment on the lands at the rates mentioned therein, and calling for their representation.
In their reply, the respondents denied the right of the appellant to assess the lands to revenue, and followed it up by instituting two suits before the Revenue Judge for establishing their rights.
In their plaints, they alleged that under the provisions of the Foras Act the maximum assessment leviable on the lands was 9 reas per burga, and that the Government had no right to enhance it; that the effect of the land acquisition proceedings between 1864 and 1867 was to extinguish the right of the State to levy even this assessment, and that further, having purchased the properties absolutely from the Governor General under Exhibit A. they were entitled to bold them without any liability to pay revenue thereon.
They accordingly prayed for a declaration that the Government had no right to levy any assessment on these lands, or, in the alternative, that such assessment should not exceed what was payable under Bombay Act No. VI of 1851.
The appellant contested the suit.
The Revenue Judge held that as a result of the land acquisition proceedings between 1864 and 1867, the lands vested in the Government freed from any liability to pay assessment, and that when the Governor General transferred them under 1314 Exhibit A without reserving the right to assess them, the purchasers had the right to hold them without any liability to pay revenue.
He accordingly granted a declaration that the appellant had no right to levy assessment, and that the notices issued by him under Act No. II of 1876 were illegal.
On appeal by the defendants to the High Court of Bombay, it was held by Chagla, C.J., Bhagwati, J. concurring, that Act No. VI of 1851 imposed a specific limit on the right of the Government to levy assessments on the lands in question, that, further, by reason of the land acquisition proceedings the right of the Provincial Government to levy assessment even within the limits prescribed by Act No. VI of 1851 was extinguished, and that when the lands were transferred by the Central Government to Lady Pochkhanawalla and others, they got them as revenue free lands.
In the result, the appeal was dismissed.
This appeal by special leave is directed against this decision.
The statutory authority under which the appellant seeks to levy assessment on the lands is section 8 of Bombay Act No. 11 of 1876, and it is as follows: "It shall be the duty of the Collector, subject to the orders of Government, to fix and to levy the assessment for land revenue.
When there is no right on the part of the superior holder in limitation of the right of Government to assess, the assessment shall be fixed at the discretion of the Collector subject to the control of Government.
When there is a right on the part of the superior bolder in limitation of the right of Government, in consequence of a specific limit to assessment having been established and preserved, the assessment shall not exceed such specific limit".
It was on the footing that the respondents were 'superior holders ' as defined in the Act, that the appellant issued notices to them in April 1942.
In their reply notices and in the plaints, the respondents did not dispute that position, but only contended in terms of section 8 that they had a specific right in limitation of the right of the Government to assess the 1315 lands; and the entire controversy in the Courts below was whether they had established that right.
No contention was raised that they were not superior holders as defined in the Act, and that, in consequence, no assessment could be imposed on the lands under section 8 of the Act.
In the argument before us, the contention was sought to be raised for the first time by the learned Attorney General that the proceedings taken by the Collector under section 8 were incompetent, as that section would apply only to lands held by superior holders, that the definition of 'superior ' holier ' in section 3 (4) as meaning "the person having the highest title under the Provincial Government to any land in the City of Bombay" would take in only persons who held on a derivative tenure from the Government, that persons who acquired lands from the Government under an outright sale could not be described as 'superior holders ' within section 3 (4), and that the lands held by the respondents were therefore outside the operation of section 8.
On behalf of the appellant, the learned Solicitor General objected to this question being allowed to be raised at this stage of the proceedings, as that would involve investigation of questions of fact and of law, such as whether under the tenures in the City of Bombay, owners held the lands as superior holders, whether under Indian jurisprudence what was paid by the occupier of land was rent or revenue, whether the prerogative right of the Crown to assess lands subsisted in the Presidency Towns of Calcutta, Bombay and Madras and several other questions, for the decision of which there were not sufficient materials.
This objection must be upheld.
In view of the fact that the respondents have, at all stages, claimed immunity from assessment on the basis of section 8, we do not consider that it would be proper to allow them now to change their front, and take up a stand wholly inconsistent with what they had taken, when that involves an investigation into facts which has not been made.
We must, therefore, proceed on the footing that the respondents are `superior holders ' as defined 1316 in section 3 (4) of Act No. 11 of 1876, and that their rights are to be determined in accordance with sec tion 8 of the Act.
Construing that section, the Privy Council laid down in Goswamini ' Shri Kamala Vahooji vs Collector of Bombay(1) two propositions: that though the language of the section would more appropriately apply when the dispute was as to the quantum of assessment ', the right to levy it not being itself controverted, it was open to the superior holder under this section to plead and prove that the State had no right to levy any assessment; and that the burden was on the person who pleaded a limitation on the right of the State to assess, to clearly and unequivocally establish it.
It is, therefore, open to the respondents to plead that the lands are wholly exempt from revenue; but the onus of making it jut lies heavily on them.
The learned Attorney General has sought to establish a right in the respondents in limitation of the right of the appellant to assess the lands on three grounds: (1) the Foras Act No. VI of 1851, (2) the land acquisition proceedings under Act No. VI of 1857, and (3) the sale deed, Exhibit A. Taking first the Foras Act: For a correct appreciation of its provisions, it is necessary to refer Co the history of the lands, which are dealt with therein.
The Island of Bombay once formed part of the Portuguese Domi nions in India.
In 1661 when Princess Infant Catherine was married to King Charles 11 of England, it was ceded by the King of Portugal to the British Crown as dowry, and by a Royal Charter dated 27th March 1668 King Charles 11 granted it to the East India Company.
At that time the Island consisted only of the Fort and the town, and "outside the walls of the town it was scarcely more than rock and marsh which became a group of islands every day on high tide".
Vide Shapurji Jivanji vs The Collector of Bombay(1).
It appears from Warden 's Report on the Landed Tenures in Bombay and Le Mesurier 's Report on the Foras lands, that during the 18th Century the East India Company started (1) (1937) L.R. 64 I.A. 334.
(2) Bom.
483, 488, 1317 reclaiming these lands, and invited the inhabitants to cultivate them, at first without payment of any assessment and subsequently on favourable rates.
These payments were called "Foras".
The meaning of this word is thus explained by Westropp, J. in his note at page 40 in Naoroji Beramji vs Rogers(1): " foras ' is derived from the Portuguese word fora (Latine foras, from foris a door), signifying outside.
It here indicates the rent or revenue derived from outlying lands.
The whole island of Bombay fell under that denomination when under Portuguese rule, being then a mere outlying dependency of Bassein.
Subsequently the term foras was, for the most part, though perhaps not quite exclusively, limited to the new salt batty ground reclaimed from the sea, or other waste ground lying outside the Fort, Native Town, and other the more ancient settled and cultivated grounds in the island, or to the quitrent arising from that new salt batty ground and outlying ground".
Thus, the salt batty lands reclaimed from the sea came to be known as Foras lands by association with the assessments payable thereon called "Foras".
The nature of the interest which the occupants had in the Foras lands was the subject of considerable debate in the beginning of the 19th Century.
In 1804, the Company resumed some of the Foras lands for settling persons displaced in the Town area, and that resulted in a suit by one Sheik Abdul Ambly, wherein the right of the Company to resume the lands was challenged.
The action failed, the Court upholding the claim of the Company to resume them, but at the same time, it observed that its action in dispossessing the occupants would "appear and be felt as a grievous hardship, if not an open and downright injury".
Vide Warden 's Report on the Landed Tenures of Bombay, pages 60 and 61.
Thereafter, the Company had the matter further investigated, and there were reports on the subject by Warden in 1814 and Le Mesurier in 1843.
And finally the Company decided to recognise (1) 4 Boni.
H.C.R. 1. 1318 the rights of the 'Occupants, and that resulted in the enactment of Act VI of 1851.
The relevant provisions of the Act may now be noticed.
The preamble to the Act states that, "Whereas the East India Company are legally entitled to the freehold reversion of the several lands heretofore paying a render called foras, the outline whereof is delineated in a plan and numbered 1, subject to certain tenancies therein at will, or from year to year; whereas it is considered expedient as of grace and favour that the rights of the said East India Company in all of the lands included in the said plan should be extinguished, save as hereinafter mentioned.
It is enacted as follows:" Section 2 enacts that: "From and after the said 1st day of July, the rights of the said Company in all of the said lands mentioned in the said plan No. 1, except those mentioned in the said plan No. 2, shall be extinguished in favour of the persons who shall then hold the same respectively as the immediate rent payers to the said Company, saving the rents now severally payable in respect of such lands, which shall continue payable and recoverable by distress, or by any means by which land revenue in Bombay is or shall be recoverable, under any Act or Regulation Section 4 provides: "Nothing herein contained shall exempt such lands from being liable to any further general taxes on land in Bombay " According to the appellant, the effect of these provisions was to grant the lands to the occupants on a permanent tenure, heritable and alienable, but not further to grant them on a permanent assessment.
Reliance was also placed on the decision in Shapurji Jivanji vs The Collector of Bombay(1), where it was held generally that the Government had the right under section 8 of the Act to enhance the assessments on Foras lands.
There is some support for this contention in the provisions of the Act.
The preamble (1) Bom.
483, 488.
1319 expressly recites that the occupants were tenants at will or from year to year, and that the reversion was with the East India Company.
One consequence of that was that the Company had the right to eject the occupants.
Now, what the Company did under the Act was to give up that right as a matter of grace, because, as already mentioned, it would appear to have invited them to settle on the lands and cultivate them, and it did that by extinguishing its reversion as landlord.
In other words, it agreed to confer on the tenants the status of owners of lands.
If that was all the scope of Act No. VI of 1851, it could not be doubted that the rights of the State to enhance the assessments would not be affected, because ownership of land does not per se carry with it an immunity from enhancement of assessment in exercise of sovereign rights, and occupants of Foras lands cannot claim to be in a better position by reason of the Act than owners of lands in ryotwari tracts, the assessments on which are liable to periodic revision.
But what is against the appellant is that section 2 does not stop with merely extinguishing the reversionary rights of the Company.
It goes further, and saves expressly "the rents now severally payable in respect of such lands", rent being used here in the sense of assessment, and adds "which shall continue to be payable".
Now, the contention of the respondents is that those words conferred on the Government a right to recover only the assessment which was then payable, and that there was thus a limitation on its right to enhance it.
It is common ground that the assessment payable on these lands at that time was 9 reas per burga, and Exhibit N shows that it was at that rate that the assessment was collected from 1858 until the lands were acquired by the Government in land acquisition proceedings.
It is accordingly contended for the respondents that under the Act, the Government could not claim anything more than 9 reas per burga as assessment on the lands.
It is urged for the appellant that the words "now severally payable" could not be construed as impos 169 1320 ing a limitation on the right of the Government to enhance the assessment, as they occur in a saving clause, the scope of which was to reserve the rights of the Company and not to confer on the occupants rights in addition to what the body of the section had granted to them.
It is true that the setting in which these words occur is more appropriate for reserving rights in favour of the Company than for declaring any in favour of the occupants.
But to adopt the construction contended for by the appellant would be to render the words "now severally payable" and "which shall continue to be payable" wholly meaningless.
Notwithstanding that the drafting is inartistic, the true import of the clause unmistakably is that while, on the one hand, the right of the Government to recover the assessment is saved, it is, on the other hand, limited to the amount then payable by the occupants.
The contention of the respondents that under the Foras Act they acquired a specific right to hold the lands on payment of assessment not exceeding what was then payable, must, therefore, be accepted We have next to decide what effect the proceedings taken by the Government under the Land Acquisition Act No. VI of 1857 during the years 1864 to 1867 have on the rights of the parties.
Section VIII of the Act is as follows: "When the Collector or other officer has made an award or directed a reference to arbitration, be may take immediate possession of the land which shall thenceforward be vested absolutely in the Government, free from all other estates, rights, titles and interests".
The contention of the respondents which has found favour with the Courts below is that under that section the effect of the vesting of the lands in the Government was to extinguish whatever interests were previously held over them, that the right of the Government to levy assessment was such an interest, and that it was also extinguished.
It is argued that when lands are acquired under the Act, the valuation that is made is of all the interests subsisting thereon, including the 1321 rights of the Crown to assess the lands, as well as the interests of the claimants therein, that what is paid to the owners is not the full value of the lands but the value of their interests therein, deduction being made of the value of the right of the Government to assess from out of the full value, and that, in effect, there was an award of compensation for the right to assess, and that, therefore, that right equally with the rights of the claimants over the lands would be extinguished.
One of the awards has been marked as Exhibit P, and the respondents rely on the recitals therein that the compensation to the claimants was "for their interest in the said lands".
The award, it must be mentioned, directs the Government to pay the claimants the amounts specified therein, but contains no provision for payment of any sum as compensation to the Government for its right to assess the lands; nor does it even value that right.
But the respondents contended that the Government being the authority to pay must be deemed to have paid itself, and that, in any event, if they were entitled to compensation, their failure to claim it could not affect the result, which was that the right to levy assessment would be extinguished.
We are unable to accept this contention.
When the Government acquires lands under the provisions of the Land Acquisition Act, it must be for a public purpose, and with a view to put them to that purpose, the Government acquires the sum total of all private interests subsisting in them.
If the Government has itself an interest in the land, it has only to acquire the other interests outstanding therein, so that it might be in a position to pass it on absolutely for public user.
In the Matter of the Land Acquisition Act: The Government of Bombay vs Esupali Salebhai(1) Batchelor, J. observed: "In other words Government, as it seems to me, are not debarred from acquiring and paying for the only outstanding interests merely because the Act, which primarily contemplates all interests as held outside Government, directs that the entire compen (1) Bom. 618, 686.
1322 sation based upon the market value of the whole of land, must be distributed among the claimants".
There, the Government claimed ownership of the land on which there stood buildings belonging to the claimants, and it was held that the Government was bound to acquire and pay only for the superstructure, as it was already the owner of the site.
Similarly in Deputy Collector, Calicut Division vs Aiyavu Pillay(1), Wallis, J. (as he then was) observed: 'It is, in my opinion, clear that the Act does not contemplate or provide for the acquisition of any interest which already belongs to Government in land which is being acquired under the Act, but only for the acquisition of such interests in the land as do not already belong to the Government".
With these observations, we are in entire agreement.
When Government possesses an interest in land which is the subject of acquisition under the Act, that interest is itself outside such acquisition, because there can be no question of Government acquiring what is its own.
An investigation into the nature and value of that interest will no doubt be necessary for determining the compensation payable for the interest outstanding in the claimants, but that would not make it the subject of acquisition.
The language of section VIII of Act No. VI of 1857 also supports this construction.
Under that section, the lands vest in the Government "free from all other estates, rights, titles and interests", which must clearly mean other than those possessed by the Government.
It is on this understanding of the section that the award, Exhibit p, is framed.
The scheme of it is that the interests of the occupants are ascertained and valued, and the Government is directed to pay the compensation fixed for them.
There is no valuation of the right of the Government to levy assessment on the lands, and there is no award of compensation therefor.
We have so far assumed with the respondents that the right of the Government to levy assessment is an interest in land within the meaning of section VIII (1) [1911] 9 I C 341. 1323 of Act VI of 1857.
But is this assumption wellfounded? We think not.
In its normal acceptation, "interest" means one or more of those rights which go to make up "ownership".
It will include for example, mortgage, lease, charge, easement and the like.
but the right to impose a tax on land is a prerogative right of the Crown, paramount to the ownership over the land and outside it.
Under the scheme of the Land Acquisition Act, what is acquired is only the ownership over the lands, or the inferior rights comprised therein.
Section 3(b) of the Land Acquisition Act No. I of 1894 defines a "person interested" as including "all persons claiming an interest in compensation to be made on account of the acquisition of land under this Act, and a person shall be deemed to be interested in land if he is interested in an easement affecting the land".
Section 9 requires that notices should be given to all persons who are interested in the land.
Under section 11, the Collector has to value the land, and apportion the compensation among the claimants according to their interest in the land.
Under section 16, when the Collector make an award "he may take possession of the land which shall thereupon vest absolutely in the Government free from all encumbrance".
The word "en cumbrance" in this section can only mean interests in respect of which a compensation was made under section 11, or could have been claimed.
It cannot include the right of the Government to levy assessment on the lands.
The Government is not a "person interested" within the definition in section 3 (b), and, as already stated, the Act does not contemplate its interest being valued or compensation being awarded therefor.
It is true that there is in Act No. VI of 1857 nothing corresponding to section 3(b) of Act No. I of 1984, but an examination of the provisions of Act No. VI of 1857 clearly shows that the subject matter of acquisition under that Act was only ownership over the lands or its constituent rights and not the right of the Government to levy assessment.
The provisions relating to the issue of notices to persons interested 1324 and the apportionment of compensation among them are substantially the same.
Moreover, under section VIII the Government is to take the lands free from all other "estates, rights, title and interest", and "interest" must, in the context, be construed ejusdem generis with "estates" etc., as meaning right over lands, of the character of, but not amounting to an estate, and cannot include the prerogative right to assess the lands.
It must accordingly be held that the effect of the land acquisition proceedings was only to extinguish the rights of the occupants in the lands and to vest them absolutely in the Government, that the right of the latter to levy assessment was not the subject matter of those proceedings, and that if after the award the lands were not assessed to revenue, it was because there could be no question of the Government levying assessment on its own lands.
Then there remains the question whether the sale deed, Exhibit A, imposes any limitation on the right of the Crown to assess the lands.
The deed conveys the lands to the purchasers absolutely "with all rights, easements and appurtenances whatsoever" to be held "for ever".
It does not, however, recite that they are to be held revenue free.
But it is argued for the respondents that where there is an absolute sale by the Crown as here, that necessarily imports that the land is conveyed revenue free; and section 3 of the Crown Grants Act No. XV of 1895 and certain observations in Dadoba vs Collector of Bombay(1) were relied on as supporting this contention.
Section 3 of Act No. XV of 1895 is as follows: "All provisions restrictions, conditions and limitations over contained in any such grant or transfer as aforesaid shall be valid and take effect according to their tenor any rule of law, statute or enactment of the Legislature to the contrary notwithstanding".
The contention is that as the grant is of a freehold estate without any reservation it must, to take effect according to its tenor, be construed as granting exemption from assessment to revenue.
But that will be extending the bounds of section 3 beyond its con (1) (1901] I.L.R. , 1325 tents.
The object of the Act as declared in the preamble is to remove certain doubts "as to the extent and operation of the , and, as to the power of the Crown to impose limitations and restrictions upon grants and other transfers of land made by it or under its authority".
Section 2 enacts that the provisions of the do not apply to Crown grants.
Then follows section 3 with a positive declaration that "all provisions, restrictions, conditions and limitations over" shall take effect according to their tenor.
Reading the enactment as a whole, the scope of section 3 is that it saves "provisions, restrictions, conditions and limitations over" which would be bad under the provisions of the , such as conditions in restraint of alienations or enjoyment repugnant to the nature of the estate, limitations offending the rule against perpetuities and the like.
But no question arises here as to the validity of any provision, restriction, condition, or limitation over, contained in Exhibit A on the ground that it is in contravention of any of the provisions of the , and there is accordingly nothing on which section 3 could take effect.
It is argued by the learned Attorney General that this limitation on the scope of the Act applies in terms only to section 2, and that section 3 goes much further, and is general and unqualified in its operation.
The scope of section 3 came up for consideration before the Privy Council in Thakur Jagannath Baksh Singh vs The United Provinces(1).
After setting out that section, Lord Wright observed: "These general words cannot be read in their apparent generality.
The whole Act was intended to settle doubts which had arisen as to the effect of the , and must be read with reference to the general context. . .
In this view, section 3 must also be construed in the light of the preamble, and so construed, it cannot, for the reasons already given, have any bearing on (1) 1326 the rights of the parties.
Moreover, that section only enacts that "all provisions, restrictions, conditions and limitations over" shall take effect according to their tenor, and what is relied on is not any provision, restriction, condition or limitation over, in Exhibit A which according to its tenor entitles the respondents to hold the lands rent free, but the absolute character of the interest conveyed under Exhibit A.
Therefore, section 3 does not in terms apply.
The respondents also relied on certain observations in Dadoba vs Collector of Bombay(1) as supporting their contention.
There, the facts were that the Government had granted one parcel of land to the Free Church Mission of Scotland revenue free under a deed dated 1 10 1884.
By another deed dated 20 12 1887 they released their right of reversion on two other parcels of land held by the Mission as tenants but "subject to the payment of taxes, rates, charges, assessments leviable or chargeable in respect of the said premises or anything for the time being thereon".
On 16 1 1888 the Mission sold all the three parcels to one Janardan Gopal, and the Secretary of State joined in the conveyance for effectually releasing the reversion of the Government.
Before Janardan Gopal purchased the lands, there had been correspondence between his solicitors and the Government as to the assessment payable on the lands, and the Government had intimated that it would be 9 pies per square yard per annum.
Subsequent to the purchase, the Collector raised the assessment payable on the lands, and the point for decision was whether he could lawfully do so.
In deciding that he could not, Sir Lawrence Jenkins stated that the purchaser had paid full value for the lands in the belief induced by the Government that the assessment of 9 pies per sq.
yard would be permanent, and that on the facts, the case fell within section 115 of the Evidence Act, and that the Government was estopped from enhancing the assessment.
He was also prepared to hold that the correspondence between the purchaser and the Government prior to (1) Bom.
1327 the sale amounted to a collateral contract not to raise the assessment.
Chandavarkar, J., concurred in the decision, and in the course of his judgment observed: ". when we have regard to the nature of the transaction, viz., that Government was selling the property out and out as any private proprietor when we look to the whole of the language used . the intention of the parties must be taken to have been that the purchaser was to be liable to pay the amount of 9 pies per square yard per annum then levied as assessment and no more".
These observations have been relied on as supporting the contention that when there is an absolute sale by the Government, it amounts to an agreement not to levy more assessment than was payable at that time.
But the remarks of the learned Judge have reference to the recitals in the deed dated 20 12 1887 and the negotiations between the purchaser and the Government which are referred to in the passage, and not to the character of the transfer as an absolute sale; and the decision is based on a finding of estoppel or collateral contract deducible from the correspondence between the purchaser and the Government.
Neither section 3 of the Crown Grants Act, nor the observa tions in Dadoba vs Collector of Bombay(1) lend any support to the contention that an absolute sale of lands by the Government ipso facto confers on the purchasers a right to hold the lands free of revenue.
The question then is whether on the, terms of Exhibit A such a right could be held to have been granted.
There was some discussion at the Bar as to the correct rule of construction applicable to the deed, Exhibit A.
It was argued by the learned Solicitor.
General for the appellant that being a Crown grant, Exhibit A should be construed in favour of the Crown and against the grantee.
On the other hand, it was argued by the learned Attorney General that it should make no difference in the construction of the grant, whether the grantor was the Crown or a subject, as (1) Bom.
170 1328 the question in either case was what had been granted; and that must be determined on the language of the deed.
When closely examined, it will be seen that there is no real conflict between the two propositions.
The former is in the nature of a rule of substantive law; and its scope is that where as the transferee from a subject acquires, unless the contrary appears, all the rights which the transferor has in the property as enacted in section 8 of the , a grantee from the Crown gets only what is granted by the deed, and nothing passes by implication.
But when the grant is embodied in a deed, the question ultimately reduces itself to a determination of what was granted thereunder.
What the Court has to do is to ascertain the intention of the grantor from the words of the document, and as the same words cannot be susceptible of two different meanings, it makes no differenbe whether they occur in a grant by the Crown or by the subject.
If the words used in a grant by a subject would be effective to pass an interest, then those words must equally be effective to pass the same interest when they occur in a Crown grant.
Dealing with this question, Sir John Coleridge observed in Lord vs Sydney(1): "But it is unnecessary for their Lordships to say more on this point, because they are clearly of opinion, that upon the true construction of this grant, the creek where it bounds the land is ad medium film, included within it.
In so holding they do not intend to differ from old authorities in respect to Crown grants; but upon a question of the meaning of the words, the same rules of common sense and justice must apply, whether the subject matter of construc tion be a grant from the Crown, or from a subject; it is always a question of intention, to be collected from the language used with reference to the surrounding circumstances 'section Exhibit A has to be construed in the light of these principles.
As already stated, there is no recital in the deed that the purchasers are entitled to, hold the lands free of assessment.
On the other hand, it (1) (1859] ; , 496, 497; ; , 1000.
1329 expressly provides that the properties will be subject "to the payment of all cesses, taxes, rates, assessments, dues and duties whatsoever now or hereafter to become payable in respect thereof", which words would in their natural and ordinary sense cover the present assessment.
In Dadoba vs Collector of Bombay(1), the Court had to consider a clause similar to the above contained in a deed executed by the Government in favour of the Mission on 20 12 1887.
Dis cussing the effect of this clause on the rights of the plaintiff to hold the property permanently on an assessment of 9 pies per sq. yard, Chandavarkar, J. observed: "When that deed says that the property was sold 'subject to the payment of all taxes, rates, charges, assessments leviable or chargeable ', it leaves the question open as to what the taxes etc., are which are `leviable or chargeable '.
Extrinsic evidence of that is admissible, for it neither contradicts nor varies the terms of the deed, but explains the sense in which the parties understood the words of the deed, which, taken by themselves, are capable of explanation: see Bank of New Zealand vs Simpson (2) ".
In that case, the dispute was not as to the liability to pay any assessment but to the quantum of assessment payable, and it was a possible view to take that the clause in question was not decisive on that question, and that it was left open.
But here, the question is whether a right was granted to the purchasers to hold the lands free from liability to be assessed, and the clause in Exhibit A clearly negatives such a right.
Even if we are to regard the question as left open, as observed in Dadoba vs Collector of Bombay(1), it will not assist the respondents, as they have not established aliunde any right to hold the lands free from assessment.
It must, therefore, be held that far from ex empting the lands from liability to be assessed to revenue, Exhibit A expressly subjects them to it.
It was finally contended that even if the land acquisition proceedings between 1864 and 1867 had not the (1) Bom.
(2) 1330 effect of extinguishing the right of the Government to levy assessment, and that even if Exhibit A conferred on the purchasers no right to hold the land revenue free, the assessment which the Government was entitled to levy under section 8 of Act No. II of 1876 was limited to what was payable under the Foras Act No. VI of 1851, and that the appellant had no right to levy assessment at a rate exceeding the same.
The argument in support of the contention was that it was an incident of the Foras tenure under which the lands wore held, that the occupants were bound to pay only a fixed assessment, that the incident was annexed to the lands, and was inseparable therefrom, that between the dates when the lands were acquired under the Land Acquisition at No. VI of 1857 and 22 11 1938 when they were sold under Exhibit A they continued to retain their character as Foras lands, that if no assessment was paid on the lands during that period, it was because the hand to pay and the hand to receive were the same, that when they came to the respondents under Exhibit A, they became impressed with the Foras tenure, and that, in consequence, they were liable to be assessed only at the rate payable under Act No. VI of 1851.
This contention is, in our judgment, wholly untenable.
When the lands were acquired under the Land Acquisition Act No. VI of 1857, the entire "estate, right, title and interest" subsisting thereon became extinguished, and the lands vested in the Government absolutely freed from Foras tenure, and when they were sold by the Government under Exhibit A the purchasers obtained them as freehold and not as Foras lands.
As the tenure under which the lands were originally held had become extinguished as a result of the land acquisition proceedings, it was incapable of coming back to life, when the lands were sold under Exhibit A.
In support of the contention that the incidents of the Foras tenure continued to attach to the lands in the hands of the respondents, the learned Attorney General relied on the following observations of 1331 Das, J. in Collector of Bombay vs Municipal Corporation of the City of Bombay and others(1): "The immunity from the liability to pay rent is just as much an integral part or an inseverable incident of the title so acquired as is the obligation to hold the land for the purposes of a market and for no other purpose".
But the point for decision there was whether the Municipal Corporation of Bombay could acquire by prescription a right to hold the lands rent free, they having entered into possession under a resolution of the Government that no rent would be charged.
And the passage quoted above merely laid down that when title to the land was acquired by the Municipal Corporation by prescription, one of the rights acquired as part of the prescriptive title 'was the right to hold the lands revenue free.
But the question here is whe ther the right to hold the lands under a fixed assessment survived after the acquisition by the Government under the land acquisition proceedings, and that depends on the effect of section VIII of Act VI of 1857.
If, as observed in the above passage, the liability to pay assessment was "an integral part or an inseverable incident of the title", then surely it was also extinguished along with the title of the occupants under section VIII of Act No. VI of 1857.
There is another difficulty in the way of accepting the contention of the respondents.
The Foras Act was repealed in 1870 by Act No. XIV of 1870 long prior to the date of Exhibit A, and therefore, even if we hold that the Foras tenure revived in the hands of the purchasers under Exhibit A, the rights under the Foras Act were no longer available in respect of the lands.
Section I of Act No. XIV of 1870 saves rights "already acquired or accrued", and it is argued that the rights now claimed are within the saving clause.
But as the lands had all been acquired under Act No. VI of 1857 between 1864 and 1867 there were no rights in respect of the lands which could subsist at the date of the repeal, and the rights now claimed (1) ; , 52, 1332 by the respondents are not within the saving clause.
In the result, it must be held that the right of the appellant to levy assessment under section 8 of Act No. II of 1876 is not limited by any right in the respondents.
We accordingly allow the appeal, set aside the judgments of the Courts below, and dismiss both the suits instituted by the respondents with costs throughout.
Appeal allowed.
| IN-Abs | In the island of Bombay certain lands were held on a tenure known as "Foras".
Under section 2 of Bombay Act VI of 1851 the occupants were entitled to hold the lands subject only to the payment of revenue then payable.
Between 1864 and 1867 the Government of India acquired these lands under the provisions of the Land Acquisition Act (VI of 1857).
On 22 11 1938 the Governor General sold them to certain persons under whom the present respondents claimed.
In April 1942 the appellant acting under the Bombay City Land Revenue Act (Bombay Act II of 1876) issued notices to the respondents proposing to levy assessment on the lands at the rates mentioned therein.
The respondents thereupon instituted two suits disputing the right of the appellant to assess the lands to revenue.
They contended that under the Foras Land Act the occupants had acquired the right to hold the lands on payment of revenue not exceeding what was then payable, that the right to levy even that assessment was extinguished when the Government acquired the lands under the Land Acquisition Act, that the Governor General having conveyed the lands absolutely under the sale deed dated 22 11 1938 the respondents were entitled to hold them revenue free and that even if revenue was payable it could not exceed what was payable under the Foras Land Act.
Held, (i) that under the Foras Land Act (VI of 1851) the occupants of Foras lands acquired a specific right to hold them on payment of assessment not exceeding what was then payable.
(ii) that the right of the Government to levy assessment was not the subject matter of the land acquisition proceedings and that the effect of those proceedings was only to extinguish the rights of the occupants in the lands and to vest them absolutely in the Government.
(iii) that where there is an absolute sale by the Crown it does not necessarily import that the land is conveyed revenuefree.
The question is one of construction of the grant.
The rule is that a grantee from the Crown gets only what is granted by the 168 1312 deed and nothing passes by implication.
When the grant is embodied in a deed the question ultimately reduces itself to a determination of what was granted thereunder.
Section 3 of the Crown Grants Act (XV of 1895) that "all provisions, restrictions conditions and limitations over shall take effect according to their tenor" does not apply when the question is as to the liability to pay revenue.
(iv)that the Foras tenure became extinguished when the lands were acquired under the Land Acquisition proceedings and it was incapable of coming back to life when the lands were sold on 22 11 1938 and the respondents cannot claim a right to pay assessment only at the rate at which it was payable under the Foras Land Act.
Goswammi Shri Kamala Vahooji vs Collector of Bombay ([1937] L.R. 64 I.A. 334), Shapurji Jivanji vs The Collector of Bombay ([1885] I.L.E. , 488), Naoroji Beramji vs Rogers , Deputy Collector, Calicut Division vs Aiyavu Pillay ([1911] , Dadoba vs Collector of Bombay ([1901] I.L.R. , Thakur Jagannoth Baksh Singh vs The United Provinces ([1946] F.L.J. 88) and Collector of Bombay vs Municipal Corpration of the City of Bombay and others ([1952] S.C.R. 43), referred to.
|
etition No. 254 of 1974.
Petition under Article 32 of the Constitution of India.
section K. Gambhir, for the petitioner.
P. K. Chatterjee and G. section Chatterjee, for the respondent.
, The particulars of the ground of detention refer to a single incident described thus: "That on 24 5 72 at about 10 35 hrs.
you along with your associates broke BEX Wagon No. WR 75961 loaded with food grains at Mathurapur Goods sidings and decamped with 10/12 bags of wheat and rice.
Your action caused disruption of supply and services".
After the rule issued in this habeas coprus petition was served on the respondent, the State of West Bengal, the District Magistrate filed a counter affidavit in answer to the petition.
Paragraph 5 of the aforesaid affidavit says that the order of detention was passed after the District Magistrate was satisfied that it was necessary to detain the petitioner with a view to preventing him from acting in a manner prejudicial to the maintenance of supplies and services essential to the community; that the District Magistrate was satisfied that if the petitioner was not detained he was likely to act in a manner described above; and that : "The nature of act, the manner in which the same was committed, the effect and result of said activity upon the community and the question of supply of food grains were taken by me into consideration before making the order of detention".
Learned counsel appearing on behalf of the petitioner argues that the petitioner was ordered to be detained on the basis of a single, isolated incident and that no reasonable person could possibly come to the conclusion that it was necessary to detain the petitioner in order to prevent him from acting prejudicially to the maintenance of supplies and services essential to the community.
This submission, in our opi nion, is well founded and must be accepted.
in Debu Mahato vs State of West Bengal(1), the Distt.
Magistrate had passed an order directing that the petitioner therein be detained with a view to preventing him from acting in a manner prejudicial to the maintenance of supplies and services essential to the community.
Only one ground of detention was set out, namely, that the petitioner and his associates were found removing three bales of empty jute bags after breaking open a. railway wagon and that when challenged by the Railway Protection Force they fled away leaving the booty behind.
A Bench consisting of three learned Judges held that though it could not be laid down as &a invariable rule that in no case can a single, solitary act form the basis for reaching the satisfaction that the detenu might repeat such acts in future, in the circumstances of the particular case one solitary isolated act of wagon breaking committed by the petitioner could not possibly persuade any reasonable person to reach the satis faction that unless the petitioner was detained he would in all probability indulge in further acts of wagon breaking.
This conclusion was not reached by the Court on the basis that what was stolen was empty jute bags.
The conclusion is based on the circumstance that (1) 451 what was alleged against the petitioner was his involvement in a solitary, isolated act of wagon breaking and secondly, nothing was said by the District Magistrate in his counter affidavit suggesting that wagon breaking had become so rampant that in the context of the peculiar situation, the District Magistrate arrived at the requisite satisfaction in spite of the fact that the act on which the satisfaction was founded was just one single, solitary act of wagon breaking.
No two cases can have precisely indentical facts but we are unable to see any material distinction in the facts of the case before us and the facts in Debu Mahato 's case.
A single act has been attributed to the petitioner and it consists of a theft of 10 or 12 bags of wheat and rice after breaking open a wagon.
The act was not accompanied by violence or by show of force and the District Magistrate has not stated in his affidavit that by reason of the peculiarity or enormity of the situation, he formed the requisite satisfaction as regards the necessity to detain the petitioner, even though the satisfaction was founded on an isolated incident.
Mr. Chattarjee who appears on behalf of the State of West Bengal, argues that the judgment of this Court in Debu Mahato 's case was predominantly influenced by the consideration that the District Magistrate in his counter affidavit had stated that the petitioner was "one of the notorious wagon breakers" and was engaged in systematic breaking of railway wagons.
We are unable to agree.
Two ground s were urged in Debu Mahato 's case for invalidating the detention order.
The first 'ground was that the District Magistrate could not have possibly reached the satisfaction on the basis of a single incident that unless the petitioner was detained, he would indulge in further acts of wagon breaking.
While considering this argument, no reference at all was made by the Court to the fact that in the counter affidavit, the District Magistrate had referred to circumstances which were not disclosed to the detenu.
Having held that the order was liable to be set aside on the ground that the satisfaction of the District Magistrate was truly no satisfaction at all, the Court proceeded to consider the second ground of attack , namely, that the order of detention was based on facts not disclosed to the petitioner.
That is why the judgment on the second ground of attack begins by saying : "There was also another angle from which the validity of the order of detention was challenged on behalf of the petitioner".
It is manifest from the judgment that the order of detention was held to be bad on two separate and distinct grounds and the reasons which weighed with the Court on the second aspect of the matter did not influence its decision on the first ground of attack.
Counsel for the State then urged that the sufficiency of grounds of detention is not a justiciable issue and all that the Courts can consider is whether the grounds of detention are germane to the purpose for which the detention has been ordered.
Learned counsel argues that if wagon breaking for the purpose of committing theft of foodstuffs bears nexus with the maintenance of supplies and services essential to the community, the detention must be upheld at all events and the Courts have no jurisdiction to enter into the question whether any 255SuP.Cl/75 452 other conclusion was possible on the basis of facts placed before the detaining authority.
It is true that Courts cannot sit in appeal over the propriety of detention orders.
But the argument of the State overlooks the distinction between the Court 's jurisdiction in regard to the sufficiency of grounds necessitating the detention and its jurisdiction to examine whether a reasonable person could at all reach the conclusion that unless the person w is detained he would in all probability indulge in a similar course of conduct.
We are not concerned to consider whether the District Magistrate was justified in passing the order of detention on the strength of the material available to him.
So long as the grounds of detention are germane to the purpose of detention, Courts do not weigh the evidentiary value of the data placed before the detaining authority in order to determine the sufficiency of that data as justifying the order of detention.
The point of the matter is that considering the nature of the act attributed to the petitioner and its context, and not merely the fact that the ground of detention refers to a single incident, the satisfaction reached by the District Magistrate that the petitioner, unless detained, was likely to commit similar acts in the future is such as no reasonable person could possibly reach.
The conclusion that the past conduct of the detenu raises an apprehension regarding his future behaviour must at least be rational.
Accordingly, we set aside the order of detention, make the rule in this petition absolute and direct that the petitioner shall be released forthwith.
P.H.P. Petition allowed.
| IN-Abs | The petitioner was detained under the Maintenance of Internal Security Act on the ground that on a particular day he along with his associates broke open a railway wagon loaded with foodgrains.
The petitioner in Writ Petition filed in this Court under article 32 contended that he was detained on the basis of a single isolated incident and that no reasonable person could possibly come to the conclusion that it is necessary to detain the petitioner in order to prevent him from acting prejudicially to the Maintenance of Supplies and Services essential to the community.
It was contended by the respondent that the sufficiency of grounds of detention is not a justiciable issue and all that the courts can consider is whether the grounds of detention are germane to the grounds on which the detention has been ordered.
If wagon breaking for the purpose of committing theft of foodstuffs bears nexus with the maintenance of supplies and services essential to the community, the detention must be upheld at all events and the courts have no jurisdiction to enter into the question whether any other conclusion was possible on the basis of facts placed before the detaining authority.
Setting aside the detention, HELD : Following the decision of this Court in Debu Mahato vs State of West Bengal, , it is true that the courts cannot sit in appeal over the propriety of a detention order.
But there is a distinction between the Court 's jurisdiction in regard to the sufficiency of grounds necessitating the detention and its jurisdiction to examine whether a reasonable person could at all reach the conclusion that unless a person was detained he would in all probability indulge in a similar course of conduct.
So long as the grounds of detention are germane to the purpose of detention courts do not weigh the evidentiary value of the data placed before the detaining authority.
In the present case, no reasonable person can come to the conclusion on the basis of a solitary act of wagon breaking that it is necessary to detain the petitioner.
Considering the nature of the act attributed to the petitioner and its context and not merely the fact that the ground of detention refers to a single incident the satisfaction reached by the District Magistrate that the petitioner, unless detained, was likely to commit similar acts in the future, is such as no reasonable person could possibly reach.
The conclusion that the past conduct of the detenu raises apprehension regarding his future behaviour must at least be rational.
[452A BD]
|
minal Appeal No. 228 of 1970.
Appeal by special leave from the judgment and Order dated the 30th April, 1970 of the Delhi High Court at New Delhi in Criminal Revision No. 90 of 1970.
D. N. Nijhawan, Urmila Kapoor and Kamlesh Bansal, for the appellant.
Sardar Bahadur Saharya, for the respondents.
Respondent No. 1, Kamla Devi was married to the appellant Bhagwan Dutt on January 22, 1957 according to Hindu rites.
out of this wedlock a daughter, Respondent No. 2, was born on November 22, 1957.
On October 18, 1966, Respondent No. 1 filed a petition against the appellant for judicial separation on the ground of desertion and cruelty.
During the pendency of that petition, she filed all application under section 488 of the Code of Criminal Procedure, 1898, in the court of the Magistrate, 1st Class, Delhi, claiming maintenance for herself and for her minor daughter, on the ground that the appellant had neglected and refused to maintain them.
At the date of the application Respondent No. 1 was employed as a stenographer on a monthly salary of Rs. 600/ .
The appellant was at that time earning about Rs. 800/ per month.
However, later on when the case was in the Sessions Court in revision, the monthly income of each of them had increased by Rs. 1501 , approximately.
By his order dated June 6,1969 the Magistrate directed the husband to pay Rs. 250/ per month i.e. Rs. 175/ for the wife and Rs. 75/ for the child for their maintenance.
While fixing the amount of maintenance for the wife, the Magistrate did not take into consideration her own independent income.
Against the order of the Magistrate, the husband went in revision to the Court of Session.
The Additional Sessions Judge was of the view that since the income of the wife was "substantial" and enough to maintain herself".
she was not entitled to any maintenance.
He was further of the opinion that Rs. 75/ p.m. allowed to the child being inadequate, it deserved to be raised to Rs. 125/ p.m. for the period of the pendency of the application in the trial court and thereafter to Rs. 150/ p.m.
He referred the case to the High Court under section 438 of the Code with a recommendation that the order of the Magistrate to the extent it allowed maintenance to the wife, be quashed, but the allowance of the child be enhanced as aforesaid.
485 A learned single Judge of the High Court who heard the reference held that in "making an order for maintenance in favour of a wife under section 488 of the Code of Criminal Procedure the court has not to take into consideration the personal income of the wife as section 488 does not contemplate such a thing".
He therefore declined the refe rence pro tanto, but accepted the same in regard to the enhancement of the allowance of the child.
Aggrieved by the judgment of the High Court, the husband has now come in appeal before us.
The material part of Section 488 of the Criminal Procedure Code is in these terms: "(1) if any person having sufficient means neglects or refuses to maintain his wife or his legitimate or illegitimate child unable to maintain itself, the District Magistrate, a Presidency Magistrate, a Sub Divisional Magistrate or a Magistrate of the first class may, upon proof of such neglect or refusal, order such person to make a monthly allowance for the maintenance of his wife or such child at such monthly rate, not exceeding five hundred rupees in the whole as such Magistrate thinks fit, and to pay the same to such person as the Magistrate from time to time directs.
(2) to (5). " The corresponding part of Section 125 in the new Criminal Procedure Code, 1973, which came into force on 1 st April 1974, reads: "125.
(1) If any person having sufficient means neglects or refuses to maintain (a) his wife, unable to maintain herself, or (b) his legitimate or illegitimate minor child, whether married or not, unable to maintain itself, or (c) his legitimate or illegitimate child (not being a married daughter) who has attained majority , where such child is, by reason of any physical or mental abnormality or injury unable to maintain itself, or (d) his father or mother, unable to maintain himself or herself.
a Magistrate of the first class may, upon proof of a such neglect or refusal, order such person to make a monthly allowance for the maintenance of his wife, such child, father or mother, at such monthly rate not exceeding five hundred rupees in the whole, as such Magistrate thinks fit, and to pay the same to such person as the Magistrate may from time to time direct. " A comparative study of the provisions set out above would show that while in Section 488 the condition "unable to maintain itself" 486 apparently attached only to the child and not to the wife, in Section 125, this condition has been expressly made applicable to the case of wife.
Does this recasting of the old provision signify ally fundamental change in the law? Or, has this been done merely to clarify and make explicit what was formerly implict ? Section 488 does not confer an absolute right on a neglected wife to get an order of maintenance against the husband nor does it impose an absolute liability on the husband to support her in all circumstances.
The use of the word "may" in Section 488(1) indicates that the power conferred on the Magistrate is discretionary.
A neglected wife, therefore, cannot, under this Section, claim, as of right, an order of maintenance against the husband.
of course, the Magistrate has to exercise his discretion in a judicial manner consistently with the language of the statute with the regard to other relevant circumstances of the case.
Nevertheless, the Magistrate has to exercise his discretion primarily towards the end which the Legislature had in view in enacting the provision.
Sections, 488, 489 and 490 constitute one family.
They have been grouped together in Ch.
XXXVI of the Code of 1898 under the caption, "of the maintenance of wives and children".
This Chapter, in the words of Sir James Fitzstephen, provides " a mode of preventing vagrancy, or at least of preventing its consequences".
These provisions are intended to fulfil a social purpose.
Their object is to compel a man to perform the moral obligation which he owes to society in respect of his wife and children.
By providing a simple, speedy but limited relief, they seek to ensure that the neglected wife and children are not left beggared and destituted on the scrap heap of society and thereby driven to a life of vagrancy, immorality and crime for their subsistence.
Thus, S section 488 is not intended to provide for a full and final determination of the status and personal rights of the parties.
The jurisdiction conferred by the Section on the Magistrate is more in the nature of a preventive, rather than a remedial jurisdiction; it is certainly not punitive.
As pointed out in Thompson 's case(1) "the scope of the Chapter XXXVI is limited and the Magistrate cannot, except as thereunder provide, usurp the jurisdiction in matrimonial disputes possessed by the Civil Courts".
Sub section (2) of section 489 expressly makes orders passed under Chapter XXXVI of the Code subject to any final adjudication that may be made by a civil Court between the parties regarding their status and civil rights.
The stage is now set for appreciating the contentions canvassed by the learned Counsel for the parties.
Mr. Nijhawan, learned Counsel for the appellant contends that if section 488(1) is construed in the light of its primary object and.
the nature of the jurisdiction conferred by it, together with section 489(1), it would be amoly clear that in determining the wife 's claim to maintenance and its quantum, her independent income is a relevant consideration.
in support of this contention, Counsel has referred to Mohd. Ali vs Mt. (1) 6 N.W.P. 205.
487 Sakina Begum(1) Narasimha Ayyar vs Rangathayammal(2); Ploonnabalam vs Saraswathi(3); Ahmed Ali Saheb vs Sarfara linisa Begum (4) and P. T. Ramankutty A chan vs Kalyanikutty(5).
As against the above, Mr. Sardar Bahadur Saharya maintains that the very fact that the Section does not make the inability of a wife to maintain herself, a condition precedent to the grant of maintenanceas it does in the case of child shows that the intention of the Legislature was that the wife 's own income or means should not be taken into account either for determining her right to maintenance or for fixing its amount.
It is further urged that the language of section 489 cannot be called in aid to construe section 488 (1).
Reliance for the main argument has been placed on Major Joginder Singh vs Bibi Raj Mohinder Kaur.(6) In Major Joginder Singh 'section case (supra), the wife had claimed maintenance under section 488, Cr. P. C. both for herself and her minor son.
The husband was a Major in the army, getting Rs. 1070/ p.m.
It is not very clear from the Report as to whether the wife was having any substantial income of her own.
However, an argument was raised that she had her own means of support which should be taken into account for determining her right to maintenance.
The learned Judge who decided the case, negatived the contention, thus : "It is obvious from the language of the section that in order to enable a child to claim maintenance it has to be proved that the child is unable to maintain itself '.
No such condition has been imposed in the case of a wife.
Cases in which maintenance was refused to the wife merely on the ground that she was in a position to maintain herself have, in my view, omitted to consider the implication of this distinction while construing the scope and effect of section 488.
In my opinion, the ability of the wife to maintain herself was not intended by the legislature to deprive her of the right of maintenance conferred by this section, if she is otherwise found entitled to it. " Commenting on the cases cited before him, the learned Judge further observed : "But if those authorities intend to lay down any rigid rule of law that the only right which a wife possesses under section 488, Cr.P.C., is to claim just subsistence allowance which should merely provide bare food, residence and raiment and that also only if she has no other means or source, then I must with respect, record my emphatic dissent.
" It may be noted that the above principle spelled out from the interpretation of section 488(1) in Major Joginder Singh 's case (supra), (1) A.I.R. 1944 Lah.
(3) A.I.R. 1957 Mad. 693.
(5) A.I.R. 1971 Kerala 22.
(2) A.I.R. 1947 Mad.
(4) A.I.R. 1952 Hyd. 76 (6) A.I.R. 1960 Punjab 249.
488 was carried a step further by the Division Bench in Nanak Chand Banarsi Dass and ors.
vs Cliander Kishore and Ors.(1) to deduce the proposition that the wife 's right to receive maintenance under section 488, Criminal Procedure Code is an absolute right.
In our opinion, one wrong assumption has led to another false deduction.
The mere fact that the language of section 488(1) does not expressly make the inability of a wife to maintain herself a condition precedent to the maintainability of her petition, does not imply that while determining her claim and fixing the amount of maintenance, the Magistrate is debarred from taking into consideration the wife 's own separate income or means of support.
There is a clear distinction between a wife 's locus standi, to file a petition under section 488 and her being entitled, on merits, to a particular amount of maintenance thereunder.
This distinction appears to have been overlooked in Major Joginder Singh 's case (supra).
Proof of the preliminary condition attached to a neglected child will establish only his competence to file the petition but his entitlement to maintenance, particularly the fixation of its amount, will still depend upon the discretion of the Magistrate.
As the Magistrate is required to exercise that discretion in a just manner, the income of the wife, also, must be put in the scales of justice as against the means of the husband.
The object of those provisions being to prevent vagrancy and destitution, the Magistrate has to find out as to what is required by the wife to maintain a standard of living which is neither luxurious nor penurious, but is modestly consistent with the status of the family.
The needs and requirements of the wife for such moderate living can be fairly determined, only if her separate income, also, is taken into account together with the earnings of the husband and his commitments.
There is nothing in these provisions to show that in determining the maintenance and its rate, the Magistrate has to inquire into the means of the husband alone, and exclude the means of the wife altogether from consideration.
Rather, there is a definite indication in the language of the associate section 489(1) that the financial resources of the wife are also a relevant consideration in making such a determination.
Section 489(1) provides inter alia, that "on proof of a change in the circumstances of any person receiving under section 488 a monthly allowance, the Magistrate, may make such alteration in the allowance as he thinks fit".
The "circumstances" contemplated by section 489(1) must include financial circumstances and in that view,the inquiry as to the change in the circumstances must extend to a change in the financial circumstances of the wife.
Keeping in view the object, scheme, setting and the language of these associate provisions in Chapter XXXVI, it seems to us clear that in determining the amount of maintenance under section 488(1), the Magistrate is competent to take into consideration the separate income and means of the wife.
(1) A.I.R. 1969 Delhi 235.
489 We do not wish to burden this judgment with discussion of all the decisions that have been cited at the Bar.
It will suffice to notice one of them rendered by the Kerala High Court in which Major Joginder Singh 's case (supra) was explained and distinguished.
That case in P. T. Ramankutti vs Kalyankutty (supra) therein, the husband was getting a net salary of Rs. 240/ , while the monthly salary.
of the wife was (after deductions) Rs. 210/ .
The question, was whether the wife in such a financial position had a right to claim maintenance under s.488, Criminal Procedure Code.
after referring to the observations of Dua, J. in Major Joginder Singh 's case (supra) and surveying the case law on the subject, the learned single Judge of the Kerala High Court correctly summed up the position thus ; "To take the view that in granting maintenance under Section 488 to a wife her personal income also can be considered may Prima facie appear to be against the language of the section because the condition "unable to maintain itself" appearing therein attaches itself only to child and not to wife.
But that condition has application only in considering the maintainability of a petition filed under s.488.
A wife can file a petition under that section irrespective of the question whether she is able or unable to maintain herself.
But on her application at the time of the granting of monthly allowance to her there is nothing prohibiting the Court from considering whether she can maintain her self with her own income and if she can, granting her nothing by way of allowance.
" Any other construction would be subversive of the primary purpose of the section and encourage vindictive wives having ample income and means of their own, to misuse the section as a punitive weapon against their husbands.
It is next contended on behalf of the appellant that section 488 must be deemed to have been partially repealed and modified by section 23 of the (for short, called the Act) which provides that in determining the amount of maintenance, the Court shall have, inter alia, regard "to the value of the wife 's property and any income derived from such property or from the claimant 's own earning or from other sources".
Clause (b) of s.4 of that Act provides "Save as otherwise expressly provided in this Act (a) x x x (b) any other law in force immediately before the commencement of this Act shall cease to apply to Hindus in so far as it is inconsistent with any of the provisions contained in this Act.
" The question therefore resolves itself into the issue : whether there is any thing in s.488 which is in consistent withs .23 or any other provisions of the act.
This matter is no longer resititegra.
In Nanak Chand vs Shri Chandra Kishore Agarwala and Ors.(1) this Court held that there is no inconsistency between Act 78 of 1956 and section 488, Criminal Procedure (1) ; 490 Code.
Both could stand together.
The Act of 1956 is an Act to amend and codify the law relating to adoption and maintenance among Hindus.
The law was substantially similar before when it was never suggested that there was any inconsistency with section 488, Cr. P. C. The scope of the two laws is different.
Section 488 provides a summary remedy and is applicable to all persons belonging to all religions and has no relationship with the personal law of the parties.
We have said and it needs to be said again, that section 488 is intended to serve a social purpose.
It provides a machinery for summary enforcement of the moral obligations of a man towards his wife and children so that they may not, out of sheer destitution become a hazard to the well being of orderly society.
As against this, section 23 and other provi sions of the Act relating to fixation of the rate of allowance, provide for the enforcement of the rights of Hindu wives or dependents under their personal law.
This contention therefore is meritless and we negative the same.
For the reasons aforesaid, we allow the appeal, set aside the judgment of the High Court and send the case back to the trial Magistrate to refix the amounts of maintenance.
In the case of the wife, he shall together with other relevant circumstances, take into account her income also.
In the case of the daughter, he shall afford opportunity to the parties to lead fresh evidence and then refix her allowance.
V.P.S. Appeal allowed.
| IN-Abs | The separate income and means of the wife can be taken into account in determining the amount of maintenance payable to her under section 488, Criminal Procedure Code, 1898.
[490 D] (1)(a) The section does not confer an absolute right on a neglected wife to get an order of maintenance against the husband nor does it impose an absolute liability on the husband to support her in all circumstances.
The use of the word ,may ' in section 488(1) indicates that the power conferred on the Magistrate is discretionary, though the discretion must be exercised in a judicial manner consistently with the language of the statute and with due regard to other relevant circumstances of the case.
[486 B I] (b)The object of Ss. 488 to 490 being to prevent vagrancy and destitution, the Magistrate has to find out what is required by the wife to maintain a standard of living which is neither luxurious nor penurious, but is consistent with the status of the family.
Such needs and requirements of the wife can be fairly determined only if her separate income, also, is taken into account together with the earnings of the husband and Ms commitments.
[488 D E] (c)The mere fact that the language of section 488(1) does not expressly make the inability of a wife to maintain herself a condition precedent to the maintainability does not imply that while determining her claim and fixing the amount of maintenance, the Magistrate is debarred from taking into consideration the wife 's own separate income or means of support.
There is a clear distinction between a wife 's locus standi to file a petition under the section and her being (entitled to a particular amount of maintenance.
Even in the case of a neglected child the proof of the preliminary condition, namely, the inability to maintain itself, will only establish the child 's competence to file the petition; but its entitlement to maintenance and the fixation of the amount would depend upon the discretion of the Magistrate.
[485 B D] (d)There is nothing in the sections to show that in determining the maintenance the Magistrate should take into account only the means of the husband and not the means of the wife.
On the contrary, section 489(1) provides that 'on proof of a change in the circumstances of any person receiving under section 488 a monthly allowance, the Magistrate may make such alteration in the allowance as he thinks fit; ' and 'circumstances ' must include financial circumstances.
[488 E G] P.
T. Ramankutty Achan vs Kalyanikutty, A.I.R. 1971 Kerala 22, approved.
Major Joginder Singh.
vs Bivi Raj Mohinder Kaur, A.I.R. 1960, Punjab 249, and Nanak Chand Banarsi Das and Ors.
vs Chander Kishore and Ors.
A.I.R. 1969 Delhi 235.
overruled.
(2)Section 488, Cr.P.C., provides a summary remedy and is applicable to all persons belonging to all religions and has no relationship with the personal law of the parties It provides a machinery for the summary enforcement of the moral obligation of a man towards his wife and children.
But section 23 and other provisions of the , relating to fixation of the rate of allowance, provide for the enforcement of the rights of Hindu wives and dependents under their personal law.
There is no inconsistency between the 1956 Act 16 M 255 Sup CI/75 484 and section 488, Cr.
P.C. Both could stand together, and hence, there is no question of section 488 being partially repealed or modified by section 23 of the 1956 Act.
[490 A B] Manak Chand vs Shri Chandra Kishore Agarwal and Ors.
, ; , followed.
|
No. 1854 of 1973.
Petition under Article 32 of the Constitution of India.
V.M. Tarkunde, Shyania Pappu, D. D. Sharma and Ashok Kunnar Srivastava, for the petitioners.
L.N. Sinha, Solicitor General of India and R. N. Sachthey for respondents nos.
B. P. Maheshwari for respondent No. 3.
R.K. Garg, section C. Agarwal, section C. Bhatnagar, V. J. Francis and section K. Mehta, for respondents nos.
The Judgment of the Court was delivered by UNTWALIA, J.
The four petitioners in this petition under Article 32 of the Constitution of India are working as Additional District & 556 'Sessions Judges in the Delhi Higher Judicial Service at Delhi.
Their ,prayers in ,his writ petition are to strike down Rules 9(a) and 11 of the Delhi Judicial Service Rules, 1970 as being ultra vires and violative of Articles 14 and 16 of the Constitution and to declare Rule 8 of Delhi Higher Judicial Service Rules, 1970 as void and unconstitutional.
Their further prayer is to quash the fixation of the seniority of the petitioners and respondents 3 to 6 and to place petitioners 1 to 4 above respondents 3 to 5 and petitioners 2 to 4 above respondent 6 in the ,,gradation of seniority in Delhi Judicial Service and Delhi Higher Judicial Service.
All the four petitioners originally belonged to the Punjab Civil service (Judicial).
Shri Joginder Nath, petitioner No. 1 joined ,he said service on 2.7.1956, Shri D. C. Aggarwal, petitioner No. 2 on 2.7.1957, Shri section R. Goel, petitioner No. 3 on 8.7.1957 and Shri P. L. Singla, petitioner No. 4 on 10.10.1958.
Prior to 1966, the Union .Territory of Delhi for the purposes of administration of Justice was included within the territorial Jurisdiction of the erstwhile Punjab High ,Court and Presiding Officers of the Courts at Delhi were posted by transfer from the State of Punjab.
There was no separation of Executive and Judiciary.
The Magistrates were selected on ad hoc basis from the States of U.P. and Punjab and were posted to work as such ::at Delhi.
Later on creation of the States of Punjab and Haryana the officers of Punjab and Haryana Civil Service (Judicial) cadre used to be posted in Delhi against all judicial posts.
A separate High Court for Delhi was constituted on the 31st October, 1966.
The arrangement in regard to Judicial officers in the lower Courts however continued as before.
In 1969 under the Union Territories (separation of Judicial and Executive functions) Act, the magistracy in Delhi was split up into two parts with effect from 2.10.1969.
Some magistrates ,.of the State Civil Service, Executive Branch, were transferred to work under the superintendence and control of the High Court of Delhi while others were assigned Executive duties and remained under the ,control of the Delhi Administration as before.
In pursuance of the 'Scheme of separation aforesaid, respondents 3 to 5 who were working as Judicial Magistrates from before were appointed as Chief or Additional Chief Judicial Magistrates under the aforesaid Union Territories Act of 1969.
They were formerly Officers of the U.P. Judicial 'Officers Service.
Respondent No. 6 was a member of the Haryana Civil Service (Judicial).
Respondents 3 to 5 were performing the functions of Revenue Officers and Judicial Magistrates in U.P. and .thereafter in Delhi.
The petitioners case is that on 27 8 1970 the Lt., Governor of Delhi, respondent No. 2 as Administrator of the Union Territory framed Delhi Higher Judicial Service Rules, 1970 and Delhi Judicial Service Rules, 1970 under Article 309 of the Constitution read with certain notifications of the Government of India, Ministry of Home Affairs.
A Selection Committee was constituted in accordance with Rule 7 of the Delhi Judical Service Rules.
On the basis of the recommendations of the Selection Committee, respondent No. 2 made 'appointment of officers by way of initial recruitment to the Delhi 557 Judicial Service under Rule 8.
61 officers were selected.
It may however, be stated here that as per the statement in the counter affidavit filed on behalf of respondent No. 2 only 49 officers joined.
The petitioners 1 to 4 were placed in the seniority list of the Delhi Judicial Service at serial nos.
6, 9, 12 and 13 respectively while the respective serial nos.
assigned to respondents 3 to 6 were 1, 2, 4 and 7.
It would thus be seen that respondent No. 6 was junior to petitioner No. 1 but senior to petitioners 2 to 4 and respondents 3 to 5 were shown us senior to all the petitioners.
The petitioners claim that they were formerly permanent members of the Punjab Civil Service Judicial Branch in the time scale of Rs. 4001250.
They had been put in the selection grade also in the scale of Rs. 1300 1500.
On the other hand, respondents 3 to 5 were euphemistically called Judicial Officers in U.P. the State of their parent service.
They were in a lower scale of Rs. 300 900.
The next higher scale on being appointed to the post of Additional District Magistrates was Rs. 400 1000/ .
The petitioners ' grievance is that Rule 11 of the Delhi Judicial Service Rules permitting the fixation of the seniority of the selected officers under Rule 9(a) on the basis of length of service was bad.
It was fixed by a notification dated 2.8.1971 and was subject to revision on good cause shown.
Respondents 3 to 5 had joined service in the year 1947 as Judicial Officers which was not a cadre service.
It was only on 1.4.1955 that a regular cadre of Judicial officers was created in U.P. but it was different and distinct from the U.P. Civil Service Judicial Branch.
Petitioners 1 and 2 were working as Assistant Sessions Judges at the time of initial constitution of the Delhi Judicial Service while none of the respondents 3 to 5 was appointed as Assistant Sessions Judge, in spite of their longer service in the cadre of U.P. Judicial Officers Service.
The petitioners case further runs thus : Petitioner No. 1 was promoted to the post of Additional District Judge with effect from 24.1.1972and the petitioners 2 to 4 were so promoted with effect from 25.3.1972.Respondents 3 to 5 were not considered to have qualified themselves for being promoted as Addl.
District Judges.
One, of the reasons for not promoting them to the higher judicial service was that they had not received requisite training in I the Civil Law.
Accordingly they were by passed and in the meantime they were given powers of the Subordinate Judges to enable them to get requisite training in Civil Law.
Respondent No. 6 was posted as Sub Judge, First Class and demoted from the post of a Senior Sub Judge on account of inefficiency.
He was not enjoying the selection grade of Haryana Civil Service (Judicial Branch) at the time of his appointment to Delhi Judicial Service while the petitioners were in such grade in their parent service.
Respondents 3 to 5 were later promoted as Additional District Judges on 2.6.1972 and respondent No. 6 was promoted in June, 1973.
Thus all of them were promoted to the higher Judicial Service after the Petitioners.
Yet they were made to ranks senior to petitioners 1 to 4 under Rule 8 of the Delhi Higher Judicial Service Rules.
Respondent No. 6 in spite of his appointment 558 as an Additional District Judge later than petitioners 2 to 4 was allowed to rank senior to them on the basis of Rule 8 aforesaid.
Mr. Tarkunde, learned counsel for the petitioners submitted support of the Writ Petition the.
following points : 1.
Rule 9(a) of the Delhi Judicial Service Rules was bad as it was not framed in accordance with Article 234 of the Constitution and because it permitted the initial appointment to the Delhi Judicial Service of persons who were not in any Judicial service from before.
In any event respondents 3 to 5 could not be _appointed to the Delhi Judicial Service under Rule 9(a).
Rule 1 1 of the Delhi Judicial Service Rules is bad as it infringes Article 14 of the Constitution in as much as it equates length of Judicial service with the length of non judicial service for the purpose of fixation of seniority and thus it makes unequals as equals.
Rule 8 of the Delhi Higher Judicial Service Rules is bad because it fixes the seniority in higher service according to the seniority in the lower one.
A counter affidavit has been filed on behalf of respondent No. 2 and learned Solicitor General appeared to oppose the rule on his behalf.
various counter affidavits were filed on behalf of respondents 3 to 6 and Mr. Garg who appeared on their behalf informed us that respondent No. 3 has since retired and the petitioners could not be ,/granted any relief against him.
He, however, raised a preliminary objection to the maintainability of the Writ petition on the ground of delay.
He submitted that the seniority fixed on 2.8.1971 by list Annexure E/1 to one of the rejoinders could not be challenged by filing a writ application in September, 1973.
He further pointed out that the said seniority list has been revised and substituted by a new list dated 2.6.1973, a copy of which is Annexure R 4/1.
The peti tioners have not challenged the correctness of that list in which had merged the first list dated 2.8.1971.
In our opinion on the facts and in the circumstance of this case the preliminary objection raised on behalf of the respondents cannot succeed.
The first list fixing the seniority of the Judicial officers initially recruited to the Delhi Judicial Service was issued on 2.8.1971 This was subject to revision on good cause being shown.
Petitioners also, as we shall show hereinafter in this Judgment on one ground or the other, wanted their position to be revised in the seniority list.
They, however, did not succeed.
A revised seniority list was issued on 2,6,1973.
The filing of the writ petition was not designedly delayed thereafter. 'Since the petitioners ' position in the seniority list vis a vis respondents 3 to 6 had not been disturbed in the new list dated 2.6.1973 it was sufficient for the petitioners to challenge the list dated 2.8.1971.
We shall point out in this judgment that except the promotion to the posts of Additional District Judges, the seniority in relation to which 559 also is under challenge in this writ application, nothing special had happened creating any right in favour of the respondents or no such position had been created the disturbance of which would unsettle the long standing settled matters.
The writ application, therefore, cannot be thrown out on the ground of delay in regard to any of the reliefs asked for by the petitioners.
It has been pointed out by Hidayatullah, C.J. in the case of Tilokchand Motichand & Ors.
vs H. B. Munshi & Anr.(1) at page 831 "The action of courts cannot harm innocent parties if their rights emerge by reason of delay on the part of the person moving the Court.
" The learned Chief Justice had said at page 832.
"Therefore, the question is one of discretion for this Court to follow from case to case.
There is no lower limit and there is no upper limit.
A case may be brought within Limitation Act by reason of some Article but this Court need not necessarily give the total time to the litigant to move this Court under article 32.
Similarly in a suitable case this Court may entertain such a petition even after a lapse of time.
It will all depend on what the breach of the Fundamental Right and the remedy claimed are and how the delay arose.
In the case of Rabindra Nath Bose & Ors.
vs Union of India & OrS.(2) Sikri J, as he then was, delivering the judgment on behalf of the Court has said at page 712 : "The highest Court in this land has been given Original Jurisdiction to entertain petitions under article 32 of the Constitution.
It could not have been the intention that this Court would go into stale demands after a lapse of years.
" But under what circumstances a petition under article 32 of the Constitution should be thrown out on the ground of delay, has been pointed out in the last paragraph on that page by observing.
"it would be unjust to deprive the respondents of the rights which have accrued to them.
Each person ought to be entitled to sit back.
and consider that his appointment and promotion effected a long time ago would not be set aside after the lapse of a number of years.
" On the facts of this case the petition was held to have been filed after inordinate delay.
In a recent decision of this Court, Bhagwati, J. delivering the judgment on behalf of the bench of five Judges in Ramchandra Shankar Deodhar and others.
vs The State of Maharashtra and others(3) it age 265 has said "In the first place, it must be remembered that the rule which says that the Court may not inquire into belated and stale claims is not a rule of law, but a rule of practice based on sound and proper exercise of discretion, and there is no inviolable rule that whenever there is delay, the court must necessarily refuse to entertain the petition.
Each case must depend on its own facts.
" on the facts and in the circumstances of this case we do not feel persuaded to throw out the petition on the ground of delay as there is none to disentitle the petitioners to claim relief.
The two impugned rules in this case were made by the Lt. Governor of Delhi in consultation with the High Court of Delhi in exercise of his powers conferred by the proviso to article 309 of the Constitution (1) (2) (3) A.I. R. , L 319 Sup CI/75 560 r/W certain notifications of the Government of India, Ministry of Rome Affairs.
The Delhi Higher Judicial Service Rules regulating the recruitment and condition of higher service could indisputably be made under the proviso to article 309 article 234 says : "Appointments of persons other than district judges to the judicial service of a State shall be made by the Governor of the State in accordance with rules made by him in that behalf after consultation with State Public Service Commission and with the High Court exercising Jurisdiction in relation to such State.
" It was not disputed on either side that the word "State" in the said Article would include a Union Territory also.
But the learned Solicitor General pointed out that there was no judicial service in the Union Territory of Delhi before its creation by initial recruitment to the service under the Delhi Judicial Service Rules.
The initial recruitment to the service could be made only under la valid rule framed under article 309 Framing of a rule under article 234 was not necessary.
We may, however, point out that part IV of Delhi Judicial Service Rules refers to recruitment to the service after the initial recruitment.
In our opinion, however, the rules framed by the Lt. Governor for appointment to the Delhi Judicial Service either at the initial stage or thereafter cannot be held to be invalid merely because they were not framed in accordance with article 234.
Rules framed under article 309 in consultation with the Delhi High Court were good and valid and cannot be assailed.
When it was pointed out to the learned counsel of the petitioners that on the argument advanced with reference to article 234 even the initial recruitment of the petitioners to the Delhi Judicial Service was in jeopardy, the point was ultimately given up and not pressed.
The constitution and strength of the Delhi Judicial Service as provided in rule 3 of the Delhi Judicial Service Rules will be of the service consisting of two grades namely Grade I (Selection Grade) and Grade 2.
The posts in Grade I shall be civil posts, class I Gazetted, and those in Grade 11 shall be civil posts, class 11 Gazetted.
Clause (d) of Rule 3 provides A "person appointed to the service shall be designated as Subordinate Judge or Judicial Magistrate or as Subordinate Judge or Judicial Magistrate or as Subordinate Judge cum Judical Magistrate in accordance with the duties being discharged by him for the time being." The posts borne on the permanent strength of the service and the posts included therein have been specified in the Schedule appended to the rules.
10% of the permanent strength of the service will be the posts in the selection grade.
A Selection Committee was constituted consisting of 3 Hon 'ble Judges of the Delhi High Court, the Chief Secretary and a Secretary of the Delhi Administration.
The initial recruitment was made by the Lt. Governor in accordance, with Rule 9 which reads, as follows : "9.
For initial recruitment to the service, the Selection Committee shall recommend to the Administrator suitable persons for appointment to the service from amongst the following : (a) Subordinate Judges and Law Graduate Judicial Magistrates working in the Union territory of Delhi on deputation from other States; 561 (b) members of Civil Judicial cadres of States whose names may be recommended by their respective State Governments for appointment, and (c) members of the Delhi Himachal Pradesh and Andaman and Nicobar Islands Civil Service, who are Law Graduates.
The consent of the officer to be recommended and the consent of his parent Government shall be necessary before his appointment to the service.", It would thus be noticed that the Selection Committee was to recommend only "suitable persons" for appointment to the service.
It is stated in paragraph 12 of the writ application that clause (c) of Rule 9 was struck down by the High Court of Delhi in Writ Petition No.1322/70 D. K. Paddar vs Lt. Governor at Delhi.
We are not concerned in this case with clause (c).
The source of the initial recruitment to the service under clause (a) was Subordinate Judges who necessarily belong to the Judicial cadre of a State and Law Graduate Judicial Magistrates (not merely Judicial Magistrates) working in the Union territory of Delhi.
The creation of the service being only in two grades, grade 2 and grade I (selection grade) and there being no provision for appointment in the selection grade at the stage of the initial recruitment of the service it is plain that all those who fulfilled the qualifications laid down in clause (a) of Rule 9 and who were found "suitable" by the Selection Committee could be initially recruited to the Delhi Judicial Service.
Even Judicial Magistrates have been put on a par with the Subordinate Judges.
None of the respondents 3 to 5 either in their parent service in U.P. or in the Union Territory of Delhi was a Magistrate on the Executive side.
All of them were doing the work of Judicial Magistrates and of Revenue officers which also included performance of judicial duties.
It is difficult to find any trace of invalidity in rule 9(a) of the Delhi Judicial Service Rules.
For the purpose of initial recruitment to the service, officers of the judicial cadre of a State and officers although not belonging to the judicial cadre but by and large performing the judicial functions could be put together.
There was no infraction of articles 14 and 16.
In the counter affidavit filed on behalf of respondent 2 it is mentioned that respondents 3 to 5 were in the regular cadre of U.P. Judicial Officers w.e.f. 1.4.1955.
It has been pointed out by this Court in the case of Chandra Mohan vs State of Uttar Pradesh & Ors.
(1) at page 80 "that the expression "judicial officers" is a euphemism for the members of the Executive department who discharge some revenue and magisterial duties." Strictly speaking the expression "Judicial duties" was held to be a misleading one for the purpose of recruitment to the higher judicial service in accordance with article 233 of the Constitution.
In the context and set up of the Article it was pointed out that the source of service for appointment as a District Judge must be the Judicial service and not any service.
It is plain that the same principle cannot apply to the recruitment of persons to the lower judicial service obviously not covered by article 233.
(1) 562 Rule 11 of the Delhi Judicial Service Rules reads as follows "11.
The Selection Committee shall arrange the seniority of the candidates recommended by it in accordance with the length of service rendered by them in the cadre, to which they belong at the time of their initial recruitment to the service.
Provided that the inter se seniority as already fixed in such cadre shall not be altered.
" The question for determination is was there any infirmity in rule 1 1 ? Did it put unequals with equals and violated article 14 of the Constitution? Was the rule arbitrary and discriminatory? Once the Selection Committee found persons belonging to clause (a) of Rule 9 suitable for appointment to the service it was under a duty and obligation to arrange the list of suitable persons by placing them in proper places in the matter of seniority.
They were all being initially appointed to the Delhi Judicial Service wherein there was no separate gradation of posts.
The assignment of duties was to follow on the basis of seniority list.
Arranging the seniority of the candidates recommended by the Selection Committee in accordance with the length of service rendered by them in the judicial cadre to which they belonged at the time of their initial recruitment to the service was perfectly good.
The petitioners could not have any grievance in that regard.
On their initial recruitment to the Delhi Judicial Service they retained their original seniority inter se as was assigned to them in their parent cadre.
Was it possible to have a different yardstick, some other date or shorter period for fixation of the seniority of the law graduates judicial magistrates on their initial recruitment to the service ? from which date their seniority ought to have been reckoned ? Was it possible to treat them as the first and the new recruits to the Delhi Judicial Service.
Even so what would have been the basis of determining their seniority inter se ? The questions posed are suggestive of the answers.
Taking the length of service rendered by the candidates in their respective cadres for the purpose of fixation of seniority under rule 1 1 of the Delhi Judicial Service Rules was justified, legal and valid.
Had it been otherwise it Would have been discriminatory.
It was not equating unequals with equals.
It was merely placing two classes at par for the purpose of seniority when it became a single class in the integrated judicial service of Delhi.
For the purpose of fixation of seniority it would have been highly unjust and unreasonable to take the date of their initial recruitment to the service as their first appointment.
Nor was it possible to take any other date in between the period of their service in their parent cadre.
It would have been wholly arbitrary.
In our judgment, therefore, there was no escape from the position that the entire length of service of the two classes of officers had got to be counted for.
the purpose of determination of their seniority on their initial recruitment to the Delhi Judicial service.
It was not possible or practical measure their respective merits for the purpose of seniority with mathematical precision by a barometer.
Some formula doing largest good to the largest number had to be evolved.
The only reason able and workable formula which could be evolved was the one engrafted in rule 11 of the Delhi Judicial Service Rules.
563 The decision of this Court in Kunnathat Thathunni Moopil Nair vs The State of Kerala and another(1) relied on by the petitioners is clearly distinguishable.
Sinha, C.J. 'in his judgment at page 92 pointed out the nature of equal burden of tax placed upon unequals and said "It is clear, therefore, that inequality is writ large on the Act and is inherent in the very provisions of the taxing section.
It is also clear that there is no attempt at classification in the provisions of the Act.
Hence, no more need be said as to what could have been the basis for a valid classification.
It is one of those cases where the lack of classification creates inequality." In the instant case for the purpose of fixing the seniority at the stage of the initial recruitment to the Delhi Judicial Service, no other classification, no different yardstick was possible.
The inequality was avoided to a large extent by rule 1 1.
The case of Jalan Trading Co. (Private Ltd.) vs Mill Mazdoor Union (2) is also of no help to the petitioners.
Distinguishing Moopil Nair 's case [1961(3) S.C.R. 77] Shah, J. as he then was pointed out at page 36 : "If the classification is not patently arbitrary, the Court will not rule it discriminatory merely because it involves hardship or inequality of burden.
Equal treatment of unequal objects, transactions or persons is not liable to be struck down as discriminatory unless there is simultaneously absence of a rational relation to the object intended to be achieved by the law.
" The principles enunciated when applied correctly to the facts of the instant case rather go against the petitioners. "Equal treatment of unequal objects" even if we prefer to call them different classes, is not discriminatory in this case ,as there is a rational relation to the object intended to be achieved by the law.
The object of the Delhi Judicial Service Rules was to create, a service by integration of different classes of persons already working as Judicial officers.
The fixation of seniority on the basis of length of service in their respective parent cadres bad a rational nexus to the object intended to be achieved.
One of us in the case of The State of Gujarat and another etc.
vs Shri Ambica Mills Ltd. Ahmedabad etc(3) delivering the judgment on behalf of the Court hag pointed out at page 1313 : "A reasonable classification is one which includes all who are similarly situated and non who are not.
The question then is : what does the phrase 'similarly situated ' mean? The answer to the question is that we must look beyond the classification to the purpose of the law.
A reasonable classification is one which includes all persons who are similarly situated with respect to the purpose of the law.
The purpose of a law may be either the elimination of a public mischief or the achievement of some positive public good.
" In the instant case treat in the two classes as one for the purpose of initial recruitment and fixation of seniority was reasonable as the classification was one which included all persons who were similarly situated with respect to the purpose of the law.
We have therefore no difficulty in rejecting the argument put forward on behalf of the petitioners that rule 11 of Delhi Judicial Service Rules is bad as being violative of articles 14 and 16 of (1) ; (2) ; (3) ; 564 of the Constitution.
It was not suggested on behalf of the petitioners and rightly so that fixation of their seniority vis a vis respondents 3 to 6 in the Delhi Judicial Service was not in accordance with rule 11.
Two more facts need be noted here in connection with the question of seniority and they are these : A notification dated September 30, 1967 was issued by the Governor of U.P., a copy of which is Annexure 'H ' to the rejoinder on behalf of the petitioners to the counter affidavit filed by respondent 2 under article 237 of the Constitution directing that the remaining provisions of Chapter VI of Part VI of the Constitution shall, With effect from October 2, 1967, apply in relation to such magistrates including additional District Magistrates (Judicial), in the State as belong to the Uttar Pradesh Judicial officers Service as they apply in relation to persons appointed to the Judicial Service of the State subject to the certain exceptions and modifications mentioned in the said notification.
It is no doubt true that respondents 3 to 5 were already on deputation to the Union territory of Delhi.
Yet they could not be denied the advantage of this notification in principle.
They were doing the judicial work in Delhi and on initial recruitment to the Delhi Judicial Service became its fulfledged members.
The letter dated September 29, 1967, a copy of which is Annexure R 4/5 to the supplementary affidavit of the respondent No. 4 written by the Chief Secretary to the Govt.
of U.P. to the Registrar, High Court of Allahabad also supports the above position.
It is admitted that on or from 2.10.1969 there was no separation of Executive and Judiciary in Delhi also and all officers working on the judicial side were placed under the control of the Delhi High Court.
Annexure "A" to the counter affidavit of respondent No. 2 is a copy of the order dated 18th December, 72 passed by Hon 'ble Mr. Justice V. section Deshpande and Hon 'ble Mr. Justice section Rangarajan of the Delhi High Court.
The representations of the petitioners were rejected.
The order indicates that the initial recruits were given seniority ac cording to the length of service in their cadres.
The representationists accepted this position and the matter was close.
Their new stand that since they belonged to the selection grade of Subordinate Judges in the Punjab and Haryana Judicial Service cadre they ought to have been appointed to such a grade in Delhi Judical Service even at the time of initial recruitment was not accepted to be correct.
It is, therefore, plain that on initial recruitment to the Delhi Judicial Service all those who are recruited including the petitioners and respondents 3 to 6 were at par and the fixation of their seniority in accordance with rule 11 of the Delhi Judicial Service Rules was legal and valid.
The facts in relation to the 6th respondent are these.
This respondent also formerly belonged to the combined Punjab Civil Service (Judicial) P.C.S. cadre.
This respondent and petitioner No. 1 were selected in the open competition together and later joined the Judicial Service in the year 1956.
Both were confirmed in the year 1958.
Petitioner No. 1 was senior to respondent No. 6 Petitioners 2 to 4 joined the same service later and were junior to respondent No. 6.
When the State of Punjab was bifurcated into two States of Punjab and Haryana of 1.11.1966 the petitioners were allotted the cadre of 565 Punjab and respondent No. 6 came to the cadre of Haryana.
On Constitution of the Delhi Judicial Service, respondent No. 6 was recommended by the Haryana St ate and was initially recruited to the Delhi Service which he joined on 1.9.1971.
Eventually respondent No. 6 was placed in the selection grade w.e.f. 25.3.1972 and he was promoted as Additional District & Sessions Judge w.e.f.
1.6.1973.
It would thus be seen that allocation of a place of seniority in the Delhi Judicial Service to respondent No. 6 below petitioner No. 1 and above petitioners 2 to 4 was valid and justified.
Coming to the Delhi Higher Judicial Service Rules, 1970 we find that under rule 6 the initial recruitment to the higher service was made.
None of the petitioners or the respondents was initially recruited.
The regular recruitment to the higher service after the initial recruit ment has been provided in rule 7 in these terms "7.
Regular recruitment Recruitment after the initial recruitment shall be made : (a) by promotion from the Delhi Judicial Service; (b) by direct recruitment from the Bar.
Provided that not more than 1/3rd of the substantive posts in the service shall be held by direct recruits.
" Rule 8 prescribes the mode of determination of inter se seniority of the promotees and the seniority of the direct recruits vis a vis promotees.
It runs as follows : "8.
(1) The inter se seniority of members of the Delhi Judicial Servicepromoted to the service shall be the same as in the Delhi Judicial Service.
(2) The seniority of direct recruits vis a vis Promotees shall be determined in the order of rotation of vacancies between the direct recruits and promotees based on the quotas of vacancies reserved for both categories by rule 7 provided that the first available vacancy will be filled by a direct recruit and the next two vacancies by promotees and so on.
" We may notice here two rules viz. Rules 16 and 17 relating to temporary appointments forming part V of the Delhi Higher Judicial Service Rules.
They read as follows : "16 (1) The Administrator may create temporary posts in the service.
(2)Such posts shall be filled, in consultation with the High Court, from amongst members of the Delhi Judicial Service." "17.
Notwithstanding anything contained in these rule the Administrator may, in consultation with the High Court, fill substantive vacancies in the service by making temporary appointments thereto from amongst members of the Delhi Judicial Service.
" It would thus be seen that there are two types of appointments to Delhi Higher Judicial Service one by regular recruitment, the source of which is by promotion from the Delhi Judicial Service and by direct 566 recruitment from the Bar.
Rule 8 prescribes the mode of determination of seniority of such regular recruits.
The inter se seniority of the members of the Delhi Judicial Service promoted to the higher service has got to be the same as in the lower rank.
As a matter of construction it necessarily follows that it would be the same provided the promotion from the lower to the higher service is at the same time.
Learned Solicitor General appearing for respondent No. 2 in his usual fairness conceded to this interpretation and added that it cannot but be so.
If a member of the Delhi Judicial Service is superseded at the time of recruitment under rule 7 by his junior but gets a chance of promotion later, it is obvious that he cannot retain his seniority in the lower rank.
All candidates on appointment to the higher service have got to be on probation for a period of two years under rule 12(2) and ordinarily and generally they would be confirmed at the end of the said period of two years in accordance with rule 13.
Strictly speaking the question of determination of inter se seniority under rule 8 will crop up at the time of the confirmation of the appointee.
In Chandramouleshwar Prasad 'vs Patna High Court I & Ors.
(1) referring to the relevant rules of the Bihar Superior Judicial Service Rules, Mitter, J delivering the judgment on behalf of this Court said at page 671 : "It may be noted at this stage that the gradation of the officers by the High Court or maintaining any list showing such gradation is not sanctioned by any service rules.
The Bihar Superior Judicial Service Rules to which our attention %,as drawn do not contain any provision which would entitle the High Court to make such a gradation or act thereon.
Rule 5 of the said Rules prescribes that ordinarily appointments to the post of Additional District and Sessions Judges shall be made by the Government in consultation with the High Court and under R. 8 a person appointed either on substantive or officiating basis to the post of Additional District and Sessions Judge shall draw pay on the lower time basis.
Rule 16(b) provides that seniority inter se of promoted officers shall be determined in accordance with the dates of their substantive appointments to the service and R. 16(d) lays down that more than one appointment is made by promotion at one time, the seniority inter se of the officers promoted shall be in accordance with the respective seniority in the Bihar Civil Service (Judicial Branch).
The question of seniority therefore has to be determined when the persons appointed either temporarily or on an officiating basis are given substantive appointments.
So far as the petitioner and the three respondents are concerned that time is yet to come.
" On a parity of reasoning it follows that question of determination of seniority comes in at the time of confirmation of the appointees.
Two members of the Delhi Judicial Service confirmed in the higher service at the same time will retain their inter se seniority as in the lower service.
But if they are not confirmed at the same time then one who is confirmed earlier will be senior to the one who is confirmed later, even though they might have been appointed on probation under rule 7 at the same time.
We may, however, add that for practical purposes and for the facility of administration the High Court for the (1) ; 567 time being may consider the promoted probationers as retaining their inter se seniority of the lower service if they are appointed at the same time until they are confirmed.
In our judgment members of the Delhi Judicial Service coming to the higher service on temporary appointments either under rule 16 or rule 17 of the Delhi Higher Judicial Service Rules cannot claim the benefit of the inter se seniority under rule 8.
There are no rules prescribing the mode of determination of inter se seniority of such temporary appointees or permitting them to count their officiation in the temporary appointments for the purpose of their seniority on their being appointed substantively.
The question of determination of interse seniority of the promotees under rule 8(1) as already stated would crop up only after the promotees have been substantively appointed.
We may add here also that as between the temporary appointees for practical purposes and for the facility of the administration it will be open to the High Court to permit the promotees to retain their seniority in the lower judicial service after they are temporarily appointed at the same time till they continue in the temporary appointments.
The vires of rule 8(1) of the Delhi Higher Judicial Service Rules was challenged by Mr. Tarkunde, learned counsel for the petitioners on the ground that rule 8(1) equates all who are promoted to the higher service and permits them to retain their seniority in the lower service irrespective of the time of their appointment.
Counsel submitted that those who came earlier to the higher service whether under rule 7 or under rule 16 or 17 should have been allowed to rank senior to those who came to be appointed either substantively or temporarily to the higher service later.
The attack on the constitutionality of rule 8(1) is obliterated if by construction it is held, as it has been done above, that the question of retention of seniority in the lower service arises only when the promotion is at the same time and not otherwise.
In absence of such an interpretation it would be a truism to say that rule 8(1) would be discriminatory and violative of article 14 of the Constitution.
But with the aid of well established cannons of interpretation we see no difficulty in saving the constitutionality of the rule by interpreting it in a reasonable, sensible and just manner as we have done in this case.
The second part of the argument of Mr. Tarkunde to rope in the temporary appointees for the purpose of determination of inter se seniority of the promotees under rule 8(1) is obviously wrong and cannot be accepted as sound.
It may also be added that sub rule (2) of rule 8 will militate against the acceptance of the submission aforesaid.
Judging the facts of the instant case in the light of the interpretation which we have put to the relevant rules of the Delhi Higher Judicial Service it will be noticed that the grievance of the petitioners in relation to the seniority of respondents 3 to 6 is either unjustified or premature.
Even though respondent No. 3 has already retired and determination of such a question vis a vis him would be futile, while referring to the relevant facts of the case we may point out that the grievance of the petitioners as against respondents 3 and 4 is wholly unjustified.
568 Annexure 'J ' is a copy of the notification dated 20th January, 1972 whereby the Administrator of Delhi was pleased to appoint in consultation with the High Court Shri Joginder Nath, petitioner No. 1 and one Om Prakash Singla, members of the Delhi Judicial Service, to the Delhi Higher Judicial Service, temporarily till further orders.
The appointment was under rule 17 of the Delhi Higher Judicial Service Rules against the 14th and.
15th vacancies.
In paragraph 15 of the counter affidavit filed on behalf of respondent No. 2 reason has been given as to why petitioner No. 1 was temporarily appointed and the appointments of respondents 3 to 5 was deferred.
It was not because they were found unfit that they were not appointed but to enable them to have more experience of the civil work they were made Subordinate Judges.
After sometime respondents 3 and 4 were appointed on probation for 2 years under rule 7 against the 14th and 15th vacancies.
By another notification of the same date issued under rule 17, petitioner No. 1 and respondent No. 5 were temporarily appointed in officiating capacity till further orders.
Four temporary posts were created by a notification dated 13th March, 1974.
Petitioners 2, 3 and 4 were temporarily appointed to three of these posts by notification dt.
22nd March, 72 by the Administrator of Delhi in exercise of his powers under rule 16(2) of the Delhi Higher Judicial Service Rules.
Copies of these notifications issued under Rules 7, 17 and 16 of the Delhi Higher Judicial Service Rules are collectively Annexure 'B ' to the counter affidavit of respondent No. 2.
Respondents 3 and 4 have been confirmed during the pendency of this Writ petition in the higher service by notification dated 13,6,1974 Annexure R 4/4 w.e.f.
2nd June, 1974.
The, petitioners have not challenged the notifications appointing them temporarily to the higher service under rule 16 or rule 17 and appointing respondents 3 and 4 substantively under rule 7.
The confirmation of the latter therefore is perfectly in order and it goes without saying that they will be senior to such members of the Delhi Judicial Service who would be substantively appointed and confirmed later.
A copy of the notification appointing respondent No. 6 to the higher judicial service from 1.6.1973 does not seem to be in the records of this case.
We were however informed at the Bar that he was also temporarily appointed either under rule 16 or rule 17.
That being so it was not clear to us whether the grievance of the petitioners in paragraph 19 of the writ petition that respondent No. 6 inspite of his appointment as Additional District Judge later than petitioners 2 to 4 was allowed to rank senior to them on the basis of rule 8 of the Delhi Higher Judicial Service Rules, is correct or justified.
The question of the 6th respondent 's ranking senior to any of the petitioners will not arise until they are substantively appointed to the higher judicial service.
We may, however, reiterate our observation that from a practical point of view and for the facility of administration, in the temporary appointments, respondent No. 6 who came later than the petitioners cannot rank senior to any of them.
In the well known case of Parshotam Lal Dhingra vs Union of India(1) Das C.J. delivering the judgment on behalf of majority of (1) ; 569 this Court pointed out at pages 841 and 842 thus : "The appointment of a Government servant to a permanent post may be substantive or on probati on or on an officiating basis. .
An appointment to officiate in a permanent post is usually made when the incumbent substantively holding that post is on leave or when the permanent post is vacant and no substantive appointment has yet been made to that post.
Such an officiating 'appointment comes to an end on the return of the incumbent substantively holding the post from leave in the former case or on substantive appointment being to that permanent post in the later case. . .
In the instant case it is clear that due to justifiable reasons, the appointment of respondents 3 and 4 substantively to the 14th and the 15th vacancies was deferred and petitioner No. 1 was made to officiate in a temporary capacity against the substantive vacancy.
But such an officiation came to an end on the substantive appointment of either of respondents 3 or 4.
For the reasons aforesaid we hold that the petitioners have made out no case entitling them to any relief asked for by them in this writ, petition.
It accordingly fails and is dismissed without costs.
| IN-Abs | The petitioners originally belonged to the Punjab Civil Service (Judicial) in the time scale of Rs. 400 1250.
They had been put in the scale of Rs. 1300 1500.
On the other hand, respondents 3 to 5 were judicial officers in the U.P. in the lower scale of Rs. 300 900.
The next higher scale on being appointed to the post of Additional District Magistrate was Rs. 400 1000.
Prior to 1966, the Union Territory of Delhi for the purposes.
of administration of justice was included within the territorial jurisdiction of the erstwhile Punjab High Court and the Presiding Officers of the courts at Delhi were posted by transfer from the State of Punjab.
There was no separation of executive and judiciary.
In1970, Delhi Higher Judicial Service Rules, 1970 and Delhi Judicial Service Rules1970 were framed under article 309 of the Constitution.
A selection Committee was constituted in accordance with rule 7 of the Delhi Judicial Service Rules.
On the basis of the recommendation of the Selection Committee, appointments of officers by way of initial recruitment to the Delhi Judicial Service were made.
Petitioners 1 and 2 were working as Assistant Sessions Judges at the time of initial constitution of the Delhi Judicial Service while none of the respondents 3 to 5 was appointed as Assistant Sessions Judge in spite of their longer service in the cadre of U.P. Judicial Officers Service.
The petitioners were promoted to the post of Additional District Judges in January and March, 1972.
Respondents 3 to 5 were not considered to have qualified for being promoted as Additional District Judges.
Respondents 3 to 5 were promoted as Additional District Judges in June, 1972 and respondent No. 6 was promoted in June, 1973.
Thus respondents 3 to 6 were promoted to the higher judicial service later on, yet they were made to rank senior to petitioners under rule 8 of the Delhi Higher Judicial Ser vice Rules.
Rule 9 of Delhi Judicial Service Rules provides that initial recruitment to the service would be made from amongst the subordinate Judges and Law Graduate Judicial Magistrates working in the Union Territory of Delhi on de putation from other States as well as members of Civil Judicial Cadres of States whose names might be recommended by their respective State Governments for appointment and members of Delhi, Himachal Pradesh and Andaman & Nicobar islands who were law graduates.
Rule 11 of Delhi Judicial Service Rules provides that the Selection Committee should arrange the seniority of the candidates recommended by it in accordance with the length of service rendered by them in, the cadre to which they belonged at the time of their initial recruitment the service provided that the interse seniority as already fixed in such cadre shall not be al tered.
Rule 7 of Delhi Higher Judicial Service Rules provides that recruitment after the initial recruitment shall be made by promotion from the Delhi Judicial Service and by direct recruitment from the Bar.
It further provides that not more than one third of the substantive posts in the service should be held by direct recruits.
Rules 8 further provides that the interse seniority of members of Delhi Higher Judicial Service promoted to the service shall be the same as in Delhi Judicial Service and that the seniority of Direct Recruits vis a vis Promotees shall be determined on the basis of roaster following the quota system.
The petitioner 's contention was that they should be treated as senior to respondents 3 to 6.
The petitioners contended that rule 9 of the Delhi Judicial Service Rules was bad as it was not framed in accordance with Article 234 of them 554.
Constitution and also because it permitted the initial appointment to the Delhi Judicial Service of persons who were not in any judicial service from before.
The petitioners further contended that rule 11 of the Delhi Judicial Service Rules is bad as it infringes Article 14 of the Constitution inasmuch as it equates length of judicial service with the length of non judicial service for the purpose of fixing seniority and thus treats unequals as equals.
Rule 8 of the Delhi Higher Judicial Service Rules is bad because it fixes the seniority in higher service according to the seniority in the lower one.
The respondents controverted the contention of the petitioners.
In addition the respondent contended that the Writ Petition was not maintainable on the ground of delay.
It was also contended that after the impugned seniority list a further seniority list was published which has not been challenged and that, therefore, the petition ought to be dismissed.
HELD : (i) The relative position of the petitioners and respondents 3 to 6 remains the same in the new seniority list as it was in the impugned seniority list.
The contention of the respondent therefore cannot succeed.
(ii)The question of laches is one of discretion.
There is no lower limit and there is no upper limit.
The rule which says that the court may not enquire into the belated and stale claims is not a rule of law but a rule of practice based on sound and proper exercise of discretion and there is no inviolable rule that when ever there is delay the court must necessarily refuse to entertain the Petition.
Each case must depend upon its own facts.
In the present case, nothing special has happened creating any right in favour of the respondent or no such position has been created the disturbance of which would unsettle the long standing settled matters.
The writ application, therefore, cannot be thrown out on the ground of delay in regard to any of the reliefs, asked for by the petitioners.
[559C; G & A D] (iii)It is difficult to find any trace of invalidity in rule 9 of the Delhi Judicial Service Rules.
For the purpose of initial recruitment to the Service officers of the Judicial cadre all the officers although not belonging to the judicial cadre but by and large performing the judicial functions could be put together.
There was no infraction of articles 14 and 16.
Rule 11 of Delhi Judicial Service which provides that the seniority should be determined in accordance with the length of service does not put unequals as equals.
The rule is neither arbitrary nor discriminatory.
Once the Selection Committee found persons belonging to Clause (a) rule 9 suitable for appointment to the service it was under a duty and obligation to arrange the list of suitable persons by placing them in proper Place in the matter of seniority.
Arranging the seniority in accordance with the length of service rendered in judicial cadre to which they belonged at the time of their initial recruitment to the service was perfectly good.
Petitioners cannot have any grievance in that regard.
It was not possible to have a different yardstick.
Taking the length of service for the purpose of fixation of seniority was justified, legal and valid.
For the purpose of fixation of seniority it would have been highly against, and un reasonable to take the date of their initial recruitment to the service as their first appointment.
Nor was it possible to take any other date in between the period of their service in their parent cadre.
It would have been wholly arbitrary.
There was no escape from the POsition that the entire length of service of the two classes of officers had got to be counted for the purpose of determination of their seniority on their initial recruitment to the Delhi Judicial Service.
It was not possible or practical to measure the respective merits for the purpose of seniority with mathematical precision by Barometer but some formula doing largest good to the largest number had to be evolved.
The only reasonable and workable formula which could be evolved was the one engrafted in rule 11.
[561F; 562C H] Kunniathat Thatthuni Moopil Nair vs The State of Kerala and another; , , distinguished.
Jalan Trading Co. (Private Ltd.) vs Mill Mazdoor Union, , distinguished.
(iv)In the instant case, treating the two classes as one for the purpose of initial recruitment and fixation of seniority was reasonable as the classification was one which included all persons who were similarly situated with respect to the purpose of the law.
[563G H] 555 (v)The interse seniority of the members of the Delhi Judicial Service promoted to the higher service would be the same provided the promotion from the lower to the higher service is at the same time.
If a member of Delhi Judicial Service is superseded at the time of recruitment under rule 7 by his junior but gets a chance of promotion later it is obvious that he cannot retain his seniority in the lower rank.
All candidates on appointment to higher service have jot to be on.
probation for a period of 2 years ordinarily and generally they would be confirmed it the end of the said period of 2 years.
Strictly speaking, the Question of determination of interse seniority under rule 8 will crop up at the time of confirmation of the appointee.
The question of seniority therefore has to be determined when the persons appointed either temporarily or on officiating basis are given substantive appointments ' So far as the petitioners and three respondents.
are concerned that time is yet to come.
Two members of the Delhi Judicial Service confirmed in the higher service at the same time will retain their interse seniority as in the lower service but if they are not confirmed at the same time then one who is confirmed earlier will be senior to the one who is confirmed later though they might have been appointed on probation at the same time.
There are no rules prescribing the mode of determination of interse seniority of temporary appointees or permitting them to count their officiation in the temporary appointments for the purpose of their seniority on their being appointed substantively.
The attack on the constitutionality of rule 8 is obliterated in view of the construction placed by this Court.
In the absence of such an interpretation rule 8 would be discriminatory and violative of article 14 of the Constitution.
With the aid of well established connons of interpretation.
we see no difficulty in saving the constitutionality of the rule by interpreting it in a reasonable sensible and just manner.
[566BC; FH] (vi)The appointment of a Government servant to a permanent post may be.
substantive or on probation or on officiating basis.
An appointment to officiatein a permanent post is usually made when the incumbent substantively holding, that post is on leave or when the permanent post is vacant and no substantive appointment has yet been made to that post.
Such an officiating appointment comes to an end on the return of the incumbent substantively holding post from leavein the former case or on the substantive appointment.
In the instant case due to justifiable reasons the appointment of respondents 3 and 4 substantively to 14th and 15th vacancies was deferred and the petitioner No. 1 was made to officiation in a temporary capacity against the substantive vacancy.
Such an officiation came to an end on the substantive apppointment of either of respondent No. 3 or 4.
[569A C]
|
it Petition No. 319 of 1974.
Petition under Article 32 of the Constitution.
Anil Kumar Gupta, for the petitioner.
P. Chatteriee and G. section Chatterjee, for the respondents.
The Judgment of the Court was delivered by BHAGWATI, J.
The petitioner challenges his detention under an order dated 10th September, 1973 made by the District Magistrate, 594 Burdwan under section 3(2)(i) of the .
There were several grounds urged before us for challenging the validity of the order of detention but it is not necessary to refer to them since we find that there is one ground which is sufficient to dispose of the petition.
To appreciate this ground it is necessary to notice a few facts.
The order of detention was made on 10th September, 1973 and it was based on the subjective satisfaction of the District Magistrate that it was necessary to detain the petitioner with a view to preventing him from acting in a manner prejudicial to the maintenance of supplies and services essential to the community.
This subjective satisfaction, according to the grounds of detention furnished to the petitioner, was founded on a solitary incident of theft of aluminums wire alleged to have been committed by the petitioner on 14th April, 1973.
It appears that in respect of this incident a criminal case was filed inter alia against the petitioner in the Court of Sub Divisional Judicial Magistrate, Asansol, but, as the affidavit in reply filed by the District Magistrate shows, the witnesses were unwilling to depose against the petitioner in open Court on account of fear of danger to their life and the prosecution was , therefore, constrained to drop th criminal case and the petitioner was discharged.
However, the date when the petitioner was discharged was not set out in the affidavit in reply.
The petitioner was thereafter detained on 23rd November, 1973 pursuant to the order of detention.
There was thus a time lag of about two and a half months between the date of the order of detention and, the date when the petitioner was actually detained.
The petitioner contended that since, the District Magistrate did not state in his affidavit in reply as to when the petitioner was discharged, it must be presumed that the petitioner was discharged on or about 10th September, 1973 and was available for being detained under the order of detention and yet he was not arrested for a period of two and a half months until 23rd November, 1973 and that shows that there was no real necessity to detain the petitioner with a view to preventing him from acting in a prejudicial manner and the subjective satisfaction of the District Magistrate founding the order of detention was not genuine.
There is great force, in this contention of the petitioner and it must result in invalidation of the order of detention.
It is obvious from the facts set out in the affidavit in reply that the, petitioner was arrested in connection with the criminal case arising out of the incident dated 14th April, 1973 set out in the grounds of detention.
The criminal case was ultimately dropped as the witnesses were not willing to come forward to give evidence for fear of danger to their life and the petitioner was discharged.
The date of discharge of the petitioner was, however not set out in the affidavit in reply.
We asked the learned counsel appearing on behalf of the respondent as to whether.there was any record with him from whick he could tell us as to ' What was the date on which the petitioner was discharged but he stated that the only record which he had was that 595 relating to the order of detention and the record relating to the criminal case had not been sent to him.
We were told that even the history sheet of the petitioner, which was before the District Magistrate when he made the order of detention, did not give the date when the criminal prosecution was dropped that the petitioner was discharged.
It did not even make any reference to the criminal case.
This is rather unfortunate.
He should have thought that the fact that a criminal case is pending against the person who is sought to be proceeded against by way of preventive detention is a very material circumstance which ought to be placed before the District Magistrate.
That circumstance might quite possibly have an impact on his decision whether or not to make an order of detention.
It is not altogether unlikely that the District Magistrate may in a given case take the view that since a criminal case is pending against the person sought to be detained, no order of detention should be made for the present, but the criminal case should be allowed to run its full course and only if it fails to result in conviction then preventive detention should be resorted to.
It would be most unfair to the person sought to be detained not to disclose the pendency of a criminal case against him to the District Magistrate.
But that is a different question altogether and it need not detain us.
The fact remains that there was no record with the learned counsel appearing on behalf of the respondent from which he could give us the date when the petitioner was discharged.
In view of this failure on the part of the respondent to supply information to the Court as to then the petitioner was discharged, we must proceed on the assumption that he must have been discharged on or about 10th September, 1973.
The order of detention must have been made by the District Magistrate in anticipation of the discharge of the petitioner and the discharge of the petitioner can, therefore, be presumed to have taken place at or about the time when the order of detention was made, that is, 10th September, 1973.
But if that be so, the conclusion is inescap able that though the petitioner was available for detention since about 10th September, 1973, he was not detained for a period of about two and a half months upto 23rd November, 1973.
There was delay of about two and a half months in detaining the petitioner pursuant to the order of detention and this delay, unless satisfactorily ex plained, would throw considerable doubt on the genuineness of the subjective satisfaction of the District Magistrate recited in the order of detention.
It would be reasonable to assume that if the District Magistrate was really and genuinely satisfied after proper application of mind to the materials before him that it was necessary to detain the petitioner with a view to preventing him from acting in a prejudicial manner, he would have acted with greater promptitude in securing the arrest of the petitioner immediately after the invoking of the order of detention, and the petitioner would not have been allowed to remain at large for such a long period of time to carry on his nefarious activities.
of course when we say this we must not be understood to mean that whenever there is delay in arresting the subjective satisfaction of the detaining authority must be held to be not genuine or colourable.
Each case must depend on its own peculiar acts and circumstances.
The detaining authority may have a reason able explanation for the delay and that might be sufficient to dispel 596 the inference that its satisfaction was not genuine.
But here we find that though an affidavit in reply was filed by the District Magistrate himself, no explanation was forthcoming in this affidavit as to why the petitioner was not arrested until 23rd November, 1973, though the order of detention was made as far back as 10th September, 1973.
The learned counsel appearing on behalf of the respondent contended that the State was not expected to render any explanation in regard to the delay in arresting the petitioner pursuant to the order of detention because no such complaint was made in the petition.
But this is hardly an argument which can avail the State when it is called upon to answer a rule issued on a petition for a writ of habeas corpus.
It is the obligation of the State or the detaining, authority in making its return to the rule in such a case to place all the relevant facts before the Court and if there is any delay in arresting the detenu pursuant to the order of detention which is prima facie unreasonable, the State must give reasons explaining the delay.
Vide Sk.
Serajul vs State of West Bengal.(1) Since in the present case no explanation for the delay has been given in the affidavit in reply filed by the District Magistrate, we are not at all satisfied that the District Magistrate applied his mind and arrived at a real and genuine subjective satisfaction that it was necessary to detain the petitioner with a view to preventing him from acting in a prejudicial manner.
The condition precedent for the making of the order of detention was, therefore, not satisfied and consequently the order of detention must be quashed and set aside.
We accordingly quash and set aside the order of detention and direct that the petitioner be set at liberty forthwith.
V.P.S. Petitioned allowed.
| IN-Abs | On 14th April, 1973, the petitioner was alleged to have committed theft of aluminium wire and a criminal case was filed but it was ultimately dropped and the petitioner was discharged, because, the witnesses were not willing to give evidence for fear of danger to their life.
On 10th September, 1973, the District Magistrate passed an order under section 3(2)(i) of the , detaining the petitioner with a view to prevent ing him from acting in a manner prejudicial to the maintenance of supplies and services essential to the community, on his subjective satisfaction, based upon the solitary incident of the theft of aluminum wire.
The petitioner was actually detained on 23rd November, 1973.
Allowing the petition challenging the order of detention, HELD : The condition precedent for the making of the order of detention, namely the existence of a. real and genuine subjective.
satisfaction of the District Magistrate was not satisfied in the case.
and consequently, the order of detention must be quashed and set aside.
[596D E] (a) It must be assumed that the petitioner was discharged on or about 10th September, 1973, because, the District Magistrate must have made the order of detention in anticipation of the order of discharge.
If that was so, though the petitioner was available for detention, there was a delay of about two and half months in detaining the petitioner pursuant to the order of detention.
This delay, unless satisfactorily explained, would throw considerable doubt on the genuineness of the subjective satisfaction of the District Magistrate recited in the order of detention.
If the District Magistrate was really and genuinely satisfied he would have acted with greater promptitude.
But he has not offered any explanation as to why the petitioner was not detained until 23rd November, 1973, more than two months after he made the order of detention.
[595D H] (b) It is the obligation of the State or the detaining authority in making its return to the rule nisi, in cases of habeas corpus, to place all the relevant facts before the court and if there is any delay in arresting the detenu pursuant to the order of detention, which is prima facie unreasonable, the State must explain the delay.
The State cannot contend that the petitioner has not raised the contention in his petition.
[596B C] Sk.
Serajul vs State of West Bengal W.P. 2000 of 1973, decided on September 9, 1974, followed.
|
Appeal No. 1357 of 1970.
From, the Judgment & Order dated the 10th February, 1969 of the Calcutta High Court in l. T.Ref.
No. 164 of 1963.
630 D. Pal, T. A. Ramanchandran and D. N. Gupta, for the appellant B. Sen and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by KHANNA, J.
This appeal on certificate is directed against the Judgment of the Calcutta High Court whereby that court answered the following question referred to it under section 66(1) of the Indian Income tax Act, 1922 against the assessee appellant and in favour of the revenue "Whether, on the facts and in the circumstances 'of the case, the sum of Rs. 7,14,398/ was liable to be included in the total income of the assessee under the Indian Income tax Act, 1922 ?" The matter relates to the assessment year 1953 54, the corresponding accounting period for which ended on June 30, 1952.
The assessee is.
a limited company with its head office at Calcutta.
One ,of its activities was the purchase and sale of jute in the State of Orissa and for this purpose the assessee was a registered dealer under the Orissa Sales Tax Act, 1947.
During.
the accounting year the assessee sold jute to M/s. McLeed & Co. Ltd. for being used in two jute miffs situated in Andhra Pradesh under the management of the purchaser company.
The assessee used to charge from the purchaser sales tax on the purchase of goods at the rate of one anna per rupee of the value of the goods.
The sales tax was charged under a separate head in the bill.
The words used in the bill in this respect were "Sales tax buyers ' account. . at the rate of /1/ per rupee to be paid to Orissa Government".
The total amount shown as "Liabilities for expenses" in the balance sheet as on June 30, 1952 included a sum of Rs 16,54 455 on account of sales tax.
The said sum was, however, not paid to the State Government as the sale by the assessee to the purchaser company were stated to be inter State sale.
The assessee contended before the income tax officer that the sales tax realised from the purchaser did not form part of the sale price of the jute and as such did not constitute receipt in jute business.
The contention was rejected by the income tax officer who held that the sales tax formed a part of, the consideration for the sales and, therefore, the accumulation on that account represented the assessee 's income.
The income tax officer accordingly added the aforesaid sum of Rs. 16,54,455 to the assessee 's total income.
On appeal by the assessee the Appellate Assistant Commissioner found that the actual amount received as sales tax during the relevant period amounted to only Rs. 7,41,962, out of which Rs. 27,564 had been paid to the Orissa Government.
He, therefore, held that the amount which was to be added to the assessee 's total income was Rs. 7,14,398.
The contention of the assessee that the sales tax realised was not part of the taxable receipt of the assessee was rejected.
The assessee preferred second appeal before the Tribunal and submitted that the purchaser paid the sales tax and the price of goods to the assessee on the understanding that if ultimately no sales tax 631 was exigible on those sales, the amount collected as sales tax would be refunded to the purchaser.
The amount collected as sales tax, according to the assessee company, could not belong to it but belonged to the purchaser and as such could not be treated as income of the assessee.
The Tribunal held that where a dealer collects sales tax under the provisions of section 9B of the Orissa Sales Tax Act, the amount of the tax does not form part of the sale price and the dealer doe:; not acquire any beneficial interest in that amount.
According to the Tribunal, if at the time of the collection the amount was collected as sales tax the subsequent failure of the assessee to deposit the amount in the Orissa Treasury could not transform the character of that amount.
The Tribunal consequently came to the conclusion that the Appellate Assistant Commissioner had erred.
in treating Rs. 7,14,398 as part of the total income of the assessee.
On the application of the Commissioner of Income tax the Tribunal referred the question reproduced above to the High Court.
The High Court held that if tax, which is validly exigible, is realised by a trader from his customer, and, is then utilised in his business, the tax so realised.
cannot but form part of the sales price.
According to the High Court, the tax would be included in the trading receipt of the dealer and would become part of his income as the money realised from the purchaser on account of tax was employed by the dealer for the purpose of making profit and was not separated from price simpliciter.
The High Court in this context referred to the fact that the assessee did not earmark the amount realised as sales tax and did not put it in a different account or deposit it with the Government.
It was further found that the assessee had treated the amount of sales tax as his own money.
Reference was made in the High Court to subsection (3) of section 9B of the Orissa Sales Tax Act which reads as under : "(3) The amount realised by any person as tax, on sale of any goods, shall, notwithstanding anything contained in any other provision of this Act, be deposited by him in a Government treasury within such period as may be pres cribed, if the amount so realised exceeds the amount payable as tax in respect of that sale or if no tax is payable in respect thereof.
" The High Court in the above context observed ; "There is no finding that the trader did not use that money for his trading purpose, and because of the fact that money was not deposited in terms of section 9B(3).
In such circumstances simply because the trader had a duty to refund, we cannot say it would not constitute trading receipt.
If a trader received money as trading receipt and employs that money as his own fund and is then called upon to refund the money even then it is trading receipt of the trader but when he pays back that money the amount refunded may be considered for deduction at the time when it is refunded." 632 In appeal before us, Dr. Pal on behalf of the assessee appellant has contended that the amount received as sales tax retained its character ,as such and could not be considered to be a part of trading receipt.
As against the above, Mr. Sen on behalf of the revenue submits that the amount in question constituted trading receipt.
According to Mr. Sen, the matter is concluded by a decision of this Court in the case of Chowringhee Sales Bureau P. Ltd. vs Commissioner of Income tax West Bengal.(1) The submission of Mr. Sen, in our opinion is well founded.
In the case of Chowringhee Sales Bureau P. Ltd. the appellant company was a dealer in furniture and also acted as an auctioneer.
In respect of sales effected by the appellant as auctioneer, it realised during the year in question in addition to the commission, Rs. 32,986 as sales tax.
This amount was credited separately in its account books under the head "sales tax collection account".
The appellant did not pay the amount of sales tax to the actual owner of the goods nor did it deposit the amount realised by it as sales tax in the State exchequer because it took the position that statutory provision creating that liability upon it was not valid.
The appellant also did not refund the amount to persons from whom it had been collected.
In the cash memos issued by the appellant to the purchasers in the auction sales the appellant was shown as the seller.
This Court held that the sum of Rs. 32,986 realised as sales tax by the appellant company in its character as an auctioneer formed part of the trading or business receipts.
The fact that the appellant credited the amount received as sales tax under the head "sales tax collection account" did not make any material difference.
According to this Court, it is the true nature and quality of the receipt and not the head under which it is entered in the account books as would prove decisive.
If a receipt is a trading receipt the fact that it is not so shown in the account books of the assessee would not prevent the assessing authority from treating it as trading receipt.
The Court further observed that the appellant company would be entitled to claim deduction of the amount as and when it paid it to the State Government.
The above decision, in our opinion, fully applies to this case and in view of it, there is no escape from the conclusion that the amount of Rs. 7,14,398 should be treated as trading receipt.
Dr. Pal has tried to distinguish the decision of this Court in the case of Chowringhee Sales Bureau P. Ltd. on the ground that there was no provision in the Bengal Finance (Sales Tax) Act, 1941 under which the sales tax was realised by the appellant in that case corresponding to sub section (3) of section 9B of the Orissa Sales Tax Act, 1947.
This circumstance, in our opinion, hardly constitutes a suffi cient ground for not applying the dictum laid down in the case of Chowringhee Sales Bureau P. Ltd. to the present case.
The provisions of sub section (3) of section 9B of the Orissa Sales Tax Act have already been reproduced above.
It is not necessary for the purpose of the present case to express an opinion on the point as to whether in view of the decisions of this Court in the cases of R. Abdul Qyader & Co. vs Sales Tax Officer, Second Circle, Hyderabad, (2) (1) (2) [1964] 15 S.T.C. 403.
633 Ashoka Marketing Ltd. vs State of Bihar Anr.(1) and State of U.P. & Anr.
vs Annapurna Biscuit Manufacturing Co. (2) the State legislature was competent to enact that provision and whether the same was constitutionally valid.
Assuming that the said provision is valid, that fact would not prevent the applicability of the dictum laid down in Chowringhee Sales Bureau P. Ltd. The aforesaid decision did take into account the possibility of the appellant in that case being com pelled to deposit the amount of sales tax in the State exchequer.
It was accordingly observed that the appellant company would be entitled to claim deduction of the amount as and when it paid the amount to the State Government.
Likewise, we would like to make it clear in the present case that if any when the appellant pays the sum of Rs. 7,14,398 or any part.
thereof either to the State Government or to the purchaser, the appellant would be entitled to claim deduction of the sum so paid.
Dr. Pal points out that the appellant may have to refund the amount realised by it as sales tax to the purchaser.
So far as this aspect is concerned, we have already mentioned above that if and when the appellant refunds any part of the amount of sales tax to the, purchaser, the appellant would be entitled to claim deduction on that account.
Lastly, reference has been made by Dr. Pal to the case of Morley (H. M. Inspector of Taxes) vs Messrs. Tattersall,(3) and it is submitted that once an amount was received as sales tax by the appellant it could never be treated as trading receipt.
We find it difficult to, accede to the above submission because the case of Chowringhee Sales Bureau P. Ltd. is a direct authority, for; the proposition that an amount even though realised as sales tax can in a case like the present be, treated as trading receipt.
It would be pertinent in this context to refer to the finding ' of the High Court that the assessee appellant in the present case did not separately earmark the amount realised as sales tax, or put it in a different account.
The assessee also did not deposit the amount with the Government as and when realised nor did ' the assessee refund it to the purchaser from whom the amount had been realised.
The High Court has further found that the assessee company mixed up the amount of sales tax with its own funds and treated the same as its own money.
Nothing cogent has been brought to our notice to justify interference with the above findings.
the case of Messrs George Oakes (Private) Ltd. vs The State of Madras & Ors.
(4) the Constitution Bench of this Court held that the Madras General Sales Tax (Definition of Turnover and Validation of Assessments) Act, 1954 was not bad on the ground of legislative incompetence.
In that context this Court observed that when the seller passes on the tax and the buyer agrees to pay sales tax in addition to the price, the tax is really part of the entire consideration and the distinction between the two amounts tax and price loses all significance.
This Court in that case relied upon the following observation of Lawrence J. in Paprika Ltd. & Anr.
vs Board of Trade.(5) (1) [1970] 26 S.T.C. 254.
(2) [1973] 32 S.T.C. 1.
(3) (4) [1961] 12 STC 476 (5) 634 "Whenever a sale attracts purchase tax, that tax presumably affects the price which the seller who is liable to pay the tax demands but it does not cease to be the price which the buyer has to pay even if the price is expressed as X plus purchase tax.
" Reliance was also placed upon the following observation of Goddard, L. J. in Love vs Norman Wright (Builders) Ltd.(1) "Where an article is taxed, whether by purchase tax, customs duty, or excise duty, the tax becomes part of the price which ordinarily the buyer will have to pay.
The price of an ounce of tobacco is what it is because of the rate of tax, but on a sale there is only one consideration though made up of cost plus profit plus tax.
So, if a seller offers goods for sale, it is for him to quote a price which includes the tax if be desires to pass it on to the buyer.
If the buyer agrees to the price, it is not for him to consider 'how it is made up or whether the seller has included tax or not.
" After referring to these observations section K. Das J. speaking for the Constitution Bench of this Court observed "We think that these observations are apposite even in the context of the provisions of the Acts we are considering now, and there is nothing in those provisions which would indicate that when the dealer collects any amount by way of tax, that cannot be part of the sale price.
So far as the purchaser is concerned, he pays for the goods what the seller demands viz., X price even though it may includes tax.
That is the whole consideration for the sale and there is no reason why the whole amount paid to the seller by the purchaser should not be treated as the consideration for the sale and included in the turnover.
" We are, therefore, of the view that the submission which has been made by Dr. Pal that the sales tax should not be treated to be a part of the price realised by the assessee from the purchaser is not well founded.
The case of Tattersall can be of no help to the appellant because the amount with which the court was concerned in that case was ,never received by the assessee as income or trading receipt.
In any case, as already observed, the question with which we are concerned ' stands concluded by the case of Chowringhee Sales Bureau P. Ltd. As a result of the above, we dismiss the appeal with cost.
P.B.R. Appeal dismissed.
| IN-Abs | The assessee collected sales tax from the purchaser but did not pay the collections to the State Government alleging that the sale was interstate sale.
The Income Tax Officer treated the sales tax as income of the assessee.
The assessee claimed that the sales tax realised from the purchaser did not form part of the sale price of the goods and as such did not constitute taxable receipt.
The Income tax Officer held that the sales tax formed part of the consideration for the sales and, therefore, the accumulation on that account represented the assessee 's income.
The Appellate Assistant Commissioner also rejected the contention of the assessee that the sales tax realised was not part of the taxable receipt of the assessee.
The Appellate Tribunal held that where a dealer collected sales tax under the provisions of the Orissa Sales tax Act the amount of tax did not form part of the sale price and the dealer did not acquire any beneficial interest in that amount and that the failure of the assessee to deposit the amount with the Government could not transform the character of that amount.
The High Court held that if a validly eligible tax was realised by a trader which had been utilised in his business the tax so realised could not form part of the sale price and that the tax would be included in the trading receipt of the dealer and would become part of his income as the money realised from the purchaser on account of tax was employed by the dealer ' for the purpose of making profit and was not separated from price simpliciter.
On appeal to this Court it was contended that the amount received as sales tax retained its character as such and could not be considered to be a part of trading receipt.
Dismissing the appeal,, HELD : It is 'the true nature and quality of the receipt and not the head under which it is entered in the account books as would prove decisive.
If a receipt is a trading receipt the fact that it is not so shown in the account books of the assessee would not prevent the assessing authority from treating it as trading receipt.
If and when the appellant paid the sum or any part thereof either to the State Government or to the purchaser it would be entitled to claim deduction of the sum so paid.
In the instant case there is no escape from the conclusion that the amount should be treated as a trade receipt.
[632B F; 633C] Chowringhee Sales Bureau P. Ltd. vs Commissioner of Income tax West Bengal followed.
The purchaser pays what the seller demands, that is, the price, even though it may include tax.
That is the whole consideration for the sale and there is no reason why the whole amount paid to the seller by the purchaser should not be treated as the consideration for the sale and included in the turn over.
[634F] Messrs George Oakes (Private) Ltd. vs The State of Madras & Ors.
(1961) 12 S.T.C. 476 followed, Morley (H. M. Inspector of Taxes) vs Messrs. Tattersall REFERRED TO, Paprika Ltd. & Anr.
vs Board of Trade and Love vs Narman Wright (Builders) Ltd. [1944] 1 All E.R. 618, held inapplicable.
|
iminal Appeal No. 142 & 205 of 1973.
Appeals from the Judgment and Order dated the 12th April 1973 of the Allahabad High Court in Govt.
Appeal No. 2847/72 and by Special Leave from the Judgment and order dated the 12th April, 1973 in Crl.
A. No. 1954 of 1972 and Ref.
No. 87 respectively.
D. B. Mukherjee, K. C. Agarwal, M. M. L. Srivastava and E. C., Agarwala, for the appellant.
D. P. Uniyal and O. P. Rana, for the respondent.
The Judgment of the Court was delivered by CHANDRACHUD, J.
These two appeals by special leave arise out of the judgment of the High Court of Allahabad dated April 12, 1975.
Three brothers by the name of Sia Ram, Shri Ram and Ram Chandra; a woman by the name of Violet; and her son Ramesh were tried by.
9 L319Sup.
CI/75 624 the learned Sessions Judge Farrukhabad, in connection with the murder of one Kunwar Singh.
The learned Judge convicted Sia Ram under section 302, Penal Code and sentenced him to death.
Violet was convicted, under section 302 read with section 109 and was sentenced to imprisonment for life.
The remaining three accused were acquitted by the Sessions Court.
Sia Ram and Violet challenged their conviction by filing an appeal in the High Court while the State of U.P. filed an appeal against the acquittal of Shri Ram, Ram Chandra and Ramesh.
The High Court confirmed the conviction and sentence of Sia Ram and Violet.
It dismissed the appeal filed by the State Government except in regard to Shri Ram whom it convicted under section 302 read with section 109.
He was sentenced to imprisonment for life.
The incident in question took place at about 5 p.m. on October 20, 1970.
The deceased Kunwar Singh was a practising lawyer and after finishing his work for the day he left the Fatehgarh court along with the brother lawyers, Brijendra Singh Yadav and Om Prakash Dubey.
They were proceeding on their bicycles and as they reached a spot near Barhpur Block, Violet is alleged to have shouted : "The Vakil has come".
Sia Ram and his companions who were hiding behind a Shisham tree came out and confronted Kunwar Singh and his companions.
Sia Ram, Ram Chandra and Shri Ram are alleged to have been armed with guns while Ramesh and an unknown person were carrying hockey sticks.
Sia Ram fired a shot from a point blank range as a result of which Kunwar Singh fell down.
All the accused thereafter ran away.
Brijendra Singh removed Kunwar Singh to a nursing home but the latter succumbed to his injury at 5 25 p.m.
The other lawyer, Om Prakash Dubey, contacted the District Magistrate and the Superintendent of Police vainly attempting to have the dying declaration of Kunwar Singh recorded.
A person called Soney Lal, also alleged to be an eye witness, lodged the First Information Report at the police station at about 5 45 p.m.
The Superintendent of Police K. N. Daruwala reached the spot of occurrence shortly before 6 p.m. R. N. Singh, the Sub Inspector, held an inquest on the dead body of Kunwar Singh and sent it for postmortem examination.
Dr. Rizvi who performed the postmortem examination found.
a firearm wound on the left upper chest of the deceased.
There were tattooing, and scorching marks around the injury.
The evidence of Brijendra Singh Yadav (P.W. 4) is clear on the part played by the appellant Sia Ram.
That evidence shows that Sia Ram fired a shot from his gun as a result of which Kunwar Singh fell down and died within half an hour, Brijendra Singh 's evidence has been accepted by both the courts and we are unable to see any valid reason for rejecting it.
Brijendra Singh is a natural witness for he, like the deceased Kunwar Singh, had left the court after the court hours.
Apart from the fact that he was a colleague of the deceased he was not in any manner concerned with the deep seated enmity between the appellant Sia Ram and the deceased.
The order of conviction and,sentence in regard to Sia Ram must therefore be confirmed.
625 Different considerations, however, arise in regard to Violet.
The only part attributed to her is that on seeing Kunwar Singh she shouted: "The Vakil has come".
It is difficult to believe that Violet was assigned the particular role, especially when Sia Ram and his companions could themselves have detected the presence of Kunwar Singh more easily and with lesser ado.
Violet 's brother Ramesh, a lad of 16, could have with greater ease and effectiveness played the swift role of alerting the assailants of Kunwar Singh.
But the Sessions Court and the High Court have accepted the evidence that Violet did give the particular shout and in accordance with our usual practice we would not like to take a different view of these simple facts.
The question which then arises for consideration, a question to which the Sessions Court and the High Court have not paid enough attention, is whether the only inference which arises from the fact that violet gave the particular shout is that by so doing, she intended to facilitate the murder of Kunwar Singh,, Section 107 of the Penal Code which defines abetment provides to the extent material that a person abets the doing of a thing who "Intentionally aides, by any act or illegal omission, the doing of that thing.
" Explanation 2 to the section says that "Whoever, either prior to or at the time of the commission of an act, does anything in order to facilitate the commission of that act, and thereby facilitates the commission thereof, is said to and the doing of that act.
" Thus, in order to constitute abetment, the abettor must be shown to have "intentionally" aided the commission of the crime.
Mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough compliance with the requirements of section 107.
A person may, for example, invite another casually or for a friendly purpose and that may facilitate the murder of the invite.
But unless the invitation was extended with intent to facilitate the commission of the murder, the person inviting cannot be said to have abetted the murder.
It is not enough that an act on the part of the alleged abettor happens to facilitate the commission of the crime.
Intentional aiding and therefore active complicity is the gist of the offence of abetment under the, third paragraph of section 107.
Apart from the words attributed to Violet, there is nothing at all to show that she was aware of the nefarious design of Sia Ram and his associates.
Violet who was working as a Nurse with a doctor was friendly with Sia Ram who was his compounder but that may rather explain why, if at all, she agreed to do as directed.
Learned counsel for the State contended that Sia Ram and his companions were carrying guns and hockey sticks and therefore she would know that they had all gathered to commit the murder of Kunwar Singh.
That is a far not a fair inference to draw.
We cannot heap one assumption on another to give, to Violet 's conduct a meaning which it does not naturally bear.
The words of Violet are at best in the nature, of a circumstance and they do not, without more, necessarily justify the inference that she was a party to the murderous design.
6 26 The High Court concluded on the complicity of Violet by a process of reasoning which does not commend to us.
It says "In case Smt.
Violet had not given intimation of the arrival of the advocate, the persons concealing themselves behind the SHISHAM tree may not have noticed the arrival of kunwar Singh in time to assault him.
In case the, accused were not assisted by Smt.
Violet, they would have to sit in such a manner that they could watch persons moving about on the road.
They could not have concealed their identity completely.
They could realise that if they were not assisted by Smt.
Violet and they had to act on their own, the deceased may notice their presence and may not proceed further.
In case the accused persons concealed themselves thoroughly, they may not notice the arrival of the deceased in time to successfully aim at him.
Assistance asked for and rendered by Smt.
Violet was real and valuable." This chain of reasoning contains a multiplicity of inferences hardly justified by the solitary circumstance that Violet informed Sia Ram and his colleagues of the presence of Kunwar Singh.
The High Court found fault with Violet for not having offered any explanation during the trial as to why she uttered the particular words.
This approach is impermeable.
The burden was on the prosecution to establish its case and no adverse inference could be raised against Violet for her failure to explain her utterance.
Besides, an accused cannot while being examined under section 342 of the Code of Criminal Procedure be subjected.
to cross examination and a bald assertion to explain a piece of conduct almost always fails to convince.
We are, accordingly, unable to agree with the High Court that Violet would not have announced the arrival of Kunwar Singh " unless she was aware that the accused persons were lying in wait on the other side of the road and it was necessary to inform them so that they might accomplish their aim".
In regard to Shri Ram, yet different considerations prevail because the High Court was dealing with an appeal against an order of acquittal in his favour.
There are certain important considerations which lend weight to the view of the trial court that it was unsafe to convict Shri Ram.
Shri Ram, along with Ram Chandra, had moved an application before the Additional District Magistrate (Judicial) who was conducting the committal proceedings that he was not known to the witnesses and therefore he should be put up for being identified in an identification parade.
The Public Prosecutor objected to that request.
The learned Magistrate upheld the objection and refused to direct that a parade be held.
The circumstance that Shri Ram had voluntarily accepted the risk of being identified, in a parade but was denied that opportunity was an important point in his favour.
The High 627 Court rejected it was inconsequential by observing that the oral testimony of witnesses even if not tested by holding an identification parade, can be made the basis of conviction if the request made by the accused is groundless and the witnesses knew the accused prior to the occurrence.
It is correct to say that no rule of law requires that the oral testimony of a witness should be corroborated by evidence of identification.
In fact, evidence of identification is itself a weak type of evidence.
But the point of the matter is that the court which acquitted Shri Ram was justifiably influenced by the consideration that though at the earliest stage he had asked that an identification parade be held, the demand was, opposed by the prosecution and the parade was there fore not held, That is not the only point in favour of Shri Ram.
Brijendra Singh Yadav who was riding on the Bicycle in the company of the deceased, Kunwar Singh did not implicate Shri Ram.
It is the other lawyer, Om Prakash Dubey, who stated in his evidence that Shri Ram was armed with a gun and he emerged from behind the Shisham trees after Violet gave the call.
Dubey is a practising lawyer and we will spare hard words.
But his evidence leaves much to be desired and, at the least, it shows that it would be unsafe to reply on his capacity or ability to identify Shri Ram.
In paragraph 4 of his evidence, repeated attempts were made by counsel for Shri tam to test the claim of Om Prakash Dubey that he knew Shri Ram and was therefore able to identify him.
Question after question put in cross examination was answered by the witness by saying either that he did not remember or that he did not know.
Dubey claimed that he had appeared for the complainant in a prosecution arising out of the murder of one Hari Singh in which Shri Ram figured as an accused.
There were two other accused in that case called.
Manphool ' and 'Balister.
Dubey admitted that he, could not say if.
he would be able to recognise Balister and that it was possible that he may not be able 'to recognise Manphool.
It is doubtful whether Dubey appeared in the case at all, which explains why he made the guarded statement that he.
had appeared on behalf of the complainant in so far as he could remember.
He was unable to say who had engaged him or who appeared the case along with him or who was examined as a witness in the case or who used to instruct him in the case.
Enveloped in this atmosphere of doubt, Dubey thought the better of it to say : "I think I had filed my Vakalatnama in that case".
The young Dubey had a standing of but 2 years in the District when he is supposed to have appeared for the complainant in the particular case.
It is unrealistic to assume that he was so flooded with work that he could remember no details of an important murder trial.
628 Soney Lal who gave the First Information Report.at the police station, also implicated.
Shri Ram but, apparently, the High Court was not impressed by his evidence.
has relied on the evidence of Om Prakash Dubey in order to hold that Shri Ram had played an important role in the murder of Kunwar Singh.
Considering the serious infirmities from which the evidence of Dubey suffers we are of the opinion that the High Court ought not to have interfered with the order of acquittal passed, by the trial.
court, in favour of Shri Ram.
Soney Lal 's evidence seems to us insufficient to sustain the conviction of Shri Ram.
In the result we dismiss the appeal of Sia Ram and confirm his conviction and sentence.
We allow the appeals of Violet and Shri Ram and acquit them.
These two shall be set at liberty forthwith.
V.M.K. Appeals partly allowed.
| IN-Abs | Three brothers by the name of Sia Ram, Shri Ram and Ram Chandra, a woman by the name of Violet, and her son Ramesh were tried by the learned Sessions Judge Farrukhabad, in connection with the murder of one Kunwar Singh.
The learned Judge convicted Sia Ram under section 302, Penal Code and sentenced him to death.
Violet was convicted under section 302 read with section 109 and was sentenced to imprisonment for life.
The remaining three accused were acquitted by the Sessions Court.
Sia Ram and Violet challenged their conviction by filing an appeal in the High Court while the State of U.P. filed an appeal against the acquittal of Shri Ram, Ram Chandra and Ramesh.
The High Court confirmed the conviction and sentence of Sia Ram and Violet.
It dismissed the appeal filed by the State Government except in regard to Shri Ram whom it convicted under section 302 read with section 109.
He was sentenced to imprisonment for life.
Shri Ram, Sia Ram and Violet have filed these appeals by special leave.
Allowing the appeals by Shri Ram and Violet and rejecting that of Sia Ram.
HELD : (i) The only part attributed to Violet is that on seeing the deceased Kunwar Singh, a practising lawyer, who was coming by cycle along with his two brother lawyers, Brijendra Singh Yadav and Om Prakash Dubey, she shouted "The Vakil has come.
" The Sessions Court and the High Court have accepted the evidence that she did give the particular shout.
In accordance with the practice of this Court, no different view ought to be taken of these simple facts.
[625A C] (ii) In order to constitute abetment, the abettor must be shown to have "intentionally" aided the commission of the crime.
Mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough compliance with the requirements of section 107.
intentional aid and therefore active complicity is the gist of the offence of abetment under the third paragraph of sec.
[625E F] (iii) Apart from the words attributed to Violet.
there is nothing at all to show that she was aware of the nefarious design of Sia Ram and his associates.
Violet who was working as a nurse with a doctor was friendly with Sia Ram who was his compounder but that may explain why, if at all, she agreed to do as directed.
it is true that the assailants were carrying guns and hockey sticks.
But on that account no fair inference can be drawn that she knew that they had all gathered to commit the murder of Kunwar Singh.
The Court cannot heap one assumption on another to give to Violet 's conduct a meaning which it does not naturally 623 bear.
The Words of Violet are at best in the nature of a circumstance and they do not, without more, necessarily justify the inference that she was a party to the murderous design.
[625G H] (iv) The High Court found fault with Violet for not having offered any explanation during the trial as to why she uttered the particular words.
This approach is impermissible.
The burden was on the prosecution to establish its case and no adverse inference could be raised against Violet for her failure to explain her utterance.
Besides, an accused cannot while being examined under section 342 of the Code of Criminal Procedure be subjected to cross examination and a bald assertion to explain a piece of conduct almost always fails to convince.
Therefore, it is not possible to agree with the High Court that Violet would not have announced the arrival of Kunwar Singh "unless she was aware that the accused persons were lying in wait on the other side of the road and it was necessary to inform them so that they might accomplish their aim." [626D F] , (v) Shri Ram, along with Ram Chandra, had moved an application ',before the Additional District Magistrate (Judicial) who was conducting the committal proceedings that he was not known to the witnesses and therefore he should be put up for being identified in 'an identification parade.
The Public Prosecutor objected to that request.
The learned Magistrate upheld the objection and refused to direct that a parade be held.
The circumstance that Shri Ram had voluntarily accepted the risk of being identified in a parade but was denied that opportunity was an important point in his favour.
The High Court rejected it as inconsequential by observing that the oral testimony of witnesses, even if not tested by holding an identification parade, can be made the basis of conviction if the request made by the accused is groundless and the witnesses knew the accused prior to the occurrence.
It is correct to say that no rule of law requires that the oral testimony of a witness should be corroborated by evidence of identification.
In fact, evidence of identification is itself a weak type of evidence.
But the point of the matter is that the court which acquitted Shri Ram was justifiably influenced by the consideration that though at the earliest stage he had asked that an identification parade be held, the demand was opposed by the prosecution and the parade was therefore not held.
But that is not the only point in favour of Shri Ram.
Brijendra Singh who was riding on bicycle in the company of the deceased did not implicate Shri Ram.
It was the other lawyer, Om Prakash Dubey, who implicated him.
His evidence shows that it would be unsafe to rely on his capacity or ability to identify Shri Ram.
Sone Lal who gave the First Information Report at the police also implicated Shri Ram.
Sone Lal 's evidence is insufficient to sustain the conviction of Shri Ram.
In view of the serious infirmities from which the evidence of Dubey suffers, the High Court ought not to have interfered with the order of acquittal passed by the trial court in favour Shri Ram.
[626 627C; 628A B]
|
No. 467 of 1972.
Petition Under Article 32 of the Constitution of India.
B. Sen and R. M. Mehta, section K. Dholakia and R. C. Bhatia, for the petitioner.
L. N. Sinha, Solicitor General of India, G. A. Shah and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
By this petition under Article 32 of the Constitution of India the petitioner has challenged the constitutional validity ,of the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienation) Act, 1972, Gujarat Act No. 12 of 1972 hereinafter referred to as the Act on the around that it violates the fundamental rights of the petitioner granted under articles 14 and 19 of the Constitution.
In the writ petition the petitioner claims that he owns 9559 square yards ,of land situate in District Bulsar, sub district and Taluka Navsari, village Kohilpore.
He intends to sell the said land but is unable to do so because of the prohibition of alienation imposed under the Act.
Mr. B. Sen, learned counsel for the petitioner conceded, and in ID ,our opinion rightly, that since the Proclamation of Emergency is in operation under Article 358 of the Constitution, fundamental right guaranteed under Article 19 is under suspension and therefore the Act could not be assailed for infraction of Article 19 even if there be any.
Counsel, however, submitted that it does violate the guarantee of equal protection of the law and offends Article 14.
In the Act under section 2 is embodied a declaration that the Act is for giving effect to the policy of the State towards securing the principles specified in clauses (b) and (c) of Article 39 of the Constitution and consequently Article 31C would save the Act from attack on account of the infraction of Article 14.
But it was submitted that the Act is not directly relatable to the object of Article 39(b) and (c) and hence Article 31C cannot protect it.
In our opinion it is not necessary in this case to take recourse to Article 31C for upholding the constitutional validity of the Act as it does not infringe the equal protection of law guaranteed under Article 14 of the Constitution.
Learned counsel for the petitioner endeavoured to make out the following points for attacking the Act as being violative of Article 14.
(1) That the limit of Prohibition in respect of the area of the vacant land is the same irrespective of its situation and value thus putting unequals as equals.
(2) That it does not apply to building lands and building areas have been left out.
(3) That there is discrimination between the permissible limit of alienation on the basis of the irrational consideration of the area forming part of a compact block or not.
66 9 (4) That there is no rational basis for not applying the Act in respect of the alienation of vacant in favour of the State, Govt., the Central Govt.
, Local authorities, Govt.
companies, Govt.
Corporations or the Cooperative House Building Societies.
(5) There is no guideline provided in section 7 of the Art for exercise of the power of exemption.
Learned Solicitor General appearing for the respondent, the State of Gujarat, submitted that none of the points urgea on behalf of the ,petitioners has got any substance and there is no violation of the equal protection of law guaranteed under Article 14 of the Constitution.
We shall first refer to and wherever necessary read some of the relevant provisions of the Act.
The Preamble of the Act indicates that it is an Act to prohibit alienation of certain vacant lands in urban areas in the State of Gujarat.
The object of the Act is to prohibit alienation of the vacant lands so that ultimately the ownership and control of the material resources of the Community may be so distributed as best to sub serve the common good and may prevent the concentration of wealth to the common detriment.
It may be pointed ,out here that the impugned Act is a temporary one.
Originally it was to remain in force for one year but the period is being extended from time to time in order to enable the State Legislature to pass the Urban Property Ceilings Act.
Prohibition of alienation by the Act is a preparatory measure for distribution of the material resources of the community.
The definition section of the Act is section 3.
Clause (b) defines "City" to mean a City as constituted under the Bombay Provincial Municipal Corporations Act, 1949.
The definition of "Collector" includes certain other officers also as mentioned in clause (c).
It is necessary to read clause (d) which defines the "compact block" to mean "any block of vacant land in an urban area exceeding one thousand square metres in extent, (whether owned by one person or jointly by more than one person or owned in contiguous parts separately by one or more members of a family unit) and whether or not divided by a private road, street, lane, footway, passage or drain, natural or artificial.
" Under clause (dd) "family unit" means an indi vidual, his or her spouse and their children.
" Clause (e) defines " 'municipal borough" to mean "a municipal borough as constituted or deemed to be constituted under the Gujarat Municipalities Act, 1963.
" It is necessary to read clauses (i) and (j) of section 3 in full.
(i) "urban area" means (1) any area which is comprised for the time being in a City or a municipal borough and also any such area in the vicinity thereof, within a distance, not exceeding sixteen kilometres from the local limits of the City, or as the case may be, of the municipal borough concerned, as the State Govt.
may, having regard to the extent of and the scope for the urbani 670 sation of that area or other relevant considerations, by a notification in the Official Gazette, specify in this behalf; and (2) any other area which the State Government may, by notification in the Official Gazette declare to be an urban area.
having regard to any project existing in that area on the appointed day or having regard to the possibility in the near future of any project being established in that area where any such project, in the opinion of the State Government, has led to or is likely to lead to urbanisation of that area; (j) "vacant land" means land in an urban area, agricultural or non agricultural, other than land on which any building has been or is being constructed in accordance with any law regulating such construction and the land appurtenant to such, building to the minimum extent required under such law or under the provisions of the Bombay; Town Planning Act, 1954 or any other corresponding law for the time being in force '.
Explanation for the purposes of this clause any land which is vacant on the appointed day shall be 'deemed to be vacant land, notwithstanding that the construction of 2 a building thereon has been commenced on or after the said day.
" Section 4 provides for prohibition of alienation etc.
in these terms (1) No person who owns any vacant land shall, on or after the appointed day, alienate such land by way of sale, gift, exchange (mortgage other than simple.mortgage), lease or otherwise, or effect a partition or create a trust of such land ', and any alienation made, or, partition effected, or trust created in contravention of this section shall be null and void : Provided that nothing in this sub section shall apply to the alienation by any person of any one plot of vacant land owned by him not exceeding one thousand square metres in extent and not forming part of a compact block or to the effecting of a partition or creation of a trust of any such plot.
(2) The provisions of sub section (1) shall apply to any sale, partition or creation of trust, of vacant land of any person in execution of a decree or order of a civil court or of any award or order of any other authority.
Restrictions on registration of documents have been put in section 5.
Section 6(1) says that "Nothing in this Act shall apply to any transfer of vacant land by or in favour of (a) A State Government or the Central Government or local authority;, 671 (b) A Government Company as defined in section 617 of the ; (c) a corporation established by or, under a Central Provincial or State Act, which in controlled or managed by a State Government or the Central Government; (d) such cooperative house building societies established for the purpose of providing housing accommodation to weaker sections of people, as may be approved by the State Government in this behalf.
" Sub section (2) of section 6 makes a distinction in the application of sub section (2) of section: 4 in relation to the execution of a decree or an order of a civil court in favour of the Government or the local authority.
Under subsection (1) of section 7 "the State Government, may, by a general or special order in writing and for reasons to recorded therein, exempt any area or any alienation or other transfer of any vacant land from all or any of The provisions of this Act." Under sub section (2), to avoid any hardship also, the State Government may, if it considers it necessary so to do, exempt, by an order in writing, any alienation or other transfer of any vacant land from all or any of the provisions of this article Subject to any rules that may be made in this behalf or to any general or special orders of the State Government, the Collector has.
been authorised under sub section (3) of section 7 by order in writing, to exempt any alienation or other transfer of any vacant land from the Provisions of this Act in case the land is to be used for ;my educational, scientific, industrial or commercial purpose or for such other purpose as may be prescribed.
"Prescribed" means under clause (g) of the third section "prescribed by rules made under this article ', The State Government has power under section 12 to make the rules.
Sub section (4) enjoins that every order issued by the State Government, under sub sections (1) and (2) and by the Collector under section 3 shall be laid before the State Legislature as soon as possible after its issue.
Alienation etc.
made on or after the 1st July, 1972 but before the appointed day under the Act has also been affected under section 8.
Section 9 gives a right to appeal against the order of the Collector under sub section (3) of section 7 to the State Government within the prescribed period and in the prescribed manner.
The jurisdiction of the Civil Court has been barred under section 10.
A penalty has been provided under section 11.
The act overrides other laws in view of section 13.
It would be noticed that the urban 'area means any area which is comprised in the City or a Municipal Borough.
Surrounding, distance of the City or municipal borough has to,.be fixed by a notification of the State Government 'in the Official Gazette having regard to the relevant considerations.
The maximum distance of such an area cannot exceed sixteen kilometres.
We were informed at the Bar by, the learned Solicitor General that notifications have been issued fixing the maximum limit of 16 kilometres in case of big cities like Ahmedabad, Baroda etc.
but lesser limits of distances have been notified in case of small municipal boroughs.
Under the proviso to sub section (1) of L319SupCI/75 672 section 4 a person is not_ prohibited from alienating one plot of vacant land owned by him not exceeding 1000 sq. metres provided it does not form part of a compact block.
When the limit of the distance outside the City or town area differed from place to place it was not necessary to fix the limit of permissible area of transfer with reference to the value of the land.
It was neither feasible nor expedient to do so.
From the permissible limit of transfer the area forming part of the compact block had to be excluded as it would have led to manipulations and manoeuvrings by persons belonging to the same family unit.
The land belonging jointly to more than one person or owned in contiguous part separately by one or more members of a family unit, which unit is a narrow one as defined in clause (dd) of section 3, comes under the definition of compact block.
Then only the permissible limit of transfer does not apply.
Excluding the land on which any building has been or is being constructed in accordance with any law regulating such construction and only the permissible limit of the vacant land appertaining to it is a reasonable classification distinguishing the vacant land from the building land.
The object of the act is to prevent alienation of certain vacant lands and that being so it is rightly excluded the building lands from its operation.
It is plain that the main object of the act being ultimately to distribute the ownership and control of the material resources of the community as best to subserve the common good and to prevent concentration of wealth, a transfer in favour of the Government, local authorities, Government companies or Corporations had to be excluded as such transfer could not possibly defeat the object of the Act, rather, it would give a fillip to it.
Permitting transfers of vacant lands in favour of Cooperative Housing Building Societies is obviously a step for the fulfilment of the object of the Act.
The Act cannot be held to be discriminatory on such grounds.
The power of the State Government under sub section (1) of section 7 to exempt any area or any alienation or other transfer of vacant land from all or any of the provisions of the Act is a power which is to be exercised for the reasons to be recorded in the general or the special order and in furtherance of the object of the Act.
The guideline is to be found in the object of the act itself.
The power under sub section (2) has to be exercised by the State Government for avoiding any hardship.
There is sufficient guideline for exemption in case of hardship which will depend upon the facts and circumstances of each case.
The order ;if exemption to be made by the Collector can only be in a case where the land is to be used for any educational, scientific, industrial or commercial purposes.
It has not been left open to the Collector to decide for what other purpose he can grant the exemption.
Such other purpose can be only that as may be prescribed by the State Government by rules made under section 12 of the Act.
Sub section (4) of section 7 is a good safety valve.
The State Legislature will act as a Supervisor of the orders of exemption 673 made by the State Government or the Collector.
The exercise of the power of exemption by the Collector is further controlled by providing an appeal to the State Government under section 9 of the Act.
In our opinion, therefore, there is no violation of the equal protection of law guaranteed under article 14 of the Constitution.
Classifications are all reasonable and there is a clear nexus between the object of the act and the classifications.
They have neither put unequals as equals nor has discriminated between equals.
In the result the writ petition fails and is dismissed with costs.
P.H.P. Petition dismissed.
| IN-Abs | The Gujarat Vacant Lands in Urban Area (Prohibition of Alienation) Act,, 1972 is enacted to prohibit the alienation of certain vacant lands in urban areas in the State of Gujarat.
Section 2 of the Act embodies a declaration that the Act is for giving effect to the policy of the State towards securing the principles specific in clauses (b) and (c) of article 39 of the Constitution.
Section 4 prohibits the alienation of vacant land after the appointed day.
It however exempts one plot of vacant land owned by a person not exceeding 1000 sq. metres and not forming part of a compact block.
The transfers in favour of the State Government, Central Government, local ' authority, Government company, statutory corporations and cooperative house building societies are also exempted.
The State Government has been empowered by general or special order to exempt any area or any alienation from all or any of the provisions of the Act.
This is subject to the rules made by the State Government.
Every order made by the State Government and the Collector exempting any area or alienation from, any of the provisions of the Act is required to be laid before the State Legislature.
The Learned Counsel for the petitioner conceded that in view of the proclamation of emergency fundamental right guaranteed under Article 19 is under suspension.
It was contended that the Act offended Article 14 and that the Act was not directly relatable to the object of Article 39 (b) and (c) and, therefore, Article 31C could, not protect it.
HELD : (i) It is not necessary to take recourse to Article 31C for upholding constitutional validity of the Act as, it does not infringe equal protection of law guaranteed under Article 14 of the Constitution.
Urban area means any area which is comprised in the city or a municipal Borough.
Surrounding area not exceeding 16 kms.
has to be fixed ' by a notification of the State Government.
By notifications limit of 16 kms. has been fixed in case of big cities like Ahmedabad, Baroda, etc.
but lesser limits of distance have been notified in case of small municipal boroughs.
When the limit of the distance outside the city or town area differed from place to, place it was not necessary to fix the limit of permissible area of transfer with reference to the value of the land.
It was neither feasible nor expedient to do so.
From the permissible limit of transfer the area forming part of the compact block had to be excluded as it would have led to monopolisation and monoeuvrings by persons belonging to the same family unit.[668F; 672 B] (ii) There is reasonable classification and there is a clear nexus between the object of the Act and the classification.
The Act has neither put unequals as equals nor has it discriminated between equals.
The object of the Act being to prevent alienation of vacant lands it rightly excludes the building lands from its operation.
Since the object of the Act is to ultimately distribute ownership and control of the material resources to subserve the common good transfer in favour of Government, Local Authorities, Government Companies and Statutory Corporations has been excluded.
Formation of Cooperative House Building Societies is obviously a step for fulfilment of the object of the Act.
The power of the State Government to exempt any area or any alienation from all or any of the provisions of the Act is a power which is to be exercised for the reasons to be recorded and in furtherance of the object of the Act.
The guideline is to be found in the object of the Act.
The order of exemption to be made by the Collector is only where the land is to be used for any educational, scientific, industrial or commercial purposes.
The exercise of the power by the Collector is further controlled by providing an appeal to the State Government.
The orders are to be placed before the State Legislature which will act as a supervisory of the orders of exemption made by the State Government or this Collector.
[672D H] 668
|
Appeal No. 441 of 1973.
From the Judgment & Order dated the 12th February, 1973 of the Assam & Nagaland High Court in Election Petition No. 5 of 1972.
P. K. Chatterjee, A. Sharma and Rathin Das, for the appellant.
section K. Hom Choudhury and section K. Nandy, for respondent No. 1.
The Judgment of the Court, was delivered by ALAGIRISWAMI, J.
In the election held to the Meghalaya Legislative Assembly from Songsak Constituency on 9th March 1972 the appellant was declared elected having received 819 votes as against 176 received by the 1st respondent and 98 votes received by the 2nd respondent.
The appellant was a candidate set up by the All Party Hills Leaders Conference and the 1st respondent was supported by the Hill State People 's Democratic Party (H.S.P.D.P.), though that party was not a recognised party.
The symbol allotted to the 1st respondent by the Election Commission was "two leaves".
The 1st respondent filed an election petition questioning the election of the appellant on the ground that be was guilty of a corrupt practice falling under section 123(4) of the Representation of the People Act, 1951.
That election petition having been allowed and appellant 's election set aside by the High Court of Assam, Nagaland, Meghalaya, Manipur and Tripura this appeal has been filed against the decision of the High Court.
802 The allegations in support of the petition were that on 3 days before the election, that is on the 25th of February 1972, the 5th of March 1972 and the 7th of March 1972, the appellant distributed dummy ballot papers in three places, Bollonggiri, Daggal Bazar and Songsak respectively.
The dummy ballot papers marked as Ext.
4 in this case contained a "boat" as the election symbol of the 1st respondent instead of the "two leaves" allotted to him as the election symbol.
The case of the respondent was that this was a false statement reasonably calculated to prejudice the prospects of his election.
The appellant 's case was that the dummy ballot papers were got printed by A. M. Sangma, the Secretary of the A.P.H.L.C., that he took the bundle of dummy ballot papers from Tura, the headquarters of the A.P.H.L.C. and when he was staying at the rest house in Bollonggiri he found out the mistake that had crept in the dummy ballot papers, that after consultation with the Chief Minister of Meghalaya, W.A. Sangma, who has been examined as R.W. 12, he issued a correction statement marked as Ext.
E, that the dummy ballot papers were not distributed, that there was therefore no publication and that it was not calculated to prejudice the prospects of the 1st respondent 's election.
The High Court after a very close, careful and restrained appreciation of the evidence in this case has come to the conclusion that the dummy ballot papers were distributed by the appellant at Bollonggiri and Daggal Bazar and we have also come to the same conclusion.
As we agree with the learned Judge we do not think it necessary to refer in elaborate detail to the evidence.
We shall refer to the evidence in broad outline and show that his conclusion is fully justified, With regard to the distribution of ballot papers like Ext. 4 in Bollonggiri on the 25th of February, the two witnesses who gave evidence are Willingson Sangma, P.W.8 and Jangnal Marak, P.W.4.
According to them the appellant distributed the dummy ballot papers and they produced two ballot papers as having been handed over to them.
They further stated that on enquiry as to how the dummy papers did not contain the "two leaves" symbol allotted to the 1st respondent the appellant stated that they were Government papers and the symbol allotted to the 1st respondent had been cancelled.
The High Court has held, and rightly so, that the alleged statement of the appellant that they were Government papers cannot be admitted in evidence on the ground that it was not so pleaded in the election petition.
We cannot also help feeling that in deposing that the appellant told them that they were Government papers and the symbol allotted to the 1st respondent had been cancelled P.Ws.8 and 4 are embellishing the story to make their evidence stronger.
In the election petition itself it is stated that at Bollonggiri and Daggal Bazar the appellant had stated that the "two leaves" election symbol allotted to the 1st respondent was withdrawn by the Government and he was nowhere whereas in the evidence given there is no mention about the appellant having said that the petitioner was nowhere.
While the election petition does not state that the dummy ballot papers were Government papers P.Ws. 4 and 8 say that the appellant stated that they were Government papers.
We therefore conclude that it would be safe and reasonable to hold that the evidence of P.Ws. 8 and 4 cannot be accepted in so far as they add any 803 thing more than that the appellant distributed the dummy ballot papers.
We shall Presently mention why we think that the dummy ballot papers like Ext.
4 should have been distributed by the appellant.
On the 26th of February the 1st respondent filed a complaint Ext.
3 before the Returning Officer and along with the complaint he filed a, dummy ballot paper Ext.
4 could not have become available to him unless it had been distributed by the appellant.
We are not perpared to accept the contention on behalf of the appellant that they, should have been pilfered because no evidence to that effect was given.
Nor are we able to accept his evidence and that of Constant Marak R.W. 8 as to how the mistake in the dummy ballot paper was found.
It sounds too artificial.
Admittedly the appellant had given a lift to P.Ws ' 8 and 4 on his journey from Tura to Bollonggiri and as admittedly he had passed through villages included in his constituency during the course of that journey it is quite likely that he distributed those dummy ballot papers.
Furthermore, according to the appellant he had distributed another pamphlet Ext.
E after coming to realise that the dummy ballot paper was wrong.
If dummy ballot papers were not distributed at all there was no need to distribute pamphlets like Ext.
These pamphlets were printed on 29th February and taken delivery of on the 1st of March.
The 1st respondent 's case that these pamphlets were not distributed does not seem to be true because one of his witnesses, P.W.8, admits having seen such a pamphlet and another witness, P.W. 5, makes an half hearted admission of the same fact.
We, are, therefore, satisfied that pamphlets like Ext.
E were in fact distributed by the appellant.
That could have been done only to counteract the effect of the distribution of the dummy ballot papers.
It is not the appellant 's case that he distributed the dummy ballot papers at all.
If so there was no need to distribute pamphlets like Ext.
E. Quite.
possibly realising rather a little late the damage likely to be done to his case the appellant tried to repair the dam age by the distribution of pamphlets like Ext.
As regards the distribution of dummy ballot papers in Duggal ' Bazar the evidence was that of P.Ws. 7, 9 and 10 who also produced the dummy ballot papers marked as Exts.
41, 42 and 43.
According to them the appellant distributed these dummy ballot papers and said that the symbol of "two leaves" bad been cancelled by the Government.
This is said to have taken place on the 5th of March and on the 6th of March the 1st respondent filed a criminal complaint against the appellant and A. M. Sangma, R.W. 2, complaining about the publication of the dummy ballot papers.
The importance of the publication on the 5th March is because if the distribution of the dummy ballot papers had been only on the 25th of February it might possibly be argued that he 'had not till then seen them and as soon as be realised the mistake he tried to undo the harm by distributing pamphlets like exhibit E.
As Ext.
E is said to have been distributed from It March onwards, the case of the bona fide mistake in the printing of the dummy ballet papers would not be sustained if their distribution on the 5th of March at Daggal Bazar is proved.
Just an in the case of evidence of P Ws. 8 and 4, we also think that the evidence of P.Ws. 7. 9 and 10 is exaggerated in so far as they say that appellant told them that the 804 1st respondent 's symbol had been cancelled by the Government.
The learned Judge of the High Court holds that the distribution of the dummy ballot papers in Daggal Bazar is proved because the appellant is unable to explain how P.Ws. 7, 9 and 10 were able to get dummy ballot papers like Exts. 41, 42 and 43.
It cannot be urged that those ballot papers were those obtained when the appellant distributed them in Bollonggiri because the appellant 's case is that he had not distributed them at all.
The appellant produced 497 ballot papers and stated that 3 ballot papers were missing and he was producing the ,other 497.
But as six ballot papers have been produced before the Court and marked as Exts.
4, 35, 41 to 43 and Ext.
P.W. 6/1 it is not possible to accept this explanation.
The question reduces itself to this : Were these 497 ballot papers produced by the appellant got printed later, as was the suggestion put to him, or did the 1st respondent get dummy ballot papers printed and produce them as the six exhibits marked by the Court ? Such a suggestion %,as not put to him.
We have already held that we cannot accept the explanation sought to be put forward on behalf of the appellant before the High ,Court that they must have been pilfered.
It is, therefore, reason able to conclude that the appellant should have distributed at least the six ,;dummy ballot papers exhibited before the Court, if not more in which case the logical conclusion would be that the 497 dummy ballot papers produced before the Court were merely an attempt to cover up what the appellant had done and to make it appear that no dummy ballot papers were distributed.
In view of the fact that the 1st respondent bad filed a complaint on the 26th of February before the Returning Officer and a criminal complaint on the 6th of March we would, in agreement with the high Court, hold that the distribution of the dummy ballot papers at Bollonggiri as well as Daggal Bazar is proved.
If the distribution of the dummy ballot papers in Daggal Bazar is proved then there can be no question of the printing of the dummy ballot papers with the wrong symbol being due to a mistake but must be deliberate.
The appellant might have distributed pamphlets like Ext.
E realising at a later stage the mistake he had committed in distributing the wrong dummy ballot papers but that cannot help him.
In a constituency admittedly consisting of more than 80 per cent illiterate electors the consequences of distribution of dummy ballot papers with wrong symbols can well be imagined.
Voters who went to the polling stations would have been confused even if they did not go there with the intention of voting for the 1st respondent and people who went there with the intention of voting for the 1st respondent might well have cast their vote either to the appellant or to the other candidate finding that the 1st respondent 's symbol was not there or they might have 805 even gone back home without voting.
In a case where a corrupt practice is alleged and proved it is not necessary further to show the exact number of votes which the 1st respondent lost or the appellant gained.
The corrupt practice itself is enough to invalidate the election.
There is a small matter to which reference may be made at this stage.
The allegation in the election petition also was that the 1st respondent 's name had been wrongly spelled in the dummy ballot papers distributed by the appellant.
As admittedly the electorate is, 80 per cent illiterate this is not likely to have any effect and no importance can be attached to it.
In the result we uphold the decision of the High Court and dismiss this appeal, the costs of the 1st respondent to be, paid by them appellant.
V. P. section Appeal dismissed.
| IN-Abs | On three days before the election to the Meghalaya Assembly the appellant, who was the successful candidate, distributed dummy ballot papers in various places.
The dummy ballot papers contained.
as the election symbol of the first respondent, who was a rival candidate, a symbol different from that allotted to the first respondent by the Election Commission.
The first respondent successfully challenged in the High Court the election of the appellant on the ground that he was guilty of a corrupt practice under s.123(4) of the Representation of the People Act, 1951.
Dismissing the appeal to this Court, HELD: In a constituency consisting of more than 80% illiterate electors the consequences of such distribution of dummy ballot papers with wrong symbols would be, (a) the voters who went to the polling station would have been confused even if they did not go there with the intention of voting for the first respondent, (b) people who went there with the intention of voting for the first respondent might well have cast their votes either for the appellant or for the other candidates finding that the first respondent 's symbol was not there, or (c) they might have gone away without voting.
Therefore, the distribution must have prejudiced the prospects of the first respondent 's election.
In a case where a corrupt practice is alleged and proved it is not necessary to further show the exact number of votes which the first respondent lost or the appellant gained.
The corrupt practice itself is enough to invalidate the election.
[804G 805B]
|
Appeal No. 1554 of 1970.
Appeal.
by Special Leave from the Judgment & Order dated the 19th August, 1968 of the Madras High Court in Tax Case No. 18 of 1 965.
G. B. Pai, A. G. Manessea, D. C. Mathur and K. K. John, for appellant.
B. B. Ahuja and section P. Nayar, for the respondent.
807 The Judgment of the Court was delivered by GUPTA, J.
This is an appeal by special leave from a judgment of the Madras High Court in a reference under section 66(1) of the Income Tax Act, 1922.
The appellant, Nonsuch Estate Limited, is a public limited company incorporated in the 'year 1924 under the Companies Act, 1913.
The appellant, referred to hereinafter as the Company, derives its income from tea grown in its estate for which it is assessed to income tax.
M/s. Harrisons and Crosfield Limited have been the managing agents of the Company from the beginning.
The following question relating to the assessment year 1959 60 was referred to the High Court : "Whether on the facts and in the circumstances of the case, the sum of Rs. 97,188/ representing the Managing Agency remuneration for the period 1 4 1956 to 30 6 1957 was deductible in the computation of the income of previous year ending on 30th June 1958, relevant for the assessment year 1959 60.
" The relevant facts leading to the reference are these.
The managing agents of the Company were entitled to commission at the rate of 11 per cent on all sales of tea and other produces of the Company and a further sum of Rs. 12,000/ per annum for secratarial work.
There was, however, no written.
agreement embodying the terms.
After the came into force on April 1, 1956 it was decided that there should be a fresh managing agency agreement between the Company and its managing agents in conformity with the provisions of the said Act.
A fresh agreement drawn up and submitted by the managing agents was approved by the Company.
The new agreement proposed the reappointment of M/s. Harrisons & Crosfield Limited as the managing agents of the Company for a period of 10 years on a remuneration of 5 per cent commission on the net profits of the Company computed in the manner laid down in sections 349 to 351 of the subject to a minimum remuneration of Rs. 12,000/ per annum.
The revised terms were to take effect from April 1, 1956.
As required by sec.
326 of the , the new agreement was sent to the Central Government for approval by a communication dated august 3, 1957 enclosing a formal application for the purpose in Form 25, On September 2, 1957 by a letter addressed to the Company the Government conveyed its approval to "the appointment of M/s. Harrisons & Crosfields Ltd. as the Managing agents. . for a period of 10 years with effect from 1st April 1956, on a remuneration of 5 per cent commission on the net profits of the Company computed in the manner as laid down in Sections 349 to 351 of the subject to a minimum remuneration of Rs. 12,000/ (Rupees twelve thousand only) per annum payable to the Managing Agents, in the event of absence or inadequacy of profits in any financial year.
" On receipt of the approval, the Company by a resolution adopted at an extraordinary general meeting of its shareholders held on October 4, 1957 reappointed M/s. Harrisons & Crosfield Limited on the terms stated above.
In terms of the new agreement the existing agency agreement between the parties stood cancelled with the expiry of March 31, 1956.
808 The Company follows the mercantile system of accounting.
For the period April 1, 1956 to June 30, 1956, the Company credited a sum of Rs. 9320/ to the account of the managing agents as their remuneration in accordance with the terms of the proposed new agreement.
This was disclosed in the published accounts of the Company for the year July 1, 1955 to June 30, 1956 relevant to the assessment year 1957 58.
For the purpose of assessment of income tax, however, the Company added back the said sum of Rs. 9,320/ to its taxable income.
In the next accounting year ending on June 30, 1957 relevant to the assessment year 1958 59 the same process was followed with regard to the remuneration payable to the managing agents.
For the assessment year 1959 60 for which the previous year was July 1, 1957 to June 30, 1958, a total sum of Rs. 97,188/ was shown as managing agents ' remuneration payable during that year.
This amount was made up as under Amount .lm15 " Proportionate remuneration for 3 months at 5 per cent on the net profits for the period ending on 30 6 1956 paid during the year ending on 30 6 1958 9,320 Remuneration at 5 per cent on the net profit of the year ending on 30th June 1957 paid during the year ending on 30 6 1958 71,368 Managing Agents expenses for the year ending 30th June 1957 recouped during the year ending on 30th June 1958.13,200 Proportionate Managing Agent 's expenses for the year ending on 30th June 1956 recouped during the year ending on 30 6 19583,300 97,188.
Though this sum did not pertain to the previous year relevant to the assessment year 1959 60, the Company claimed it as deductible expenditure for that year on the ground that the sum became payable only during that year when the Government accorded its approval to the new 'agreement.
The Income tax Officer rejected this claim on the view that the approval of the Central Government was necessary only for actual payment and "the assessee should have ascertained the liability for each year and claimed it on the mercantile basis which was the system adopted by the assessee company.
" The Appellate Assistant Commissioner and the Tribunal also took the same view.
The High Court answered the question referred to it against the assessee on the following reasoning : ". .
There was undoubtedly an understanding between the managing agency and the assessee as to the new terms of remuneration which actually were given effect to by making debit entries in the remuneration account then and there.
It is true that at the time the debit entries were made, approval of the Central Government had not come.
But when it came actually later, it gave legal effect to the debit 809 entries, not from the date of the approval but from April 1, 1956.
That being the case, the refusal of the deduction, in our opinion was right.
" In our judgment the High Court was in error in answering the question referred to it against the assessee.
It appears that the Income tax authorities, the Tribunal and the.
High Court all laid special emphasis on the fact that the Company followed the mercantile system of accounting.
The distinction between the two methods of accounting, one on the cash basis and the other on the mercantile basis is well known.
In Commissioner of Income tax, Madras vs A. Gajapathy Naidu(1), this Court explained the difference between the two methods quoting with approval an extract from a Judgment of the, Allahabad High Court in Commissioner of Income tax vs Singari Bai(2).
In Gajapathy Naidu 's(1) case this Court said: " It is commonplace that there are two principal methods of accounting for the income, profits and gains of a business one is the cash basis and the other, the mercantile basis.
The latter system of accountancy "brings into credit what is due immediately it becomes legally due and before it is actually received; and it brings into debit expenditure the amount for which a legal liability has been incurred before it is actually disbursed"." However, even an assessee following the mercantile system of accounting is not entitled to claim a deduction until liability for the sum for which deduction is claimed has accrued.
The reasons given by the High Court overlook the plain terms of sec.
326 of the .
326 so far it is material for the question involved in this case, is in these terms : "Sec.
326.)1) In respect of any company. . (a). . (b) unless the approval of the Central Government has been obtained for such appointment or re appointment.
(2) The Central Government shall not accord its approval under sub section (1) in any case, unless it is satisfied (a) that it is not against the public interest to allow the company to have a managing agent; (b) that the managing agent proposed is, in the opinion, a fit and proper person to be appoi nted or re appointed as such, and that the conditions of the managing agency agreement proposed are fair and reasonable; and (c) that the managing agent proposed has fulfilled any conditions which the Central Government requires him to fulfil.
" (1) (2) 810 Section 326 prohibits the appointment or re appointment of a managing agent unless the Central Government approved such appointment or re appointment.
The Central Government would not accord its approval unless the requirements specified in clauses (a), (b) and (c) of sub section (2) of the section have been fulfilled.
Therefore, it cannot be assumed that the Central Government will approve every proposed appointment or reappointment of a managing agent.
Thus in the instant case it is only when the Central Government conveyed its approval to the appointment of M/s. Harrisons and Crosfield Limited as managing agents by its letter dated September 2, 1957 that the appointment became effective and the Company 's liability to pay the remuneration of the managing agents accrued.
The position here is not that the liability had arisen earlier and its quantification only depended on the approval of the Central Government.
It is true that the liability became effective from April 1, 1956, a date anterior to the relevant previous year, but 'that is because the Central Government chose to give its approval retrospective operation.
The liability in these circumstances cannot be said to have arisen from any date prior to September, 2, 1957 when the approval was given as sec.
326 contains an absolute prohibition against the appointment or re appointment of a managing agent before the approval of the Central Government was obtained.
In our opinion, the position is quite clear from the terms of sec.
326 and we do not consider it necessary to refer to the authorities cited by the learned counsel for either side.
The appeal is accordingly allowed, the answer given by the High Court to the question referred to it is discharged and the question is answered in the affirmative and in favour of the assessee.
The appellantwill be entitled to its costs in this Court and in the High Court.
P.E.R. Appeal allowed.
| IN-Abs | The assessee who followed the mercantile system of accounting debited in its account books certain sums of money as remuneration of the managing agents for the assessment years 1957 58 to 1959 60.
For the purpose of income tax the company added back the sum to its taxable income and claimed the whole sum as a deductible expenditure in the assessment year 1959 60 on the ground that the sum became payable only during that year when the Government accorded its approval to the new managing agency agreement.
The income tax Officer rejected the claim holding that the approval of the Central Government was necessary only for actual payment and the assessee should have ascertained the liability for each year and claimed it since he followed the mercantile system of accounting.
This view was upheld by the Appellate Assistant Commissioner and the Income tax Appellate Tribunal.
The High Court held that although at the time the debit entries were made in the account books of the assessee, approval of the Central Government had not been received, when it came later, it gave legal effect to the debit entries with retrospective effect from April 1. 1956 and that the refusal of deduction by the Income tax Officer was right.
Allowing the appeal to this Court, HELD : The High Court was in error in answering the question against the assessee.
Even an assessee following the mercantile system of accounting is not entitled to claim a deduction until liability for the sum for which deduction is claimed has accrued.
The High Court overlooked the plain terms of s.326 of the under which it could not be assumed that the Central Government would approve every proposed appointment or re appointment of managing agent.
[809A; D; 810A] In the instant case it is only when the Central Government conveyed its approval to the appointment of managing agents by its letter dated September 2, 1957 that the appointment became effective and the Company 's liability to pay the remuneration of the managing agents accrued.
The liability became effective from April 1, 1956 because the Central Government chose to give its approval retrospective operation.
The liability could not be said to had &risen from any date prior to September 2, 1957 when the approval was given.
Section 326 of the contains an absolute prohibition against the appointment or re appointment of a managing agent before the approval of Central Government was obtained.
[810B C]
|
Appeal No. 1968 of 1972.
Appeal by Special Leave from the Judgment and Order dated the 4th August 1971 of the Madhya Pradesh High Court in Misc.
Petition No. 41 of 1970 O. P. Malhotra, O. C. Mathur, and R. N. Mishra, for the Appellant.
M. K. Ramamurthi and J. Ramamurthi for Respondents Nos 14.
25. 31.
46. 47, 59, 61, 68, 70, 72, 76, 79, 80, 83, 84.
95, 96, 102, 126 and 129.
The Judgment of the Court was delivered by SARKARIA, J.
This appeal by special leave is directed against the judgment, dated August 4, 1971, of the Madhya Pradesh High Court 875 whereby the apPellant 's Writ Petition under Articles 226 and 227 of the Constitution was dismissed.
The appellant is the Jhagrakhan Collieries (P) Ltd., a Company incorporated under the Indian Companies Act.
The Company owns three collieries in Jhagrakhan in Surguja District of Madhya Pradesh.
These collieries employ over 4,200 workmen.
At the relevant time there were three Trade Unions functioning at the collieries, namely, (1) Madhya Pradesh Koyla Mazdoor Panchayat (for short, the 'Panchayat ' ); (2) Azad Koyla Shramik Sabha (for short, the 'Sabha '), (3) Madhya Pradesh Colliery Workers ' Federation (for short.
the Federation) At the material time, the Panchayat, according to the allegations of the Company, had about 75 per cent of the workers on its rolls.
This Union conducted a complete strike for 57 days in the months of March and April 1968 at the collieries.
The Central Wage Board for Coal Mining Industry by its award recommended payment of Variable Dearness Allowance (for short, V.D.A.), correlated to the cost of living index prevailing from time to time.
The Company accepted these recommendations.
The workers represented by *,he various Unions, on the basis of the Wage Board 's award demanded V.D.A. at the rate of Rs. 1.47 per day with effect from April 1, 1968 while the Company was paying it at the rate of Rs. 1. 11 per day.
The Company refused to pay more than Rs. 1.11 per day.
Thereupon, in December 1968.
the Federation, which had a membership of 169 workers (Respondents 4 to 173 herein) made an application before the Central Labour Court cum Industrial Tribunal Jabalpur (for short, the Labour Court) under Section 33 C(2) of the Industrial Dispute ,; Act (for short the 'Act ') for determination of the amount of V.D.A. due to the workers The Company submitted its written statement on May 13.
1969, challenging the jurisdiction of the court and raised other legal objections.
On October 4, 1969, the Panchayat served a notice of strike under Section 22(1) of the Act on the Company together with a charter of 29 demands and threatened to strike on or after November 7, 1969 if their demands were not conceded.
Thereupon.
the counciliation Proceedings purporting to be under section 22 read with section 12(1) of the Act were held by Mr. B. D. Sharma, Assistant Labour Commissioner (C) Shahdol on the 21st and 22nd October.
In the course of these conciliation proceedings on October 22, 1969, besides other matters.
the dispute relating to V.D.A. was settled.
On October 22, 1969, the Assistant Labour Commissioner (Mr. Sharma) sent a report together with a copy of the settlement to the Government, as required by Section 12(3) of the Act.
Subsequent to the signing of this conciliation agreement, dated October 22, 1969.
the Company filed a supplementary statement on November 5, 1969, submitting that in view of the said settlement, the application under section 33C(2) of the Act filed by the Federation, had become infructuous.
The Labour 876 Court by its order, dated December 20, 1969 framed this additional issue : "Whether the claim stands settled by 'reason of settlement dated 22 10 1969, if any".
On behalf of the workers several objections were raised to the enforceability of.
this settlement, Their ultimate stand was that the settlement was not in accordance with the provisions of the Act, inasmuch as it had not been brought about in proceedings before a duly appointed Conciliation Officer.
The Labour Court tried this issue as a preliminary issue.
It held that Shri Sharma was not a duly appointed Conciliation Officer on the date on which the settlement was arrived at, and consequently, it did not put an end to the dispute pending before the Labour Court.
To impugn this order of the Labour Court, the Company through its agent and Mining Engineer filed a Writ Petition under Article 226 and 227 of the Constitution, which as stated before, was dismissed by the High Court.
Hence this appeal.
Mr. Malhotra, learned Counsel for the appellant raised three points in the course of his arguments before us : (1) In holding that the settlement, dated October 22, 1969 was not a settlement in the course of conciliation proceedings, the courts below have misconstrued Section 4 of the Act , inasmuch as, they have relied only upon sub section (1) and have not taken into account its sub section (2) and the relevant notification thereunder.
(2) (a) Assuming that the settlement in question was not a settlement in the course of conciliation proceedings and binding under section 18(3) on the Act, it was still a settlement binding on the workman, including respondents 4 to 173 herein, when 99 per cent of the total workmen had accepted the terms of the settlement, including V.D.A. (b) The Labour Court 's order refusing permission to the appellant Company to lead evidence to prove the implementation and acceptance of the, aforesaid settlement by 99 per cent of the workers, was.
violative of the principles of natural justice.
(3) There is nothing in the Act which prohibits the employee and the workmen from entering into a settlement during the pendency of proceedings under section 33 C(2) of the Act.
On the other band, settlements inter se between the parties have always been preferred by this Court to the adjudicatory process.
Subsequently, however, Mr. Malhotra withdrew his contention with regard to point No. (1) and requested the Court not to give any finding thereon.
We, therefore, refrain from going into the same.
877 For points (2) and (3), Mr. Malhotra placed reliance on two decisions of this Court, namely : Amalgamated Coffee Estates Ltd. and ors.
vs Their workmen and others(1) and The Sirsilk Ltd. and ors.
vs Government of Andhra Pradesh and anr.(2) Before dealing with the points canvassed, it will be appropriate to examine the relevant provisions of the Act.
Section 2(p) of the Act defines settlement to mean " a settlement arrived at in the course of conciliation proceedings and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding 'where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to (an officer authorised in this behalf by) the appropriate Government and the conciliation officer." As analysis of.
the above definition would show that it contemplates only two kinds of settlement (i) A settlement arrived at in the course of conciliation,proceedings under the Act and (ii) a written agreement between the employer and the workmen arrived at otherwise than in the course of conciliation proceedings.
But a written agreement of the latter kind in order to fall within the definition must satisfy two more conditions, namely : (a) it must have been signed by the parties thereto in the prescribed manner, and (b) a copy thereof must have been sent to the authorities indicated in section 2(p).
The effect of a settlement of the first kind is indicated in subsection (3) and that of the second in sub section
(1) of section 18 of the Act.
The material part of section 18 reads "18)1) A settlement arrived at by agreement between the employer and workmen otherwise than in the course of conciliation proceedings shall be binding on the parties to the agreement.
(2) Subject to the provisions of sub section (3), an arbitration award which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration.
" (3) A settlement arrived at in the course of conciliation proceedings under this Act (or an arbitration award in a case where a notification has been issued under ,sub section (3A) of Section (10A) or (an award of a Labour Court, Tribunal or National Tribunal) which has become enforceable shall be binding on (a) all parties to the industrial dispute; (b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, (arbitrator) (Labour Court, Tribunal or National (1) (2) [1964]S.C.R. 448. 878 Tribunal), as the case may be, records the opinion that they were summoned without proper cause; (c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates; (d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part.
" It is clear from a perusal of Section 18, that a settlement arrived at in the course of conciliation proceedings is binding not only on the actual parties to the industrial dispute but also on the heirs, successors or assigns of the employer on the one hand, and all the workmen in the establishment, present or future, on the other.
In extending the operation of such a settlement beyond the parties thereto, sub section (3) of the Section departs from the ordinary law of contract and gives effect to the principle of collective bargaining.
Thus, had Mr. B. D. Sharma been a duly appointed Conciliation Officer, the settlement arrived at in the conciliation proceedings, duly conducted by him under Section 12, would have been binding on the entire body of the workers including Respondents 4 to 173 represented by the Federation.
and others who 'are members of the Sabha.
Since the finding of the High Court to the effect that the settlement between the Panchayat and the management cannot be deemed to be settlement arrived at in the course of conciliation proceedings under the Act, now stands unassailed.
the aforesaid sub section (3) cannot be invoked to make it binding on Respondents 4 to 173.
The question remains : Can it be enforced against these Respondents by virtue of sub section (1) of the Section ? This further narrows down into the issue : Were these respondents parties and signatories to the agreement between the management and the Panchayat ? The answer to this question is undoubtedly in the negative.
Even Mr. Malhotra has conceded that at the time when the settlement was arrived at on October 22, 1969, these respondents and the members of the Sabha. were not Parties to it.
But his argument is that subsequently by drawing V.D.A. in accordance with the settlement, 99% of the workers have accepted the settlement which, in consequence, would be as effective against them as if they were parties to it.
The argument is attractive but does not stand a close examination.
We have already noticed that according to the scheme of section 18, read with section 2(d), an agreement, made otherwise than in the course of conciliation proceedings, to be a settlement within the meaning of 879 the Act must be a written agreement signed in the manner prescribed by the Rules framed under the Act.
As rightly pointed out by Mr. Ramamurthy, learned Counsel for the Respondents an implied agreement by acquiescence, or conduct such as acceptance of a benefit under an agreement in which the worker acquiescing or accepting the benefit was not a party being outside the purview of the Act, is not binding on such a worker either under sub section (1) or under sub section (3) of section 18.
It follows, therefore, that even if 99% of the workers have impliedly accepted the agreement arrived at on October 22, 1969, by drawing V.D.A., under it, it will not whatever its effect under the general law put an end to the dispute before the Labour Court and make it functus officio under the Act.
The refusal of the Labour Court to allow the appellant to lead evidence at this stage, has not caused any prejudice to the appellant.
The issue decided as a preliminary issue involved a question of law which could be decided on the, basis of material on record.
For its it was not necessary to prove that 99% of the workers had accepted the agreement dated October 22, 1969.
Even on an assumption of that fact in favour of the Company, the claim before the Labour Court could not be deemed to have been settled qua respondents 4 to 173.
Furthermore.
the decision of the Labour Court neither debars the appellant from bringing on record evidence relevant to the issues; which still remain to be decided, nor does it rule out the agreement dated October 22, 1969, for all purposes.
Indeed, the Labour Court has in its order, towards the end, expressly said that the settlement, dated October 22,_ 1969, can be binding under section 18 (1) of the Act between the contracting parties.
In view of the above, we would negative contention (2) canvassed by Mr. Malhotra.
This takes us to the third contention.
Assuming that the Act does not inhibit the employers and the workmen from arriving at a settlement during the pendency of proceedings under section 33 C(2) of the Act, such a settlement, not being one arrived at in the course of conciliation proceedings would be enforceable only against the parties thereto.
In the present case, Respondents 4 to 173 and others who were not parties to the settlement dated October 22, 1969, would not be bound by it.
In the case of Amalgamated Coffee Estates Ltd. vs Their workmen (supra) cited by Mr. Malhotra, pending the appeals by the management before this Court, the subject matter of the award were settled between most of the managements and most of their employees represented by 'certain Unions.
An application was made requesting the Court to dispose of the appeals in terms of such settlement.
It was opposed on behalf of some of the employees.
This Court called for a finding from the Industrial Tribunal on this issue 880 "In view of the fact that admittedly a large number of workmen employed by the appellants have accepted payments consistently with the terms of the agreements set up by the employers.
in their present petition, is it shown by the respondents that the said agreement is not valid and binding on them ?" The Tribunal submitted the finding that in every estate payments were made in terms of the settlement and such payments were voluntary and knowingly accepted by the workmen.
It also held that the terms of the settlement were fair.
This Court accepted the finding of the Tribunal holding that "the settlement appears to us also to be a fair one".
It therefore, decided the appeals in terms of the settlement.
It will be seen that the decision in Amalgamated Coffee Estates case (supra) stands on its own facts.
There the appeals arose, out of an award of the Special Industrial Tribunal for plantations in a dispute between 228 coffee, tea and rubber estates in South India and their employees referred to it under section 10(1) whereas the instant appeal arises out of proceedings under section 33 C(2) for the recovery of money on the basis of the Wage Board 's award and the dispute, if any, is about the computation of V.D.A. in implementation of that award.
The scope of section 33 C(2) is not the same as that of section 10(1) of the Act.
In East India Coal Company Ltd. Banares Colliery, Dhanbad vs Raweshwar and Ors.(1) this Court held that although the scope of section 33 C(2) is wider than that of a 33 C(1), cases which would appropriately be adjudicated under section 10(1) are outside the purview of section 33 C(2).
The provisions of section 33 C are, broadly speaking, in the nature of executing provisions.
An appeal being a rehearing of the case, in Amalgamated Coffee Estates ' case, the jurisdiction of the Court to decide the dispute in a just manner was co extensive with that of the Tribunal to which it was referred under section 10(1).
This Court found in agreement with the report of the Tribunal that the settlement arrived at between the most of the Unions representing most of the workers and the manage ments was fair and conducive to industrial peace, and therefore, it was just and appropriate to decide the dispute and dispose of the appeals in terms of the settlement.
In the case before us, the jurisdiction of the Labour Court is not only circumscribed by s 33 C(2) but the matter also is yet at the initial stage.
The controversy between the parties still remains to be determined on merits.
therefore, do not think it necessary to say anything more with regard to contention No. 3 than what we have broadly indicated above.
For the foregoing reasons, the appeal fails and is dismissed with costs.
Appeal Dismissed.
V.M.K. 1.
| IN-Abs | The three collieries owned by the appellant company employ over 4,200 workmen.
At the relevant time, there were three Trade Unions functioning at the collieries namely, Madhya Pradesh Koyla Mazdoor Panchayat, Azad Koyla Shramik Sabha and Madhya Pradesh Colliery Workers ' Federation.
At the material time, the Panchayat, according to the allegations of the Company, had about 75 per cent of the workers on its rolls.
This Union conducted a complete strike for 57 days in the months of March and April 1968 at the collieries.
The Central Wage Board for Mining Industry by its award recommended payment of Variable Dearness Allowance (V.D.A.), correlated to the cost of living index prevailing from time to time.
The Company accepted those recommendations.
The workers represented by the various Unions, on the basis of the Wage Board 's award, demanded V.D.A. at the rate of Rs. 1.47 per day with effect from April 1, 1968 while the Company was paying it at the rate of Re. 1. 1 1 per day.
The Company refused to pay more than Re. 1. 11 per day.
Thereupon, in December 1968.
the Federation.
which had a membership of 169 workers (Respondents 4 to 173) made an application before the Central Labour Court cum Industrial Tribunal Jabalpur (the Labour Court) under section 33 C(2) of the Industrial Disputes Act for determination of the amount of V.D.A. due to the workers.
The Company submitted its Written Statement on May 13, 1969, challenging the jurisdiction of the court and raised other legal objections.
In consequence of the notice of strike under Sec.
22(1) of the Act by the Panchayat, the conciliation proceedings to be under section 22 read with sec.
12(1) of the Act were held by Mr. B. D. Sharma.
Assistant Labour Commissioner.
In the course of these conciliation proceedings besides other matters, the dispute relating to V.D.A. was settled.
Subsequent to the signing of the conciliation agreement, the company filed a supplementary statement before the Labour Court that, in view of the settlement, the application filed by the Federation had become infructuous.
The stand taken by the workers Was that the settlement was not in accordance.
with the provisions of the Act.
The Labour Court tried this issue as a preliminary issue.
It held that Shri Sharma was not a duly appointed ,conciliation officer on the 'date on which the settlement was arrived at and consequently, it did not put an end to the dispute pending before the Labour Court.
The Writ Petition filed by the Company in the High Court impugning the order of the Labour Court was dismissed.
Hence this appeal by special leave.
It was contended for the appellant (i) Assuming that the settlement in question was not a settlement in the course of conciliation proceedings and binding under section 18(3) of the Act, it was still a settlement binding on the workmen, including respondents 4 to 173 herein, when 99 per cent of the total workmen had accepted the terms of the settlement, including V.D.A; (ii) The Labour Court 's order refusing permission to the appellant Company to lead evidence to prove the implementation and acceptance of the aforesaid settlement by 99 per cent of the workers, was violative of the principles of natural justice, and (iii) There is nothing in the Act which prohibits the employers and the workmen 874 from entering into a settlement during the pendency of proceedings under section 33 C(2) the Act.
On the other hand, settlements inter se between the parties have always been preferred by this Court to the adjudicatory process.
HELD (i) A perusal of sec.
18 of the Act makes it clear that a settlement at rived at in the course of conciliation proceedings is binding not only On the actual parties to the industrial dispute but also on the heirs, successors or assigns ,of the employer on the one hand, and all the workmen in the establishment, present or future.
on the other.
Thus had Mr. B. D. Sharma been a duly appointed Conciliation Officer, the settlement arrived at in the conciliation proceedings, duly conducted by him under sec.
12, would have been binding on the entire body of the workers.
Since the finding of the High Court to the effect, that the settlement between the Panchayat and the management cannot be deemed a, settlement arrived at in the course of conciliation proceedings under the Act, now stands unassailed, sub sec.
(3) of sec.
18 cannot be invoked to make it binding on Respondents 4 to 173 represented by the Federation.
An implied agreement by acquiescence or conduct such as acceptance of a benefit under an agreement to which the worker acquiescing or accepting the benefit was not a party being out side the purview of the Act is not binding on such a worker either under sub sec.
(1) or under sub sec.
(3) of sec.
18 of the Act.
It follows, therefore, that, even if 99% of the workers have impliedly accepted the agreement by drawing V.D.A. under it, it will not whatever its effect under the general law put an end to the dispute before the Labour Court and make it functus officio under the Act, [878C E; 879A B] (ii) The refusal of the Labour Court to allow the appellant to lead evidence at this stage, has not caused any prejudice to the appellant.
The issue decided as a preliminary issue involved a question of law which could be decided on the basis of material on record.
Furthermore, the decision of the Labour Court neither debars the appellant from bringing on record evidence relevant to the issues which still remain to be decided, nor does it rule out the agreement for all purposes.
[879C E] ' (iii) In East India Coal Company Ltd., Benares Colliery, Dhanbad vs Rameshwar and ors.
, this Court held that although the scope of section 33C(2) is wider than that of sec. 33 C(1), cases which would appropriately be adjudicated under sec.
10(1) are outside the purview of sec.
33C(2).
The provisions of section 33 C are broadly speaking in the nature of executing provisions.
The jurisdiction of the Labour Court, in the present case, is not only circumscribed by sec.33 C(2) but the matter also is yet at the initial stage.
The controversy between the parties still remains to be determined on merits.
[880F & G] Amalgamated Coffee Estates Ltd. and Ors.
vs Their workmen and Ors.
discussed and The Sirsilk Ltd. and Ors.
vs Govt.
of Andhra Pradesh and Anr, [1964] S.C.R. 448, referred to.
|
Appeal No. 260 of 1953 and connected appeal (C.A. No. 12 of 1954).
Appeals from the Judgment and Decree dated the 11th day of May 1951 of the High Court of Judicature at Patna in Miscellaneous Appeal No. 253 of 1950 and in appeal from Original Order No. 252 of 1950 arising out of the order dated the 11th day of May 1951 of the Court of Subordinate Judge, Dhanbad in Suit No. 34 of 1949 and in Title Suit No. 27 of 1949 respectively.
Mahabir Prasad, Advocate General for the State of Bihar (section P. Varma and M. Sinha, with him), for the appellant (In Civil Appeal No. 260 of 1953).
Mahabir Prasad, Advocate General for the State of Bihar (M. M. Sinha for R. C. Prasad, with him), for the appellant (In Civil Appeal No. 12 of 1954).
7 50 C. K. Daphtary, Solicitor General for India (Porus A. Mehta and P. G. Gokhale, with him), for the respondent (In both the Appeals).
March 24.
The Judgment of the Court was delivered by BOSE J.
This appeal and Civil Appeal No. 12 of 1954, which will also be governed by this judgment, raise the same points though there are some differences in the facts.
We will deal with Civil Appeal No. 260 of 1953 first.
The suit there related to an arbitration matter.
The appellant before us, whom it will be convenient to call the contractor, entered into a contract with the Dominion of India through an Additional Chief Engineer of the C.P.W.D. on 1 11 1945 for the supply of bricks to the C.P.W.D., a department of the Dominion Government.
Disputes arose about a number of matters.
Clause 14 of the agreement provided that all disputes arising out of or relating to the contract should be referred to the Superintending Engineer of the Circle for the time being.
Accordingly, there was a reference on 21 1 1949 and an award followed on 8 5 1949.
It was filed in the Court of the Subordinate Judge, Dhanbad, and the contractor prayed that it be accepted and that a decree be passed in terms of it.
The Dominion of India filed objections under section 30 of the and prayed that the award be set aside and alternatively that it be modified or corrected.
The contractor 's application was registered as a suit under section 20(2) of the Act and a decree was passed in terms of the award on 18 3 1950.
By that time the Constitution had come into force and the Union of India replaced the Dominion of India as a defendant.
The Union of India filed an appeal to the High Court.
The appeal was allowed in part.
The contractor thereupon appealed to this Court.
The dispute that was referred to the arbitrator consisted of 17 heads of claim but only three of them are contested here, namely items 5, 8 and 17.
51 In the 5th head of claim the contractor claimed Rs. 75,900 as the price of 88 lacs of katcha bricks that were destroyed by rain.
These bricks were not the subject matter of the contract but the contractor put his claim in this way.
The contract was for the supply of 2 1/2 crores of pucca bricks which bad to be delivered according to the following schedule 30 lacs by 25 1 46 50 lacs by 25 2 46 55 lacs by 25 3 46 55 lacs by 25 4 46 60 lacs by 25 5 46.
Delivery was to be at the kiln site.
In order to keep to this schedule the contractor bad to think ahead and work to a particular time table.
First, he had to prepare katcha or unbaked bricks and place them in his kilns for baking.
While this lot was baking be had to prepare and stock another lot of katcha bricks ready to take the place of the baked bricks as soon as they were removed.
It was the duty of the C.P.W.D. to remove these bricks as soon as they were ready for delivery,that is to say, as soon as they were fully baked.
At a certain stage of the contract the C.P.W.D. failed to remove the baked bricks which were ready for delivery and removal.
This caused a jam in the kilns and prevented the contractor from placing a fresh stock of unburnt bricks in the kilns, and in the meanwhile his stock pile of katcha bricks ready for baking kept on mounting up.
Had everything been done to time the 2 1/2 crores of bricks would have been delivered before the rains set in.
But owing to the default of the C.P.W.D. in not removing the burnt bricks which were ready for removal, delay occurred in the time table and the rains set in with the result that88 lacs of katcha bricks were destroyed by the rains.
As this loss was occasioned by the default of the C.P.W.D. the contractor claimed that be should be paid their price.
The reply of the Union Government was two fold.
First, it contended that the katcha bricks formed no part of the contract and even if it was at fault in not 52 taking delivery of the burnt bricks in time all that it could be held liable for would be for breach of that contract; and said that the loss that was occasioned by the damage caused to the katcha bricks which formed no part of the contract was too remote.
Secondly, that compensation for this loss could not in any event be claimed because this kind of situation was envisaged by the parties when the contract was made and they expressly stipulated that the Dominion Government would not be responsible.
The Union Government relied on additional clause 6 of the agreement which is in these terms: "The department will not entertain any claim for idle labour or for damage to unburnt bricks due to any cause whatsoever".
The arbitrator held that this clause was not meant "to absolve the department from carrying out their part of the contract" and so he awarded the contractor Rs. 64,075 under this head.
We are clear that the arbitrator went wrong in law.
Government departments have their difficulties no less than contractors.
There is trouble with labour, there is the likelihood of machinery breaking down in out of the way places and so forth; there was also the danger of thunder storms and heavy showers of rain in the month of May: it will be remembered that the last date of delivery was 25 5 46 if, with that in view, Government expressly stipulated, and the contractor expressly agreed, that Government was not to be liable for any loss occasioned by a consequence as remote as this, then that is an express term of the contract and the contractor must be tied down to it.
If he chose to contract in absolute terms that was his affair.
But having contracted he cannot go back on his agreement simply because it does not suit him to abide by it.
This is not to say that Government is absolved from all liability, but all it can be held responsible for is for damages occasioned by the breach of its contract to remove the pucca bricks which it had undertaken to remove.
But what would such a breach entail? 53 The contractor had a duty under section 73 of the Contract Act to minimise the loss, accordingly he would have had the right to remove the bricks himself and stack them elsewhere and claim compensation for the loss so occasioned; and indeed two of his heads of claim (not in dispute here) relate to that.
He has been awarded Rs. 11,744 11 0 under claim No. 4 for the extra load in connection with the stacking of I crore 7 lacs of bricks due to the accumulation at the kiln site owing to the department 's failure to work to its part of the time table, and in addition, he has been given Rs. 15,500 under claim 13 for the cost of levelling and dressing land to enable him to stack these extra bricks.
Alternatively, he could have sold the bricks in the market and claimed the difference in price, but ordinarily he could not have claimed compensation for damage done to the katcha bricks unless he could have shown that that kind of damage, ordinarily too remote, was expressly contemplated by the parties when the contract was made: section 73 of the Contract Act.
Here it is clear that this was in their express contemplation and they chose to provide against such a contingency by making clause 6 an express clause in their contract.
There can therefore be no doubt that the arbitrator was wrong in his law.
His construction of the terms of the contract was at fault.
The question now arises whether his decision on this point is final despite it being wrong in law.
In India this question is governed by section 16(1) (c) of the of 1940 which empowers a Court to remit an award for reconsideration "where an objection to the legality of the award is apparent upon the face of it".
This covers cases in which an error of law appears on the face of the award.
But in determining what such an error is, a distinction must be drawn between cases in which a question of law is specifically referred and those in which a decision on a question of law is incidentally material (however necessary) in order to decide the question actually referred.
If a question of law is specifically referred and it is evident that the 54 parties desire to have a decision from the arbitrator about that rather than one from the Courts, then the Courts will not interfere, though even there, there is authority for the view that the Courts will interfere if it is apparent that the arbitrator has acted illegally in reaching his decision, that is to say, if he has decided on inadmissible evidence or on principles of construction that the law does not countenance or something of that nature.
See the speech of Viscount Cave in Kelantan Government vs Duff Development Co.(1) at page 409.
But that is not a matter which arises in this case.
The law about this is, in our opinion, the same in England as here and the principles that govern this class of case have been reviewed at length and set out with clarity by the House of Lords in F. B. Absalom Ltd. vs Great Western (London) Garden Village Society(1) and in Kelantan Government vs Duff Development Co.(1).
In Durga Prasad vs Sewkishendas (3) the Privy Council applied the law expounded in Absalom 's case(2) to India: see also Champsey Bhara & Co. vs Jivraj Balloo Spinning and Weaving Co.(4) and Saleh Mahomed Umer Dossal vs Nathoomal kessamal (5).
The wider language used by Lord Macnaghten in Ghulam Jilani vs Muhammad Hassan(1) bad reference to the revisional powers of the High Court under the Civil Procedure Code and must be confined to the facts of that case where the question of law involved there, namely limitation, was specifically referred.
An arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks is just and reasonable.
He is a tribunal selected by the parties to decide their disputes according to law and so is bound to follow and apply the law, and if he does not, he can be set right by the Courts provided his error appears on the face of the award The single exception to this is when the parties choose specifically to refer a question of law as a separate and distinct matter.
(1) (2) (3) , 79.
(4) 50 I.A. 324, 330 & 331.
(5) 54 I.A. 427, 430.
(6) 29 I.A. 51, 60.
55 Reference was made to a decision of this Court in A. M. Mair & Co. vs Gordhandass Sagarmull(1) where Fazl Ali, J. quoted a passage from Viscount Simon 's speech in Heyman vs Darwins Ltd.") where the learned Lord Chancellor (Viscount Simon) in turn, quoted from Lord Dunedin in another case.
It was argued on the basis of this that if you have to have recourse to the contract to establish your case, then the dispute must fall within the arbitration clause.
That is undeniable but it is not enough that the dispute should fall within the clause.
It is also necessary that the parties should define what the dispute is and agree to refer the dispute so set out and defined to arbitration, or, if they do not, that the Court should compel them to do so: (see Lord Macmillan in Heyman 's case(1) just cited at pages 369 and 370).
If, therefore, no specific question of law is referred, either by agreement or by compulsion, the decision of the arbitrator on that is not final however much it may be within his jurisdiction, and indeed essential, for him to decide the question incidentally.
Lord Russell of Killowen and Lord Wright were both in the earlier case, F. R. Absalom Ltd. vs Great Western (London) Garden Village Society(1), as well as in Heyman 's case(2) and they would have pointed to any distinction had there been a likelihood of conflict; but in fact there is none and we do not read Fazl Ali J. 's judgment as a decision to the contrary.
We have next to see whether the arbitrator was specifically asked to construe clause 6 of the contract or any part of the contract, or whether any question of law was specifically referred.
We stress the word "specifically" because parties who make a reference to arbitration have the right to insist that the tribunal of their choice shall decide their dispute according to law, so before the right can be denied to them in any particular matter, the Court must be very sure that both sides wanted the decision of the arbitrator on a point of law rather than that of the Courts and that they wanted his decision oil that point to be final.
(1) ; at 798.
(2) at 368.
(3) 56 The clause in the contract that requires disputes about the contract to be referred to arbitration is clause 14 and is in the following terms: "Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specification and instructions here in before mentioned and as to quality of materials or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, specification, instructions, orders or these conditions, or otherwise concerning the supplies whether arising during the progress of delivery or after the completion of abandonment thereof shall be referred to the arbitration of the Superintending Engineer of the Circle for the time being in the manner provided by law relating to arbitration for the time being in force who after such investigation as he may think proper shall deliver his award which shall be final, conclusive and binding on all parties to the contract".
The dispute sprang out of a series of claims made in a number of letters written by the contractor to the Additional Chief Engineer, C.P.W.D. and culminated in a petition, exhibit B(1), in which the contractor summarised his claims.
The document is not dated.
On receipt of this, someone on behalf of the C.P.W.D. invoked the jurisdiction of the arbitrator.
That letter has not been filed.
The arbitrator then wrote to the contractor and asked him to submit a statement of claim.
That letter has not been filed either but reference is made to it in exhibit C(1), the statement claim which the contractor filed in response to that letter.
As the material documents setting out the terms of reference are not here, we were asked by both sides to infer what the terms were from this statement of claim and the recitals in the award.
The learned counsel for the contractor relied on the following: In the statement of claim "Item 5.
Loss of katcha bricks. .
Rs. 75,900.
The chief reason of the destruction of these bricks was the failure of the department to lift the 57 monthly quota of bricks The argument of the department that they are not liable to compensate us on this account because of clause 6 of the agreement is not correct.
Clause 6 refers to only such cases over which the department has no control.
But if the department would have lifted the bricks (this was entirely under their control) then no such loss would have occurred.
Also be it noted that clause 6 refers only to 'damage ' and not to 'destruction. .
Damage means only partial loss. . .it cannot mean total destruction.
: The award states "The statement of claims submitted by the contractor contains seventeen items in respect of which the contractor claimed a total payment of Rs. 4,76,138 12 0 plus interest i.e., approximate total amount claimed: Rs. 5,03,803 12 0 as detailed below".
Then follow the seventeen items of which item 5 is "Payment for katcha bricks destroyed by rain: Rs. 75,900".
The body of the award deals with this as follows: " Claim No. 5.
Payment for 88.
lacs of katcha bricks destroyed by rain.
The contractor argued etc The Executive Engineer stated . .
The C.P.W.D. moreover were safeguarded by clause 6 of the contract. .
The contractor maintained that clause 6 of the contract could not be invoked when the department was at fault as in this case.
Clause 6 was meant to cover contingencies which were not of the department 's own making.
I hold that the removal of the bricks in such a manner or to prevent accumulation in excess of 60 lacs was an implied contractual obligation on the part of the C.P.W.D. .
I further hold that the C.P.W.D. cannot take shelter behind clause 6 of the contract.
This clause is not, in my opinion, meant 8 58 to absolve the department from carrying out their part of the contract.
It is impossible not to admit this without offending the rudiments of common sense reasoning".
We are of opinion that this is not the kind of specific reference on a point of law that the law of arbitration requires.
In the first place, what was shown to us is no reference at all.
It is only an incidental matter introduced by the Dominion Government to repel the claim made by the contractor in general terms under claim No. 5.
In the next place, this was the submission of the contractor alone.
A reference requires the assent of both sides.
If one side is not prepared to submit a given matter to arbitration when there is an agreement between them that it should be referred, then recourse must be had to the Court under section 20 of the Act and the recalcitrant party can then be compelled to submit the matter under sub section (4).
In the absence of either, agreement by both sides about the terms of reference, or an order of the Court under section 20(4) compelling a reference, the arbitrator is not vested with the necessary exclusive jurisdiction.
Therefore, when a question of law is the point at issue, unless both sides specifically agree to refer it and agree to be bound by the arbitrator 's decision, the jurisdiction of the Courts to set an arbitration right when the error is apparent on the face of the award is not ousted.
The mere fact that both parties submit incidental arguments about a point of law in the course of the proceedings is not enough.
The language of Lord Wright in F. R. Absalom Ltd. vs Great Western (London ) Garden Village Society(1), a case similar to this so far as this point is concerned, is apposite here "There is here no submission of any specific question of law as such and as a specific question of law; no doubt incidentally, and indeed necessarily, the arbitrator will have to decide some questions on the construction of the building contract, but the two matters submitted are both composite questions of law and fact; there is no express submission of the (1) , 616.59 true effect of the contract on the basis of undisputed facts, as in the Kelantan case(1) or as a separate and distinct matter on facts to be separately assumed or found, as in In re King and Duveen(2). .
The arbitrator was not being asked simply and specifically to decide, upon some agreed or assumed basis of fact, the true interpretation of either clause 26 or clause 30 of the conditions or of both together; he was being required to make an award on the two matters submitted on whatever questions of fact and law might emerge".
Clause 32 of the contract in the House of Lords case was the equivalent of clause 14 in ours.
It ran "Provided always that in case any dispute or difference shall arise . . . as to the construction of the contract or as to any matter or thing arising thereunder. . such dispute shall be and is hereby referred to the arbitration and final decision of etc.
" The arbitrator relied on that to invest him with juris diction to determine,, as a matter of law, the construction of clauses 26 30 of that contract.
The House of Lords held that in the absence of a specific reference about the construction of the contract the jurisdiction of the Courts was not taken away.
Lord Russell of Killowen put it this way at page 610 "No specific question of construction or of law was submitted.
The parties had, however, been ordered to deliver pleadings, and by their statement of claim the contractor had claimed that the arbitrator should under his powers revise the last certificate issued etc.
It is at this point that the question of the construction of condition 30 arose as a question of law, not specifically submitted, but material in the decision of the matters which bad been submitted.
This question of law the arbitrator has decided; but if upon the face of the award he has decided it wrongly his decision is, in my opinion, open to review by the Court".
That is exactly the position here.
Simply because the matter was referred to incidentally in the pleadings (1) (2) , 36.60 and arguments in support of, or against, the general issue about liability for damages, that is not enough to clothe the arbitrator with exclusive jurisdiction on a point of law.
The next question is whether the error is apparent on the face of the award.
That; in our opinion, is clear from the passages we have quoted from the award.
We hold that clause 6 expressly relieves the Union Government of all liability under this head of claim and that the arbitrator was wrong in awarding any sum on that account.
The next head in dispute is item No. 8 in the statement of claim: "Cost of additional wages paid to the coolies on account of non supply of ration and cloth Rs.
51,495".
Here again no specific question of law was referred, so all we have to see is whether there is an error of law apparent on the face of the award.
The contractor put his case as follows in the statement of claim: "At the time when this work was allotted to us there was rationing system in the locality.
As per conditions of contract we were bound not to employ local labour and we had to import coolies from far off places.
We had in our employ about 1800 coolies and it was an impossibility to arrange their ration from open market.
This difficulty was brought to the notice of the authorities concerned, and they promised us to supply ration.
It was only after this promise that we signed the agreement. .
From a perusal of these letters it is clear that the department promised us to supply ration. . .
These circumstantial evidences are sufficient enough to show that there was a mutual understanding between the parties that ration will be supplied.
In the eyes of law even circumstantial evidence is sufficient to prove that such a promise was made.
Any breach of that promise makes the department legally liable to compensate for that loss. .
Apart from the legal responsibility it was also a moral responsibility for the department to supply ration".
61 This claim, therefore, was not grounded on any clause of the contract, nor was it said to be implied in the contract.
What was relied on was a collateral promise evidenced, not by the contract, but by two letters written by "the department" and a promise by "the authorities concerned"; and later this promise is turned into a "mutual understanding" and to a "moral responsibility" in addition to a legal one.
The arbitrator dealt with this as follows.
He began by saying "The contractor stated that when he submitted his tender on 25 9 45 he did so in the bona fide belief that the department would make the necessary arrangements, etc.
" Then he sets out the following dates.
On 1 11 45 the contractor was told that his tender had been accepted.
On 9 11 45 the contractor "warned" the Executive Engineer about his "immediate requirements in respect of rations".
The contract was finally accepted and signed on 22 11 45.
Now it is admitted that the contract contains no clause about rations and it is also evident that the question was not raised when the tender was accepted on behalf of the Dominion Government.
The question was raised in a letter to the Executive Engineer, and the contractor signed the contract without waiting for a reply.
It is well settled that governments can only be bound by contracts that are entered into in a particular way and which are signed by the proper authority.
A reference to the agreement, exhibit A(1), will show that it was accepted on behalf of the Dominion Government by the Additional Chief Engineer and not by an Executive Engineer.
A letter written to the Executive Engineer would therefore have no effect and even if it be assumed that the letter was forwarded to the Additional Chief Engineer for consideration, what does it amount to? A tender embodying certain terms is submitted and is accepted on 1 11 45.
Both sides are agreed on all matters contained in it and their conduct shows that both sides indicated that the contract should be reduced to writing.
Be 62 fore the agreement is signed, one party wants to include a further condition in the contract.
We will assume that the request was made to the other contracting party.
But without waiting for the assent of the other side, both sides accept and sign the contract as it existed before the fresh suggestion was made.
It is an error in law to deduce from this that there was acceptance of the fresh proposal.
On the contrary, the legal conclusion is that the new suggestion was dropped and that the contractor was content to accept the contract as it was without ' this condition.
In any case, a person cannot be bound by a one sided offer which is never accepted, particularly when the parties intend that the contract should be reduced to writing.
That is the whole point of insisting on a document.
It excludes speculation as to what was and what was not agreed to however much the matter might have been raised by one of the parties during the stage of negotiation.
The arbitrator continues that the contractor stated that "it was a well known and established fact that Sindri was a rationed area; that the C.P.W.D. were giving rations at controlled rates to their employees and contractors through arrangements with the local Civil Supply Authorities; that nobody working under the C.P.W.D. was allowed to make independent arrangements or approach the Civil Supply Authorities direct" and the contractor contended that the very fact that he tendered such low rates showed that he expected to supply his labourers with rations at controlled rates.
The arbitrator then sets out some more of the contractor 's contentions and from them concludes that "there was an implied contractual obligation for the C.P.W.D. to make available controlled rations to the contractor and that this obligation was not fulfilled with due diligence and care".
He accordingly awarded Rs. 40,000 as compensation under this head.
The error is apparent.
Facts must be based either on evidence or on admissions; they cannot be found to 63 exist from a mere contention by one side especially when they are expressly denied by the other.
The inference from the facts stated above is that the contractor entered into the agreement with his eyes open and whatever his one sided hopes may have been he was content to enter into the agreement as it stood without binding the other side to the new conditions and without even waiting to ascertain the reaction of the other side to his further proposals.
It has to be remembered that rationing was not a matter that was under the direction and control of the Dominion Government.
It was a local matter handled by the then Provincial authorities and under their direction and contract.
The C.P.W.D., as a department of the Dominion Government, was not concerned with rationing except that its employees had to submit to rationing like everybody else in the Sindri area.
This confusion between the Dominion Government and the Provincial Government occurs in the arbitrator 's opening sentence under this head where he sets out the contractor 's contention that "commodities such as rations and cloth which were absolutely essential for the maintenance of his labourers and which were under Government control".
As the arbitrator bases solely on the contractor 's contentions it is evident that he failed to appreciate the fact that the Dominion Government and the Provincial rationing authorities were separate entities distinct from one another.
The position accordingly reduces itself to this: two persons, neither of which is a part of the Provincial Government or has any control over rationing, chose to enter into an agreement for work in a rationed area.
They insisted that their contract should be reduced to writing, and that indeed was essential, this being a contract with the Dominion Government which was incapable of contracting in any other way; they agreed upon and concluded all their terms; then, at the last minute, one side raised a point about rationing but without waiting for a reply and without having the term entered in the contract, he signed the contract as it stood before the point was raised even during the negotiation.
It is 64 an error in law to hold that any contractual obligation can be inferred or implied from these circumstances.
Then there is still another error.
If this implied agreement about rations and cloth does not spring out of the written contract but is to be inferred collaterally as a distinct and subsidiary contract, and we gather that that is the finding, especially as reference was made to section 9 of the Contract Act, then that is not a contract to which the arbitration clause can apply.
Wide though it is, clause 14 is confined to any matter relating to the written con tract and if ration and cloth are not covered by the written contract, they are not matters that relate to it.
If parties choose to add a fresh contract in addition to or in substitution for the old, then the arbitration clause cannot cover the new contract.
See Lord Macmillan in Heyman vs Darwins Ltd.(1).
The last item in dispute in this appeal is claim No. 17 about interest.
The statement of claims sets out "Item 17 Interest on the amount of money involved in this claim at the rate of Rs. 6 percent.
27,665.
This work was finished in May 1946 and it was proper for the department to have decided all our claims at least by 31st December 1947. . . .
But this was not done.
Due to this a heavy amount remained blocked up and we were compelled to take money from our bankers on interest.
We therefore pray for interest for 16 months from 1 1 48 to 31 4 49".
The arbitrator held "The contractor 's contention that his claims should have been settled by January 1948 is, in my opinion, reasonable.
I therefore award interest at 6% for 16 months on the total amount of the awards given i.e., Rs. 17,363".
Then the arbitrator sets out the amounts awarded under each head of claim.
A perusal of them shows that each bead relates to a claim for an unliquidated sum.
The Interest Act, 1839 applies, as interest is (1) at 371.65 not otherwise payable by law in this kind of case (see Bengal Nagpur Ry.Co. vs Ruttanji Ramji(1)), but even if it be assumed that an arbitrator is a "court" within the meaning of that Act, (a fact that by no means appears to be the case), the following among other conditions must be fulfilled before interest can be awarded under the Act: (1) there must be a debt or a sum certain; (2) it must be payable at a certain time or other wise; (3) these debts or sums must be payable by virtue of some written contract at a certain time; (4) There must have been a demand in writing stating that interest will be demanded from the date of the demand.
Not one of these elements is present, so the arbitrator erred in law in thinking that he had the power to allow interest simply because he thought the demand was reasonable.
It was suggested that at least interest from the date of "suit" could be awarded on the analogy of section 34 of the Civil Procedure Code, 1908.
But section 34 does not apply because an arbitrator is not a "court" within the meaning of the Code nor does the Code apply to arbitrators, and, but for section 34, even a Court would not have the power to give interest after the suit.
This was, therefore, also rightly struck out from the award.
We pause to note that there was only a delay of five days at the outside in the over all picture.
The last date for removal of the last instalment of bricks was 25 5 46 and the contractor says under this head that the whole contract was completed by the end of May, 1946.
It is difficult to see how 88 lacs of bricks could have been damaged by rain in the last five days of May, and if the damage occurred before it would have occurred anyway, for on the contractor 's case he had to have a large stack of unbaked bricks on hand ready to enter the kilns in order to keep pace with his time table.
However, that was a (1) 65 I.A. 66. 9 66 matter within the jurisdiction of the arbitrator and is not a matter in which the Courts can interfere.
That concludes Civil Appeal No. 260 of 1953 and we now turn to the other appeal, Civil Appeal No. 12 of 1954.
Only two items are in dispute here.
Heads 4 and 17 of the claim.
The over all pattern of the claim is the same as in the other case.
There was a contractor and he entered into an agreement containing the same terms and conditions, except about the details of supply.
It was signed on the same day as the other and by the same authority on behalf of the Dominion Government., and the matter went before the same arbitrator and the award in this case was given on 1 5 1949, one week before the other award.
Here also, no specific question of law was referred and we need not cover the same ground.
Our decision is the same here as there.
The fourth head of claim is about cloth and rations.
The claim here.
, and the Dominion Government 's reply, is the same as in the other case, but the award in this case is not based on an implied contractual obligation but on "a moral and implied obligation".
The error here is even greater than before.
The sum claimed was Rs. 51,495 and the amount awarded was Rs. 30,000.
The seventeenth head of claim was about interest.
The contractor claimed Rs. 27,665 and the arbitrator awarded Rs. 9,954.
There is the same error of law apparent on the face of the award.
The High Court was right in dismissing the claims made under the heads in dispute here.
The two appeals fail and each is dismissed with costs in this Court.
Appeals dismissed.
| IN-Abs | The appellant, a contractor, entered into a contract with the Dominion of India for the supply of bricks.
A clause in the contract required all disputes arising out of or relating to the contract to be refered to arbitration.
Disputes arose and the matter was duly referred.
The arbitrator gave an award in the contractor 's favour.
The Union Government, which by then had displaced the Dominion of India, contested the award on a number of grounds.
Held:(1) that it is not enough for the contract to provide for arbitration; more is necessary.
An arbitrator only gets jurisdiction when either, both the parties specifically agree to refer specified matters or, failing that, the court compels them to do so under the arbitration clause if the dispute is covered by it; (2) the legality of an award cannot be challenged on facts, but it can be challenged on questions of law provided the illegality is apparent on the face of the award: section 16(1)(c) of the ; (3) the only exception is when both parties specifically refer a question of law for the decision of the arbitrator.
In that event they are bound by his decision on that particular question as well as by his decision on the facts.
But a distinction must be drawn between cases in which a question of law is specifically referred and those in which a decision is incidentally material (however necessary) in order to decide the question actually referred.
The law about this is the same in India as in England.
and , followed.
at 79, 50 I.A. 324 at 330 49 331, 54 I.A. 427 at 430, 29 I.A. 51 at 60, at 368 referred to and ; at 798, explained; Quaere: Whether the courts will interfere when a question of law is specifically referred if the arbitrator acts illegally in deciding it, such as deciding on inadmissible evidence or on principles of construction which the law does not countenance.
at 409, referred to; (4) a wrong construction of the contract is an error of law and can be challenged provided the error appears on the face of the award; (5) so is the awarding of interest when the contract does not provide for interest and the requirements of the Interest Act are not fulfilled:65 I.A. 66, referred to.
Quaere: whether the Interest Act applies to arbitrations; (6) when a specific type of loss is directly contemplated by the parties to a contract and they expressly stipulate that no damages will be payable in respect of it they must be bound down to their agreement and any claim for damages in respect of such loss must be dismissed; (7) when the agreement on which the suit is based is not to be found in a contract which has been reduced to writing but has to be implied under section 9 of the Contract Act then the matter is not covered by an arbitration clause of the kind referred to above because the dispute in such a case arises out of and relates to the implied agreement and not to the written contract: at 371, referred to.
|
No. 379 of 1974.
Petition under article 32 of the Constitution of India.
Govinda Mukhoty, for the petitioner.
P. K. Chatterjee and G. section Chatterjee, for the respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
The District Magistrate, 24 Parganas, by an order dated 29th December, 1973 made under sub section (1) read with subsection (2) of section 3 of the directed that the petitioner be detained as be was satisfied that with a view to preventing the petitioner from acting in a manner pre 998 judicial to the maintenance of public order it was necessary to detain him.
The fact of the making of the order of detention was reported by the District Magistrate to the State Government on 2nd January, 1974 and the State Government, by an order dated 8th January, 1974, approved the order of detention.
Pursuant to the order of detention, ,the petitioner was arrested on 18th January, 1974 and immediately ,on his arrest he was served with the grounds on which the order of detention was made.
The grounds of detention referred only to the incident as forming the basis of arriving at the subjective satisfaction ,,as regards the necessity for detention of the petitioner and that incident was in the following terms : "On the night of 25/26 6 73 at about 00.1 hrs.
you along with your associates being armed with lethal.
weapons including fire Arms raided the house of Ananta Keyal of Naitala under Diamond Harbour P.S. and looted away cash, ornaments etc.
At the time of operation you fixed from your fire arms indiscriminately disregarding human lives and their safety.
As a result, the house owner Ananta Kayal and his close door neighbour Ajit Kayal sustained grievous gun shot injuries on their persons, Subsequently both of them ,expired in Diamond Harbour Hospital.
You also brutally assulated some of the inmates of the house of occurrence.
Your action created such panic in the locality and the local people felt a sense of insecurity.
Thus you acted in a manner prejudicial to the maintenance of public order.
" The petitioner made a representation against the order of detention on 29th January, 1974 but it was considered and rejected by the State Government on 31st January, 1974.
The State Government thereafter submitted the case of the petitioner to the Advisory Board along ,with his representation and the Advisory Board, after bearing the ,petitioner and taking into account the representation made by him, ,made a report to the State Government on 6th March, 1974 stating that in its opinion there was sufficient cause for the detention of the petitioner.
The State Government accordingly passed an order dated 14th March, 1974 confirming the detention of the petitioner.
This detention is challenged by the petitioner in the present petition which 'has been submitted from jail.
The first contention urged Mr. Mukhoty, learned counsel appearing amicus curiae on behalf of the petitioner, was that the solitary incident set out in the grounds of detention was so remote from the date of the order of detention in fact there was a time lag about six months that the District Magistrate could not possibly have arrived at his subjective satisfaction on the basis of that incident.
The requirement of proximity, said Mr. Mukhoty, was not satisfied and the subjective satisfaction said to have been reached by the District Magistrate could not be regarded as real or genuine.
Now it is true, as pointed out by this Court in Golam Hussain vs The Commissioner of Police, Calcutta & Oi .v.(1) that "there must be a live link between the grounds of criminal activity alleged by the detaining authority and the purpose of (1) ; 99 9 detention, namely, inhibition of prejudicial activity of the species specified in the statute.
This credible chain is, snapped if there is too long and unexplained an interval between the offending acts and the order of detention.
Such is the ratio of proximity in Lakshman Khatik vs
State of West Bengal(1).
No authority, acting rationally, can be satisfied, subjectively or otherwise, of future mischief merely because long ago the detenu had done something evil.
To rule otherwise is to sanction a simulacrum of a statutory requirement.
But no mechanical test by counting the months of the interval is sound.
It all depends on the nature of the acts relied on, grave and determined or less serious land corrigible, on the length of the gap, short or long, on the reason for the delay in taking preventive action, like information of participation being available only in the course of an investigation.
We have to investigate whether the casual connection has been broken in the circumstances of each case".
There is, therefore, no hard and fast rule that merely because there is a time lag of about six months between the 'offending acts ' and the date of the order of detention, the causal link must be taken to be broken and the satisfaction claimed to have been arrived at by the District Magistrate must be regarded as sham or unreal.
Whether the acts of the detenu forming the basis for arriving at a subjective satisfaction are too remote in point of time to induce any reasonable person to reach such subjective satisfaction must depend on the facts and circumstances of each case. 'The test of proximity is no* a rigid or mechanical test to be blindly applied by merely counting the number of months between the 'offending acts ' and the order of detention.
It is a subsidiary test evolved by the court for the purpose of determining the main question whether the past activities of the detenu is such tat from it a reasonable prognosis can be made as to the future conduct of the detenu and its utility, therefore, lies only in so far as it subserves that purpose and it cannot be allowed to dominate or drown it. 'The prejudicial act of the detenu may in a given case of such a character as to suggest that it is a part of an organised operation of a complex of agencies collaborating to clandestinely and secretly carry on such activities and in such a case the detaining authority may reasonably feel satisfied that the prejudicial act of the detenu which has come to light cannot be a solitary 'or isolated act, but must be part of a course of conduct of such or similar activities clandestinely or secretly carried on by the detenu and it is, therefore, necessary to detain him with a view to preventing him from indulging in such activities in the future.
Here in the present case, the, act alleged against the petitioner was a daring act of dacoity in a village by a gang consisting of the petitioner and his associates and if this act is judged in its correct setting, grave proportions and clear implications, it would be clear that it cannot be a stray isolated act but must be the work of a habituated and hardened criminal given to commit dacoities and the District Magistrate could, therefore, reasonably arrive at a satisfaction that with a view to preventing the petitioner from carrying on such activities it was necessary to detain him.
Moreover, the affidavit in reply filed on behalf of the State Government by the Secretary in the Department of Public Relations and Youth (1) 1000 Services, points out that in connection with the incident set out in the grounds of detention a criminal case was filed in the court of the Sub , Divisional Judicial Magistrate, Diamond Harbour on 26th June, 1973 and he was arrested in connection with that case, but it appeared during investigation that witnesses were unwilling to give evidence in open court against the petitioner and his associates and it was, therefore, felt that it was futile to proceed with the criminal case and it was decided to drop it against the petitioner.
Now, if the criminal case were dropped, the petitioner would have to be released and in that event he would be free to carry on his nefarious activities.
The District Magistrate, therefore, passed the order of detention on 29th December, 1973.
The order of detention was in fact passed in anticipation of the petitioner being released as a result of dropping of the criminal case against him.
The record of the case which was produced before us by the learned counsel appearing on behalf of the State showed that the criminal case was actually pending against the petitioner on.
3rd January, 1974.
That means that the criminal case must have been dropped and the petitioner must have been discharged sometime between 3rd January, 1974 and 18th January, 1974, the latter being the date when he was once again arrested pursuant to the order of detention.
It is, therefore, not possible to say that the District Magistrate could not have arrived at a subjective satisfaction or) the basis of the incident set out in the grounds of detention, or that the subjective satisfaction reached by him was sham or unreal.
Mr. Mukhoty on behalf of the petitioner then urged that even if the incident set out in the grounds of detention were true, it merely affected maintenance of law and order and did not have any impact on public order and hence there was no nexus between the act alleged against the petitioner and the subjective, satisfaction reached by the District Magistrate.
Now, there can be no doubt that the acts of the detenu on which a subjective satisfaction is claimed to have been reached by the detaining authority must have relevance to the formation of such subjective satisfaction.
If the acts of the detenu relied.
on by the detaining authority are irrelevant, no reasonable person could possibly arrive at a subjective satisfaction on the basis of such irrelevant acts and the subjective satisfaction said to have been reached by the detaining authority would be a mere pretence.
It is, therefore necessary to consider whether the act alleged against the petitioner in the grounds of detention could be said to be relevant to the formation of a subjective satisfaction that it was necessary to detain the petitioner with a view to preventing him from acting in a manner prejudicial to the maintenance of public Order.
What was the potency or radiation of the act alleged against the petitioner: did it affect maintenance of public order or was its prejudicial effect confined merely to maintenance of law and order? The distinction between law and order, on the one hand, and public order, on the other, has been brought out admirably by Hidayatulla, C.J., in a recent decision in Arun Ghosh vs State of West Bengal.(1) The learned Chief Justice pointed out in that case the difference between maintenance of law and order and its disturbance and the maintenance of public order and its disturbance in the following words (1) [1970]3 section C. R. 288 1001 "Public order was said to embrace more of the community than law and order.
Public order is the even tempo of the life of the community taking the country as a whole or even a specified locality.
Disturbance of public, order is to be distinguished from acts directed against individuals which do not disturb the society to the extent of causing a general disturbance of public tranquillity.
It is the degree of disturbance and its effect upon the life of the community in a locality which determines whether the disturbance amounts only to a breach of law and order.
Take for instance, a man stabs another.
People may be shocked and even disturbed, but the life of the community keeps moving at an even tempo, however much one may dislike the act.
Take another case of a town where there is communal tension.
A man stabs a different sort.
Its implications are deeper and it affects the even tempo life and public order is jeopardized because the repercussions of the act embrace large sections of the community and incite them to make further breaches of the law and order and to subvert the public order.
It means therefore that the question whether a man has only committed a breach of law and order or has acted in a manner likely to cause a disturbance of the public order is a question of degree and the extent of the reach of the Act upon the society.
The question to ask is: Does it lead to disturbance of the current of life of the community so as to amount to a disturbance of the public order or does it affect merely an individual leaving the tranquillity of the society undisturbed?" If we ask this question in relation to the facts of the present cases, it is obvious that the act alleged against the petitioner was calculated to disturb "the current of life of the community" in the village.
It was a serious act of dacoity which was alleged against the petitioner and it was perpetrated at dead of night and the petitioner and his associates who participated were armed with lethal weapons including guns and they used these lethal weapons recklessly and indiscriminately in utter disregard of human life and actually caused grievous injuries to at least two persons and beat up several others.
This act of dacoity created a panic in the locality and seriously disturbed the even tempo of life of the community in the village.
There was clearly disturbance of public order and the act alleged against the petitioner had nexus with the object of maintenance of public order.
The subjective satisfaction reached by the District Magistrate could not, therefore, he said to be based on an irrelevant ground.
Then it was contended on behalf of the petitioner that the District Magistrate had taken into account other material contained in the history sheet of the petitioner in arriving at his subjective satisfaction and since this material was not disclosed to the petitioner, he had no opportunity of making an effective representation and that the order of detention was, therefore, invalid.
Now, the proposition can no longer be disputed that if any material which has not been disclosed to the 17 L346SupCI75 10 0 2 Petitioner has gone into the formation of the subjective satisfaction of the detaining authority it would have an invalidating consequence on the order of detention.
But in the pesent case it is not possible to say that any material other than that that set out in the grounds of detention was taken into account by the District Magistrate in reaching his subjective satisfaction We have looked at the history sheet of the petitioner which was produced before us by the learned counsel appearing on behalf of the State Government and we do not find any material prejudicial to the petitioner other than that set out in the grounds of detention.
There is, therefore, no factual basis for this contention and it must be rejected.
Mr. Mukhoty on behalf of the petitioner also tried to persuade us to strike down the order of detention on the ground that though the order of detention was made on 29th December, 1973, the petitioner was not arrested until 18th January, 1974 and there was thus a delay of twenty days in arresting the petitioner pursuant to the order of detention But this is equally unsustainable and for two very good reasons.
In the first., place.
the delay of twenty days between the date of the order of detention and the date of arrest cannot be regarded as unreasonable.
Secondly, there is sufficient explanation for the delay.
The petitioner was actually in jail on 29th December, 1973 when the order of detention was made and it was only on some date between 3rd January, 1974 and 18th January, 1974 that lie was released and then once again arrested on 18th January, 1974.
The last contention urged by Mr. Mukhoty on behalf of the petitioner was that though the order of detention was made by the District Magistrate an 29th December, 1973, he did not report the fact of the making of the order of detention to the State Government until 2nd January, 1974 and there was thus a delay of about five days which constituted a violation of the statutory requirement of section 3, sub section (3 ) that the fact of the making of the order of detention must be reported forthwith to the State Government.
This contention raises the question as to what is the true meaning and connotation of the word 'forthwith ' as used in section 3 sub section (3).
The, question is fortunately not res integra.
It is concluded by a decision of this Court in Keshav Nilkanth Joglekar vs The Commissioner of Police, Greater Bombay.(1) The statutory provision which came up for consideration in that case was section 3, sub section (3) of the which contained an identical provision as section 3.
subsection (3) of the present Act and the question which arose was as to whether Commissioner who made the order of detention on 13th January, 1956 could be said to have reported that fact 'forthwith ' to the State Government under section 3, sub section (3) when he did so as late as 21st January, 1956.
The Court was, therefor ., called upon to construe the word 'forthwith ' in section 3, sub section (3) and after discussing various authorities, English as well as Indian, bearing on the interpretation of this word, the Court, speaking through Venkatarama Ayyar, J. pointed out that : "On these authorities, it may be taken.
an act which is to be done forthwith must be held to (1) ; 1003 have so done, when it is done with all reasonable despatch and without avoidable delay", and proceeded to add : "under section 3(3) it is whether the report has been sent at the earliest point of time possible, and when there, is an interval of time between the date of the order and the date of the report, what has to be considered is whether the delay in sending the report could have been avoided the result then is that the report sent by the Commissioner to the State on 21 1 1956 could be held to have been sent 'forthwith ' as required by section 3(3), only if the authority could satisfy us that, in spite of all diligence, it was not in a position to send the report during the period.
from 13th to 21st January, 1956".
The same test must be applied in the present case and we must inquire whether the District Magistrate sent the report to the State Government "with all reasonable despatch and without avoidable delay", or, to put it differently, whether in spite of all diligence the District Magistrate was not in a position to send the report until 2nd January, 1974.
Now, the District Magistrate has made an affidavit explaining the reason for the delay in sending the report to the State Government.
He has pointed out that 29th December, 1973, which was the date when the order of detention was made, was a Saturday and on that day he had passed eight other orders of detention and the materials in connection with all these nine cases had to be typed out by the typist which could not possibly be completed in one single day.
30th December, 1973 was a Sunday and, therefore, the earliest when the report could be submitted to the State Government was 31st December, 1973.
But the District Magistrate could not send the report on that day as he was very busy in connection with food procurement work in the district and the next day, namely, 1st January, 1974 being a public holiday, he could send the report only on 2nd January, 1974.
This explanation given by the District Magistrate it, in our opinion, sufficient to show that he sent the report to the State Government with all reasonable despatch and there was no avoidable delay on his part.
Whilst taking this view on facts, we do not wish to underscore the need for strict compliance with this requirement of section 3, sub section (3).
It is a very important requirement intended to secure that the State Government shall have sufficient time for consideration before it decides and this decision has to be made within twelve days of the making of the order of detention whether or not to approve the order of detention and the Court would, therefore, insist on strict compliance with it and not condone avoidable delay, even if it be trivial But in the present case the facts stated by the District Magistrate in his affidavit show that be acted with prompt despatch and was not guilty of any avoidable delay.
The District Magistrate must, therefore, be held to have sent the report 'forthwith ' as required by section 3, sub section (3).
These were the only contentions urged on behalf of the petitioner in support of the petition and since there is no substance in them, the petition fails and the rule is discharged.
V.P.S. Petition dismissed.
| IN-Abs | The petitioner was directed to be detained by an order of the Dist.
Magistrate under the .
with a view to preventing him from acting in a manner prejudicial to the maintenance of public order.
The order was made on December 29, 1973.
and the fact of making the order was reported to the State Government on January 2, 1974.
He was arrested on Jan. 8. 1974.
The grounds of detention referred to only one incident, namely, that on the night of 25/26 6 73, the petitioner along with his associates being armed with fire arms, raided a house, looted cash and ornaments brutally assaulted some of the inmates and fired indiscriminately a. result of which the house owner and his neighbour sustained grievous injuries and subsequently died.
The petitioner challenged the detention order in a writ petition on the following grounds : (1) There was a time lag of 6 months between the date of the incident and the date of order and hence the Dist.
Magistrate could not have possibly arrived '.It his Subjective satisfaction on the basis of that incident, (2) the incident merely affected law and order and not public order, (3) the District Magistrate had taken into account other material in the history sheet which was not disclosed to the petitioner.
in arriving at his subjective satisfaction, (4) there was a delay of 20 days in arresting the petitioner pursuant to the order of detention, and (5) there was a delay of 5 days in reporting the fact of making the order of detention to the State Government.
Dismissing the writ, petition, HELD '.
(1) (a) There is no hard and fast rule that merely because there is a time lag of about 6 months between the 'offending acts ' and the date of the order of detention the causal link must be taken to be broken and the satisfaction claimed to have been arrived at by the Dist.
Magistrate must be regarded as sham or unreal.
Whether the acts of the detenu forming the basis of the subjective satisfaction are too remote in time must depend on the facts of each case.
The test of proximity is not a rigid or mechanical test to be blindly applied by merely counting the number of months between the two dates.
The test is evolved by the court for determining the main question whether the past activity of the detenu is such that from it a reason able prognosis can be made as to the future conduct of the detenu.
The prejudicial act of the detenu may be of such a character as to suggest that it is a part of an organised operation, and in such a case, the detaining authority may reasonably feel satisfied that the act which has come to light cannot be a solitary or isolated act but must be part of a course of conduct of similar activities and that therefore, it is necessary to detain him with a view to preventing him from indulging in such activities in the future.
[999 C G] In the present case, the act was a daring act of dacoity in a village by the petitioner 's gang, and judged in its correct setting, it could not be a stray isolated act but must be the work of a habituated and hardened criminal given to commit dacoities.
and therefore, the Dist.
Magistrate could reasonably arrive ,it a satisfaction that with a view to preventing him from carrying on such activities, it was necessary to detain him.
[999 G H] (b) Further, it was stated in the counter affidavit that a criminal case was filed in the Magistrates ' court in connection with the identical incident on June 26, 1973 and the petitioner was arrested but it was found that witnesses were unwilling to give evidence against him.
The Dist, Magistrate, 9 97 therefore.
passed the order of detention in anticipation of the petitioner being released as a result of dropping the criminal case against him.
The petitioner was discharged between January 3, 1974 and Jan. 18, 1974, and on the latter date he was once again arrested pursuant to the order of detention.
[1000 A D] Golam Hussain vs The Commissioner of Police, Calcutta & Ors. ; and Lakshman Khatik vs State of West Bengal.
[1974] 4 S.C.C. I referred to.
(2)The act alleged against the petitioner was calculated to disturb the current of life of the community in the village.
It was a serious act of dacoity perpetrated at dead of night.
It created panic in the locality and seriously disturbed the even tempo of life of the community in the village.
It was clearly disturbance of public order and the act of the petitioner had nexus with the object of maintenance of public order.
[1001 E G] Arun Ghosh vs State of Bengal followed.
(3) There was no factual basis for the contention that the Dist.
Magistrate had taken into account any other material not disclosed to the petitioner.
[1002 A B] (4) (a) The delay of 20 days between the date of the order of detention and the date of arrest cannot be regarded as unreasonable.
[1002 C D] (b) The petitioner was in jail on Dec. 29, 1973 when the order of detention was made and was once again arrested only after he was released on some date between January 3, 1974 and Jan. 18, 1974.
and hence the delay was explained.
[1002 D E] (5) Section 3(3) of the Act requires that the fact of the making of the order of detention must be reported forthwith to the State Government.
An act which is to be done forthwith must be held to have been so done when it is done with all reasonable despatch and without avoidable delay.
It is a very important requirement intended to secure that the State Government shall have sufficient time for consideration before it decides and the decision has to be made within 12 days of the making of the order of detention whether or not to approve the order and the Court.
would, therefore.
insist on strict compliance with it and not condone avoidable delay even if it be trivial.
When them is an interval of time between the date of order and the date of report what has to be considered is whether the delay in sending the report could have been avoided, or to put it differently, whether, in the present case.
in spite of all diligence, the Dist.
Magistrate was not in a position to send the report until Jan. 2, 1974.
[1003 A C] In the present case.
the facts stated by the Dist.
Magistrate in his affidavit show that be acted with prompt despatch and was not guilty of any avoidable delay.
On Dec. 29, 1973 he had passed 9 orders of detention and the typing of the material in connection with the 9 cases took time.
Dec. 30 was a Sunday and he could not send the reports on Dec. 31 as he was very busy in connection with food procurement work.
Jan. 1, 1974 was a public holiday, and hence, he could send the report only on Jan. 2.
[1003 C E]
|
ion No. 489 of 1972.
Petition Under Article 32 of the Constitution of India AND C.A. Nos.
1745 to 1747 of 1974 Appeal by Special Leave from the Judgment & Order dated the 20th May, 1971 of Delhi High Court in C.W. No. 716/69, 553/70 and 574 of 1970.
M. C. Bhandare, P. H. Parekh and section Bhandare, for the Petitioner (In WP No. 489/72) and Appellants (In CA.
No. 1745/74).
981 Lal Narain Sinha, Solicitor General of India, section N. Prasad and R. N. Sachthey, for Respondents Nos.
1 3 (In WP.
No. 489/72).
K. section Ramamurthi, section Balakrishnan and T. M. Ghatate of Bala krishnan and Ghatate, for Respondents Nos. 5, 23, 27, 31 ', 53, 59 & 65 (In WP.
No. 489/72).
section Markandeya, for Respondents Nos. 71, 73, 83, 87, 93, 94, 96, 98, 103, 107, 109 & 111 113 (In WP.
No. 489/72).
P. P. Rao, for Intervener Nos.
1 8 (In WP.
No. 489/72).
P. H. Parekh and section Bhandare, for Intervener No. 8 (In WP.
No. 489/72).
P. P. Rao, for the Appellants (In CAS Nos. 1746 1747/1974).
Balakrishnan and N. M. Ghatate, for Respondent No. 3 (In All the Appeals).
The Judgment of the Court was delivered by GOSWAMI, J.
The petitioners in Writ Petition No. 489 of 1972 are confirred Assistant Engineers in the Central Engineering Service (Class 11).
They were promoted to officiate as Executive Engineers in Class I between December 27, 1956 and September 8, 1959, by a properly constituted Departmental Promotion Committee and have been working as Executive Engineers in the Central Public Works Department of the Ministry of Works and Housing of the Government of India.
Except one petitioner (namely, K. G. Chopra) all the petitioners were promoted to the grade of Executive Engineer prior to their confirmation as Assistant Engineers.
The respondents 4 to 66 were initially recruited as Assistant Executive Engineers in Class I and were promoted to the grade of Executive Engineer between the period March 11, 1957 and February 23, 1966.
The appellants in Civil Appeals Nos.
1745 of 1974 and 1746 and 1747 of 1974, who were recruited directly to Class 11 as a result of competitive examination in which they had failed to secure requisite marks for being selected for Class 1, are also confirmed Assistant Engineers in Grade II and have been officiating as Executive Engineers in Grade I.
They have obtained special leave against the Full Bench judgment of the Delhi High Court in their writ petitions under Article 226 of the Constitution decided by a common judgment of 20th May, 1971.
Since a common question of law is involved in all these matters, this judgment will govern all the above matters.
We will, therefore, include the appellants also in describing them as petitioners in this judgment.
The Service with which we are concerned is the Central Engineering Service, Class I.
According to the Central Engineering Service, Class 1, Recruitment Rules (briefly the Rules) framed in the year 1954 by S.R.O. 1841 dated May 21, 1964, which are admittedly similar to those of 1949 Recruitment Rules, officers in the grade of Assistant Executive Engineer (Class I) and certain Assistant Engineers (Class II) are eligible for promotion to the grade of Executive Engineer 982 (Class 1).
The vacancies in the grade of Executive Engineer can only be filled by promotion from the aforesaid two grades in the ratio of 75% and 25%.
The aforesaid quota was retrospectively altered with effect from September 7, 1955, to 66 2/3% and 33 113 %.
Part I of the Rules contains the definitions.
By Rule 2(b) thereof, "The Commission" means the Union Public Service, Commission.
Rule 2(c) defines "The Service" as the Central Engineering Service, Class I.
The Service includes various grades of posts.
Rules 3, 4 and 5 relevant for our purpose are as under "3.
Recruitment to the service shall be made by any of the following methods: (a) By competitive examination in India in accordance with Part III of these rules.
(b) By promotion in accordance with Part IV of these Rules.
(c) By transfer in accordance with Part V of these Rules.
(1)All appointments to the service or to posts borne upon the cadre of the Service shall be made by Government.
(2) Subject to the provisions of rule 3 Government shall determine the method or methods of requirement (sic) (recruitment?) to be employed for the purpose of filling any particular vacancies in the Service or such vacancies therein as may be required to be filled during any particular period and the number of candidates to be recruited by each method.
Provided that all recruitments by competitive examination (vide Part HI of the rules) shall be to the grade of Assistant Executive Engineer, Class I only.
Seventy five per cent of the vacancies in the grade of Executive Engineer, Class 1, shall be filled by promotion of Assistant Executive Engineers, Class 1, the rest of the vacancies being filled by promotion and/ or by transfer in accordance with Parts IV and V of the Rules respectively.
Appointments to the Service made otherwise than by promotion will be subject to orders issued from time to time by the Ministry of Home Affairs regarding special representation in the Services for specific, sections of the people.
As noted earlier the quota for promotion between the directly recruited Assistant Executive Engineers and promotees from Clam II, which was initially in the ratio of 75% and 25%, was later altered to 66 2/3% and 33 1/3% in 1956 and with effect from April 1, 1972, the percentage has come to be 50:50 for a period of seven years.
983 According to the petitioners prior to their promotion as Excise Engineers the petitioners and respondents 4 to 66 were holding interchangeable posts, the nature of work, responsibilities, powers and duties discharged by all of them being the same and subsequent to their promotion all these and the pay scales were identical in every respect.
Prior to the promotion, however, the pay scale of the petitioners was different from that of the Assistant Executive Engineers who were already in Grade 1.
The Assistant Executive Engineers are directly recruited to Grade I by competitive examination and sometimes Assistant Engineers (Class 11) are also recruited by the same competitive examination to Class 11 when they cannot quality with the requisite marks to obtain entry in Class I Services.
Besides, Class III Officers are also promoted to Class 11.
In order, therefore, to give incentive of promotion to employees in Class II, who have already gathered experience in the service, a certain percentage of quota is reserved for their promotion to the grade of Executive Engineer in the recruitment rules.
The Principal grievance of the petitioners is against the seniority list as on 1 7 1971 (Annexure 'J ') where the petitioners have bets shown as Junior to the respondents 4 to 66 (in Writ Petition No. 489 of 1972) and to the respondents in the other two appeals.
According to them notwithstanding the fact that they were recruited by promotion to officiate in the grade of Executive Engineer regularly as a result of selection by the Departmental Promotion Committee and they bay been working in that capacity for nearly 13 years or over their cases were not considered for the purpose of promotion to the still higher grades in Class I and Assistant Executive Engineers recruited several years after their recruitment have been held to be, senior to them and some of them have been promoted to the next higher grades ignoring their claim.
It is admitted that there are no statutory seniority rules as such and both sides depend upon certain memorandum issued by the Government of India in the Home Department to establish their respective claims.
According to the respondents it is manifest in the quota rule that there is ail implied rotational system by which only at the time of confirmation of the petitioners as Executive Engineers the seniority may be fixed in accordance with the quota.
According to the learned Solicitor General appearing on behalf of the Union of India the petitioners, who were confirmed in Class II, have a lien in that grade and they cannot be expected to belong to two grades at the same time.
It is, therefore, only at the lime of confirmation against permanent vacancies that for the first time the petitioners may be held to have been recruited to class I of the Service.
Since according to him the recruitment is from two sources it is essential that recruitment can only be understood within the meaning of these rules to have taken place at the time of confirmation of the petitioners in the superior grade, namely, Class 1.
Necessarily, therefore, says the learned Solicitor General, the quota rule applies at the stage, of confirmation and seniority would be relateable to confirmation in Grade I of the Service.
984 It will be necessary also to refer to rule 23 in Part IV referred to in rule 4(2) providing for promotion: "23(1) No Assistant Engineer, Class II shall be promoted as Assistant Executive Engineer, Class 1.
(2) Recruitment by promotion to the Grade of Executive Engineer, Class I shall be made by selection from among permanent Assistant Engineers in the Central Engineering Service, Class 11, after consultation with the Commission.
No officer shall have any claim to such promotion as of right.
(3) No Assistant Engineer shall be eligible for promotion to the Service, unless he (a) would, but for age, be qualified for admission to the competitive examination under Part III of these Rules.
(b) has rendered at least three years ' services in a permanent or temporary capacity as an Assistant Engineer and subordinate under the Central Government; and (c) satisfies the Commission that he is in every respect suitable for appointment to the Service.
It shall not be necessary to consult the Commission, under this rule, in the case of any person, if the Commission had been consulted in connection with his temporary promotion to the Service.
The learned Solicitor General draw& our particular attention to rule 23 (2) which provides that recruitment to the grade of Executive Engineer (Class 1) has to be made by selection from amongst permanent Assistant Engineers in Class H.
He submits that the word 'permanent ' in sub rule (2) is very significant.
Since recruitment by promotion can be made only from amongst permanent Assistant Engineers, there can be no recruitment earlier when an Assistant Engineer is holding his post in an officiating or temporary capacity.
According to him the petitioners could not be said to be recruited to Class I when they were not permanent Assistant Engineers.
Again according to him the petitioners could be considered as permanent Assistant Engineers only when they were confirmed in their posts in Class 11.
According to the respondents, confirmation and not officiating appointment in the grade of Executive Engineer is sine qua non of recruitment to Clauses.
As stated earlier there are no statutory seniority rules as such.
The whole question will turn on the construction of rule 4 read with rule 23 and also any other appropriate administrative instructions, issued by the Ministry of Home Affairs with regard to the principles for determining seniority.
We have already quoted the said rules.
We have now to consider the Memorandum of the Home Ministry dated June 22, 1949 (Annexure G 1) and another similar Memorandum dated 985 December 22, 1959 (Annexure G 11).
The latter Memorandum givesan annexure containing the general principles for determination of seniority in the Central Services.
Mr. Bhandare followed by Mr. Rao relies upon the Memorandumof June 22, 1949 and agrees with the learned Solicitor General that the Memorandum of December 22, 1959, is not relevant: But the learned Solicitor General goes further to submit that the Memorandum of June 22, 1949, is also not relevant as it deals with seniority of displaced Government servants who have been absorbed temporarily in the Central Government and the petitioners do not fall in that category.
On the other hand, the petitioners submit that from the Memorandum of December 22, 1959, it is clear that although the instructions contained in the Memorandum dated June 22, 1949, were issued in order to safeguard the interests of the displaced Government servants, later on as the specific objects underlying the instructions 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.
The Memorandum proceeds "it has, therefore, been decided in consultation with the Union Public Service 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 Memorandum cited in paragraph I (including that of June 22, 1949) 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 particular service/grade from (sic (for?) which revised principles are to be adopted for purpose of determining seniority has already been or is hereafter agreed to by this Ministry".
It is, therefore, clear that so far as the petitioners are concernedthe Memorandum of December 22, 1959, is not attracted.
On the other hand the Memorandum of June 22, 1949, will clearly apply (See Union of India and Others vs M. Ravi Varma and Others, etc.(1).
Para 2 of that Memorandum may now be quoted "2.
The question of seniority of Assistants in the Secretariat was recently examined very carefully in consultation with all the Ministries and the Federal Public Service Commission 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 framing 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 (1) ; 16 346SupCI 75 986 length of service in that grade as well as service in an equivalent grade irrespective of whether the latter was under Central or Provincial Government in India or Pakistan".
Paragraph 8 to which a reference is made in the above Memorandum reads as follows : "8.
Seniority of Assistants in Grade IV as newly constituted.
The names of all existing permanent Assistant who are included in the permanent strength of the service and who were confirmed in their ' posts prior Lo the 22nd October, 1943, will be arranged in the first instance Ministry wise in accordance with the rules in force at present.
Such permanent Assistance will be considered senior to all others conferment in pursuance of these instructions in vacancies arising upto the 22nd October, 1950.
The order of seniority of the latter group of Assistants, namely, those confirmed after the 22nd October, 1943, which will be arranged in a single list for all Ministries, will be determined inter se on the basis of their length of continuous service, temporary or permanent in the grade of Assistant or in an equivalent grade, provided that any period of service during which the pay actually drawn exceeds Rs. 160/ per month should be deemed to be service in a grade equivalent to that of an Assistant".
It is submitted on behalf of the respondents that the question of seniority arises between Assistant Executive Engineers and Assistant Engineers only when the latter are members of ' the same class grade which happens only after the Assistant Engineers are confirmed as Executive Engineers.
It is emphasised that as between members of different classes the question of relative Seniority cannot arise.
It is further submitted that having regard to the nature of the scheme the rules provide that the grade of Assistant Executive Engineer will consists exclusively of young men of merit proved by competitive examination who will quickly after the necessary training have promotion to the posts of Executive Engineer and above.
In the context of that scheme rule 4 (2) requires 66 2/3 % vacancies to be filled by the Assistart ', Executive Engineers and "the rest" by promotion of the Assistant Engineers or by transfer.
We are not concerned with transfer from other service in this case.
It is also contended that the rule clearly gives preference to the extent of 66 2/3% to the Assistant Executive Engineers.
It is only after their appointment to the extent of 66 2/3% that "the rest" comes into existence.
The argument proceeds that it is only on confirmation and absorption of Assistant Engineers in Class I that the question of relative seniority between them and Assistant Executive Ercincers promoted as Executive Engineers can arise.
It is strenuously contended that an Assistant Engineer officiating as Executive Engineer cannot be senior to an Assistant Executive Engineer while officiating as Executive Engineer.
Particular vacancies as and when they go on arising must be finally filled to give effect to 66 2/3% to Assistant Engineers and thereafter only the residue to Assistant Engineers or transferred officers.
It is stressed by the respondents that appointment by rotation is involved in the mandate rule 4(2) itself.
987 Mr. Ramamurthi and Mr. Balakrishnan while adopting the argu ments of the learned Solicitor General reply upon an Office Memorandum of December 8, 1960, of the Ministry of Works, Housing and Supply, Government of India, on the subject of principles for seniority in the Central Engineering Service and Central Electrical Engineering Service (Class 1) in the Central Public Works Department.
The learned Solicitor General did not address us on this Office Memorandum as he rightly found considerable difficulty in doing so.
It will appear from the recital in this Memorandum that it has not emanated from the Home Ministry which is the appropriate Department for issuing instructions in service matters under the Allocation of Business Rules of the Central Government under Article 77(3) of the Constitution.
Besides, this Office Memorandum refers to and relies upon a Notification of November 22, 1960, of the Home Ministry, namely, U.0.
No. 9/38/60 Estt(D) for issuing these instructions.
The said Notification of the Home Ministry could not be traced and was not produced before us and in its absence we are unable to take into consideration the Memorandum of December 8, 1960.
The learned Solicitor General is, therefore, correct in not referring to the same but submitted his arguments mainly on the construction of the Recruitment Rules.
He, however, did submit that what was recited in para 4 of the Memorandum of December 8, 1960, actually followed from rule 4(2) read with rule 23 and it was not, therefore, necessary at all to make any reference to this Memorandum.
It will be appropriate at this stage to refer to the judgment of the Delhi High Court under appeal where the High Court relied upon the said Notification of December 8, 1960 and also accepted the arguments on the line made before us by the learned Solicitor General.
The High Court relied upon the Circular of December 8, 1960 and paragraph 7 of the annexure to the Office Memorandum of December 22, 1959, of the Home Ministry with regard to the relative seniority of direct recruits and promotees and observed as follows "The rotational sysstem is, therefore, firstly justified by rule 4 (2) itself.
Even if it is assumed for the sake of argument that rule, 4(2) is silent about the rotational system, then the administrative instructions make it clear that the quota system in rule 4(2) has to be worked out only by the rotational system and not in any other manner".
The High Court further held as follows "The case of Shri Ojha (appellant in Civil Appeal NO. 1745 of 1974) is that because he was officiating as an Executive Engineer Class I from before the time the respondent No. 9 started officiating Shri Ojha was entitled to seniority not only against respondent No. 9 but against the other respondents also.
This stand is contrary to the last part of rule 4(2) which compels the Government to fill the vacancies in the grade of Executive Engineers Class 'I strictly by rotation system implementing the quota rule.
Our conclusion on question No. 1, therefore, is that the earlier confirmation and 988 the higher seniority given to the respondents are legal both according to the statutory rule 4(2) and according to the administrative instructions".
The administrative instruction which is referred to in the above extract is to be found in the aforementioned paragraph 6 of the Circular of December 22, 1959, regarding relative seniority of direct recruits and promotees.
We have already made it clear that the Memorandum of December 22, 1959, is not applicable in this particular case.
We have, therefore, to examine whether it is correct to hold that it is implicit in rule 4(2) read with rule 23 that the rotational system is necessarily implied to the extent of denying seniority to the petitioners if appointed regularly earlier within their quota at the time of recruit ment.
We have also to examine the correctness of the submission as to whether the Assistant Engineers after they are confirmed as such and continue to hold the appointments of Executive Engineer in regular course of selection through the Departmental Promotion Committee, presided over by a member of the Union Public Service Commission are entitled to claim seniority vis a vis the Assistant Executive Engineers when promoted subsequent to their appointments.
Now the question which arises for consideration is what is the meaning of the words "vacancies in the grade of Executive Engineer" as used in the aforesaid paragraph of rule 4(2).
When does a vacancy in the grade of.
Executive Engineer arise? To answer this question it is necessary to ascertain what are the posts which the grade of Executive Engineer consists of, for the vacancies can only be in the posts in the grade 'of Executive Engineer.
The word "grade" has various shades of meaning in the service jurisprudence.
It is sometimes used to denote a pay scale and sometimes a cadre.
Here it is obviously ,used in the sense of cadre.
A cadre may consists only of permanent posts or sometimes, as is quite common these days, also of temporary posts.
To give one example, the cadre of Income Tax Officers, Class 1, Grade II, as pointed out by this Court in Bishan Sarup Gupta vs Union of India and Others(1) in para 18 of the report, consisted of It permanent and temporary posts".
Here in the present case it has been stated on oath by P. K. Kulkarni, Under.
Secretary to the Ministry of Works and Housing, in paragraph 7 of his Affidavit inreply at page 252 of the Paper Book that "there are permanent and temporary posts sanctioned from time to time in the grade of Executive Engineer, Class 1.
Promotions from the grade of Assistant Executive Engineers and/or Assistant Engineers are initially made in an officiating capacity against the available vacancies,.
the avail able vacancies obviously being in the permanent and temporary posts in the grade of Executive Engineer.
Paragraph 23 of the same Affidavit in reply at page 257 of the record is also to the same effect "I say that there are permanent and temporary posts sanctioned in the grade of Executive Engineer".
It is, therefore, clear that the cadre of Executive Engineer consists both of permanent posts and tempo 1. ; 98 9 rary posts.
Even from the statement of sanctioned strength of Engineering Officer Class 1, Central P.W.D., from 1960 to 1972 filed by the Solicitor General in the course of argument it is apparent that the cadre includes both permanent and temporary posts.
Whenever therefore, a vacancy arises in a permanent post or in a temporary post it would be a vacancy in the grade of Executive Engineer and the quota rule for promotion would apply.
The above conclusion at which we have reached is reinforced also by a reference to rule 2 of section 6 in Chapter V at page 31 of the C.P.W.D. Manual, Volume 1 (1970 edition) (hereinafter referred to as the Manual) wherein "every officer appointed against a permanent or temporary post" is specifically adverted to.
Again at page 35, rule 19(b), there is a reference to Class I Direct Recruits (temporary).
Indeed we find an admission in paragraph 67 of the Affidavit in reply filed by P.B. Kulkarni at page 271 of the record: "I submit that the quota rule is to be applied as and when vacancies in the grade of Executive Engineer are required to be filled but as already stated earlier it has not been possible to apply this quota rigidly at the time of officiating promotions as promotions from the grade of Assistant Engineer have been far in excess of their quota".
It may also be noted that it is at the stage of promotion to the grade of Executive Engineer that the quota rule is to be applied.
Now there is a well recognised distinction between "promotion" and "confirmation" and that is apparent from the Manual, Chapter VI, Section 6 at pages 46 47.
Rule 6, at page 47 says that promotions by a Departmental Promotion Committee on the basis of assessment of merit from a field of choice which may extend upto 5 6 times the number of ex pected vacancies, while rule 4 provides that the confirmation is subject to satisfactory performance and clearance from the vigilance angle and the confidential dossier of the official concerned is required to be reviewed to see that the individual has been reported satisfactorily during the 'period of last three years as may be fixed by the Departmental Promotion Committee for the purpose and if the reports are unfavourable or below average, the incumbent shall 'have to wait for a further period till he gains satisfactory reports.
The tests , to be applied for the purpose of "promotion" and "confirmation" are entirely different.
When promotion is made by selection, as it is, from amongst Assistant Engineers, it is based on the assessment of relative merit from a field choice consisting of the senior most persons in the lower cadre upto about 5 or 6 times the number of expected vacancies, while for confirmation the only aspect considered is whether the performance of the incumbent is satisfactory and there is nothing objectionable from the violence angle.
Then again section 7 of Chapter V of the Manual deals with the subject of promotion while section 8 of the same chapter deals with the subject of confirmation clearly recognising the distinc tion between promotion and confirmation.
Rule 4 of section 7 at page 48 also makes a clear distinction between promotion and confirmation.
Rule 9 of the same section at page 50 lays down the procedure for promotion to the selection posts and this procedure has clearly no application in cases of confirmation.
It was this procedure which was apparently followed when the petitioners and respondents 67 to 118 9 90 were promoted as officiating Executive Engineers from the grade of Assistant Engineer.
Then rule 12 of section 7 at page 52 lays down that in order to be eligible for promotion as Superintending Engineer an Executive Engineer promoted from Class I Service would have to, put in "7 years ' service in the grade of Executive Engineer".
Similarly an Executive Engineer promoted from Class II service also has to put in "7 years ' service in the grade of Executive Engineer '.
Thus once an Assistant Engineer is regularly promoted to officiate in the grade of Executive Engineer, there is no further restriction under the rules in his next jump to the grade of Superintending Engineer.
Now it cannot be disputed that for the purpose of promotion to the grade of Superintending Engineer 7 years service in the grade of Executive Engineer would count by taking into account not only service rendered after confirmation in the permanent post of Executive Engineer but also service rendered in an officiating capacity in a permanent or temporary post as Executive Engineer.
This can be explained only on the hypothesis that the grade of Executive Engineer consists both of permanent and temporary posts and service in an officiating capacity, here, is service in the grade of Executive Engineer.
When an Assistant Executive, Engineer or Assistant Engineer is promoted to officiate as Executive Engineer he is regarded as promoted to and serving in the grade of Executive Engineer.
Again rule 11 of section 8 at page 57 of the Manual enunciates a very important principle which clearly brings out the distinction between promotion and confirmation.
It says inter alia that the list of eligibility, is to be finalised "after keeping in view the seniority of the persons concerned in the post in which he is to be confirmed".
Seniority "in the post in which he, is to be confirmed" is to be reckoned.
That means that those who are to be confirmed as Executive Engineers have a seniority in the grade of Executive Engineer though they are only officiating Executive Engineers and their confirmation would follow according to their seniority as officiating Executive Engineers which would depend on when they were promoted as officiating Executive Engineers in a regular manner within their quota.
It would, therefore, be seen that so far as this service is concerned promotion has always been recognised as distinct from confirmation.
During the course of hearing instances have been shown where Assistant Engineers before confirmation in Class It have been regularly promoted to officiate as Executive Engineers.
So also Executive Engineers prior to their confirmation as such have been promoted to officiate as Superintending Engineers.
The process of selection by the Departmental Promotion Committee, according to rule 9 of section 7 at page 50 of the Manual is applied at the stage of promotion of Assistant Engineers as officiating Executive Engineers and not at the stage of their confirmation which is required to be made according to rule 4 of section 6 at page 46 and rule 1 1. of section 7 at page 57 of the Manual.
The quota rule which on the plain language of the last paragraph of rule 4(2) is to be applied at the stage of promotion must, therefore, be given effect to at the point of time when Assistant Engineers and Assistant Executive Engineers are promoted as officiating Executive Engineers and not at the stage of their confirmation.
It is submitted by the respondents that one third quota cannot be filled unless the two third quota was exhausted.
This, in our view, 991 will introduce sterility in the quota rule so far as the promotees are concerned.
Their hopes and aspirations cannot be related to the availability or non availability of the direct recruits to fill the two third quota.
Each quota will have to be worked independently on its own force.
The word "rest" in the quota rule cannot be pressed into service to defeat the object of the rule coming in aid of advancement of prospects of promotees in the hierapchy by of the Service.
It may be pointed out that even in the case of recruitment to the cadre of Income Tax Officer, Grade II, Class 1, the, letter of the Government of India dated September 29, 1944, which fixed the quota between direct recruits and promotees pursuant to rule 4 was substantially in the same terms as the last paragraph of the present rule 4(2).
It is stated that the recruitment to Grade 11 of Class I will be made partly by promotion and partly by direct recruitment and that "80% of the vacancies arising in the grade will be filled by direct recruitment and the remaining 20% vacancies will be filled on the basis of the promotion by selection provided suitable number of men are available for promotion".
This quota of 80% and 20% was subsequently altered by Government of India to 66 2/3% and 33 1/3% by their letter dated October 18, 1951.
This Court held in Bishan Sarup Gupta 's case (supra) interpreting the quota rule of 1944 and 1951 in para 18 thereof as follows "It is feebly contended on behalf of the direct recruits that the quota rule should relate to only vacancies in permanent posts and not temporary posts.
This contention is not accepted either by the promotees or the department.
There is nothing in the ' Rules of 1945 or the quota rule of 1951 which says that the vacancies must be vacancies in perma nent posts.
Indeed the vacancies must be permanent vacancies that is to say vacancies which are not for a few days, or for a few months or are otherwise adventitious.
The whole cadre has consisted of permanent and temporary Posts for years.
Permanent vacancies are, therefore, likely to take place both in the permanent posts and in the temporary posts.
In fact Mr. Dutt, in his affidavit filed in Jaisinghani 's case (supra), had clearly alleged in paras 25 and 26 of the affidavit that all the: direct recruits from 1948 onwards were initially appointed against temporary posts and even at the time of the filing of the affidavit, i.e. on January 31, 1967, direct recruits were being appointed against temporary posts.
We, therefore, find no sufficient warrant for the contention that the vacancies referred to in the quota rule are vacancies only in the permanent posts".
This reasoning applies equally in the present case and it must be held that the vacancies referred to in the quota rule in the last paragraph of rule 4(2) are vacancies not only in the permanent posts but also in the temporary posts in the grade of Executive Engineer and the quota rule applies at the stage when Assistant Engineers and Assistant Executive Engineers are promoted even if it be in an offi 992 ciating capacity to fill vacancies in the grade of Executive Engineer irrespective of whether the vacancies are in permanent posts or temporary posts.
But then the question may arise as to how the quota rule is to be applied.
Here again we find that guidance is afforded by the decision of this Court in Bishan Sarup Gupta 's case (supra).
Paragraph 14 of the judgment in that case deals with this very question vis a vis recruitment to the cadre of Income Tax Officers, Grade 11, Class I "On the other hand, the contention on behalf of the direct recruits is that the real intention of the rule was to secure that at any given moment the service must consist of direct recruits and promotees in the proportion of 2:1.
If, for example, in any year 50 direct recruits were appointed, than not more than 25 promotees could be appointed in that year.
If also no direct recruit was appointed in a year there could be no appointment of promotees.
This line of argument has been accepted by the High Court and it was substantially on that ground that the seniority list prepared on July 15, 1968, has been set aside and directions given for preparing a fresh one.
What was, however, over looked is that the rule, dated October 18, 1951, was not concerned With the constitution of the cadre but was concerned as to how permanent vacancies were to be filled.
Rule 4 of the Income tax Class 1, Grade 11 Service Recruitment Rules also refers to recruitment of candidates to vacancies in the service.
The vacancies for any particular year being ascertained, not more than one third of the same were to go to the promotees and the rest to the direct recruits.
The ratio was not made dependent on whether any direct recruit was appointed in any particular year or not.
We are, therefore, unable to accept the con construction put on the quota rule by the High Court.
In our opinion, the promotees were entitled to one third of the vacancies in any particular year whether or not there was direct recruitment by competitive examination in that year".
It would, therefore, be seen that the Assistant Executive Engineers were entitled initially to three fourth and subsequently to two third of the vacancies in the grade of Executive Engineers arising in any particular year, while Assistant Engineers were entitled initially to ,one fourth and subsequently to one third of such vacancies and the ratio was not dependent on whether any persons from one class or the other were, promoted or not.
If there were three vacancies in a year, two would go to the Assistant Executive Engineers while one would go to the Assistant Engineers and even if there were no eligible Assistant Executive Engineers, who could be promoted to fill in two vacancies belonging to their quota, one vacancy will have to be filled by promotion of an Assistant Engineer.
If having regard to the exigencies of the situation, the two vacancies belonging to the quota of Assistant Executive Engineers had to be filled in by Assistant Engineers for want of availability of eligible Assistant Executive Engineers, 993 the appointment of the Assistant Engineers to fill in such two vacancies would be irregular, because that would be outside their quota and in that event they would have to be pushed down to later years when their appointment can be, regularised as a result of absorption in their lawful quota for those years.
This is what was directed to be done by this Court for the purpose of fixing inter se seniority amongst direct recruits and promotees in the grade of Income Tax Officers Grade 11, Class 1, in Bishan Sarup Gupta 's case (supra).
This Court pointed out in that case as follows at page 8 "If there were promotions in any year in excess of the quota those promotions were merely invalid for that year but they were not invalid for all time.
They can be regularised by being absorbed in the quota for the later years.
That is the reason why this Court advisedly used the expression "and onwards" just to enable the Government to push down ex cess promotions to later years so that these promotions can be absorbed in the lawful quota for those years".
The same procedure will have to be followed in the present case.
Whenever it is found that Assistant Engineers were promoted as officiating Executive Engineers in excess of their quota they would have to be pushed down to later years in order that their promotion may be regularised by being absorbed in their quota for later years.
When recruitment is from two or several ' sources it should be observed that there is no inherent invalidity in introduction of quota system and to Work it out by a rule of rotation.
The existence of a quota and rotational rule, by itself, will not violate article 14 or article 16 of the Constitution (See Marvyn Coutinho & Ors.
vs Collector of Customs, Bombay & Ors.
,(1) and Govind Dattatray Kelkar & Ors.
V. Chief Controller of Imports & Exports & Ors.) .(2) It is the unreasonable implementation of the same which may, in a given case, attract ,he frown of the equality clause.
If the seniority list is now properly prepared in the manner indicated in this judgment, +,here may be no objection on the score of article 14 or article 16 of the Constitution.
In this view of the matter, it is not necessary to pursue the arguments addressed regarding violation of articles 14 and 16 of the Constitution.
To summarise the conclusions (1) When Assistant Engineers (Class 11) are initially appointed in a regular manner in accordance with the rules to, officiate as Executive Engineers, their seniority in service in Grade I will count from the date of their initial officiating appointment in Class I provided their initial officiating appointment as Executive Engineers was within their quota.
(2) Their seniority will not be reckoned from the date of their future confirmation in Class 1.
(1) ; [1967] 2 S.C.R. 29. 9 94 The above principle is, however, suspect to one reservation, namely, if an Assistant Engineer before his confirmation in Class 11 were appointed to officiate in Class I in the grade of Executive Engineer, although within his quota, his seniority will count only from the date of his confirmation in Class 11 as permanent Assistant Engineer notwithstanding his earlier officiating appointment as Executive Engineer.
(3) The quota rule will be enforced at the time of initial recruitment, in an officiating capacity, to the grade of Executive Engineer and not at the time of confirmation.
(4) The quota rule will be enforced with reference to vacancies in all posts, whether permanent or temporary, included in the sanctioned strength of the cadre (except such vacancies as are purely of a fortuitous or adventitious nature) and the operation of the quota rule will not depend upon the availability or non availability of Assistant Executive Engineers for appointment as Executive Engineers.
The non availability of Assistant Executive Engineers for recruitment to the grade of Executive Engineer will not postpone the regular recruitment of the Assistant Executive Engineers as Executive Engineers within their quota.
(5) Once the Assistant Engineers are regularly appointed to officiate as Executive Engineers within their quota they will be entitled to consideration in their own rights as Class I Officers to further promotions.
Their "birth marks" in their earlier service will be of no relevance once they are regularly officiating in the grade of Executive Engineer within their quota.
(6) If Assistant Engineers are recruited as Executive Engineers in excess of their quota in a Particular year they will be pushed down to later years for absorption when due within their quota.
In the result the Writ Petition and the Civil Appeals are allowed.
The judgment of the High Court is set aside.
The respondents 1 to 3 in Writ Petition No. 489 of 1972 (respondent No. 1 being common in the other two Appeals) are directed to amend and revise the 995 seniority list of 1971 (Annexure 'J ') in the light of the directions in this judgment and to give effect thereafter to the revised seniority list so prepared.
The revision of the seniority list shall not, however,.
affect those employees who are not impleaded in the proceedings before this Court and who have already been promoted and confirmed in higher grades in the Service.
Respondents 1 to 3 will pay the costs of the petitioners in Writ Petition No. 489 of 1972 and respondent No. 1 will pay to the appellants in the Civil Appeals costs through out.
C.M.P. No. 1889 of 1974 regarding delay in filling of the counter affidavit on behalf of respondents 1 to 3 in the Writ Petition is.
allowed.
We may observe in the end that it maybe desirable that the time , of this Court may not be consumed in resolving these complex tangles in conditions of service breeding human discontent and the solution thereof is better left to a fair and proper formulation of precise and ' unequivocal statutory rules after examination of the problems with a,.
broad humane approach.
| IN-Abs | The petitioners who were Assistant Engineers (Class II) were promoted to officiate as Executive Engineers in Class I Central Engineering Service by a properly constituted Departmental Promotion Committee.
Respondents 4 to 66 we initially recruited as Assistant Executive Engineers Class I and were promoted to the grade of Executive Engineer.
The vacancies in the grade of Executive Engineer can only be filled by promotion from the aforesaid two grades in the ratio of 75 % and 25%.
The relevant rule reads as under : "75 per cent of the vacancies in the grade of Executive Engineer, Class 1, shall be filled by promotion of Assistant Executive Engineers Clause I., the rest of the vacancies being filled by promotion and or by transfer in accordance with parts 4 and 5 of the rules respectively".
There are no statutory seniority rules.
The petitioners ware shown as junior to respondents No. 4 to 66 and they were not considered for promotion to the higher post of Superintending Engineer, although they have been Executive Engineers for longer period by following the quota rule at the stage of confirmation.
The petitioners contended that their seniority should be determined in accordance with the Home Ministry 's Memorandum dated 22 6 1949.
i.e., the length of service put in by them in the grade of Executive Engineer.
It was contended on behalf of the respondents.
(1) In the quota rule there is an implied rotational system by which only at the time of confirmation of the petitioners as Executive Engineers the seniority may be fixed in accordance with the quota.
(2) Reliance was also placed on the Office Memorandum dated 8 12 1960 issued by the Ministry of Works, Housing and Supply according to which confirmation was to be made by applying rotational method in working out the quota rule.
(3) Vacancies in quota rule means only vacancies in permanent posts.
(4) Quota rule applies at the stage of confirmation and the seniority would be relatable to confirmation.
(5) One third quota cannot be filled in until and unless two third quota is available and filled in.
(6) Since the petitioners had their lien in Class II posts they cannot be expected to belong to 2 grades at the same time.
(7) Memorandum dated 22 6 1949 has no application since it was issued is order to safeguard the interests of the displaced government servants.
980 HELD: (1) When recruitment is from two or several sources there is so inherent invalidity in introduction of quota system and to work it out by a rule of rotation.
The existence of a quota and rotational rule by itself will not violate Article 14 or Article 16 of the Constitution.
[993 E] Mervin Coutinho and Govind Dattatraya Kelkar cases referred to.
It is the unreasonable implementation of the same which may in a given came attract the frown of the equality clause.
[993 E F] (2) The Memorandum dated 8 12 1960 issued by the Ministry of Works, Housing and Supply has not emanated from the Home Ministry which is the appropriate department for issuing instructions n ,service matters under Allocation of Business Rules of the Central Government framed under Article 77(3) of the Constitution.
The said Memorandum also refers to a notification dated 22 11 1960 of the Home Ministry which ha , not been produced.
The said Memorandum, therefore.
cannot be availed of.
The High Court wrongly relied upon the Memorandum dated 8 12 1960.
[987 B D] (3) Words "vacancies in the grade of Executive Engineer" include both vacancies in the permanent posts as well as in temporary posts since the cadre consists of both permanent and temporary posts.
The quota rule will be enforced with refer ence to vacancies in all posts, whether permanent or temporary, included in the sanctioned strength of the cadre (except such vacancies as are purely of a fortuitous or adventitious nature).
[991 H 992 A; 994 C D] (4) The quota rule will be enforced at the time of initial recruitment in officiating capacity to the grade of Executive Engineer and not at the time of confirmation.
[994 B C] (5) The argument that one third quota cannot be filled in unless two third quota was exhausted was negatived as the argument if accepted would introduce sterility in the quota rule so far as the promotees are concerned.
Their hopes and aspirations cannot be related to the availability of the direct recruits to fill two third quota.
Each quota will have to be worked independently on its own force.
The word "rest ' in the quota rule cannot be pressed into service to defect the object of the rule coming in aid of advancement of prospects of promotees.
[991 A B] The case of Bishan Sarup Gupta applied.
(6) There is a well recognised distinction between promotion and confirmation.
The tests to be applied for the purposes of promotion and confirmation are entirely different.
[989 F G] (7) Memorandum dated 22 6 1949 will clearly apply and Memorandum dated 22 12 1959 is not applicable in this particular case.
[985 F G] Union of India & Ors.
vs Ravi Varma and others, etc.
; , , followed (8) In view of the judgment in the Writ Petition the Judgment of the full Bench of Delhi High Court was set aside.
[994 H]
|
Civil Appeal No. 208 of 1973.
From the Judgment and order dated the 25th September, 1973 of the Patna High Court in Election Petition No. 4 of 1972.
K. K. Prasad, K. K. Sinha and section K. Sinha for the appellant.
K. P. Varma, D. P. Mukherjee and D. Goburdhan for respondent No. 1.
U. section Prasad for respondent No. 3.
The Judgment of the Court was delivered by SARKARIA, J.
Election from 168 Katoria Bihar Legislative Assembly Constituency took place in March, 1972.
The poll was held on March 11, 1972 and the votes were counted on March 12, 1972.
Respondent No. 1 herein, an independent candidate, % as declared elected having secured 16649 votes as against 16074 polled by the appellant, a nominee of Indian National Congress (R).
There were three other candidates (Respondents 2 to 4) who secured 2347, 8001 & 1542 votes respectively.
The votes rejected as invalid, were 1219.
On April 14, 1972, the appellant filed an election petition under the Representation of the People Act, 1951 challenging the election of the returned candidate on the ground that several irregularities and illegalities were committed in the counting of votes.
The petition was resisted by the returned candidate.
The High Court framed issues, recorded the evidence produced by the parties 23 and held that the allegations had not been substantiated.
It declined the request for a recount and dismissed the petition.
Hence this appeal by the petitioner.
Mr. Prasad, learned Counsel for the appellant contends that the following irregularities/illegalities in the counting had been established : (1) Four unauthorised persons, viz., Ajudhya Prasad Singh, Q. M. Zaman, Parvez Ahmed and Radhey Sham Sah were allowed to work as Counting Supervisors at tables 4, 5, 7 and 9 in breach of the rules, and this had vitiated the counting.
(2) In the first round of counting at table No. 4 in the box relating to polling station No. 74, Madhopur U.P. School, 50 unsigned ballot papers were found in excess of those actually polled.
When this was detected and brought to the notice of the Assistant Returning officer, he, in violation of Rule 93(1) of the Conduct of Election Rules (for short, called the Rules) and to cover up the irregularity, opened that packet and inspected those unused ballot papers.
(3) The detailed result sheet which was inter alia prepared tablewise, in accordance with the instructions of the Election Commission, has been deliberately suppressed to prevent detection of mistakes and manipulations made in the counting.
(4) About 600 700 uncounted ballot papers in bundles were kept below his table by the Assistant Returning Officer.
In the final round of counting, despite protest, 600 votes were counted twice, in favour of Respondent No. 1.
That was why the petitioner who at the end of the third round was leading by a margin of 2205 votes, was shown having lost by 575 votes to Respondent No. 1, notwithstanding the fact that in the last round there were only 3800 ballot papers to be counted.
Before dealing with these contentions, we may recall, what this Court has repeatedly said, that an order for inspection and recount of the ballot papers cannot be made as a matter of course.
The reason is two fold.
Firstly such an order affects the secrecy of the ballot which under the law is not to be lightly disturbed.
Secondly, the Rules provide an elaborate procedure for counting of ballot papers.
This procedure contains so many statutory checks and effective safeguards against trickery mistakes and fraud in counting, that it can be called almost fool proof.
Although no, hard and fast rule can be laid down, yet the broad guidelines, as discernible from the decisions of this Court, may be indicated thus : The Court would be justified in ordering a recount of the ballot papers, only where : (1) the election petition contains an adequate statements of all the material facts on which the allegations of 24 irregularity or illegality in counting are founded; (2).
On the basis of evidence adduced such allegations are believing that there has been a mistake in counting prima facie established, affording a good ground for and (3) the Court trying the petition is prima facie satisfied that the making of such an order is imperatively necessary to decide the dispute and to do complete and effectual justice between the parties.
The contentions advanced in this case are to be tested in the light of these principles.
Since, on the whole, we agree with the findings and the conclusion of the court below, we will confine the discussion to the broad features of the case and the legal aspects of the contentions canvassed before 'US.
The first contention is that four unauthorised persons were allowed to act as Counting Supervisors at tables Nos. 4, 5, 7 and 9.
The argument proceeds that the list of all the persons who were appointed as Counting Supervisors/Counting Assistants, was summoned from the office of the District Election Officer, and in response thereto, the list exhibit 6, has been produced.
It is argued that since the names of Ajudhya Prasad Singh, Q. M. Zaman, Parez Ahmed and Radhey Sham Sah do not find mention in Exh. 6, they were never appointed to act a, , Counting Supervisors.
In this connection, reference has been made to the application filed on April 14, 1972, by the petitioner for summoning documents, the list exhibit 6, and the Check Memos (exhibit C/3, exhibit C/4, exhibit C/6 and exhibit C/8).
The Check Memos show that the aforesaid persons actually supervised the counting at tables Nos. 4, 5, 7 and 9.
It may be noted that there is not even an oblique hint in the election petition that any unauthorised person was allowed to act as Counting Supervisor or Counting Assistant.
Such an allegation was made for the first time in the application, dated 3 7 1973.
This application seeking a recount was made at the stage of final arguments, after the parties had closed their evidence.
It is true that in cross examination the Returning Officer and the Assistant Returning Officer were questioned by the Counsel for the petitioner with regard to the authorisation of these persons to act as Counting Supervisors.
But that could hardly constitute an adequate notice to the Respondent of this new plea which was sought to be smuggled into the case in a questionable manner at the belated stage.
The Respondent could be justified in assuming that the evidence on this plea which was not even faintly adumberated in the petition nor put in issue would not be looked into by the Court.
In any case at that stage the Respondent had no opportunity or right to produce evidence to show that apart from 'the list.
6, there was other record showing that the aforesaid persons were duly appointed by the Returning Officer to act as Counting SuperviSors.
25 Be that as it may, it has not been shown that these four persons who took part in the counting, were unauthorised persons.
It is not disputed that the are all Government officials.
The mere fact that their names do rot appear in Exh.
6 does not exclude the probability of their having been appointed and kept in reserve by a separate order or orders to act as Counting Supervisors in case of need.
That such appointments were made and a waiting list of such appointees in reserve was prepared, is clear from the answer that the Returning Officer (R.W. 14), Mr. Sinha, gave to a Court question "If an officer of this list did not turn up in time to participate in the counting then in his place another officer had to be appointed from the waiting list that was maintained in my office regarding this matter.
That waiting list contained the names of officers reserved whose services were to be utilised in case, any of the appointed officer did not turn up or % as subsequently exempted from working as such inside the counting hall.
" In reply to a further question put by the petitioner 's Counsel, the Returning Officer reiterated "There was a reserved list like this in my office regarding this matter which had been prepared under my orders." The fact that such a list of officials in reserve was prepared and exists receives further support from the evidence of R.W. 18 and R.W 19 who had worked as Counting Supervisors at tables Nos. 6 and 3.
respectively.
The petitioner appeared in the witness box as P.W. 19 on 7 5 1973.
Even then he did not make any allegation that any unauthorised persons had been admitted into the Counting Hall.
His Chief Counting Agent who appeared as P.W. 13, also did not allege anything of this kind.
The circumstances of this case fully attract the maximum omnia praesumuntur rite esee acta, and it would be presumed that the aforesaid four persons were rightly and regularly appointed and admitted into the Counting Hall to act as Counting Supervisors, by the Returning Officer.
On this score no violation of Rule 53 or any other statutory provision has been shown.
Now we turn to the second contention of Mr. Prasad.
The argument is that at the first round of counting in the box of Polling Station No. 74 (Madhopur), fifty unsigned ballot papers were found in excess of those polled.
This irregularity, it is submitted, was brought to the notice of the Returning Officer by Prof. Yadav, the Chief Counting Agent of the appellant, but to no avail.
Part I of exhibit 4 is the Ballot Paper Account sent by the Presiding Officer of Polling Station No. 74.
Its Part 11 contains the result of the initial counting of those ballot papers at table No. 4.
In Part 1, in column No. 2(a), the number of unused ballot papers is shown as 397, and in column 3, the number of ballot papers issued to voters is given as 323.
In Part 11, column 1, the total number of ballot papers found 26 in the ballot box used at the polling station, is entered as 373, and in column 2, captioned Discrepancy, if any etc. ', it is written "Found fifty excess including one ballot paper unsigned".
The entries in columns 1 and 2 of Part II purport to bear the signature of the Counting Supervisor, R. Shyam Sah who was not examined by either side.
It is common ground that when this discrepancy was brought to the notice of the Assistant Returning Officer and the Returning Officer, the sealed packet of the unused ballot papers was opened and the papers were counted.
The result of that count is to be found noted on the back of exhibit 4 by the Assistant Returning Officer, thus : "On verification by counting the actual number of unused ballot papers by opening the statutory packet in presence of the Returning Officer and the candidates,/agents, it was found that only 347 unused ?) ballot papers have been returned.
This settles the discrepancy in the ballot paper account.
" Under it is the endorsement of the Returning Officer to the effect "This was done by (A.R. O?) in my presence.
" The Assistant Returning Officer stated in the witness stand as R.W. 13, that in the Ballot paper Account, the total number of unused ballot papers was wrongly shown as 397, while it should have been 347, which was the actual number of ballot papers found in the packet.
Thus, the physical verification revealed that this apparent discrepancy did not actually exist.
The court below has accepted the genuineness of the endorsements of the Assistant Returning Officer (R.W. 13) and the Returning Officer (R.W. 14) on exhibit 4 and the evidence of those officers in preference to the, interested statements of the Counting Agent (P.W. 9) and the Chief Counting Agent (P.W. 13) of the petitioner.
It has also found that only one unused ballot paper was found unsigned, and not fifty.
We have no good reason to differ from those findings.
Indeed the main burden of the arguments of Mr. Prasad, is that the Assistant Returning Officer/Retarning Officer was not competent to open the packet of unused ballot papers and inspect the same as such a course was expressly forbidden by Rule 93 (1) of the Rules.
It is stressed that this illegality vitiating the counting, was itself a good ground for ordering a recount.
Rule 93 reads "Production and inspection of election papers. (1) While in the custody of the district election officer or, as the case may be, the returning officer (a) the packets of unused ballot papers with counterfoils attached thereto; (b) the packets of used ballot papers whether valid, tendered or rejected; 27 (c) the packets of the counterfoils of used ballot papers; (d) the packets of the marked copy of the electoral roll or, as the case may be, the list maintained under sub section (1) or sub section (2) of section 152; and (e) the packets of the declaration by electors and the attestation of their signature; shall not be opened and their contents shall not be inspected by, or produced before, any person or authority except under the order of a com petent court.
(2) Subject to such conditions and to the payment of such fee as the Election Commission may direct, (a) all other papers relating to the election shall be open to public inspection; and (b) copies thereof shall on application be furnished.
(3) Copies of the returns by the returning officer forwarded under rule 64, or as the case may be, under clause (b) of sub rule (1) of rule 84 shall be furnished by the returning officer, district election officer, chief electoral officer or the Election Commission on payment of a fee of two rupees for each copy.
For understanding the import and object of Rule 93, it would her appropriate to have a short and swift glance at the scheme of them Rules.
Part V of the Rules makes provision with regard to "Counting of Votes in Parliamentary and Assembly Constituencies.
" It cover&.
Rules 50 to 66.
Part VI relates to "Voting at Elections by Assembly Members and in Council Constituencies" '.
It includes Rules 67 to 70.
Part VII provides for "Counting of votes at Elections by Assembly Members or in Council Constituencies".
It contains Rules 71 to 85.
It will be, seen that Rule 93 has not been placed in any of the Parts relating to counting of votes.
It seems to have been advisedly placed ' in Part TX captioned "Miscellaneous", which in the serial order comes after the Parts dealing with voting and counting of votes.
Viewed in the light of the scheme of the Rules, and its setting, the language of Rule 93 seems to us clear enough to indicate that the custody of the District Election Officer or the Returning Officer spoken of in the Rule is a post election custody.
Such an indication is available in the words "unused ballot papers" which repeatedly occur in this rule.
The word "unused" in the context means that which "was made available for use in the election but remained unused in the election".
Sub rule (3) of the Rule enables the authorities mentioned therein to issue copies of the returns forwarded by the Returning Officer under Rule 64 or Rule 84(1) (b).
The supply of such copies will obviously be a post election function.
28 Any other interpretation of Rule 93 and its scope would make it difficult, if not altogether impossible, for the Returning Officer to perform the various functions and duties enjoined by the rules at the stage of counting.
This will be clear from a reference to the other Rules.
Take for instance Rule 56 which requires that the ballot papers shall first, be taken out from the boxes used in a constituency and mixed together and then arranged in convenient bundles and scrutinised.
Subrule (2) of Rule 56 further requires inter alia that if a ballot paper does not bear any mark at all or does not bear both the mark or the signature which it should have borne under the provisions of sub rule (1) of Rule 38, it shall be rejected by the Returning Officer.
To perform this duty it would be absolutely necessary for the Returning Officer to inspect such ballot papers.
Indeed, in the present case, in ,objection was raised that fifty unused ballot papers in the packet did not bear the mark or signature required by Rule 38(1).
The Returning Officer was therefore, fully competent to open the packet and inspect and count the ballot papers found therein.
Instruction 23 in the Hand Book issued by the Election Com mission, also indicates that R. 93(1) operates at a post election stage.
Under this instruction, the Returning Officer is required to seal the packets of all the papers relating to the election, specified in Clauses (a), (b), (c), (d) and (e) of R. 93(1) immediately after the counting of the votes is over, with his own seal and also with that of the Commission.
After the: sealing, the packets are to be put in a separate steel box which shall be locked with two locks and each lock shall be sealed.
Immediately after the declaration of the election results the sealed box is to be despatched to the District Election Officer who on receipt of the same shall forthright deposit it in safe custody in the Treasury under double lock.
The key of one of the locks is entrusted to the Treasury Officer.
In Union Territories such a deposit is to be made by the Returning officer.
The secret seals of the Commission are returned immediately after their required use.
Thus, it is clear that the custody contemplated by Rule 93(1) is the post election custody.
In the light of the above discussion, the conclusion is inescapable that the act of the Returning Officer in opening.
the packet, and in inspecting and counting the unused ballot papers found therein, far from amounting to an illegality, was necessary for the due performance of the duty enjoined on him by the Rules.
Accordingly, we overrule this contention.
It is urged that the detailed result sheet, prepared candidatewise, table wise and roundwise, from which figures mentioned in the final result sheet (Exh. 7) were extracted has been deliberately withheld to prevent detection of the hanky panky done in the counting.
Such a detailed result sheet, it is maintained, was required to be prepared and was admittedly prepared under instruction No. 17(q) in the Hand Book for Returning Officers (1970)" issued by the Election 'commission.
The contention appears to be attractive but does not stand a close examination.
29 Instruction 17(q) in the Hand Book runs thus "Side by side, the work of tabulating the result of counting shall be done.
The Check Memos duly signed by the Returning Officer shall be passed on to an officer seated at a separate table near the Returning Officer/Assistant Returning Officer.
This officer shall fill in the result of counting of each round of each table in Form 20.
It is desirable that a separate sheet for each round is used for the purpose.
Copies of Form 20 may be printed, cyclostyled or type written.
The entries in the form should be made on loose sheets prepared for the purpose.
A copy of Form 20 is at Annexure XIII.
" A perusal of Form 20 prescribed under rule 56(7) of the Rules would show that, it does not require that the final result sheet should be prepared tablewise, also.
It is sufficient if the final result sheet is candidate wise and round wise.
The final result sheet (Exh. 7) exactly conforms to the prescribed Form 20.
The Assistant Returning Officer (R.W. 13) in cross examination said : "On the above table where the entries used to be made in the result sheets from the check memos, those entries were made candidate wise, table wise and round wise.
The figures of total votes of the different rounds of counting, as mentioned in this abstract result sheet, Exh. 7, (the witness looks into it) were not directly taken from the figures as they found mention in the different check memos of the different tables of the different rounds of counting, but from these check memos the figures were first extracted on the detailed result sheet giving their numbers round wise, candidate wise and table wise and thereafter those figures were totalled round wise and extracted in this Exh. 7.
" From the statement of R.W. 13 extracted above, it would appear that at first a detailed result sheet in which figures were tabulated candidatewise, tablewise and roundwise was I prepared, and then, therefrom, all the figures, excepting.those showing table wise break up, were carried over to the final result sheet, Exh. 7, drawn up in the prescribed Form 20.
This detailed result sheet, though summoned, is not forthcoming from the District Election Officer might be, it hag been misplaced.
Might be, it was destroyed by the Counting Staff after the preparation of the final result sheet in the prescribed Form.
Whatever be the case, the absence of that document, does not make the checking and verification of the figures entered in the final result sheet, Exn. 7 impossible or even difficult.
Its preparation is not a requirement of any statutory provision.
It is prepared only as a matter of convenience in view of the instructions of the Election Commission, by carrying over, collating and totalling the figures from the Check Memos containing tablewise figures of each round of counting.
It is a sort of rough intermediary tabulation intended to facilitate the compilation of the final result sheet in the prescribed form.
The basic figures from which the final result sheet, whether detailed or abstracted, are worked out are 30 given in the Check Memos pertaining to the various counting tables.
,Such Check Memos are available and indeed reference to some of them namely, Exh. C/3, C/4, C/6 and C/8 was specifically made before us. 'The correctness or otherwise of the figures given in exhibit 7 could easily 'be verified by tallying the same with the aggregate of those given in the Check Memos.
Indeed, no argument has been advanced before us that the figures given in the final result sheet, exhibit 7, would not agree with the figures taken and totalled from the Check Memos.
We therefore, repel this contention.
This bring us to the last contention.
The argument advanced by Mr. Prasad is that during the fourth round of counting, 600 to 700 unused and uncounted ballot papers in bundles of 25 each were detected by the petitioner 's counting agent, Jagannath Sah, lying under the table of the Assistant Returning Officer.
Jagannath Sah protested.
The Assistant Returning Officer, however, put those uncounted ballot papers in the lot of counted votes.
P.W. 13 also, on coming to know about it, protested against that mixing.
In support of this contention, ,Counsel has.referred to the circumstance that at the end of the third round of counting, the appellant was leading by a margin of 2205 votes.
It is urged, this lead of 2205 votes could not thereafter be turned into a deficit of 575 votes when the total number of ballot papers that remained to be counted in the last round, was 3800 only.
Like the elusive cloud, this ground of objection, also, has been ever changing its hue and shape.
In the application 'Exh. 3, for a recount which was submitted by the petitioner to the Returning officer ,at 7 p.m. towards the close of.
the final round of counting all that was stated, was : "It is respectfully submitted that recounting of 168 Katoria Assembly Constituency be done.
Because one bundle of 600 votes have been recounted again.
All the votes be recounted.
" It was not alleged therein, even in an embryonic form that 600 uncounted votes in bundles were detected lying underneath the table of the Assistant Returning Officer.
Such an allegation, appeared for the first time in the election petition which was filed about 33 days after the election.
What was earlier said to have been 'counted twice over ', had now become completely 'uncounted '.
What was then alleged in exhibit 3 to have been counted on the table, has now gone underneath the table.
The original allegation in exhibit 3 (which was repeated in the second application, exhibit 3a, presented at 7 40 p.m.) was manifestly untenable.
because if there was double counting of any ballot papers, the total of the votes polled should have exceeded by the number doubly counted.
No such excess was reflected in the grand total of the final result sheet.
The total was correct.
The petitioner bad no explanation as to why the grand total of the final result sheet did not show an excess of 600 or any other number of ballot papers.
It was mainly for this reason, that the Returning Officer had rejected the applications of the petitioner for a recount.
That is why the petitioner has now come forward with a changed version, invented as an after thought.
31 The final result sheet, Exh. 7, falsifies his present contention also.
it shows that at the end of the third round, the appellant was leading by a margin of 424 votes only.
There is no good reason to doubt the authenticity of the figures given in Exh. 7.
As against it, the notes, exhibit 2 Series, on which the petitioner relies for his contention that at the end of the third round he was leading by 2205 votes, was a self serving and wholly unreliable piece of evidence.
These notes (Exh.
2 series) were not mentioned in the list of reliance filed along with the petition.
There is no reference to any such notes or their contents in the appli cations Exhs. 3 and 3a.
These notes are said to have been made by the Counting Agents of the petitioner at the time of counting.
But in the initial list submitted by the petitioner on 30 8 1972 for summoning among others his Counting Agents as witnesses, it was not mentioned that they would produce any such notes.
Subsequently on 28 3 1973 he moved the court requesting that these witnesses be required to bring their notes.
In these circumstances, the High Court was right in holding that these notes had been subsequently brought into existence for the purpose of this petition.
For the foregoing reasons, we are of the opinion that the appellant has been unable to make out a good case for a recount of the ballot papers.
We dismiss his appeal.
He shall pay the costs of Respondent No. J. V.M.K. Appeal dismissed.
| IN-Abs | In the election from 168 Katoria Bihar Legislative Assembly constituency, the Respondent No. 1 was declared elected having secured 16649 votes as against 16074 polled by the appellant.
The votes rejected as invalid were 1219.
The appellant filed an election petition challenging the election of the returned candidate on the ground that several irregularities and illegalities were committed in the counting of votes.
The petition was resisted by the returned candidate.
The High Court framed issues, recorded the evidence produced by the parties and held that the allegations had not been substantiated.
It declined the request for a recount and dismissed the petition.
Hence this appeal by the petitioner.
It was contended for the appellant : (i) Four unauthorised persons were allowed to work as Counting Supervisors at tables 4, 5, 7 and 9 in breach of the rules and this had vitiated the counting, (ii) When the fact, that, 50 unsigned ballot papers relating to polling station No. 74 were in excess of those actually polled, was brought to the notice of the Assistant Returning Officer, he, in violation of Rule 93(i) of the Conduct of Election Rules and to cover up the irregularity, opened that packet and inspected those unused ballot papers; (iii) The detailed result sheet prepared tablewise in accordance with the instructions of the Election Commission has been deliberately suppressed to prevent detection of mistakes and manipulations made in the counting, and (iv) Despite protest, 600 votes were counted twice in favour of Respondent No. 1.
Rejecting the contentions and dismissing the appeal, HELD : The court would be justified in ordering a recount of the ballot papers, only where : (1) the election petition contains an adequate statements of all the material facts on which the allegations of irregularity or illegality in counting are founded.
(2)On the basis of evidence adduced such allegations are prima facie established, affording a good ground for believing that there has been a mistake in counting and; (3) the Court trying the petition is prima facie satisfied that the making of such an order is imperatively necessary to decide the dispute and to do complete and effectual justice between the parties.
[23H; 24A B] (i) There is not even an oblique hint in the election petition that any unauthorised person was allowed to act as Counting Super visor or Counting Assistant.
It was made at the stage of final arguments in the application seeding a recount.
Questioning the Returning Officer and the Assistant Returning officer in this regard during cross examination, could hardly constitute an adequate notice to the Respondent of this new plea.
That apart, neither the petitioner nor his chief Counting Agent alleged anything of this kind.
All the four persons are Govt.
Officials.
The fact that their names do not appear in exhibit 6 does not exclude the probability of their having been appointed and kept in reserve by a separate order or orders to act as counting Supervisors in case of need.
That such appointments were made and a waiting list was prepared is disclosed in the evidence of the Returning Officer, and it receives further support from the Evidence of R.W. 18 22 and R.W. 19.
The circumstances of this case fully attract the maxim omnia praesumuntur rite esse acta, and it would be presumed that the aforesaid four persons were rightly and regularly appointed and admitted into the Counting Hall to act as Counting Supervisors, by the Returning Officer.
On this score no violation of Rule 53 or any other statutory provision has been established.
[24F H; 24A E] (ii) The act of the Returning Officer in opening the packet, and inspecting and counting the unused ballot papers found the rein, far from amounting to an illegality, was necessary for the due performance of the duty enjoined on him by the Rules.
The language of Rule 93 is clear enough to indicate that the custody of the District Election Officer or the Returning Officer spoken of in the Rule is a postelection custody.
Indeed, in the present case, an objection was raised that fifty unused ballot papers in the packet did not bear the mark or signature required by Rule 38(1).
The Returning Officer was therefore, fully competent to open the packet and inspect and count the ballot papers found therein.
[28F; C] (iii) The absence of a detailed result sheet showing tablewise figures of each round of counting does not make the verification of the figures collated in the final result sheet drawn up in Form 20, impossible or even difficult as such figures can always be checked with the aid of Check Memos which contain tablewise figures of each round.
[29G H] (iv) In the application for a recount submitted to the Returning Officer, the appellant alleged that 600 votes constituting one bundle, have been "recounted again".
But it was not alleged therein, even in an embryonic form, that 600 uncounted votes in bundles were detected lying underneath the table of the Assistant Returning Officer.
Such an allegation appeared for the first time in the election petition filed 33 days later.
The original allegation was untenable because such an excess was not reflected in the grand total of the result sheet.
The total was correct.
The result sheet falsified the subsequent contention also which had been put forward as an afterthought.
[30F H]
|
Appeal No. 1672 of 1973.
Appeal by special leave from the judgment and order dated the 9th January, 1973 of the Madras High Court in C.R.P. No. 2486 of 1972.
Y. section Chitale, C. section Prakasa Rao and A. T. M. Sampath, for the appellant.
K. section Ramamurthy, V. Subramanian and Vineet Kumar, for the respondent.
The judgment of the Court was delivered by BHAGWATI J.
There were fifteen applicants before the Regional Transport Authority, Chingleput for grant of a stage carriage permit to ply a bus on the route Red Hills to Kancheepuram.
This route covers a distance of 501 miles of 81.27 kilometers and is a 'long :route, ' within the meaning of that expression as used in rule 155A of the Motor Vehicles Rules, 1940.
Out of fifteen applicants, only two are before us, namely, the appellant and the respondent.
The appellant was applicant No. 7, while the respondent was applicant No. 6.
The Regional Transport Authority, after considering the applications, made an order dated 19th June, 1971 granting the permit to the respondent, though on marking according to the provisions contained in clause (3) of rule 155A, the respondent obtained only 7.40 marks as against 9.00 marks obtained by the appellant.
The main ground ,on which the Regional Transport Authority preferred the respondent to the appellant was that the respondent was a single bus operator, while the appellant was a multi bus operator having four stage carriage permits including a stage carriage permit recently granted to him.
The appellant and seven other applicants, who were aggrieved by the decision of the Regional Transport Authority, granting a permit to the respondent, preferred appeals before the State Transport Appellate Tribunal impleading the respondent as the opposite party in the appeals.
The State Transport Appellate Tribunal took the.
view that at tile date of the consideration of the applications by the Regional Transport 93 Authority, the respondent had a workshop but it was housed only in a thatched shed and not in a pucca fire proof building and the respondent was, therefore, not entitled to two marks under clause (3) (E) of rule 155A and his total marks should, therefore, have been 5.40 and not 7.40.
The Regional Transport Authority had refused to grant two marks to the appellant on account of sector qualification on the ground that he had been plying only on temporary permits but this view did not find favour with the State Transport Appellate Tribunal which held that under clause (3) (C) of rule 155A it was immaterial whether sector experience was derived by an applicant under a temporary permit or a permanent permit and the appellant was, therefore, entitled to two marks under that clause on account of sector experience even though gained by operation on temporary permits.
So far as the past record was concerned, the State Transport Appellate Tribunal relied heavily on the fact that the history sheet of the appellant was clean without any adverse entry while the respondent had one adverse entry in the history sheet relating to his single stage carriage and four adverse entries in the history sheet relating to his lorry operation.
The State Transport Appellate Tribunal also pointed out that a portion of the route fell within the interior roads and it was, therefore, desirable in public interest to prefer "an experienced operator instead of single bus operator".
Having regard to these considerations the State Transport Appellate Tribunal set aside the order of the Regional Transport Authority granting permit to the respondent.
The State Transport Appellate Tribunal then proceeded to consider who amongst the appellants before it deserved to be granted permit.
After considering the claim of the appellants before it, the State Transport Appellate Tribunal took the view that since the appellant had higher marks which reflected his superior qualifications and was an experienced operator with a clean history sheet, he was entitled to be preferred to the other appellants and in this view, the State Transport Appellate Tribunal, by an order dated 23rd September, 1972, granted permit to the appellant.
The respondent thereupon preferred a revision application to the High Court under section 64B of the Madras Vehicles Act, 1939.
The learned Single Judge, who heard the revision application, held that the State Transport Appellate Tribunal had acted with material irregularity in exercise of its jurisdiction in preferring the appellant to the respondent for the grant of permit.
There were in the main five reasons which prevailed with the learned Single Judge in taking this view in favour of the respondent.
First, the learned Single Judge held that though according to the provisions for marking contained ' in clause (3) of rule 155A the appellant had admittedly more marks than the respondent, that was not ' a determinative factor because rule155A was itself subject to the overriding consideration of public interest emphasised in section 47(1) of the Act and public interest required that in the socialist pattern of society which we had adopted monopoly should as far as possible be avoided and a smaller operator with one stage carriage permit should be preferred to a bigger operator having three or more stage carriage permits.
This important consi deration was ignored by the State Transport Appellate Tribunal in 94 preferring the appellant to the respondent.
Secondly, the State Transport Appellate Tribunal had over looked the, fact that the appellant was a recent grantee of a stage carriage permit though it was a relevant circumstance which weighed against the appellant in the process of comparison with the respondent.
Thirdly, a proper standard of comparison was not applied in considering the rival claims of the appellant and the respondent.
Though the history sheet of the res pondent in regard to his performance, as a lorry operator was scanned by the State Transport Appellate Tribunal over a period of ten years, no such scrutiny was made in the case of the appellant of the history sheet relating to his stage carriage operation for the past ten years and this vitiated the order of the State Transport Appellate Tribunal.
Fourthly, the respondent was entitled to two marks on account of workshop under clause (3) (E) of rule 155A and these had been wrongly denied by the State Transport Appellate Tribunal, and lastly, the appellant was not entitled to two marks on account of sector experience under clause (3) (C) of rule 155A since the sector experience claimed by him was on the basis of operation on temporary permits.
The learned Single Judge accordingly allowed the revision application and set aside the order of the State Transport Appellate Tribunal granting permit to the appellant.
The result was that the order of the Regional Transport Authority granting permit to the respondent was restored.
The appellant was obviously aggrieved by this order made by the learned Single Judge and he accordingly preferred the present appeal with special leave obtained from this Court.
We will first dispose of the last two reasons which prevailed with the learned Single Judge in interfering with the order of the State Transport Appellate Tribunal.
So far as the claim of the respondent 'for two marks in respect of workshop under clause (3) (E) of rule 155A is concerned, we agree with the learned Single Judge that the 'State Transport Appellate Tribunal was in error in refusing that claim. 'The Regional Transport Officer under instructions from the Regional Transport Authority inspected the workshop of the respondent and found that it was in a pucca fire proof building and the respondent was accordingly entitled to two marks under clause (3) (E) of rule 155A.
But that would not make any difference because even with these two marks, the total number of marks of the respondent would not exceed 7.40 as against 9 marks of the appellant.
Moreover, ,these 9 marks, do not include two marks on account of sector experience under clause (3) (C) of rule 155A.
The State Transport Appellate Tribunal gave two marks to the appellant on account of sector experience but the learned Single Judge took a different view.
We do not think the learned Judge was right in refusing two marks to the appellant on this count.
Clause (3) (C) of rule 155A provides that two marks shall be awarded to the applicant who on the date of consideration of the application by the Regional Transport Authority has been plying a stage carriage on the entire route:.
It does not contain any restriction that in order to be entitled to these two marks the applicant should have been plying on the route; on the basis of a permanent permit.
It is immaterial whether the applicant has been plying ton the route on a temporary permit or a permanent permit.
What is 95 material is that the applicant should have experience of plying on the route and this experience would be there whether plying is done on a temporary permit or on a permanent permit.
The appellant was, therefore, entitled to two marks on account of sector experience under clause (3)(C) of rule 155A and that would raise his total number of marks to 11.
The position, therefore, was that the appellant was entitled to 11 marks as against 7.40 of the respondent.
But that by itself would not be determinative of the controversy.
The paramount consideration to be taken into account in determining as to which of the applicants should be selected for grant of permit always is public interest.
Section 47(1) provides in so many words that the Regional Transport Authority shall, in considering an application for a stage carriage permit have regard inter alia, to "the interest of the public generally", and this is a consideration which must necessarily outweigh all others.
It is ultimately on the touchstone of public interest that selection of an applicant for grant of permit must be justified.
Clause (3) of rule 155A undoubtedly provides for giving of marks to the rival applicants but the number of marks obtained by each applicant can only provide a guiding principle for the grant of permit.
It can never override the consideration of public interest which must dominate the selection in all cases.
In fact clause (4) of rule 155A concedes that after the applicants are ranked according to the total marks obtained by them the applications shall be disposed of in accordance with the provisions of section 47(1).
The fact that the appellant had 11 marks as against 7.40 of the respondent would certainly be a factor in favour of the appellant, but notwithstanding his higher marks, if public interest so requires, he may have to yield place to the respondent in the matter of selection for grant or permit.
Now, two circumstances were relied upon by the learned Single Judge for outweighing the higher marks obtained by the appellant and justifying the grant of permit to the respondent in public interest.
The first was that the respondent was a single bus operator while the appellant was a multi bus operator having four stage carriage permits and the second was that one of the stage carriage permits was recently granted to the respondent and hence he was in terms of the 'motor vehicle jurisprudence ' a "recent grantee".
Both these circumstances by themselves are not sufficient to constitute such requirement of public interest as to outweigh the higher marks obtained by the appellant.
This Court had occasion to consider in Ajantha Transports (P) Ltd., Coimbatore vs M/s. T. V. K. Transport, Pulampatti, Coimbatore Dist.(1) the relevance of possession of more than one permit as also recent grant in selecting an applicant for grant of permit and Beg, J., speaking on behalf of the Court, stated the law on the subject in the following words : "It should be clear when the main object, to which other considerations must yield in cases of conflict, of the permit issuing powers under sec.
47 of the Act is the service of (1) ; 96 interest of the public generally, that any particular fact or circumstances, such as a previous recent grant in favour of an applicant or the holding of other permits by an operator, cannot by itself, indicate how it is related to this object.
Unless, there are other facts and circumstance which link it with this object the nexus will not be established.
For instance, an applicant may be a recent grantee whose capacity to operate a transport service efficiently remains to be tested so that a fresh grant to him may be premature.
In such a case, another applicant of tested efficiency may be preferred.
On the other hand, a fresh grantee may have within a short period, disclosed such superiority or efficiency or offer such amenities to passengers that a recent grant in his favour may be no obstacle in his way at all.
Again, the fact that an applicant is operating other motor vehicles on other permits may, in one case, indicate that he had excee ded the optimum, or, has a position comparable to a monopolist, but, in another case, it may enable, the applicant to achieve better efficiency by moving towards the optimum which seems to be described as a "viable unit" in the rules framed in Madras in 1968.
Thus, it will be seen that, by itself, a recent grant or the possession of other permits is neither a qualification nor a disqualification divorced from other circumstances which could indicate low such a fact is related to the interests of the public generally.
It is only if there are other facts establishing the correlationship and indicate its advantages or disadvantages to the public generally that it will become a relevant circumstance.
But, in cases where everything else is absolutely equal as between two applicants, which will rarely be the case, it could be said that an application of principle of equality of oppor tunity, which could be covered by Article 14, may enable a person who is not a fresh grantee to obtain a preference.
" It would, therefore, be seen that the mere fact that an applicant has more than one permit or he is a recent grantee cannot by itself be regarded as a factor against him in the comparative scale.
It would all depend on the facts and circumstances of each case.
As 'pointed out by Beg, J., in the case just cited : "an applicant may be a recent grantee whose capacity to operate a transport service efficiently remains to be tested so that a fresh grant to him may be premature on the other hand.
a fresh grantee may have within a short period disclosed such superiority or efficiency or offer such amenities to passengers that a recent grant in his favour may be no obstacle in his way at all a recent grant could not, considered by itself and singly, be, converted into a demerit".
Similarly, possession of more than one permit also cannot by itself, divorced from other circumstances, be regarded as a disqualification.
It may in a given case show that the applicant has already reached the viable unit of five stage carriages contemplated under 'clause (3) (F) of rule 155A or that the effect of granting permit to him would be to make him a monopolist on the route a result disfavoured by the decision of this Court in Sri Rama 97 Vilas Service (P) Ltd. vs C. Chandrasekharan & Ors.(1) as being inconsistent with the interest of the general public or, on the other hand, it may be a circumstance in his favour enabling him to achieve greater efficiency by moving towards the optimum of viable unit.
The learned Single Judge, was, therefore, in error in rejecting the claim of the appellant to the grant of permit by mechanically relying on the circumstance that the appellant was a multi bus operator having four stage carriage permits, including a recent grant without considering how in the light of the other facts and circumstances, it was correlated to the question of public interest.
There was nothing to show that this circumstance would have, any prejudicial or adverse impact on public interest, if permit were granted to the appellant notwithstanding it.
The four stage carriage, permits which the appellant had were not on the same route and there was no question of.
any monopoly being created in his favour if the permit applied for by him were granted.
In fact, possession of more than on& permit by the appellant was a circumstance in his favour, because according to clause (3)(F) of rule 155A an applicant operating in more than four stage carriages would be entitled to one mark for each stage carriage in order to have a viable unit of five carriage.
The principle laid down in clause (3) (F) of rule 155A proceeds on the hypothesis that an applicant would be able to achieve greater efficiency if he has a larger number of stage carriages, but it sets a limit of five stage carriages as it was thought that that would be sufficient to constitute a viable unit which could legitimately be permitted to an applicant, consistently with the requirement of a socialistic pattern of society that there should be distributive or social justice and no undue economic disparities.
So long, therefore, as an applicant has not more than four stage carriages, it cannot by itself be regarded as a factor against him and, as pointed out by Beg, J., in the case cited above, the rule in clause (3) (F) of rule 155A providing for giving of one mark to the applicant for each stage carriage operated by him should be taken into account unless there is good enough reason to depart from it.
"Every additional stage carriage upto four would give an applicant an additional mark so as to help him to make up a viable unit of five".
The State Transport Appellate Tribunal was, therefore, right, in the circumstances of the case, in not regarding possession of four stage carriage permits by the appellant, including a recent grant, as a circumstance against him, but treating it as a circumstance in his favour by adding four marks under clause (3) (F) of rule 155A, and the learned Single Judge acted erroneously in upsetting this view taken by the State Transport Appellate Tribunal.
The learned Single Judge was also in error in holding, thatthe same standard was not applied by the State Transport AppellateTribunal in comparing the history sheets of the appellant and therespondent.
The history sheet of the appellant related only to hisperformance as stage carriage operator and the entire history sheetwas before the State Transport Appellate Tribunal and it showedthat the appellant had a clean record.
On the other hand, the respondent (1) ; L379 Sup.
CI/75 98 had two history sheets, one relating to his performance as stage carriage operator and the other relating to his performance as lorry operator and both the history sheets showed adverse entries.
It can hardly be disputed that this comparison with reference to the past performance of the appellant and the respondent was relevant to the question as to who between the two should be selected for grant of permit.
It may be that the history sheet of the respondent as lorry operator related to a period of ten years while that of the appellant as a stage carriage, perator covered a shorter period, but that cannot be helped.
The comparison has to be made on the basis of the available material and if the history sheet of the respondent, which may be for a longer period, shows that the past performance of the respondent 'was not satisfactory while the history sheet of the appellant, though for a shorter period, shows that he has had a clean record of performance, that would certainly be a relevant circumstance to lie taken into ;account.
The State Transport Appellate Tribunal was plainly right in relying on this circumstance, amongst others, for the purpose of preferring the appellant to the respondent.
Before we part with this case we may point out that the learned Single, Judge overstepped the limits of his revisional jurisdiction and treated the revision application before him as if it wore an appeal.
That was clearly impermissible as the revisional jurisdiction of the High Court under section 64B is as severely restricted as that under section 115 of the Code of Civil Procedure and it is only where there is a jurisdictional error or illegality or material irregularity in the exercise of jurisdiction that the High Court can interfere under section 64B ,with an order made by the State Transport Appellate Tribunal.
We must, therefore, set aside the judgment of the learned Single Judge and restore the order made by the State Transport Appellate Tribunal granting permit to the appellant.
The appeal is accordingly allowed.
The respondent will pay the costs to the appellant.
P.B.R. Appeal allowed.
| IN-Abs | The Regional Transport Authority granted a stage carriage permit to the respondent as against the appellant on the ground that the former was a single bus operator while the appellant was an operator having four stage carriage permits, including a stage carriage permit which was recently granted to him.
The State Transport Appellate Tribunal, on the other hand, took the view that the respondent did not have a pucca fire proof building for workshop,.
that it was immaterial whether the sector experience of the appellant was derived under a temporary permit or a permanent permit; that the appellant was entitled to two marks even though the experience gained by him was by operation of temporary permits, that the history sheet of the appellant was clean without any adverse remark and that since a portion of the route fell within the interior roads it was desirable in public interest to prefer "an experienced operator instead of single bus operator".
The Appellate Tribunal,.
therefore, found that the appellant had superior qualifications and was entitled to be preferred to others.
On a revision application under section 64B of the a single Judge of the High Court took the view that public interest required that in the socialist pattern of society monopoly should as far as possible be avoided and a smaller operator with one stage carriage permit should be preferred to a bigger operator having three or more stage carriage permits, that the appellant was a recent grantee of stage carriage permit; that a proper standard of comparison of the history sheets of the appellant and the respondent had not been made; and that the respondent was entitled to two marks on account of sector experience.
The order of the Regional Transport Authority granting permit to the respondent was, therefore, restored.
Allowing the appeal, HELD : (1) The High Court was not right in refusing two marks to the appellant.
Clause 3(c) of rule 155A provides that two marks shall be awarded to the applicant, who.
on the date of the consideration of the application by the Regional Transport Authority, has been plying a stage carriage permit on the entire route.
It does not contain any restriction that in order to be entitled ' to these two marks the applicant should have been plying on the route on the basis of a permanent permit.
What is material is that the applicant should have experience of plying on the route and this experience would be there whether plying is done on a temporary permit or a permanent permit.
[94G H] (2) The paramount consideration to be taken into account in determining as to which of the applicants should be selected for grant of permit always is public interest.
[95 B C] (3) The mere fact that an applicant has more than one permit or he is a recent grantee cannot by itself be regarded as a factor against him in the comparative scale.
Possession of more than one permit also cannot, by itself, divorced from other circumstances, be regarded as a disqualification.
[96 F; H] Ajantha Transports (P) Ltd. vs T. Y. K. Transports, ; , followed.
The High Court was in error in rejecting the claim of the appellant to the grant of permit by mechanically relying on the circumstance that the 92 appellant was a multi bus operator having four Stage carriage permits including a recent grant without considering how in the light of the other facts and circumstances, it was correlated to the question of public interest. ' The four stage carriage permits which the appellant had were not on the same route and there was no question of any monopoly being created in his favour if the permit applied for by him was granted.
The possession of more than one permit by the appellant was a circumstance in his.
favour because according to cl.
3(F) of rule 155A an applicant operating more than four stage carriages would be entitled to one mark.
[97B D] (4) The High Court was in error in holding that the same standard was not applied by the State Transport Appellate Tribunal in comparing the history sheets of the appellant and the respondents.
[97H] (5) In the instant case the, High Court overstepped the limits of the revisional jurisdiction and treated the revision application as if it were an appeal.
The jurisdiction of the High Court under section 64B is as severely restricted as that under section 115 of the Code of Civil Procedure and it is only where there is a jurisdictional error or illegality or material irregularity in the exercise of jurisdiction that the High Court can interfere under section 64B with an order made by the State Transport Appellate Tribunal.
[98D E]
|
No. 522 of 1974.
Petition under Article 32 of the Constitution.
H. section Marwah for the petitioner.
section C. Majumdar, G. section Chatterjee and Sukumar Basu for the respondent.
KRISHNA IYER, J.
The detenu petitioner, challenges his detention on various rounds but Shri H. section Marwah, appearing as amicus curiae, has raised big contentions and small, some of which do not merit consideration and others need not be dealt with since, on a short point, the petition must succeed.
The scheme of the (Act No. 26 of 1971) (hereinafter called the MISA, for short) is in keeping with article 27 of the Constitution and emphasizes the various stages at which there will be consideration of the need for the detention by different authorities, such as the District Magistrate, the State Government and, ultimately, the Central Government.
For the effective exercise of this power a scheme has been built into the statute.
15 5 We are concerned at present with the power to direct release of the detenu.
We may extract the provision here : 14(1) Without prejudice to the provisions of section 21 of the , a detention order may, at any time, he revoked or modified= (b)notwithstanding that the order has been made by a State Government, by the Central Government.", With a view to posting the Central Government with the detention and the grounds t herefore, section 3(4) provides thus : "3. Power to make orders detaining certain persons.
(4)When any order is made or approved by the State Government Under this section, the State Government shall, within seven days, report the fact to the Central Government together with the grounds on which the order has been made and such other particulars as in the opinion of the State Government have a bearing on the necessity for the order." (emphasis, ours) A fair reading of section 3 indicates that the State Government may directly issue an order of detention or, if it is done by a lesser authority, approve of such detention order as provided in the statute.
Sub section
(4) of section 3, which we have extracted, obligates the State Government to communicate, within seven days of the order of detention it makes or it approves, that fact to the Central Government, together with the grounds on which the order has been made and other relevant particulars.
Even assuming that the order is made by the District Magistrate and is approved by the State Government, the communication has to be made to the Central Government within the time specified.
This procedural mandate is inviolable except on peril of the order being voided.
In the present case it is obvious that the detention order was made on November 21, 1972 by the District Magistrate and approved by the State Government on December 2, 1972.
It is curious that on the State 's own showing the communication to the Central Government in compliance with section 3(4) of the MISA has been made on December 1, 1972.
This date is beyond seven days of the District Magistrate 's order and it could not have been in compliance with the seven days ' spell after the approval by the State Government, that having been done only a day after the alleged communication to the Central Government.
It is thus plain that the State Government before the approval itself was made.
Secondly, if what it communicated was the order of the District Magistrate, it, was not sufficient compliance with the statutory requirement.
Moreover, it was beyond the seven, days ' period.
156 In short, there has been an infringement of the procedural safeguard.
This has, in several rulings, held that the liberty of the citien is a priceless freedom, sedulously secured by the Constitution.
Even so, during times of emergency, in compliance with the provisions of the Constitution, the said freedom may be curtailed, but only in strict compliance with statutory formalities which are the vigilant concern of the Courts to enforce.
We have pointed out how in the present case there has been a failure on the part of the State Government to comply with s.3(4).
Judicial engineering prevents breaches of constitutional dykes protecting fundamental freedoms.
The order of detention is invalid and the detenu is liable to be ,released.
The rule is made absolute.
Petition allowed.
| IN-Abs | Section 3 of the , indicates that the State Government may directly issue an order of detention or, if it is done by a lesser authority, approve of such detention order as provided.
Section 3(4) obligates the State Government to communicate, within 7 days of the order of detention it makes or approves, that fact to the Central Government, together with the grounds and other relevant particulars.
The procedural mandate is inviolable except on peril of the order being avoided.
In the present case, the order of detention was made by the Dt.
Magistrate on November 21, 1972 and the order was approved by the State Government on December 2, 1972.
The order was however communicated to the Central Government on December 1, 1972.
HELD : There was no strict compliance with statutory formalities and since there has been ail infringement of the procedural safeguard, the order of detention is invalid.
[155H 156A] (a) The communication to the Central Government by the State Government of its approval was not within 7 days after its approval, as required by section 3(4), because, the approval by the State Government was only a day after the communication to the Central Government.
[155G] (b)If what is communicated is only the order of the District Magistrate, this was not sufficient compliance with the statutory requirement, and it further was also beyond the 7 days ' period [155 G H]
|
No. 429 of 1974.
Under article 32 of the Constitution of India.
Shiv Pujan Singh, for the petitioner.
G. section Chatterjee, for the respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
Shri section P. Singh, appearing as amicus curiae has urged a few points in support of his submission that the petitioner detenu, very poor and not fallen into criminal company, is entitled to be set free, the order being illegal.
The obnoxious acts, with futuristic import, relating to the detention, have been set out in the grounds annexed to the order and are repeated in the affidavit of the Deputy Secretary, Home (Special) Department, Government of West Bengal, based on the records available in the Secretariat.
The District Magistrate of Purulia, nearly three long years ago, passed the order of detention against the petitioner on February 2, 1972 on receipt of materials regarding the pre judicial activities of the detenu and on being subjectively satisfied of the need for the detention under s.3 of the Maintenance of internal Security Act, 1971 (Act of 1971) (her r called the MISA, for short).
293 The two criminal adventuress of the petitioner which persuaded the District Magistrate to prognosticate about his prejudicial activities were allegedly indulged in on September 3, 1971.
The grounds of detention are that on that date, in two separate dramatic sallies, the detenu and his associates went armed with hacksaws, lathis etc., and what not, committed theft of overhead copper catenary wires and certain other items from a place between Anaka and Bagalia railway stations.
On the first occasion, which was during broad daylight, the miscreants were challenged 'by the R. section Members ' but were scared away by the petitioner and his gang repeated the theft of traction wire etc.
, at stone throw.
On the second occasion, which was at about mid night about the same spot 'When resisted by the duty RPF Rakshaks with the help Of villagers, ballasts were pelted at them by the violent in uders who made good their escape with the gains of robbery.
on these two frightful episodes, the detaining authority came to the requisite conclusion about danger to the community, which is recited in the order.
The question is whether, in the facts and circumstances of the case, the order can be impugned as colorable or exercise of power based on illusory or extraneous circumstances and therefore void.
An examination of the surrounding set of facts, serving as backdrop or basis, becomes necessary to appreciate the argument that the subjective satisfaction of the authority did not stem from any real application of his mind but as a ritualistic recital in a routine manner.
It is admitted in paragraph 6 of the counter affidavit that the two incidents were investigated as GRPS Case No. 1 and No .2.
The petitioner was arrested in connection with the said cases on September 9. 1971 and the police submitted a final report in both the cases on January 6, 1972 and February 9, 1972 respectively, 'not because there was no evidence against the petitioner but because the detenu petitioner being a dangerous person, witnesses were afraid to depose against him in open Court '.
It may be mentioned here that the petitioners name was not in the FIR but is alleged to have been gathered in the, course of the investigation.
However, be was discharged from the two cases on February 9, 1972 but was taken into custody the same day pursuant to the detention order.
Thereafter the prescribed formalities were followed and there is no quarrel about non compliance in this statutory sequence.
The crucial submission that deserves close study turns on the colorable nature or mindless manner of the impugned order.
What are the facts germane to this issue? It is seen that the petitioner 's name is not in the first information statements.
Had a court occasion to adjudge the guilt of an accused person charged with serious crime committed in the presence of quasi police officers and his name is not seen in the earliest report, to the police, that would have received adverse notice unless explained.
Likewise, the circumstance that the final report to the Court terminated the criminal proceedings may, unless other reasons are given, militate against the implication of the petitioner since section 169 Cr.
P.C. refers to two situations one of which at least nullifies possible inference of incrimination i.e., that 294 there is no 'reasonable ground of suspicion to justify the forwarding of the accused to a magistrate '.
It behoves the detaining authority to tell this Court how he reached his mental result in the face of a 'release report ' by the police.
For, the legal label that the satisfaction of the executive authority about potential prejudicial activity is 'subjective ' does not mean that it can be irrational to the point of unreality.
Subjective satisfaction is actual satisfaction, nevertheless.
The objective standards which courts apply may not be applied, the subject being more sensitive; but a sham satisfaction is no satisfaction and will fail in court when challenged under article 32 of the Constitution.
If material factors are slurred over, the formula of 'subjective, satisfaction ' cannot salvage the deprivatory order.
Statutory immunology hardly saves such invalidity.
After all, the jurisprudence of 'detention without trial is not the vanishing point of judicial review.
The area and depth of the probe, of course, is conditioned by the particular law, its purpose and language.
But our freedoms axe not wholly free unless the judiciary have a minimal look at their executive deprivation, even though under exceptional situations.
We may here refer to what a bench of five Judges of this Court observed in the vintage ruling Rameshwar Shaw(1) : "It is however necessary to emphasise in this connection that though the satisfaction of the detaining authority contemplated by section 3 (1) (a) is the subjective satisfaction of the said authority, cases may arise where the detenu may challenge the validity of his detention on the ground of mala fides and in support of the said plea urge that along with other which show, mala fides, the Court may also consider his grievance that the grounds served on him cannot possibly or rationally support the conclusion drawn against him by the detaining authority.
It is only in this incidental manner and in ' support of the plea of malafides that this question can become justiciable; otherwise the reasonableness or propriety of the said satisfaction contemplated by section 3 (1) (a) cannot be questioned before the Courts.
" Back to the facts.
Of course, the mere circumstance that the aim of the petitioner was gathered in the course of the investigation is neither here nor there and cannot help him in the tall contention that for that reason the order of detention is a make believe.
The conspectus of circumstances placed before the authority and his rational response, having regard to the duty to immobilise dangerous delinquents from molesting the community these are pertinent factors to decode the responsible reality of the satisfaction, although not the plenary rightness of the detention order.
There are a few vital facts which loom large in this context.
One is that court discharged the accused, the reason alleged in the counter being that ; , 926. 295 "The police submitted final report in those cases on 6 1 72 and 9 2 72 respectively not because there was no facts which show malafides, the Court may also consider his evidence against the petitioner but because the detenu petitioner being a dangerous person witnesses were afraid to depose against him in open court.
" What is the impact of a discharge of the accused by the criminal court based on police reports on the validity of the detention order against the same person based on the same charge in the context of a contention of a non application of the authority 's mind ? The two jurisdictions are different, the two jurisprudential principles diverge, the objects of enquiry and nature of mental search and satisfaction in the two processes vary.
The argument that detention without trial, for long spells as in this instance, is undemocratic has its limitations in modern times when criminal individuals hold the community to ran som, although vigilant check of executive abuse becomes a paramount judicial necessity.
We, as judges and citizens, must remember that, in law as in life, the dogmas of the quiet past are not adequate to the demands of the stormy present and the philosophy and strategy of preventive detention has come to stay.
We may merely observe that we are not legally impressed with counsel 's persistent point that solely or mainly because the petitioner has been discharged in the two criminal cases he is entitled to be enlarged from preventive captivity.
Even so, it does not follow that the extreme view propounded by the counsel for the State that the termination of the proceedings in a criminal case on identical facts is of no consequence is sound.
In this connection, we may draw attention to a few decisions of this Court cited at the bar.
Chandrachud J., speaking for the Court, recently observed in Srilal Shaw vs The State of West Bengal(1), dealing with a situation somewhat like the one in this case, thus): "This strikes us as a typical case in which for no apparent reason a person who could easily be prosecuted under the punitive laws is being preventively detained.
The Railway Property (Unlawful Possession) Act, 29 of 1966, confers extensive powers to bring to book persons who are found in unlawful possession of railway property.
The first offence is punishable with a sentence of five years and in the absence of special and adequate reasons to be mentioned in the judgment the imprisonment shall not be less than one year.
When a person is arrested for an offence punishable under that Act, officers of the Railway Protection Force have the power to investigate into the alleged offence and the statements recorded by them during the course of investigation do not attract the provisions of section 162, Criminal Procedure Code.
(See Criminal Appeal No. 156 of 1972 decided on 23 8 1974).
If the facts stated in the ground are true, this was an easy case to take to a successful termination.
We find it impossible of accept that the prosecution could not be proceeded with as the witnesses (1) Writ Petition No. 453 of 1974, decided on 4 12 74.
296 were afraid to depose, in the public against the petitioner.
The Sub inspector of Police who made the Panchnavna, we hope, could certainly not be afraid of giving evidence against the petitioner.
He had made the Panchnama of seizure openly and to the knowledge of the petitioner.
Besides, if the petitioner 's statement was recorded during the course of investigation under the Act of 1966, that itself could be relied upon by the prosecution in order to establish the charge that the petitioner was in unlawful possession of Rail , way property." (emphasis ours) Again, in Noorchand 's case(1) Gupta J., delivering judgment for Court, held: "We do not think it can be said that the fact that the petitioner was discharged from the criminal cases is entirely irrelevant and of no significance; it is a circumstance which the detaining authority cannot altogether disregard.
In the case of Bhut Nath Mate vs State of West Bengal ; this Court observed: ".
detention power cannot be quietly used to subvert, supplant or to substitute the punitive law of the Penal Code.
The immune expedient of throwing into a prison cell one whom the ordinary law would take care of, merely because it is irksome to undertake the inconvenience of proving guilt in court is unfair abuse.
" If as the petitioner has asserted, he was discharged because t 'here was no material against him and not because witnesses were afraid to give evidence against him, there would be apparently no rational basis for the subjective satisfaction of the detaining authority.
It is for the detaining authority to say that in spite of the discharge he was satisfied, on some valid material, about the petitioner 's complicity in the criminal acts which constitute the basis of the detention order.
But, as stated already, the District Magistrate Malda, who passed the order in this case, has not affirmed the affidavit that has been filed on behalf of the State.
" There was reference at the bar to the ruling reported as Golam Husvain vs Commissioner of Police(2) where the Court clarified that there was no bar to a detention order being made after the order of discharge by the criminal court, but emphasized the need to scan the ,order to prevent executive abuse in the following words: "Of course, we can visualise extreme cases where a Court has held a criminal case to be false and a detaining authority with that judicial pronouncement before him may not reasonably claim to be satisfied about prospective prejudicial activities based on what a Court has found to be baseless.
" (1) A.I.R. 1974 S.C. 2120.
(2) [1974]4 S.C.C. 530.
297 Maybe, we may as well refer to the, vintage ruling in Jagannath 's care(1) where Wanchoo J., (as he thn was) spoke for a unanimous Court : order of detention should show that it had acted with all due care and caution and with the sense of responsibility necessary when a citizen is deprived his liberty without trial.
We have therefore to see whether in the present case the authority concerned has acted in this manner or not.
If it has not so acted and if it appears that it did not apply its mind properly before making the order of detention the order in question would not be an order under die Rules and the person detained would be entitled to release.
" The precedential backdrop help crystallize the jurisprudence of, preventive detention, an odd but inevitable juridical phenomenon, in a suicide manner and to the extent relevant to the case.
Although.
the circumstances of each case will ultimately demarcate the callous, or colorable exercise of power from the activist or alert application of the executive 's mind in making the impugned order, some clear.
guidelines, though overlapping, help application of the law: (1) The discharge or acquittal by a criminal court is not necessarily a bar to preventive detention on the same facts for 'security ' purposes.
But if such discharge or acquittal proceeds on the footing that the charge is false or baseless, preventive detention on the same condemned facts may be vulnerable on the ground that the power under the MISA has been exercised in a malafide or colorable manner.
(2) The executive may act on subjective satisfaction and is immunised from judicial dissection of the sufficiency of the material.
(3) The satisfaction, though attenuated by 'subjectivity ' must be real and rational, not random divination, must flow from an advertence to relevant factors, not be a mock recital or mechanical chant of statutorily sanctified phrases.
(4) The executive conclusion regarding futuristic prejudicial activities of the detenu and its nexus with his past conduct is acceptable but not invulnerable.
The court can lift the verbal veil to discover the true face.
(5) One test to check upon the recolourable nature or mindless mood of the alleged satisfaction of the authority is to see if the articulate 'grounds ' are too groundless to induce credence in any reasonable man or to frivolous to be brushed aside as fictitious by a (1) ; ,138.
298 responsible instrumentality.
The court must see through mere sleights of mind played by the detaining authority. ' (6) More concretaly, if witnesses are frightened off by a desperate criminal, the court may discharge for deficient evidence but on being convinced (on police or other materials coming within his ken) that witnesses had been scared of testifying, the District Magistrate may still invoke his preventive power to protect society.
(7) But if on a rational or fair consideration of the police version or probative circumstances he would or should necessarily have rejected it, the routinisation of the satisfaction, couched in correct diction, cannot carry conviction about its reality or fidelity, as against factitious terminological conformity.
And on a charge of malafides or misuse of power being made, the court can go behind the facade and reach at the factum.
So viewed, how does the petitioner 's case stand? The petitioner 's identity and involvement must, in some manner, brought home, sufficient for the subjective satisfaction of a responsible officer not merely for his hunch or intuition.
Let us assume in favour of the officer that such material was present before him when he passed the order of detention.
This should be revealed to the court hearing the habeas corpus motion, in a proper return in the shape of an affidavit.
While we agree that the detainer 's own oath is not always insisted on as the price for sustaining the order, subjective satisfaction, being a mental fact or state is best established by the author 's affidavit, not a stranger in the Secretariat familiar with papers, but the mind of the man who realised the imperativeness of the detention.
This is not a formality when the subject matter is personal liberty and the more 'subjective ' the executive 's operation the more sensitive is procedural insistence.
Here the District Magistrate 's affidavit is unavailable.
Another obstacle in the way of the State, which has to be surmounted, consists in the circumstances that both the criminal occurrences took place in the presence of public servants, members of the para police forces attached to the railway administration.
Indeed, the case is that some of these officials were terrorized and over awed before the stolen articles were removed.
Naturally, one would expect a serious crime like railway property being removed by show of violence being the subject matter of the prosecution.
In the present case.
the District Magistrate does not swear an affidavit himself and what is stated is that he is now posted in Sikkim and is not 'presently available for affirming the affidavit '.
In a case where a personal expla nation is necessary, Sikkim is not too distant and so we have to see Whether the District Magistrate has, in the instant case, to show why, 299 when the cases were discharged by the trying magistrate, he thought there was enough material for preventive detention.
True, the Home Department official, informed by the records, has sworn that the police report for non prosecution was 'not because there was no offence against the petitioner but because the detenu petitioner being a Jangerous person witnesses were afraid to depose against him in open court '.
Maybe this is true, but the subjective satisfaction of the District Magistrate must be spoken to by him, particularly in a situation where the circumstances of the non prosecution strongly militate against the reality of the petitioner 's involvement in the occurrence.
After all, merely to allege that witnesses were panicked away from Testifying to truth cannot be swallowed gullibly when the witnesses Themselves are members of a railway protection force and the offenses against public property are of a grave, character.
The observations of Chandrachud J. in Srilal Shaw, quoted earlier, are in point.
In the case of non officials, maybe they are afraid to give evidence against dangerous characters for fear of their life but such an excuse or alibi is ordinarily unavailable where the witnesses are para police public servants.
If the District Magistrate had sworn an affidavit that he identity of the petitioner, as participant in the crime, was not known of the railway protection force and that other villagers made them out is the gang was decamping with the booty, something may be said for he plea.
There is no such averment in the counter affidavit and the pare ipse dixit of the Deputy Secretary in the Home Department that witnesses were afraid to depose is too implausible and tenuous to be acceptable even for subjective satisfaction.
After all, freedom is not bubble to be blown away by executive whif or whim.
For, as pointed put by Gajendragadkar J. (as he then was) in Rameshwar Shaw (supra) it p. 930 : "At the point of time when an order of detention is going to be served on a person, it must be patent that the said person would act prejudicially if he is not detained and that is a consideration which would be absent when the authority is dealing with a person already in detention.
" Had the statement been of the detaining authority, had the deponent furnished some fact which would or could make any reasonable man believe that the witnesses were likely to shy away from the court for far of the petitioner, bad the affidavit thrown some light on the dark lint behind the non prosecution in court due to non disclosure of evidence or to indicate that the final report of investigation was not on account of the absence of any reasonable suspicion but because of the deficiency of evidence (section 169 Cr.
P.C. contemplates both types of situations and the copy of the report was easy to produce), we might have upheld the detention.
In Dulat Roy vs The District Magistrate Burdwan(1) this question has been dealt with in some detail.
The flaw in the order flows from non explanation of how the District Magistrate has made his inference in the circumstances indicated.
(1) ; 300 Without more, we are inclined to the view that the observations of Wanchoo J. (as he than was) in Jagannath (supra), at p. 138, applies "This casualness also shows that the mind of the authority concerned was really not applied to the question of detention of the petitioner in the present case.
In this view of the matter we are of opinion that the petitioner is entitled to release as the order by which he was detained is no order under the Rules for it was passed without the application of the mind of the authority con In the present case, on account of the special reasons set out above, who are far from satisfied that the detention order is not a cloak to avoid the irksome procedure of a trial in Court.
There are two social implications of dropping prosecutions and resorting to substitutive detentions which deserve to be remembered.
Where a grievous crime against the community has been committed, the culprit must be subjected to condign punishment so that the penal law may strike a stem blow where it should.
Detention is a softer treatment than stringent sentence and there is no reason why a dangeral should get away with it by enjoying an unfree but unpaid holiday.
Secondly, if the man is innocent, the process of the law should give him a fair chance and that should not be scuttled by indiscriminate resort to easy but unreal orders of detention unbound by precise time.
That is a negation of the correctional humanism of our system and breeds bitterness, alienation and hostility within the cage.
We accordingly allow me writ petition, make the rule absolute and ' direct that the petitioner set free.
V.P.S. Petition allowed.
| IN-Abs | The petitioner was detained under section 3 of the .
The grounds of detention were that twice on the same day he and his associates, armed with dangerous weapons, committed thefts of overhead copper wire, the first time in broad day light and then at about mid night.
On both occasions they were challenged by public servants, members of the para police force, attached to the railway administration but the petitioner and his associates escaped after attacking the members of the Railway Police Force.
The petitioner was arrested in connection with the two incidents.
His name was not in the F.I.R. but was gathered in the course of investigation.
The police, how ever reported that the petitioner being a dangerous person, witnesses were afraid to depose against him in open court and so he was discharged.
He was, however, taken into custody the same day of discharge pursuant to the detention order.
Allowing the petition challenging the detention.
HELD : 1(a) The discharge or acquittal by a criminal court is not necessarily a bar to preventive detention on the same facts for 'security ' purposes.
But if such discharge or acquittal proceeds on the footing that the charge is baseless or false, preventive detention on the same condemned facts may be vulnerable on the ground that the power of detention has been exercised in a mala fide or colorable manner.
(b) The executive authority may act on subjective satisfaction and is immunised from judicial dissection of the sufficiency of the material.
But the executive conclusion regarding futuristic prejudicial activities of the detenu and its nexus with his past conduct though acceptable is not invulnerable.
(c) The satisfaction though attenuated by 'subjectivity ' must be real and rational, must flow from an advertence to relevant factors, and not be a mockery or mechanical chant of statutorily sanctified phrases.
The subjective satisfaction must be actual satisfaction.
(d) One test to check upon the colorable nature or mindless mood of the alleged satisfaction of the authority,is to see if the articulated 'grounds ' are too groundless to induce credence in any reasonable man or too frivolous to be brushed aside as fictitious by a responsible instrumentality.
(e) If witnesses are frightened off by a desperate criminal, the court may discharge for deficient evidence but on being convinced (on police or other materials coming within his ken) that witnesses had been scared of testifying, the District Magistrate may still invoke his preventive power to protect society.
(f) But if on a rational or fair consideration of the police version or probative circumstances he should have rejected it the routinisation of the satisfaction, couched in correct diction.
cannot carry conviction about its reality and on a charge of mala fides or misuse of power being made, the court can examine the circumstances.
[297 D 298 C] (2) Merely to allege that witnesses were panicked away from testifying to truth cannot be swallowed gullibly when the witnesses are members of the Railway Protection Force and the offenses against public property were of grave character.
[299 B C] 292 (3)In a case like the present, where the circumstances Of the non prosecution strongly militate against the reality of the petitioner 's involvement in the occurrence, the subjective satisfaction of the District Magistrate must be spoken to by him.
While the detainer 's on oath is not always insisted on as the price for sustaining the order, subjective satisfaction, being a mental fact or state is best established by the author 's affidavit and not that of a stranger in the secretariat familiar with the papers.
But in the present case, the District Magistrate 's affidavit is not available and the reason given for his not filing his affidavit is not convincing.
If the District Magistrate had sworn an affidavit that the identity of the petitioner as participant in the two incidents was not known to the Railway Protection Force and that other villagers made them out as the gang was decamping with the booty, the detention might have been upheld.
But there is no such averment and the bare ipse dixit of the Deputy Secretary in the Home Department that witnesses were afraid to depose is too implausible and tenuous to be acceptable even for subjective satisfaction.
[298 E F; 299 A B, C E] [Were a grievous crime against the community has been committed the culprit must be subjected to condign punishment so that the penal law may strike a stern blow where it should.
Detention is a softer treatment.
Further, if the is innocent the process of the law should give him a fair chance and that should not be scuttled by indiscriminate to easy but unreal orders of detention un bound by precise time.].
[300 C E] Srilal Shaw vs The State of West Bengal Writ Petition No. 453 of 1974.
decided on 4 12 74 and Jaganath 's case ; and 138, followed.
Rameshwar Shaw ; 926.
Hoorchand 's cast A.I.R. 1974 S.C. 2120; Golam Hussain vs Commissioner of Police ; , 534 and Dulal Roy vs The District Magistrate, Burdwan ; referred to.
|
iminal Appeal No. 22 of 1971.
(Appeal by Special Leave from the Judgment & Order dated the 30th March, 1970 of the Madhya Pradesh High Court in Criminal appeal No. 536 of 1966).
P. P. Juneja for the appellant.
Ram Punjwani and H. section Parihar, for the respondent.
The Judgment of the Court was delivered by BEG, J.
This is an appeal by special leave by one out of 118 persons who were prosecuted for participation in a serious riot on August 1, 1965, in village Ganiari, Tehsil Bilaspur, in the State of Madhya Pradesh, as a result of which several persons were attacked with sharp edged weapons and three of them died of wounds sustained by them.
Five accused persons were discharged by the Committing Magistrate.
One hundred and thirteen persons were jointly tried for various offences punishable under Sections 147, 148, 302, 307, 325 and 323 Indian Penal Code.
Charges were also alternatively framed under Section 464 302/149, 307/149, 323/149 and 325/149 against all of them.
An Additional Sessions ' Judge of Bilaspur acquitted sixty one accused persons And convicted fifty two persons.
He found all the convicted persons guilty under Section 147 P.C. and sentenced them to two years rigorous imprisonment.
We need only mention the other convictions of the appellant before us.
He was held guilty under Section 304(1)/149 IPC and sentenced to five years rigorous imprisonment and under Section 325/149 IPC and sentenced to two years rigorous imprisonment, and under Section 323/149 IPC and sentenced to a month 's rigorous imprisonment.
On appeals by the convicted persons as well as by the State Government, the High Court, while convicting only fourteen persons, including the appellant, altered his conviction under section 304(1) /149 IPC into three convictions under Section 302/149 for the murder of three persons Badlu, Santu, Chhote Bhurwa, but it made the sentences of life imprisonment concurrent for the three offences.
It main tained the other convictions and sentences passed by the learned Sessions ' Judge.
Learned Counsel for the appellant has tried to advance some ,arguments to assail the conviction of the appellant for participation in rioting.
But, we are not impressed by any of the criticisms leveled against six witnesses relied upon by the Trial Court as well as the High Court: Baliram, PW 1, Ganesh Rao, PW 2, Gangaram, PW 3, Bade Bhurwa, PW 4, Kabra, PW 5, and Lulwa, PW 7.
The unshaken evidence, of these witnesses had established that the appellant had participated in the riot, and chased the victims, and even inflicted some minor injuries on Baliram, PW 1.
But, beyond that, the participation of the appellant in the actual acts of cutting the limbs of the three persons, who eventually died of profuse bleeding, was not deposed to by any prosecution witness.
Although we are unable to disturb the concurrent finding of the fact by the Trial Court and the High Court of the participation of the appellant in the serious riot which took place on 1 8 1965 in village Ganiari, we are also unable to concur with the view of the High Court that, on facts established, the common object of the unlawful assem bly was necessarily to cause the death of the three individuals who, unfortunately, lost their lives as a result of the out burse of frenzy of ,an outraged mob against persons who, according to the learned Session ' Judge, had given cause to the villagers to be seriously displeased with their nefarious activities.
The learned Sessions ' Judge, while convicting the appellant under Section 304(1), had observed "I am inclined to take a lenient view of these killings because the persons killed had become a nuisance to the village community and their criminal acts knew no bounds or rationality.
A time comes when even an orderly society revolts finding no relief in the regular course.
Though such acts are not permissible even in such cases and cannot be encouraged yet due discrimination was not lost sight of by 4 65 the assailants and severe penalty is thus not called for in the present case. ' We do not consider these reasons of the learned Sessions Judge, who had given them for convicting the appellant together with other accused persons under Section 304 (1) /149 IPC and sentencing them to five years ' rigorous imprisonment, to be at all sound or relevant in justifying a conviction under Section 304(1)/149 IPC.
The learned Sessions ' Judge had relied upon Kapur Singh vs State of Pepsu(1), to hold that, as injuries were inflicted upon the limbs of the three men, who died of bleeding, but infliction of injuries on vital parts of the body was deliberately avoided, an intention of anybody to murder was not established.
The learned Session 's Judge appears to have overlooked the various clauses of Section 300 IPC.
An intention to kill is not required in every case.
A knowledge that the natural and probable consequences of an act would be death will suffice for a conviction under Section 302 IPC.
The question on which we entertain serious doubts, after examining the nature of the case and the relevant evidence on record is whether the killing of any of the three men who died was within the common object of the large number of persons who.
took part in the riot in various ways in a fairly wide spread area.
It may well be that those who actually inflicted the injuries on the three men who died could be held liable for causing death in a particularly cruel manner.
The( question, nevertheless, remains whether each of the large number of other rioters in the village, who took part in various ways in what appeared to be an upsurge of resentment and hostility against a party three of which lost their lives, shared the common object to kill them or to do acts whose natural and probable results would be their deaths.
A reference made to Chikkarange Gowda & Ors.
vs State of Mysore(2), would show that each member of a mob need not be necessarily be held liable for the actions of every other member of that mob.
It may be easier, in some respects, to prove a common object as a basis for a vicarious liability under Section 149 IPC, than to establish a common intention within the meaning of Section 34 IPC.
Nevertheless, as was pointed out by this Court in Chikkarange Gowda 's case (supra), the principle has been well recognised, since the decision in 1873 in Queen vs Sabed Ali(3), that every offence which may be committed by a member of an unlawful assembly will not be necessarily ascribed to or vicariously fastened upon every other member of that assembly by using Section 149 IPC.
The likelihood of causing of death by the nature of the actions of the members of the assembly must be shown to be within the knowledge of a member who is to be made vicariously liable for a death.
Such knowledge may be inferred from the nature of the actions committed by others in an unlawful assembly which the member held vicariously liable continues to associate himself with despite these actions seen by him or known to him.
In a case such as the one before us, in which there were two factions in a village, one of the oppressors and the other of the oppressed, (1) AIR 1956 S.C. 654.
(2) AIR 1956 S.C. 731.
(3) 20 Sut.
W.R. (Cr.) 5 (A).
466 smarting under the pain of injuries inflicted by their oppressors, the intention of a member of an assembly could be initially quite lawful.
His object may not go beyond joining a procession for purposes of protest.
We are convinced, on the evidence on record, that the participation of the appellant before us went beyond,exhibiting a mere intention to protest.
It not only embraced knowledge of likelihood of hurt of some kind to members of the party attacked, but it included an attack by the appellant on Baliram, PW 1.
The nature of that attack was, however, relatively mild.
At most, from the, concerted action of so many men a member of the unlawful assembly, on the facts and circumstances of the case before us, could be reasonably held to be aware that grievous hurt would result.
After examining all the evidence relating to the participation of the appellant and others in the riot we are left in grave doubt whether the assembly had a common object of killing any one at all, ' even if such was really the object of any particular member or members of the unlawful assembly.
It may be that those who cut the limbs of men who lost their lives due to bleeding could reasonably be held liable for murder.
But, it seems to be unlikely that each member, considering the nature of the riot and the different acts of different members of the riotous assembly, had such an object.
This was exactly the view adopted by this Court in Chikkarange Gowda 's case (supra).
As we are doubtful whether the appellant could be held guilty of participation in an unlawful assembly which had the common object of killing or even maiming the three men who lost their lives, we think that the appellant could not be convicted under Section 302/149 IPC.
We also think that the learned Sessions ' Judge was in error in holding that the appellant could be convicted under Section 304 (1) /149 IPC.
For a conviction under Section 304(1) IPC., it has to be shown that the case of the convicted person falls within one of the five Exceptions found in Section 300 IPC.
It is obvious that the case of the appellant does not fall under any of these Exceptions.
If it is doubtful whether the common object of the unlawful assembly joined by the appellant was to commit any acts which were either intended to cause death, or, from which knowledge of likelihood of death could be inferred, we think that persons other than those who actually committed the acts resulting in death could not be held vicariously liable for murder.
The result is that we allow this appeal to the extent that we set aside the convictions and sentences of the appellant under Section 302/149 IPC.
We maintained his convictions and sentences under Section 147, 323/149 and 325/149 IPC.
Subject to the modification indicated here this, appeal is dismissed.
We, understand that the appellant has already undergone imprisonment longer than the longest one imposed for the convictions sustained by us.
We therefore, direct that he be released forthwith unless wanted in some other connection.
P.H.P. Appeal allowed.
| IN-Abs | 118 persons were prosecuted for participation in a serious riot.
5 accused were discharged by the Committing Magistrate.
The Additional Sessions Judge acquitted 61 accused and convicted 52 under section 147 and sentenced them to 2 years ' rigorous imprisonment.
The appellant was held guilty under section 304(1) read with 149 and sentenced to 5 years rigorous imprisonment, under section 325/149 sentenced to 2 years rigorous imprisonment and under section 323/149 sentenced to a month 's rigorous imprisonment.
The convicted persons and the State filed appeals before the High Court.
Tile High Court convicted 14 persons including the appellant and altered his conviction under section 304/1/149 into 302/149 for the murder of 3 persons and sentenced the appellant to life imprisonment.
The Learned Counsel for the appellant before this Court contended that the appellant did not participate in the riot.
HELD : This Court is unable to disturb the concurrent findings of the two courts below about appellant 's participation in the riot.
The High Court however, was wrong in holding that the common object of the unlawful assembly was necessarily to cause death of three individuals.
In a case like the present there were two factions; one of the oppressors and the other of the opp ressed, and the intention of members of the oppressed faction could be initially, to demonstrate quite lawfully.
The circumstances showed that the appellant 's intention may have been confined to joining a procession for purposes of protest.
If it is doubtful that the common object of the unlawful assembly was to cause death, persons other than those who actually committed the acts resulting in death could not be held vicariously liable for murder.
[464F G; 564H466D] [The judgment of the High Court as far as appellant is concerned was set aside and that of the Sessions Court restored.] [446G]
|
Appeal No. 1605 of 1972.
Appeal by Special leave from the Award dated November 24, 1971 of the Labour Court, Delhi in L.C.I.C. No. 31 of 1971.
M. K. Ramamurthi and J. Ramamurthi, for the appellant.
V. M. Tarkunde, O. C. Mathur, D. N. Mishra, and Sudhir K. Khanna, for the respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
Industrial law in India has many twilight patches, illustrated by the present appeal which projects the problem of an employee whose services have been terminated similiciter by the Management, a pump manufacturing enterprise, issuing a notice ending the ,employment and offering one month 's pay as authorized by the relevant Standing orders.
The thorny legal issue is whether the ipse dixit of the employer that he has lost confidence in the employee is sufficient justification jettison the latter without levelling and proving the objec tionable conduct which has undermined his confidence so that the tribunal may be satisfied about the bona fides of the 'firing ' as contrasted with the colourable exercise of power hiding a not so innocuous purpose.
The backdrop The facts and circumstances become decisive of the fate of the, ,case even where the law is simplistic or fair in its face.
Here, what are the events and environments of employment leading to the worker being given the boot ? Is the order an innocent and, therefore, legal quit notice sanctioned by the Standing Orders which does not stigmatize the worker but merely bids him good bye ? Oris it a sinister intent to punish as a guileless order based on 'loss of confidence ', an alibi which, on a certain reading of this Court 's rulings, is also a protective armour against judicial probe and setting aside ? 491 Michael, a permanent employee of proved efficiency and six years standing, was appreciatively given two 'merit ' increments.
But a letter of September 2, 1970 told him off service, giving him one month 's 'notice pay ' discharging him without damning, as distinguished from dismissing him for misconduct.
The rival versions illumine the factual confrontation, the resolution of which is no easy legal essay.
The worker, Michael, through his Union, protested against the 'sack ' order as victimisation of a Trade Union activist but the Management was heedless, conciliation was fruitless and the dispute between the Union and the Management was eventually referred by the Delhi Administration to the Labour Court for adjudication.
The reference ran thus "Whether the termination of services of Shri L. Michael is illegal and/or unjustified and, if so, to what relief is he entitled and what directions are necessary in this respect ?" Both sides stated their cases in their pleadings and the true nature of the conflict emerges from them.
The story set out by the employee in his statement before the Labour Court was that although he was efficient, appreciated and awarded merit increments, the Management was antagonized by his active part in the formation of an Employees ' Union, especially because oral warnings by the Regional Manager against his Unionist proclivity was ignored.
Michael became the treasurer of the Union.
This Union chapter claimed its price, for the Management quietly terminated his services by a simple letter which reads: "We are sorry to advise that your services are no longer required by the Company.
As such, this letter may be treated as a notice for the termination of your services with immediate effect.
As for the terms of your employment letter, on termination of services you will be paid one month 's salary extra.
You may please call on the undersigned and have your accounts settled.
" This act, claims the worker, was 'in flagrant violation of elementary principles of natural justice without assigning any reason and without giving him an opportunity to defend himself.
This, in his statement he challenged the termination as 'wrongful, mala fide, illegal, and an act of victimisation '.
The counter case of the management get up in its statement, as is apparent from the discharge order, is that no dismissal is involved, no enquiry necessary and no illegality invalidates.
The management claimed that the alleged annoyance with the, workman for union activity was a concoction in self defence, as the Management had not even knowledge of the formation of the Union.
This fatter limb of the plea is a little too naive.
The warning by the Regional Manager was denied and the reference to trade union activities by the worker was more 'to create a ground for the workman 's claim and has been leveled as a matter of habit and routine.
The basic plea of the management was that the action being a simple 492 termination without a sting, the process and consequence of a disciplinary action were not attracted.
The Management, however, took the Court into confidence to explain why the employee was discharged.
He was employed as a Receipt and Dispatch Clerk in the office upto 10 3 1970.
As an insider with a to office correspondence the employee misused his position by passing on 'very important and secret information about the affairs of the company to certain outsiders.
He was consequentially shifted to the post of clerk handling posting of bins and collection of payments but the workman, although denied direct access to correspondence in the Receipt and Dispatch section, made attempt 'to elicit information from the section with a view to pass it on to outsiders '.
The upshot of these activities of which the management was alerted was a loss of confidence in the employee.
This unreliability was visited with non injurious termination of service by a bona fide order.
Therefore, the action was claimed to be legal and immune to judicial interference.
Two socially vital factors must inform the understanding and application of Industrial jurisprudence.
The first is the constitutional mandate of Part IV obligating the State to make 'provision for securing just and humane conditions of work '.
Security of employment is the first requisite of a worker 's life.
The second equally axiomatic consideration is that a worker who willfully or anti socially holds up the wheels of production or undermines the success of the business is a high risk and deserves, in industrial interest, to be removed without tears.
Legislation and judicial interpretation have woven the legal fabric.
We have to see whether on the facts of the present case what the relevant law is, whether it has been applied by the Labour Court rightly and whether the appellant has merit on his side, judged by the social conscience and judicial construction of the law in this branch of discharge simpliciter versus disguised ' dismissal.
A few salient facts need emphasis before the principles of law are applied.
The workman in his statement stressed the case of malaus antinus due to his union activities, although he did vaguely refer to the termination of service as wrongful and malafide.
From this it cannot be argued, as the Management sought to make out, that his denial of leaking out office secrets was an after thought pleaded only in the rejoinder and therefore liable to be discredited.
How could the worker have a hunch about the management 's undisclosed ground for dismissal ? When the latter stated the reason which prompted this action for the first time before the Labour Court, the workman in his reply refuted this case.
It is noteworthy that there is no speck of record or any hint of written material in support of the story that the management had credible information of the appellant betraying sensitive secrets of business.
The letters sent by the Union and the worker requesting for reinstatement were being ignored.
The management could well have disclosed their suspicion in reply and told the Union and the workman that they resorted to an innocuous discharge to avoid punitive trauma.
The management could have divulged in writing to 493 the Conciliation Officer their legitimate fears about the worker 's integrity and their considerate action of simple termination.
This too they failed to do.
In their written statement in Court the Management asserted for the first time that the employee was an intractable smuggler of inside information.
The statement winds up with the legalistic plea : 'the management had, in the meanwhile, lost confi dence in the workman '.
This culminating collapse of trust is alleged to be the primary cause for the discharge from employment.
At the time of the evidence, M.W.1, a former Regional Manager, swore that the workman joined as a pump operator in 1963, was promoted as clerk in 1967, that the suspicion of disloyal communication arose 'for the first time in 1968 ' and yet 'thereafter he was given two increments extra in addition to normal increments.
He was a hard working man and has a very good memory but the suspicion was there '.
These are the facts and the evidence in the case and it has been fairly conceded before the Labour Court by the Management 's representative that were the action regarded as punitive it was bad, there having been no enquiry whatever with liberty to the employee to meet the charge.
But the single slender strand on which the discharge was suspended was 'loss of confidence of the management in the employee.
The Labour Court argued: "According to the management, as there was no proof with it for this suspicion it could not proceed against him departmentally and, in the circumstances, it was considered desirable to terminate his services by passing an order of discharge without any stigma attached to it." While on all hands it was agreed that the employee was efficient, the court took the view that the motivation for the termination was the suspicion Which lurked in the mind of the Regional Manager that information regarding tenders was being passed on by the workman '.
We, have to find out whether the holding in the award that, on the materials above placed, the action could be called colourable or saved as bona fide, could be castigated as achieving an illegitimate end or supported as a premature but straight forward and harmless farewell.
In short, was loss of confidence a legal label affixed by the management to eject the workman, there being no other legal method of accompli shing their wish to remove him for misconduct ? Two questions, therefore, fall for decision.
Can a person, reasonably instructed in the law and scrutinising with critical faculties the facts on record, conic to the conclusion that the snapping of the tic of master and servant in the present case was innocuous andbona fide or oblique circumvention of the processual protection the law provides before a workman is dismissed for mis conduct ? We can discern harmony and consistency in case lawfrom Chartered Bank(1) and Murugan(2) through Sudder Office(3) and (1) ; (2) (3) [1970] II L. L. J. 620.
423SCI/75 494 Air India Corporation(1).
The social justice ice perspective and particular facts are important, though.
The plethora if precedents need not, be covered in extenso as the law laid down is the same except that judicial response to each case situation leads to emphasis on different facets of the principle.
Even so some milestone decisions, if we may say so, may be considered.
In Murugan Mills Case (supra) Wanchoo J (as he then was), speaking for the Court made the following observations : "The right of the employer to terminate the services of his workman under a standing order like cl.17(a) in the present case, which amounts to a claim 'to hire and fire ' an employee as the employer pleases and thus completely negatives security of service which has been secured to industrial employees through industrial adjudication, came up for consideration before the Labour Appellate Tribunal in Buckingham & Carnatic Co. Ltd vs Workers of the Company The matter then came up before this Court also in Chartered Bank vs Chartered Bank Employees Union ; and the Management of U. B. Dutt & Co. vs Workmen of U. B. Dutt & Co. (1962 Supp. 2 SCR 822) wherein the view taken by the Labour Appellate Tribunal was approved and it was held that even in a case like the present the requirement of bona fides was essential and if the termination of service was a colourable exercise of the power or as a result of victimisation or unfair labour practice the industrial tribunal would have the jurisdiction to intervene and set aside such termination.
The form of the order in such a case is not conclusive and the tribunal can go behind the order to find the reasons which led to the order and then consider for itself whether the termination was a colourable exercise of unfair labour practice.
If it came to the conclusion that the termination was a colourable exercise of the power or was a result of victimisation or unfair labour practice, it would have the jurisdiction to intervene and set aside such termination.
" In that case the form of the order had no foul trace, but before the Tribunal dereliction of duty and go slow tactics were disclosed as the inarticulate reasons.
This Court ruled : "This clearly amounted to punishment for misconduct and therefore to pass an order under cl.17(a) of the Standing Orders in such circumstances was clearly a colourable exercise of the power to terminate the services of a workman under the provisions of the Standing Orders." Shri M. K. Ramamurthy, counsel for the appellants, contended for the proposition that even where a management had the power to terminate the services of its employee without reasons but with notice pay only, the colourable exercise of that power invalidated it, and the (1)[1972] 3 section C. R. 606.
495 Court could probe, beneath the surface to check upon the bonafides behind the exercise of the power.
If the reasons including the termination were victimisation, unfair labour practice or misconduct, it was foul play to avoid a fair enquiry and fall back upon the power to terminate simpliciter There are myriad situations where an employer may in good faith, have to reduce his staff, even though he may have only a good word for his employees.
Simple termination is a weapon usable on such occasions and not when the master is willing to strike but afraid to wound.
We have been referred to the Bihar State Road Transport Corporation case(1).
The power of the Court to go behind the language of the order is reaffirmed there.
In Suddek Office (supra) the Court apparently laid stress on the Management 's right to terminate the services simpliciter under the terms of contract, where there was no lack of bona fides, unfair labour practice or victimisation.
It is significant that this Court used language and laid down law very much like in the earlier cases and did refer to the precedents on the point.
For instance, Vaidialingam J., 'there observed : " 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 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 termination.
In order to find out whether the order of termination is one of 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 manner of dressing up an order does not matter.
The Court will lift the veil to view the reality or substance of the order.
The Court, in that case, examined the circumstances in detail to see whether a dismissal for misconduct was being masked as a simple send off with a month 's pay, and held ultimately : "We are satisfied that the management has passed the order of termination simpliciter and the order does not amount to one of dismissal as and by way of punishment.
" of course, loss of confidence in the workman was alleged by the management and the Court found that it was not a camouflage.
It may be noticed that in that case the workman was being entrusted with stores worth several lakhs of rupees, some goods were lost from the stores and the Union was informed by the management that it had lost confidence in the workman.
In the written statement before the Labour Court the management alleged that the workman was the head godown clerk who was the custodian of the company 's property, the post being one of trust and confidence.
It is noteworthy that in the High Court the workman did not even file a counter affidavit and the counsel for the Union and the workman agreed that the order of termination was not a camouflage to cover up what really was an order (1) 496 of dismissal.
He merely urged that the termination of the services was really by way of dismissal.
In this conspectus of circumstances, this Court found that the Head Clerk in charge of the engineering godown and responsible for the maintenance of considerable stores, held a sensitive position.
This Court observed : "The entire basis of the Labour Court 's award for holding that the order is one of dismissal is its view that the management has invoked cl. 9 to camouflage its action.
When that approach has been given up on behalf of the workman before the High Court the reasoning of the Labour Court falls to the ground and the High Court has acted within the jurisdiction under article 226 when it set aside the order of the Labour Court especially when there has been no finding of victimisation, unfair labour practices or mala fides recorded, against the management.
To conclude we are satisfied that the High Court was justified in setting aside the order of the Labour Court.
" We have gone into this decision at length to disabuse the impression that a new defence mechanism to protect termination of service simpliciter, viz., loss of confidence, had been propounded in this ruling.
We do not agree, that any such innovation has been made.
The Air, India Corporation Case (supra) may seem to support the 'no confidence ' doctrine but a closer study contradicts any such view.
of course, Shri Tarkunde, counsel for the management, placed great reliance on this ruling.
Needless to say, this Court recognised the power of the Tribunal to go behind the form of the order, look at the substance and set aside what may masquerade as termination simpliciter, if in reality it cloaked a dismissal for misconduct 'as a colourable exercise of power by the management.
The Court repeated that an Industrial employer cannot 'hire and fire ' his workmen on the basis of an unfettered right under the contract of employment.
On the facts of the Air India Case (supra) the Court concluded that it was 'not possible to hold this order to be based on any conceivable misconduct '.
Special reference was made to the grave suspicion regarding the complainant 's private conduct with air hostesses.
Where no misconduct spurs the action and a delicate unsuitability for the job vis a vis the young women in employment in the same firm is strongly suspected, resort to termination simpliciter cannot be criticized as a malafide machination.
In that background, the action was held to be bonafide and the overall unsuitability led to a loss of confidence in the employee.
Not that the loss of.
confidence was exalted as a ground but the special circumstances of the case exonerated bad faith in discharge simpliciter.
Before concluding the discussion, we may refer to the case of Delhi Transport Undertaking vs Goel(1) adverted to by the Labour Court.
Indeed that decision turned on Regulations framed under the Delhi Road Transport Authority Act, 1950 and not on pure Industrial Law or construction of the Standing Orders.
Moreover, the Court, in that (1) [1970] II LLJ 20.
497 case, appears to have discussed rulings under article 311 also.
However, on the facts of that case, the Court was satisfied that order of termination was not a disguise or cloak for dismissing the employee and the ground given that he was a cantankerous person undesirable to be retained was good.
We do not read the Delhi Transport case (supra) to depart from Murugan Mills Case (supra).
Indeed, the latter did not, and maybe could not, over rule the former.
The above study of the.
chain of rulings brings out the futility of the contention that subsequent to Murugan Mill 's Case (supra) colourable exercise of power has lost validity and loss of confidence has gained ground.
The law is.
simply this : The Tribunal has the power land, indeed, the duty to X ray the order and discover its true nature, if ,,he object and effect, if the attendant circumstances and the ulterior purpose be to dismiss the employee because he is an evil to be eliminated.
But if the management, to cover up the inability to establish by an enquiry, illegitimately but ingeniously passes an innocent looking order of termination simpliciter, such action is bad and is liable to be set aside.
Loss of confidence is no new Armour for the management; otherwise security of tenure, ensured by the new industrial Jurisprudence and authenticated by a catena of cases of this Court, can be subverted by this neo formula.
Loss of confidence in the Law will be the conse quence of the Loss of Confidence doctrine.
In the light of what we have indicated, it is clear that loss of confidence is often a subjective feeling or individual reaction to an objective set facts and motivations.
The Court is concerned with the latter and not with the former, although circumstances may exist which justify a genuine exercise of the power of simple termination.
In a reasonable case of a confidential or responsible post being misused or a sensitive or strategic position being abused, it may be a high risk to keep the employee, once suspicion has started and a disciplinary en quiry cannot be forced on the master.
There, a termination simpliciter may be bow fide, not colourable, and loss of confidence may be evidentiary of good faith of the employer.
In the present case, the catalogue of circumstances set out in the earlier part of the judgment strikes a contrary note.
The worker was not told when he wrote; the Union was not disclosed when they demanded; the Labour Court was treated to verbal statements like; very reliable sources ' and other credulous phrases without a modicum of evidence to prove bonafides.
Some testimony of unseemly attempts by the workman to get at secrets outside his orbit, some indication of the source of suspicion, some proof of the sensitive or strategic role of the employee, should and would have been forthcoming had the case been bona fide.
How contradictory, that even when a strong suspicion of leaking out sensitive secrets was being entertained about the employee he was being given special merit increments over and above the normal increments ' A case of res ipsa loauitur.
Circums tances militate against the 'I say so ' of M.W.1 that the management had suffered an ineffable loss of confidence.
To hit below the belt by trading legal pharses is not Industrial Law.
We are constrained to express ourselves unmistakably lest industrial unrest induced by 498 wrongful terminations based on convenient loss of confidence should be generated.
Before we conclude we would like to add that an employer who believes or suspects that his employee, particularly one holding a position of confidence, has betrayed that confidence, can, if the conditions and terms of the employment permit, terminate his employment and discharge him without any stigma attaching to the discharge.
But such belief or suspicion of the employer should not be a mere whim or fancy.
It should be bona fide and reasonable.
It must rest on some tangible basis and the power has to be exercised by the employer objectively, in good faith, which means honestly with due care and ' prudence.
If the exercise of such power is challenged on the ground of being colourable or mala fide or an act of victimisation or unfair labour practice, the employer must disclose to the Court the grounds of his impugned action so that the same may be tested judicially.
In the instant case this has not been done.
There is only the ipse dixit of the employer that he was suspecting since 1968 that the appellant was divulging secrets relating to his business.
The employer has not dis closed the grounds oil which this suspicion arose in 1968.
Further after 1968, the appellant was given two extra increments, in addition to his normal increments, as stated already, in appreciation of his hard work.
This circumstance completely demolishes even the whimsical and tenuous stand taken by the employer.
It was manifest therefore that the impugned action was not bona fide.
It was urged by Mr. Tarkunde, learned counsel for the employer that the question whether or not the employer had lost confidence in the employee, was essentially one of fact aad this Court should not disturb the finding of fact recorded by the trial court on this point.
It is true that this Court, in appeal, as a rule of practice, is loath to interfere with a finding of fact recorded by the trial Court.
But if such a finding is based on no evidence, or is the result of a misreading of the material evidence, or is so unreasonable or grossly unjust that no reasonable person would judicially arrive at that conclusion, it is the duty of this Court to interfere and set matters fight.
The case before us is one such instance , where we are called upon to do so.
The Labour Court has misled itself on the law land we set aside its order.
The workmans will be reinstated with back wages.
However the management will be free, if it has sufficient material and if so advised, to proceed against the workman for misconducts or on other ,grounds valid in law.
The appeal is, accordingly, allowed with costs.
P.B.R. Appeal allowed.
| IN-Abs | The services of the appellant, who was an employee of the respondents, were terminated by the latter by giving him a month 's notice as per the standing orders without assigning any reasons for the termination.
The consequential industrial dispute was referred to the Labour Court.
The management alleged that the dismissed employee misused his position by passing on important and secret information about the affairs of the company to certain outsiders, that even after he was transferred to another section he made attempts to elicit information from the section with a view to pass it on to outsiders, and that, therefore, the management lost confidence in the employee and terminated his services by a bona fide order.
The Labour Court confirmed the order of termination.
In appeal to this Court, it was contended that, even where a management had the Power to terminate the services of its employees without reasons but with notice pay the colourable exercise of that power invalidated the order and the Court court probe, beheath the surface to check upon the bona fides behind the exercise of the power, Allowing the appeal to this Court.
HELD: 1(a) Ile Labour Court has misled itself on the law and its order should be set aside.
The word will be reinstated with back wages.
[498 G] (b) The manner of dressing up an order does not matter.
The Court will lift the veil to view the reality or substance of the order.
[495 F] (2) (a) 'The Tribunal has the power and.
indeed, the duty to X ray the order and discover its true nature, if the object and effect, if the attendant circumstances and the ulterior purpose be to dismiss the employee because he is an evil to be eliminated.
But if the management, to cover up the inability to establish by an inquiry, illegitimately but ingeniously passes an innocent looking order of termination simpliciter, such action is bad and is liable to be set aside.
Loss of confidence is no new Armour for the management; otherwise security of tenure, ensured by the new industrial jurisprudence and authenticated by a catena of cases of this Court can be subverted by this neo formula Loss of confidence in the law will be the consequence of the Loss of Confidence doctrine.
[497 C D] (b) An employer who believe or suspects that _his employee, particularly one holding a position of confidence, has betrayed that confidence, can, if the conditions and terms of the employment permit, terminate his employment and discharge him without any stigma attaching to the discharge.
But such belief or suspicion of the employer should not be a mere whim or fancy.
it should be bona fide and reasonable.
It must rest on some tangible basis and the Power has to be exercised by the employer objectively, in good faith, which means honestly and with due care and prudence.
If the exercise of such power is challenged on the ground of being colourable or mala fide or an act of victimisation or unfair labour practice.
the employer must disclose to the Court the grounds of his impugned action so that the same may be tested judicially.
[498 B C] In the instant case this has not been done.
There is only the ipse dixit of the employer that he was suspecting since 1968 that the appellant was divulging secrets relating to his business.
The employer has not disclosed the grounds on which this suspicion arose in 1968.
Further after 1968, the appellant was given 490 two extra increments in addition to his normal increments in appreciation of his hard work.
This circumstance completely demolishes even the whimsical and tenuous stand taken by the employer.
It was manifest that the impugned action was not bona fide.
[498 D] The Chartered Bank vs The Chartered Bank Employees ' Union ; ; Murgan Mills Ltd. vs Industrial Tribunal, Madras ; and Workmen of Sudder Office, Cinnamare vs Management, [MO] II L.L.J. 620. followed.
Air India Corporation Bombay v, V. A. Rebellow & Anr. ; distinguished.
Delhi Transport Undertaking vs Goel [1970] II LIJ, 20, referred to.
(3) It is true that this Court, in appeal, as a rule of practice, is loath to interfere with a finding of fact recorded by the trial court.
But if such a finding is based on no evidence or is the result of a misreading of the material evidence or is so unreasonable or grossly unjust that no reasonable Person would judicially arrive at that conclusion.
it is the duty of this Court to interfere and set matters right.
[498 E F]
|
iminal Appeal No. 12 of 1972.
From the Judgment and Order dated the 1st May, 1971 of the Madhya Pradesh High Court in Crl.
Appeal No. 653 of 1970.
2 470SCI/75 520 R. K. Bhatt for the appellant.
Ram Punjwani, H. section Parihar and 1.
N. Shroff, for the respondent.
The, Judgment of the Court was delivered by BEG, J. The sole appellant Ram Kumar Pandey, aged 45 years, was tried together with Suresh Kumar aged 20.
years, and Mulkraj, aged 45 years, and Ramesh Kumar, aged 17 years, on two charges framed against him.
These were : "Firstly; That you on or about the 23rd day of March 1970 at Raipur, did an act, to wit, hit Uttam Singh with a knife with such intention or.
knowledge and under such circumstances, that if by that act, you had caused the death of Uttam Singh you would have been guilty of murder and that you caused grievous hurt to Uttam Singh by the said act and that you thereby committed an offence, punishable under Section 307 I.P.C. and; Secondly : That at the said time and place, you or some other persons did commit murder by intentionally or knowingly causing the death of Harbinger Singh and the said act was done in furtherance of the common intention of all and thereby committed an offence punishable under Section 302 read with Section 34 of the Indian Penal Code and within the cognizance of the Court of Sessions.
" Suresh Kumar, Mulkraj and Ramesh Kumar, were accused of ,offences punishable under Sections 307/114 and Section 302 read with Section 34 and 114 Indian Penal Code.
The Sessions ' Judge of Raipur, who had tried the case, found Suresh Kumar guilty of the murder by stabbing of Harbinder Singh, aged about 16 years, and sentenced him to life imprisonment.
He convicted the appellant under Section 324 I.P.C. only for the injury inflicted on Uttam Singh and sentenced him to one year 's rigorous imprisonment, but acquitted him of other charges.
He also acquitted the accused Ramesh and Mulkraj of all charges leveled against him.
The State of Madhya Pradesh appealed against the acquittal of the appellant Ram Kumar Pandey of the charge under Section 302/34 I.P.C., and of Mulkraj and Ramesh Kumar of all charges.
Suresh Kumar, the son of Mulkraj appealed against his conviction under Section 302 simplicitor, but this appeal was dismissed by the High Court which maintained his life imprisonment.
The High Court also allowed the States appeal against the acquittal of Ram Kumar Pandey for injuries caused to Harbinder Singh, and, convicting him under Section 302/34 I.P.C., it sentenced him to life imprisonment.
It convicted Mulkraj of an offence punishable only under Section 323 I.P.C. and sentenced him to a fine of Rs. 200/ , and, in default of payment of fine, to rigorous imprisonment for two months.
It, upheld the acquittal of Ramesh Kumar Ahuja of all charges.
This appeal has come up before us after a certificate granted by the High Court under Article 134(1) (c) of the Constitution, but the 521 certificate says that the appellant is entitled to it under the , strictly speaking, no certificate of the High Court is required for such an appeal where an acquittal has been converted into a conviction finder Section 302/34 I.P.C., and a sentence of life imprisonment imposed upon an accused person.
Thus appeal, in such a case, lies as a matter of right to this Court under the Act of 1970.
The only question before us now is whether the appellant, who had not appealed at all to the High Court against his conviction under Section 324 I.P.C., which stands, was rightly convicted by the High Court under Section 302/34, I.P.C., after setting aside his acquittal for the graver offence for injuries resulting in the death of Harbinder Singh.
The well settled rule of practice in a case of an appeal against an acquittal is that the appellate Court should not interfere with the acquittal merely because it can take one of the two reasonably possible views which favours conviction.
But, if the view of the Trial Court is not reasonably sustainable, on the evidence on record, the appellate Court will interfere with an acquittal.
If the Appellate Court sets aside an acquittal and convicts, we have to be satisfied, after examining the prosecution and defence cases, and the crucial points emerging for decision from the facts of the case, that the view taken by the Trial Court, on evidence on record, is at least as acceptable as the one taken by the High Court, before we could interfere with the High Court 's judgment.
The prosecution case, as set out in the First Information Report was ; Uttam Singh, PW 1, residing at Ganj Parao, on the first floor went home at about 3.30 p.m. on 23 3 1970 and was preparing to have a bath when Suresh Ahuja came down from an upper storey of the house and complained that Uttam Singh had been quarreling with members of his family.
Uttam Singh requested him to take his seat and promised to look into the matter.
This angered Suresh Ahuja.
Thereafter, his, elder brother arrived and started quarreling with Uttam Singh 's daughter.
At this stage, the landlord Mulkraj Ahuja, accompanied by the appellant Ram Kumar Pandey, who lives with his family in a side room on the ground floor, entered and immediately gave him a blow on his eye ,brow.
Uttam Singh fell down.
As Uttam Singh got up, the appellant struck him with a knife from behind.
Mukhraj asked Pandey to run down stairs.
Both the accused tried to run away.
Uttam Singh tried to catch them but failed.
Uttam Singh when asked his son Harbinder Singh to make a telephone call.
At this point, Suresh, son of Mulkraj, stabbed Harbinder Singh who fell down in the lane.
Uttam Singh saw Harbinder Singh lying near the house of Saudager Shah with an injury on his chest which was bleeding profusely.
Harbinder Singh was carried to a hospital on a cart and Gurcharan Singh telephoned the police.
Joginder Singh also came while the injuries were being inflicted.
Uttam Singh 's daughters Amarit Kaur and Taranjit Kaur saw Uttam Singh wrapping a chadar an the wound of Harbinder Singh.
Raj Jaggi had seen Harbinder 522 Singh falling down.
The motive for this incident was that Mulkraj Ahuja, the landlord, wanted his house vacated by Uttam Singh.
Harbinder Singh had died while being taken to hospital.
The above mentioned First information Report was lodged at Police Station Ganj on 23 3 1970 at 9.15 p.m.
The time of this incident is stated to be 5 p.m.
The only person mentioned as an eye witness to the murder of Harbinder Singh is Joginder Singh.
The two daughters Taranjit Kaur, PW 2, and Amarjit Kaur, PW 6, are mentioned in the F.I.R. only as persons who saw the wrapping of the chadar on the wound of Harbinder Singh, What is most significant is that it is nowhere mentioned in the F.I.R. that the appellant had stabbed Harbinder Singh at all.
It seems inconceivable that by 9.15 p.m. it would not be known to Uttam Singh, the father of Harbinder Singh, that the appellant had inflicted one of the two stab wounds on the body of Harbinder Singh.
No doubt, an F.I.R. is a previous statement which can, strictly speaking, be only used to corroborate or contradict the maker of it.
But, in this case, it had been made by the father of the murdered boy to whom all the important facts of the occurrence, so far as they were, known up to 9.15 p.m. on 23 3 1970, were bound to have been communicated.
If his daughters had seen the appellant inflicting a blow ' on Harbinder Singh, the father would certainly have mentioned it in the F.I.R. We think that or missions of such important facts, affecting the probabilities of the case, are relevant under Section 11 of the Evidence Act in judging the veracity of the prosecution case.
Even Joginder Singh, PW 8, was not an eye witness of the, occurrence.
He merely proves an alleged dying declaration.
He stated that Harbinder Singh (described by his pet name as "Pappi") rushed out of his house by opening its door, and held his hand on his chest with blood flowing down from it.
He deposed that, when he asked Pappi what had happened, Pappi had stated that Suresh and Pandey had injured him.
It is clear from the F.I.R. that Joginder Singh had met Uttam Singh before the F.I.R. was made.
Uttam Singh did not mention there that any dying declaration indicating that the appellant had also injured Harbinder Singh.
was made by Harbinder Singh.
The omission to mention any injury inflicted on Harbinder Singh by the appellant in the F.I.R. seems very significant in the circumstances of this case.
Indeed, according to the version in the F.I.R., Joginder Singh, who was in the lane, is said to have arrived while Harbinder Singh was being injured.
Therefore, if this was correct, the two injuries on Harbinder Singh must also have been inflicted in the lane outside.
Satwant Kaur, PW 7, the wife of Uttam Singh, who claimed to have been an eye witness of the whole occurrence, was also not mentioned in the F.I.R. Suresh had, according to her, stabbed Harbinder Singh on the right side of the chest at the door of the kitchen, and thereafter, Pandey was said to have attacked him.
523 Again, we find that Taranjit Kaur, PW 2, and Amarjit Kaur, PW 6, daughters of Uttam Singh, have figured as eye witnesses of the whole occurrence including the stabbing of Harbinder Singh by the appellant.
As already indicated, they are not mentioned in the F.I.R. as eye witnesses of the murder.
This is also very significant in the present case.
They have been mentioned only as witnesses of wrapping a chadar on the wound of Harbinder Singh who was then said to be lying in the lane after the occurrence.
In order to explain how Harbinder Singh, said to have been attacked near the kitchen of Uttam Singh on the first floor, was found lying in the lane in a pool of blood, the persecution version is that, after the attack with knives by Suresh and the appellant, Harbinder Singh ran and rushed down the steps into the lane.
It was pointed out that, in view of the nature of two injuries sustained, by Harbinder Singh and the medical evidence about them, it was not possible for Harbinder Singh either to have rushed down, or, in any case, to have made a dying declaration.
The injuries on Harbinder Singh found by Dr. section C. Vishnoi were as follows : "(i) An incised wound on the left side of the chest placed anteriorly and measuring 1 1/2" x 1" x 1 1/2" deep.
In the fifth intercostal space closed to the lateral border of the left side of the sternum.
It had clean cut and blood stains margins.
(ii) An incised wound on the right side of back in the 8th intercostal space 2" below the inferior angle of scapula.
It had measured 1" x 1" x 1".
It had clean cut and bloodstains margins.
There was found difficulty in probing through this wound".
The Doctor said about the first injury "This injury had entered the cavity of the right ventrical.
It was a very serious injury.
Right ventrical is an important part of the heart.
Generally such an injury would result in an instantaneous death.
Injury to the right ventrical and the paricardium had resulted in profused hemorrhage".
He also said : Injury to the lobe of the right lung and the pleura as found in this case will result in shock.
Ordinarily such a injury would immediately be fatal".
The main points for decision which emerged from the evidence in the case were: 1.
Where was Harbinder Singh stabbed? 2.
Who could have been the witness of the stabbing? 3.
Could the alleged eye witnesses be believed? 4.
Could the dying declaration, said to have been made, to 524 Joginder Singh, be made the sole basis of the conviction of the appellant under section 302/34 IPC if the evidence ,of alleged eye witnesses was to be discarded? As regards the place where the stabbing ' took place, the High Court had itself felt highly dissatisfied with the manner in which the case was investigated.
The site plans do not show any place where the blood was found.
if blood marks had been shown and blood had been taken from spots where it had fallen, it would have afforded very valuable evidence on the question whether any stabbing of Harbinder Singh did take place at door of the kitchen and whether he ran after that.
The site plans did not show even where the kitchen was.
Therefore, we cannot know, by looking at these, whether the three ladies, who are alleged to be eye witnesses at the trial, could have seen the occurrence in the room in which Uttam Singh was injured as well as at the door of the kitchen.
Taking all the relevant evidence on this point into account, it is far 'more likely that, as the Sessions ' Judge had guessed, the deceased had been stabbed by Suresh twice in the lane, probably once from the front and again while he fell or was trying to run away.
He could not have moved far from the scene where he was stabbed.
The High Court 's reasons to dislodge this inference are insufficient.
As regards the second and third points, we are unable to give credence to the version of the three alleged eye witnesses as they were not mentioned as eye witnesses in the F.I.R. made in the circumstances indicated above.
Lastly, the alleged dying declaration is also not mentioned in the F.I.R.
On the other hand, the F.I.R., mentions Joginder Singh, who tried to prove the dying declaration as an eye witness.
It may be pointed out that the charge against the appellant for offences under Section 302/34 I.P.C. is also defective inasmuch as it shows that either the appellant "or some other person" committed the murder.
It does not show how or even mention that the appellant acted in concert with anyone else.
However, no grievance has been made of any defect in the charge or any prejudice to the appellant from it.
We therefore, ignore it.
It may also be mentioned that the High Court had itself recorded the following finding: "All the eye witnesses have admitted that the four accused did not come together ;it the same time in the room where the incident happened.
Suresh Kumar came in that room first, Ramesh Kumar then entered the room and some time after they were followed by Mulkraj and Ram Kumar Pandey.
There is nothing to show that there was a preconcert between the four accused to commit any particular offence in the room.
It appears that the whole incident took an ugly and unexpected turn and the most unfortunate result 525 was that Harbinder Singh was killed.
We are of the view that the trial Court was right in reaching the conclusion that Ram Kumar Pandey and Suresh Kumar were individually responsible for their acts".
It is difficult, after this finding to follow the reasoning of the High Court in coming to the conclusion that the appellant was guilty of an offence punishable under Section 302/34 I.P.C. Consequently, we allow this appeal and set aside the conviction and sentence of the appellant under Section 302/34 I.P.C. If the appellant has already served the sentence awarded under Section 324 I.P.C., as is stated on his behalf, he will be released forthwith.
V.M.K. Appeal allowed.
| IN-Abs | The appellant was charged with two offences, (i) under section 307 I.P.C. with respect to one person, and (ii) under section 302/34, I.P.C. for having, along with other accused, caused the death of another.
The trial court convicted him under s.324 I.P.C. on the first charge and acquitted him of the other charge.
The appeal by the State against the acquittal on the second charge was allowed by the High Court and the appellant was convicted under s.302/34 I.P.C. and sentenced to life imprisonment.
Allowing the appeal to this Court, HELD : (1) In the case of an appeal against an acquittal the appellate court should not interfere with the acquittal merely because it can take one of the two reasonably possible views which favours conviction.
But if the view of the trial court is not reasonably sustainable, on the evidence on record.
the appellate court will interfere with the acquittal.
If the High Court sets aside an acquittal and convicts, this Court has to be satisfied, after examining the prosecution and defence cases, and the crucial points emerging for decision from the facts of the case, that the view taken by the trial court, on the evidence on record, is atleast as acceptable as the one taken by the High Court, before this Court could interfere with the decision of the High Court.
[521D] (a) The First Information Report is a previous statement which, strictly speaking, can be only used to corroborate or contradict the maker of it.
In the present case, the F.I.R. was made by the father of the deceased to whom all the important facts of the occurrence were bound to have been communicated.
But, though the F.I.R. was given about 4 hours after the incident, it was not mentioned therein that the appellant had stabbed the deceased.
The omission of such an important fact affecting the probabilities of the case is relevant under s.11 of the Evidence Act in judging the veracity of the prosecution case.
[522D] (b) The evidence, shows that the deceased was stabbed by one or the other accused; that the place of occurrence had been shifted by the witnesses for the prosecution; that the version of the alleged eye witnesses is not credible; and that the alleged dying declaration is unreliable.
[524B D] (2) The High Court, having found that the appellant and the other accused were individually responsible for their acts, erred in finding the appellants guilty on the basis of common intention, of an offense under section 302/34 I.P.C. [524FG] (3) An appeal to this Court by the accused, in a case where his acquittal had been converted into a conviction and the sentence of life imprisonment was imposed upon him, lies as a matter of right under the , and no certificate of the High Court is necessary.
[521A]
|
Appeal No. 2053 of 1971.
Appeal by special leave from the Judgment & Order dated the 8th July, 1971 of the Bombay High Court in S.C.A. No. 1346/68.
M. C. Bhandare, P. H. Parekh and section Bhandare, for the appellant.
The Judgment of the Court was delivered by SARKARIA, J.
Whether the difference of 10 per cent between an Industrial Company and other Companies in the levy of Income tax provided in the Finance Act, 1966 is to be construed a "rebate" or "relief" in the payment of any direct tax, for the development of an industry for the purposes of section 7(e) of the , (for short, the Bonus Act) is the short question that falls to be answered in this appeal by special leave.
The appellant is a Private Ltd. Company.
it manufactures automobile ancillaries and other goods in its Factory at Bombay.
It employs about 170 workmen.
The workmen demanded bonus for the year 1964 65.
Their demand was not met by the Company.
Conciliation proceedings before the Conciliation Officer having failed, the dispute was submitted to the Government which by its Order, dated May 2, 1967 referred the same for adjudication to the Industrial Tribunal.
One of the points mooted before the Tribunal was, whether in calculating the available surplus, the direct tax payable by the Company was deductible at the rate of 55 per cent or 65 per cent.
The case of the Mazdoor Saneh (Respondent No. 1) was that the rate should be 55 per cent as the Company was paying the tax at the rate As against this, the Company contended that it was entitled to deduct as per section 7(e) of the Bonus Act, direct tax at the normal rate of 65 per cent and not at 55 per cent which was only a confessional levy amounting to a "relief" for the purpose of development.
The Tribunal accepted the contention of the Company.
After referring to the speech of the Finance Minister on the Budget of 196667, the Tribunal held: assessed to income tax at the rate of 65 per cent, those engaged in industrial undertakings have been assessed at the concessional rate of 55 per cent, as a measure of rendering assistance to their growth.
Such a concession would, unquestionably amount to relief for the purpose of development as contemplated by Section 7(e) of the Act.
" Aggrieved, the Mazdoor Sangh impugned the Tribunal 's Award, dated 29 2 1968, by a Writ Petition under Article 227 of the Con 544 stitution before the High Court of Bombay.
The High Court held that the Company being an Industrial Company, was liable to pay tax under the Finance Act, 1966 at the rate of 55% only on its total income after deducting depreciation.
Therefore it could not claim deduction at a rate higher than 55% in calculating the available surplus.
In the result, the High Court set aside the Award and remitted the case to the Tribunal for further disposal in accordance with law.
Hence this appeal by the Company.
Broadly, the scheme of the Bonus Act is this : At first, the gross profits derived by an employer from an establishment are calculated in the manner specified in the First Schedule, or the Second Schedule, whichever may be applicable (section 4).
On the basis of such gross profits, the available surplus for the particular accounting year is computed.
This is done by deducting therefrom the sums referred to in Section 6.
According to Clause (c) of Section 6, one of the sums so deductible is: "Subject to the provisions of Section 7, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year".
Section 7, to which section 6(c) is subject, provides how for the purposes of the Act, the direct tax payable by the employer is to be calculated.
Clause (e) of Section 7 is material.
It runs thus : "no account shall be taken of any rebate (other than development rebate or development allowance) or credit or relief or deduction (not hereinbefore mentioned in section) in the payment of any direct tax allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act, for the development of any industry".
The rates of income tax applicable to Private Ltd. Companies tinder Paragraph F, Part I of the First Schedule fixed by the Finance Act, 1966, are as follows : 1.
In the case of a domestic Company(A) (1). (2) where the Company is not a company in which the public are substantially interested.
(i) in the case of an industrial Company (1) on so much of the total income as does not exceed Rs. 10,00,000 55 per cent.
(2) on the balance, if any of the total income 60 per cent.
(ii) in any other case 65 per cent of the total income".
It is not disputed that the Company being an industrial Company with total income for the relevant year, not exceeding Rs. 10,00,900,, 545 the rate of tax under the above Paragaph 1(A) (2) (i), applicable to it was 55 per cent and not 65 per cent of the total income.
However, Mr. Bhandare 's contention is that this was only a concessional rate and not the normal rate which was prescribed under Clause (ii) of the above Paragraph 1(A) (2).
The point pressed into argument is that this ten per cent concession in the tax rate was given to Industrial Companies with a view to promote development of Industry and, as such, must be deemed to be a "relief" or "rebate" in the payment of direct tax of the kind contemplated by Section 7(e) of the Act.
Reliance for this contention has been placed on the speech of the Finance Minister on the Budget of 1966 67, wherein he proposed to provide "certain reliefs" which he considered "necessary for providing a suitable climate of growth", and, in that context, described the rate of 55% tax on Industrial Companies as a "concessional rate".
We are afraid what the Finance Minister said in his speech cannot be imported into this case and used for the construction of Clause (e) of Section 7.
The language of that provision is manifestly clear and unequivocal.
It has to be construed as it stands, according to its plain grammatical sense without addition or deletion of any words.
As a general principle of interpretation, where the words of a statute are plain, precise and unambiguous, the intention of the Legislature is to be gathered from the language of the statute itself and no external evidence such as Parliamentary Debates, Reports of the Committees of the Legislature or even the statement made by the Minister on the introduction of a measure or by the framers of the Act is admissible to construe those words.
It is only where a statute is not exhaustive or where its language is ambiguous, uncertain, clouded or susceptible of more than one meaning or shades of meaning, that external evidence as to the evils, if any, which the statute was intended to remedy, or of the circumstances which led to the passing of the statute may be looked into for the purpose of ascertain ing the object which the Legislature had in view in using the words in question.
In the case before us, the language of Section 7(e) is crystal clear and self contained.
It indicates in unmistakable terms that the 'rebate or relief ' in the payment of any direct tax in order to fall within the purview of this clause must satisfy two conditions, viz., (i) that it must be a rebate or relief "allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act", and further, (ii) that it must be a relief or rebate for the development of any Industry.
In the present case, condition (i) is lack ing.
The Finance Act, 1966, does not say that this difference of 10per cent in the rates of tax applicable to an Industrial Company and any other Company is to be deemed to be a rebate or relief for the development of Industry.
Nor has it been shown that this difference in the rates is allowed as a rebate or relief under any other extant law relating to direct taxes.
546 The High Court was, therefore, right in holding that it was not ,permissible to use the speech of the Finance Minister to construe the clear language of the statute,.
For the forgoing reasons the question posed above is answered in the negative and the appeal is dismissed.
As regards the costs, the delay in payment of the bonus caused by the pendency of this appeal has been amply compensated vide this Court 's order dated February 17, 1972, which is to this effect "The order of ex parte stay is made absolute on the condition that the petitioner appellant shall pay six percent interest on any amount that is found payable by the appellant to the respondent workmen from the date the award become enforceable till the disposal of the appeal in this Court, in case the appeal fails in this Court.
" The appeal has been heard ex parte, we therefore make no order as to costs.
P.B.R. Appeal dismissed.
| IN-Abs | Section 7 of the Bonus Act provides as to how the direct tax payable by an employer is to be calculated for the purpose of computing the available surplus.
Clause (e) of section 7 enacts that no account shall be taken of any 'rebate ' or 'relief ' or deduction in the payment of any direct tax allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act for the development of any industry.
in the case of an industrial company, which is not a company in which public ,arc substantially interested, the Finance Act.
1966 fixed the rate of income tax at 55% on so much of the total income as did not exceed Rs. ten lakhs, on the balance, if any, of the total income 60% and 65% in the case of any other ,company.
In a dispute between its employees and the appellant, which is an industrial company the latter contended that for the purpose of computing the available surplus it was entitled to deduct direct tax at 65% and not 55% which was only a confessional levy amounting to a 'relief ' for the purpose of development.
The Tribunal accepted the contention of the appellant.
The High Court allowed the respondent 's writ petition under article 227 of the Constitution holding that the company being an industrial company could not claim deduction at a rate higher than 55% in calculating the available surplus.
On appeal it was contended that the 10% concession in the rate was given to industrial companies with a view to promote development of industry and as such must be deemed to be a 'relief ' or 'rebate ' in be payment of direct tax contemplated by section 7(e) of the Bonus Act.
Reliance for this had been placed on the speech of the Finance Minister on the budget for the year 1966 67.
Dismissing the appeal, HELD : (1) The company being an industrial company with total income not exceeding rupees ten lakhs the rate of tax under paragraph 1(A)(2)(i) of the Finance Act.
1966 applicable to it was 55% and not 65% of the total income.
[544H 545A] (2) The 'rebate or relief ' in the payment of any direct tax, in order to fall within the purview of section 7(e) of Bonus Act.
must be a rebate or relief "allowed under any law for the time being in force relating.
to direct taxes or under the relevant Finance Act.
for the development of any industry" which is one of the conditions to be satisfied.
In the present case it did not satisfy this condition.
The Finance Act, 1966 did not say that this difference of 10% in the rate of tax applicable to an industrial company and any other company is to be deemed to be a rebate or relief for the development of industry.
No, has it been shown that this difference in the rates is allowed as a rebate or relief under any other extant law relating to direct taxes.
[545F H] 3 (a) It was not permissible to use the speech of the Finance Minister to construe the clear language of the statute.
[545C D] (b) As a general principle of interpretation, where the words of a statute are ,plain, precise and unambiguous the intention of the Legislature has to be gathered from the language of the statute itself and no external evidence such as Parliamentary debate , Reports of the Committees of the Legislature or even the statement made by the Minister on the introduction of a measure or by the framers of the Act is admissible to construe those words.
It is only where a statute is not exhaustive or where its language is ambiguous, uncertain, clouded or susceptible of more 543 than one meaning or shades of meaning that external evidence as to the evils.
if any.
which the statute was intended to remedy.
or of the circumstances which led to the passing of the statute may be looked into for the purpose of ascertain ing the object which the Legislature had in view in using the words in question.
[545D F]
|
Appeal No. 11 of 1954.
68 Appeal from the judgment and Decree dated the 20th day of June 1950 of the High Court of Judicature for the State of Punjab at Simla in Regular First Appeal No. 73 of 1941 arising out of the Decree dated the 19th day of December 1940 of the Sikh Gurudaras Tribunal, Lahore in Suit No. 11 of 1938.
Gurbachan Singh and R. section Narula, for the appellant.
Achhru Ram, (Naunit Lal with him), for the respondents Nos.
I and 2.
K. L. Mehta, for the respondents Nos.
3 to 5. 1955.
March 24.
The Judgment of the Court was delivered by JAGANNADHADAS J.
This is an appeal on leave granted by the High Court of Punjab against its judgment affirming the decree of the Sikh Gurdwara Tribunal dated the 19th December, 1940, dismissing the plaintiff 's suit.
The plaintiff in the appeal is the Committee of Management of Sikh Gurdwaras within the Municipal limits of Amritsar (except the Gurdwara Sri Akal Takhat Sahib, Amritsar).
The plaint was filed under section 25 A of the Sikh Gurdwaras Act, 1925, (Punjab Act VIII of 1925) (hereinafter referred to as the Act) for possession of certain properties situated in Amritsar, marked and bounded as specified in the plaint and purporting to have been declared as a Sikh Gurdwara by the Government of Punjab under section 17 of the Act by means of the notification No. 9 G dated the 3rd March, 1937.
The case of the plaintiff Committee is that these properties were, and were determined to be, a Sikh Gurdwara, by name Gurdwara Bunga Sarkar, by the Sikh Gurdwara Tribunal by its decree dated the 4th November, 1935 and confirmed on appeal therefrom by the High Court of Judicature at Lahore, on the 16th June, 1936 and that accordingly the Committee was entitled to possession of the properties.
The facts that have led up to the present appeal are as follows: After the Act was passed and within one year of its commencement the then existing non statutory Shiromani Gur 69 dwara Parbandhak Committee filed a list under section 3 of the Act claiming the suit properties and certain other items attached thereto as belonging to the Gurdwara Harmandir Sahib.
These properties comprised two items called Bunga Sarkar and Bunga Mai Mallan and the shops appurtenant to each of them.
Objections were filed to this list by way of two applications under section 8 of the Act claiming these as private properties.
One was by Sardar Balwant Singh dated the 8th March., 1928 and the other was by Sardar Raghbir Singh dated the 10th March, 1928.
Sardar Raghbir Singh claimed the whole of Bunga Sarkar and its appurtenant shops as well as 1/3rd of the Bunga Mai Mallan and of the appurtenant shops.
Sardar Balwant Singh 's claim was confined to 1/3rd share in Bunga Mai Mallan and in the appurtenant shops.
The other 1/3rd share in Bunga Mai Mallan was apparently treated by these claimants as belong ing to some other person who was not a party to these proceedings.
These two applications were forwarded under section 14 of the Act to the Gurdwara Tribunal for its decision.
The parties to these proceedings entered into a compromise on the 6th february, 1930.
There were two compromises one relating to each of the applications.
The net effect of the compromises was that some out of the items claimed were admitted to be the private property of the respective claimants and the rest as wakf bungas for the Yatries to Sri Darbar Sahib, that the non personal properties were to remain in the management of the claimants, their heirs and representatives as such wakf with certain stipulations as to how that management was to be carried on.
The Tribunal disposed of the two applications before them in terms of these compromises.
It may be mentioned that though the original list under section 3 of the Act was filed by the then non statutory Shiromani Gurdwara Parbandhak Committee, the compromises were entered into by the Managing Committee of the Gurdwaras within the limits of the Municipal Committee, Amritsar, which presumably had already by then been formed Linder section 85 of the Act.
Now, quite independently of these 70 proceedings befere the Tribunal, and prior to the filing of the list under section 3 and of the objections under section 5 above referred to, there had been filed a petition under section 7 of the Act, signed by 55 Sikhs, claiming these very properties as being in themselves a Sikh Gurdwara by name Bunga Sarkar (Maharaja Ranjit Singh Saheb) and enclosing a list of properties as belonging thereto under section 7(2) of the Act.
It does not appear that this petition was brought to the notice of the Gurdwara Tribunal when it passed the decree in terms of the compromise with reference to the objections under section 5 of the Act.
The petition under section 7 was in the usual course followed by a notification issued by the Government on the 18th February, 1930, under section 7(3) of the Act.
This resulted in (1) an objection under section 8 by the Granthis objecting that this was not a Sikh Gurdwara, and (2) two other objections by Sardar Raghbir Singh and Sardar Balwant Singh, already previously above referred to, under section 10 of the Act claiming the properties as their own and objecting to the claim made that they were Sikh Gurdwaras.
These objections were filed on the 5th April, 1930.
It may be noticed that the notification under section 7(3) of the Act was within a few days after the compromise decrees in the proceedings under section 5 of the Act and it does not appear whether the compromises were brought to the notice of the Government or not.
These objections under sections 8 and 10 (and presumably also the petition under section 7) were forwarded to the Tribunal for its decision under section 14 of the Act.
The petition under section 8 filed by the Granthis was contested by the Shiromani Gurdwara Parbandhak Committee (Statutory) and after recording some evidence, the Tribunal came to the conclusion that Bunga Sarkar was a Sikh Gurdwara and declared it as such on the 28th August, 1935.
On the objections under section 10; notices were given to the Committee of Manaaement as well as to the Shiromani Gurdwara Parbandhak Committee but they declined to become parties to it.
The contest under section 10 of the Act 71 was only as between the claimants and some of the Sikhs who filed the petition under section 7.
At the hearing before the Tribunal both sides relied upon the previous compromises in support of their respective claims.
The Tribunal by its decision dated the 4th November, 1935, decided that the properties which had been declared as the properties of Sardar Raghbir Singh and Sardar Balwant Singh respectively, should be declared to be their personal properties and that the rest of the properties claimed to belong to Bunga Sarkar and Bunga Mai Mallan should be declared to be Sikh Gurdwaras and as properties appurtenant thereto.
It was also declared that these two Gurdwaras and the properties held to be appurtenant to them should vest in the management of Sardar Raghbir Singh and Sardar Balwant Singh by virtue of and as per terms of the compromises.
As against these decrees two appeals were presented by the Sikh worshippers to the High Court and the only question that ultimately appears to have been raised was that the direction given by the Tribunal to the effect that the properties should remain in the management of the claimants, Sardar Raghbir Singh and Sardar Balwant Singh, was illegal.
The High Court without giving any decision on the legal question so raised was of the opinion that it was no function of the Sikh Gurdwara Tribunal to pass an order on an application made under section 10 by the claimants that the claimants should manage the properties appurtenant to the Gurdwaras by virtue of the compromises.
They thought that the question of right of management should be left open in these proceedings and that the directions in the decree of the Tribunal relating to the management should be deleted therefrom and that the rest of the decrees of the Sikh Gurdwara Tribunal is to stand.
They expressed their conclusion in the following terms: "That portion of the decree of the Sikh Gurdwara s Tribunal which has declared the respondents ' right to manage the Gurdwaras and the properties appended thereto shall form no part of the decree granted by the Tribunal; the rest of the decree of the Sikh Gur 72 dwaras Tribunal stands, that is to say, the properties which have been declared to be the personal properties of Sardar Raghbir Singh and Sardar Balwant Singh shall remain their properties and the properties which have been declared to be appended to the two Gurdwaras shall remain the properties of the two Gurdwaras".
The High Court also added that though the proceedings mentioned the existence of two Gurdwaras by name Bunga Sarkar and Bunga Mai Mallan, the real position seemed to be that there was only one Gurdwara, viz. Bunga Sarkar, and that Bunga Mai Mallan had no separate existence as a Gurdwara but was a well known part of Bunga Sarkar.
This decision of the High Court was on the 16th June, 1936.
This was followed by notification No. 9 G dated the 3rd March, 1937, under section 17 of the Act which is the foundation of the present suit.
On these facts a number of contentions were raised by both sides before the High Court as well as before us.
The judgment of the High Court as well as the arguments before us have covered a wide range.
On the merits, the case for the plaintiff is quite simple.
The plaintiff says that whatever may be the position with reference to the earlier compromises arrived at between the parties in the proceedings under section 5 of the Act, the later proceedings with reference to those very properties under section 10 of the Act resulted in the judgment of the High Court dated the 16th June 1936, which is conclusive and binding.
By virtue of the said judgment and the notification dated the 3rd March, 1937, following thereupon, the plaintiff is entitled to possession of the properties by virtue of section 25 A of the Act.
On the side of the defendants various objections have been raised which may be summarised as follows: (1) The proceedings under section 10 did not result in any specific declaration in favour of the Committee that the properties in dispute in the present suit constituted a Sikh Gurdwara or belong to a Sikh Gurdwara.
No such declaration can be gathered from the decision of the Tribunal dated the 4th November, 1935, or from that of 73 the High Court on appeal dated the 16th June, 1936.
(2) The Tribunal had no jurisdiction in disposing of an application under section 10 of the Act, to give a positive declaration that the property in question is a Sikh Gurdwara.
Its only function was to decide whether or not the properties claimed were the private properties of the claimants.
Hence even if the decision of the Tribunal and of the High Court can be treated as a decision declaring the properties as a Sikh Gurdwara that is not valid and the notification issued thereupon is void.
(3) Any such decision would be contrary to section 37 of the Act and also contrary to the principles of res judicata and would be, therefore, a nullity on that ground.
(4) The conduct of the Gurdwara Parbandhak Committee and the concerned Committee of Management, in entering into the compromises in the proceedings under section 5 of the Act without disclosing the pendency of the petition filed by the 55 Sikhs under section 7 of the Act, followed up by their declining to be made parties in the section 10 proceedings and in virtually promoting the contest of the proceedings under sections 8 and 10, was fraudulent.
They are accordingly estopped from relying on the decree obtained under section 10 proceedings and basing their right to relief thereon.
(5) The suit under section 25 A lies only where the decision on an objection under section 10(1) is reached after the notification that the Gurdwara is a Sikh Gurdwara is published since the section refers to.
a decision in favour of a "Notified Sikh Gurdwara" implying the pre existence of such notification.
(6) The suit under section 25 A was barred by limitation.
(7) The whole appeal abated in the High Court inasmuch as one of the respondents, Sardar Balwant Singh died during the pendency of the appeal.
His legal representatives were not brought on record in time and the High Court declined to excuse the delay and to set aside the abatement, as a result of which the entire appeal abated, the claim against both the respondents being joint and not being maintainable against one only in the absence of 10 74 the other.
In addition to these contentions which have been put forward before us and strenuously argued by both sides, the High Court also based its decision on the view that section 7 of the Act assumes the existence of a Gurdwara and that a notification issued under section 7 (3) without there being in fact a Gurdwara in existence would be ultra vires.
In the present case, in view of the prior proceedings under section 5 and the compromises following thereupon, the non existence of the Gurdwara as claimed in the petition under section 7(1) must be taken to have been made out and therefore the notification and all the proceedings following thereupon are illegal and ultra vires.
Though we have heard elaborate arguments from both sides on these various contentions, it appeared to us ultimately that the plea of limitation is decisive against the appellants and that it is unnecessary to express any opinion on any of the other contentions raised.
The question of limitation arises with reference to the terms of section 25 A which is as follows: "25 A. (1) When it has been decided under the provisions of this Act that a right, title or interest in immovable property belongs to a Notified Sikh Gurdwara , or any person, the Committee of the Gurdwara concerned or the person in whose favour a declaration has been made may, within a period of one year from the date of the decision or the date of the constitution of the Committee, whichever is later, institute a suit before a tribunal claiming to be awarded possession of the right, title or interest in the immovable property in question as against the parties to the previous petition, and the tribunal shall if satisfied that the claim relates to the right, title or interest in the immovable property which has been held to belong to the Gurdwara, or to the person in whose favour the declaration has been made, pass a decree for possession accordingly.
(2)Notwithstanding anything contained in any Act to the contrary, the court fee payable on the plaint in such suit shall be five rupees".
75 This section provides, for the filing of the suit, the period of one year from the date of the decision or the date of the constitution of the committee whichever is later.
Now the date of the decision in this case must be taken to be the date when the High Court on appeal disposed of the proceedings under section 10, i.e., the 16th June, 1936.
The present suit has been filed on the 25th February, 1938, i.e., clearly beyond one year of the decision.
The question for consideration, therefore, is whether the suit can be said to have been within one year from the date of the constitution of the Committee of the Gurdwara concerned.
Now, one has to turn to sections 85, 86 and 88 of the Act to appreciate which is, the Committee concerned with this Gurdwara and what the date of its constitution is.
Section 85 is as follows (in so far as it is relevant): "Subject to the provisions of section 88, there shall be one committee for the Gurdwaras known as the Darbar Sahib, Amritsar, and the Baba Atal Sahib, and all other Notified Sikh Gurdwaras situated within the municipal boundaries of Amritsar other than the Sri Akal Takht Sahib".
Section 86 is as follows (in so far as it is relevant): "For every Notified Sikh Gurdwara other than a Gurdwara specified in section 85 a committee shall be constituted after it has been declared to be a Sikh Gurdwara under the provisions of this Act".
Section 88 is as follows (in so far as it is relevant): "(1)The committees described in sections 85 and 86 shall be constituted as soon as may be after the constitution of the Board, provided that no committee shall be constituted for any gurdwara under the provisions of this Act unless and until it has been declared to be a Sikh Gurdwara under the provisions of this Act.
(2)When all the members of any committee described in section 85 have been elected or co opted, as the case may be, according to the provisions of that section, the Provincial Government shall notify the fact that the committee has been duly constituted, 76 and the date of the publication of the notification shall be deemed to be the date of the constitution of the committee".
Now, it is not disputed that the present plaintiff which is the Committee of Management for all the Gurdwaras situated within the Municipal limits of Amritsar, except the Gurdwara Sri Akal Takht Sahib was constituted prior to the year 1930 and was in fact functioning at the date of the compromises in the section 5 proceedings dated the 6th February, 1930.
It is also not disputed that by virtue of section 85(2), this committee also became the Committee concerned with the suit Gurdwara, which is admittedly located within the Municipal limits of Amritsar.
But it is contended for the appellants that this Committee becomes concerned with the suit Gurdwara only from the date when the notification under section 17 is issued, i.e., from the 3rd March, 1937, and that, therefore,, the plaintiff had one year from that date for the filing of the suit and that in the situation, section 25 A in providing the alternative period of limitation as being "one year from the date of the constitution of the committee", must be construed reasonably as being one year from the date of the notification in such a case and that for the purposes of this section, the pre existing committee must be deemed to have been constituted for the suit Gurdwara only on the date of the notification.
In support of this contention it has been pointed out that the specific policy of the Act as disclosed in sections 86 and 88 is that no Committee is to be formed for a Gurdwara until after ' it has been declared a Sikh Gurdwara under the provisions of the Act.
It is accordingly urged that the phrase "constitution of the committee" in section 25 A should be construed so as to indicate a point of time not earlier than the notification of the concerned Gurdwara and that in the circumstances and in such cases the date of the notification of the Gurdwara must be the date of the constitution of the concerned committee.
It appears to us, however, that this contention is untenable.
Section 86 in terms relates to a Notified Sikh Gurdwara other than Gurdwaras 77 specified in section 85.
Hence so far as our present purpose is concerned, the policy underlying section 86 does not necessarily apply to the Gurdwaras within the Municipal limits of Amritsar for which a Committee already exists.
Moreover, sub section (2) of section 88 provides with reference to Committees under section 85, that, as soon as all the members described therein have been elected or co opted, the fact should be duly notified, and also declares in clear and categorical terms that the date of the publication of the notification shall be deemed to be the date of the constitution of the Committee.
In the face of this deeming provision relating to these committees, it is not permissible to impute to such a Committee any other date as the date of its constitution for any of the purposes of the Act and to imply an exception and an addendum to the specific deeming provision.
This would be legislating.
We cannot, therefore, accept the contention of the appellant that the date of the notification under section 17 in the present case should be deemed to be the date of the constitution of the Committee concerned for the purposes of section 25 A. It has been urged that this view deprives the Committee of the benefit of the longer alternative period of limitation and that in a case where no notification under section 17 has been issued until after the expiry of an year from the date of the final decision that the Gurdwara claimed is a Sikh Gurdwara, the remedy under section 25 A would become inapplicable.
It may be that an exceptional case of undue delay in the publication of the notification may be a casus omissus but such a delay need not be assumed to be a matter of course.
That, at any rate, is not the present case where the notification was in fact issued within nine months of the decision of the High Court.
The Committee which should have been alert with reference to these matters, had, not only the whole of these nine months to take steps to get the notification published earlier, but, it had three months thereafter to come forward with the present suit.
However this may be, we do not consider that there is any question of hardship, 78 because obviously section 25 A is only an enabling section providing a cheap remedy by way of a suit before the Tribunal itself.
We are clearly of the opinion that the present suit under section 25 A is barred by limitation and on this ground the appeal must fail.
The appeal is accordingly dismissed with costs.
Appeal dismissed.
| IN-Abs | The plaintiff which is the Committee of Management for all Gurudwaras situated within the Municipal limits of Amritsar, except the Gurudwara Sri Akal Takht Sabib, was constituted prior to the year 1930 and by virtue of section 85(2) of the Sikh Gurudwaras Act (Punjab Act VIII of 1925) became the Committee concerned with the suit Gurudwara.
There were certain proceedings under the Act in respect of the suit properties which were ultimately decided by the High Court on the 16th June 1936 and the decision was followed by a notification under section 17 of the Act on the 3rd March 1937.
As a result the plaintiff became entitled to get possession of the said properties by instituting a suit before a tribunal under section 25 A of the Act within one year from the date of the decision or the date of the constitution of the Committee, whichever was later.
The present suit was filed on the 25th February 1938 which was beyond one year of the decision and the question was whether the suit can be said to have been instituted within one year of the date of the constitution of the Committee of the Gurudwara concerned, the contention being that the plaintiff must be deemed to have become the committee concerned with the suit Gurudwara only on the date of the notification thereof in 1937 under section 17 of the Act by virtue of the provisions of sections 86 and 88.
Held, that the date of the notification in 1937 under section 17 cannot be deemed to be the date of the constitution of the Committee concerned for the purposes of section 25 A and that the present suit is barred by limitation.
Section 86 does not apply to Gurudwaras within the Municipal limits of Amritsar specified in section 85, in respect of which a Committee already exists and by virtue of sub section (2) of section 88 the date of the publication of the notification of the Committee which already has been in existence since 1930 will be the date of the constitution of the Committee within the meaning of section 25 A.
|
Appeal No. 1868 of 1970.
From the Judgment and Order dated the 30th March, 1970 of the Gujarat High Court in S.C.A. No. 1219 of 1966.
N. A. Palkhivala, Sol.
J. Sorabji, Ashok Desai, D. B. Engineer, K. K. Master, and Ravinder Narain, for the appellant.
G. L. Sanghi and Girish Chandra, for the Respondents.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal, on, certificate of fitness obtained under Article 133 (1) (a) of the Constitution, is directed against a judgment of the High Court of Gujarat dismissing Special Civil Application No. 1279 of 1966 preferred by the appellants challenging the assessments to excise duty of certain dye stuffs manufactured by them.
The facts giving rise to the appeal are few and may be briefly stated as follows.
The appellants carry on business of manufacturing dye stuffs in a factory situate in a small township called Atul in Bulsar District in the State of Gujarat.
The dye stuffs manufactured by the, appellants were, throughout the period relevant to this appeal, sold by them in wholesale units to two wholesale buyers, namely, ICI (India) Ltd. (hereinafter referred to as ICI) and Atul Products Ltd. (hereinafter referred to as Atul) under respective agreements entered into by them with ICI and Atul.
Seventy per cent of the dye stuffs manufactured by the appellants were sold to ICI, while the remaining 30% to Atul.
The price charged by the appellants to ICI and Atul was a uniform price described as "the basic selling price" less trade discount of 18%.
ICI and Atul, in their turn, resold the dye stuffs purchased by them from the appellants to two categories of buyers.
One was the category of textile mills and other large consumers, while the 565 other was the category of distributors.
The sales by ICI and Atul to the textile mills and other large consumers were at the basic selling price without any discount, but so far as the distributors were concerned, the sales to them by ICI and Atul were at a higher price, though with trade discount.
ICI charged a higher price but allowed 10% trade discount, while Atul charged a slightly lower price and allowed two and a half per cent trade discount.
The prices were, how ever, so adjusted that the net selling prices charged by ICI and Atul to :the, distributors were almost the same.
The distributors, in their turn, resold the dye stuffs purchased by them from ICI and Atul to the small consumers at a slightly higher price referred to as "small consumers price".
No discount was given by the distributors to the small consumers.
The position which, therefore, obtained during the relevant period was that the appellants sold the dye stuffs manufactured by them in wholesale units, 701% to ICI and 30% to Atul, at the basic selling price, less trade discount of 18%: ICI and Atul in their turn resold a part of the dye stuffs in retail units to the textile mills and large consumers at the basic selling price and the balance in wholesale units to the distributors at higher selling prices with 10% trade discount in case of ICI and 2 1/2% trade discount in case of Atul, the net selling prices charged by both of them, however, being the same; and the distributors, in their turn, resold the dye stuffs to small consumers in retail units at the small consumers price.
It may be pointed out that though Atul initially charged a lower selling price and gave a trade discount of 2 1/2%, it fell incline with ICI and adopted the same selling price as ICI with trade discount of 10% from and after 1st May, 1963.
There was no excise duty on dye stuffs prior to 1st March, 1961, but with effect from that date excise duty was imposed for the first time on dye stuffs, including those manufactured by the appellants.
The excise duty chargeable under the relevant entry in the first Schedule read with section 3, sub section (1) of the Central Excise and Salt Act, 1944 was ad valorem, and it was, therefore, necessary to determine the value of the dye staffs manufactured by the appellants for the purpose of assessing the excise duty payable on them.
Section 4 of the Act provided how the value of an article chargeable with duty at a rate depending on its value shall be determined for the purpose of assessment of excise duty.
It said : "Determination of value for the purpose of duty.
Where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value be deemed to be (a) the whole sale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production, or if a wholesale 566 market does not exist for such article at such place, at the nearest place where such market exists, or (b) where such price is not ascertainable, the price at which an article of the like kind and quality sold or is capable of being sold by the manufacturer or producer, or his agent, at the time of the removal of of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production or if such article is not sold or is not capable of being sold at such place, at any other place nearest thereto.
Explanation.
In determining the price of any article under this section no abatement or deduction shall be allowed except in respect of trade discount and amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesaid.
" The question arose as to how the value of the dye stuffs manufactured by the appellants should be determined on a proper application of the rule aid down in section 4.
The appellants contended before the Excise Authorities that for the purpose of assessing the excise duty, the value of the dye stuffs manufactured by the appellants should be taken to be the price at which the appellants sold the same in whole sale units to ICI and Atul, less a uniform trade discount of 18% which the appellants at the relevant time gave to these two wholesale buyers.
This contention was not accepted by the Superintendent of Central Excise who was the original assessing authority.
He took the view that the value of the dye stuffs for ,the purpose of assessment of excise duty should be taken to be the price at which ICI and Atul sold the dye stuffs to the distributors and.
no deduction should be allowed in respect of the discount given by them to the distributors since it was not uniform, being 10% in case of ICI and 2 1/2% in case of Atul.
The appellants appealed against the assessment to the Assistant Collector of Central Excise, but the appeal was unsuccessful and the assessment was confirmed.
That led to the filling of a further appeal to the Collector of Central Excise.
This appeal resulted in some gain, little though it was, as the Collector of Central Excise held that in determining the, assessable value, trade discount of 21% which was given by Atul to the distributors should be allowed to be deducted from the price charged by ICI to the distributors.
This was, however, plainly illogical.
If the price charged by ICI was taken as a basis, trade discount of 10% should have been allowed as that was the discount given by ICI to the distributors.
Trade discount of 21% given by Atul on the lower price charged by it to the distributors could not be deducted from the price charged by ICI to the distributors which was fixed at a higher figure because of the larger trade discount of 10% given by it to the distributors.
The assessable value determined by the Collector of Central Excise was a strange hybrid.
The appellants preferred a revision application to the, Central Government against the order of the Collector of Central Excise.
The, Central 567 Government in revision rejected the main contention of the, appellants that the value of the dye stuffs should be arrived at the price at watch the same were sold by the appellant to ICI and Atul less 18% trade discount allowed to them.
The reason for rejecting this contention was that since dye stuffs manufactured by the appellants were not "available to an independent buyer in open market conditions at prices at which these are sold by them to the Sole Distributors, M/s ICI Ltd. and M/s Atut Products Ltd., these prices cannot be adopted as the basis of ad valorem assessment" under section 4 of the Act.
The Central Government, however, observed that these dye stuffs were "available to any independent buyer in open market conditions at the sole distributors, prices ' that is, at the price charged by ICI and Atul to the distributors and, therefore, these prices should form the basis of assessment after allowing discount of 10% on the prices charged by ICI from the beginning and 2 1/2% on the prices charged by Atul upto 30th April, 1963 and 10% thereafter and on this basis directed refund of the excise duty collected by the Excise Authorities.
The appellants were obviously not satisfied with this rather trivial and insignificant success and since their main plea was negatived by the Central Government, they filed a petition in the High Court of Gujarat under article 226 of the Constitution challenging the, validity of the various orders made by the Excise authorities culminating in the order of the Central Government and seeking a writ directing the Union of India "to refund excess duty amounting to Rs. 1,26,229.80 illegally recovered from the petitioners and to forbear from recovering duty from the petitioners in respect.
of the said products otherwise than on the basis of the prices charged by the petitioners to the said wholesale buyers viz. ICI and Atul.
" The Division Bench which heard the petition took the view, following certain decisions of the Calcutta, Mysore, Andhra Pradesh and Bombay High Courts, that where the entire production is sold by a manufacturer to one or more favoured distributors, there is no wholesale market in the sense of open market at the site of the factory where an independent buyer can purchase the goods in wholesale and in such a case the price at which the goods are sold by the manufacturer to the favoured distributors cannot be taken to be the assessable value of the goods but the assessable value must be taken to be the price at which the favoured distributors, in their turn, sell the goods in wholesale and if not in wholesale, then in retail.
The Division Bench accordingly held that the price charged by the appellants to ICI and Atul less 18% trade discount could not be adopted for determining the assessable value of the dye stuffs since ICI and Atul were favoured distributors and not independent buyers and the Central Government was right in taking the price charged by ICI less 10% trade discount and the price charged by Atul less 2 1/2% trade discount as the assessable value because "that was the wholesale cash price at which the independent buyers could get these goods in the nearest wholesale market at the relevant time.
" The appellants being agerieved by the decision of the High Court preferred the present appeal after obtaining certificate of fitness from the High Court.
5 470SupCI/75 568 It would be seen from the judgment of the, High Court that the only ground on which the High Court negatived the contention of the, applicants that the price charged by the appellants to ICI and Atul less 18% trade discount should be taken as the assessable value was that ICI and Alul were favoured distributors and apart from them, no independent buyer could purchase the dye stuffs in wholesale market at or near the place of manufacture so as to attract the appli cability of the first Part of section 4(.a).
This is ground of course, at one time, looked highly plausible, supported as it was by decisions of several High Courts.
But now, after the recent decision of this Court in A. K. Roy vs voltas Ltd.(1) it stands completely decimated.
The facts of that case are a little interesting and requires to be noticed in order to understand the true ratio of the decision.
The respondent in that case carried on inter alia business of manufacturing air conditioners, water coolers and their component parts.
It effected direct sales to consumers at list prices and the sales so effected came to about 90% to 95% of its production during the relevant period.
It also sold its articles amounting to 5% to 10% of its production to wholesale dealers from different parts of the country in pursuance of agreements entered into with them.
The agreements provided among other things that the dealers should not sell the articles sold to them except in accordance with the list prices fixed by the respondent and the respondent would sell the articles to them at the list prices less 22% discount.
The dealers were also required under the agreements to give service to the units sold in their terdtory.
Excise duty on the basis of ad valorem value was imposed on air conditioners, water coolers and parts of water coolers from March 1, 1961.
The respondent claimed, in accordance with section 4(a), that the list prices after deducting the discount of 22% allowed to the wholesale dealers should be taken to be the wholesale cash price, for ascertaining the real value of the articles.
This claim was resisted by the Excise Authorities and the respondent was therefore constrained to file a writ petition in the High Court of Bombay.
The High Court allowed the petition holding that the list prices at which the articles were sold to ' the wholesale dealers, less 22% discount allowed to them under the agreements, represented 'the wholesale cash price ' and excise duty was accordingly chargeable under section 4(a).
The Excise Authorities thereupon preferred an appeal by certificate to this Court.
The same argument was advanced before this Court on behalf of the Excise Authorities which has found favour with the High Court in the present case.
The Excise Authorities contended that the agreements with, the whole sale dealers conferred certain extra commercial advantages upon them, and so, the sales to them were not sales to independent purchasers but to favoured ones, and, therefore, the price charged would not represent the "wholesale cash price" as mentioned in section 4(a) of the Act.
They argued that section 4(a) visualizes a wholesale market at the place of manufacture where articles of like (1) 569 kind and quality are sold or could be sold and that it also postulates a market where any wholesale purchaser can purchase the articles, and, as no articles of a like kind and quality were sold, at or near the place of manufacture, and as the wholesale sales were confined to the favoured buyers, there was no wholesale market at the place of manufacture.
It was further argued that "articles of a like kind and quality" is a phrase which suggests goods other than those under assessment and that one must disregard the price fetched by the sale of the goods themselves.
speaking on behalf of the Court, explained the true scope and meaning of section 4(a) and its applicability in a situation of this kind in the following words "We do not think that for a wholesale market to exist, it is necessary that there should be a market in the physical sense of the term where articles of a like kind or quality are or could be sold or that the articles should be sold to so called independent buyers.
Even if it is assumed that the latter part of section 4(a) proceeds on the assumption that the former part will apply only if there is a wholesale market at the place of manufacture for articles of a like kind and quality, the question is what exactly is the concept of wholesale market in the context.
A wholesale market does not always mean that there should be an actual place where articles are sold and bought on a wholesale basis.
These words can also mean the potentiality of the articles being sold on a wholesale basis.
So, even if there was no market in the physical sense of the term at or near the place of manufacture where the articles of a like kind and quality are or could be sold, that would not in any way affect the existence of market in the proper sense of the term provided the articles themselves could be sold wholesale to traders, even though the articles are sold to them on the basis of agreements whichconfer certain, commercial advantages upon them.
In other words, the sale to the wholesale dealers did not cease to bewholesale sales merely because the wholesale dealers hadentered into agreement with the respondent under which certain commercial benefits were conferred upon them in consideration of their undertaking to do service to the articles sold, or because of the fact that no other person could purchase the articles wholesale from the respondent.
We also think that the application of clause (a) of section 4 of the Act does not depend upon any hypothesis to the effect that at the time and place of sale, any further articles of like kind and quality should have been sold.
If there is an actual price for the goods themselves at the time and place of sale and if that is a 'wholesale cash Price '.
the clause is not inapplicable for want of sale of other goods of a like kind and quality.
570 The learned Judge then referred to the decision of the Privy Council in Ford Motor Company of India Limited vs Secretary of State India in Council(1) and pointed out that : "This case is an authority for the proposition that mere existence of the agreements between the respondent and the wholesale dealers under which certain obligations were undertaken by them like service to the articles, would not render the price any the less the 'wholesale cash price.
TO put it in other words, event if the articles in question were sold only to wholesale dealers on the basis of agreements and not to independent persons, that would not make the price for the safes anything other than the 'wholesale cash price.
The argument that what was relevant to determine the 'wholesale cash price, under cl.
(a) of section 30 of the , was the price of goods of a like kind and quality was negatived by the Privy Council by saying that goods under assessment may, under el.
(a) be con sidered as members of their own class even though at the time and place of importation there are no other members and that the price obtained for them may correctly represent the price obtainable for goods of a like kind and quality at the time and place of importation.
" Then, with reference to the decisions of the various High Courts, which had taken a different view, the learned Judge observed : "We do not think that these decisions, in so far as they hold that the price of sales to wholesale dealers would not represent the wholesale cash price for the purpose of section 4(a) of the Act merely because the man*, facturers had entered into agreements with them stipulating for commercial advantages, are correct", and proceeded to add : "If a manufacturer were to enter into agreements with dealers for wholesale sales of the articles manufactured on certain terms and conditions, it would not follow from that alone that the price for those sales would not be the 'wholesale cash price, for the purpose of section 4(a) of the Act if the agreements were made at arms length and in the usual course of business.
There can be no doubt that the 'wholesale cash price ' has to be ascertained only on the basis of transactions at arms length.
If there is a special or favoured buyer to whom a specially low price is charged because of extra commercial considerations, e.g. because he is relative of the manufacturer, the price charged for those sales would not be the 'wholesale cash price, for levying excise under section 4(a) of the Act.
A sole distributor might or might not be a favoured buyer according as terms of the agreement with him are fair and reasonable and were arrived at on purely commercial basis.
Once wholesale dealings at arms length are established, the determination of the whole (1) 65 I.A.32.
571 sale cash price for the purpose of section 4(a) of the Act may, not depend upon the number of such wholesale dealing.
The fact that the respondent sold 90 to 95 per cent of the articles manufactured to consumers direct would not make the, price of the wholesale sales of the rest of the articles any the less the 'wholesale cash, price ' for the purpose of section 4(a), even if these sales were made pursuant to agreements stipulating for certain commercial advantages, provided the agreements were entered into at arms length and in the ordinary course of business.
" it is not necessary for attracting the operations of section 4(a) that there should be a large number of wholesale sales.
The quantum of goods sold by a manufacturer on wholesale basis is entirely irrelevant.
The mere fact that such sales may be few or scanty does not alter the true position.
" On this view, it was held that the respondent was liable to be charged with excise duty on the basis of the price payable by the wholesale dealers, after deducting 22% discount, under section 4 (a).
This decision provides a complete refutation of the view taken by the High Court in the present case.
In fact, the present case is much stronger than the Voltas case (supra).
In the Voltas case (supra), 90 to 95 per cent of the production was sold by the manufacturer in retail and only a small percentage, namely 5 to 10 per cent was sold in wholesale and yet the price charged by the manufacturer to the wholesale dealers less trade discount of 22% was taken as 'the wholesale cash price ' for assessment of value under section 4(a).
Here, on the contrary, no retail sales at all were effected by the appellants and the entire production was sold in wholesale to ICI and Atul under agreements entered into with them.
Moreover, it was not in dispute between the parties that the agreements entered into by the appellants with ICI and Atul were made at arms length and in the usual course of business.
It was not the case of the Excise Authorities at any time that specially low prices were charged by the appellants to ICI and Atul because of extra commercial considerations or that the agreements were anything but fair and reasonable or arrived at on purely commercial basis.
The wholesale dealings between the appellants and lCI and Atul were purely commercial dcalings at arms length and the price charged by the appellants for sales in wholesale made to ICI and Atul less trade discount of 18% was, therefore, clearly 'wholesale cash price ' within the meaning of section 4(a) and it did not make any difference that the wholesale dealings of the appellants were confined exclusively to ICI and Atul and apart from these two, no independent buyers could purchase the 'dye stuffs in wholesale from the at) appellants.
The Excise Authorities, robbed of what they thought was a strong argument prior to the decision in Voltas case (supra), then tried to 572 fall back on a subsidiary argument in an attempt to save, the assessments.
They contended that all that section 4(a) provides is that the value of the article sought to be charged to excise duty shall be deemed to be the wholesale cash price for which the article is sold or is capable of being sold and it does not say which wholesale cash price shall be taken to be the value of the article that charged by the manufacturer to the wholesale dealer or that charged by the wholesale dealer who having purchased the article from the manufacturer sells it in wholesale to another dealer.
The latter price, they pointed out, would equally be the wholesale cash price within the meaning of section 4 (a) as it would be the price at which the article is sold or in any event capable of being sold in the wholesale market and there is no reason why it should not be taken to be the value of the article for the purpose of assessment under section 4(a).
The contention, therefore, was that the price charged by ICI and Atul to the dealers less trade discount allowed to them should be taken to be the assessable value of the dye stuffs and not the price charged by the appellants to ICI and Atul less trade discount of 18%.
This contention is without force and must be rejected.
It violates two basic principles underlying imposition of excise duty.
In the first place, as pointed out by Mathew, J., in Voltas ' case (supra), "excise is a tax on the production and manufacture of goods Section 4 of the Act therefore provides that the real value should be found after deducting the selling cost and selling profit and that the real value can include only the manufacturing cost and the manufacturing profit.
The section makes it clear that excise is levied only on the amount representing the manufacturing cost plus the manufacturing profit and excludes post manufacturing cost and the profit arising from pos manufacturing operation, namely, selling profit.
" The value of the goods for the purpose of excise must take, into account only the manufacturing cost and the manufacturing profit and it must not be, loaded with post manufacturing cost or profit arising from post manufacturing operation.
The price charged by the manufacturer for sale of the goods in wholesale would, therefore, represent the real value of the goods for the purpose of assessment of excise duty.
If the price charged by the wholesale dealer who purchases the goods from the manufacturer and sells them in wholesale to another dealer were taken as the value of the goods, it would include not only the manufacturing cost and the manufacturing profit of the manufacturer but also the wholesale dealer 's selling cost and selling profit and that would be wholly incompatible with the, nature of excise.
It may be noted that wholesale market in a particular type of goods may be in several tiers and the goods may reach the consumer after a series of wholesale transactions.
In fact the more common and less expensive the goods, there would be greater possibility of more than one tier of wholesale transactions.
For instance, in a textile trade, a manufacturer may sell his entire production to a single wholesale dealer and the latter may in his turn sell the goods purchased by him from the manufacturer to different wholesale dealers at 'State level, and they may in their turn sell the goods to wholesale 573 dealers at the district level and from the wholesale dealers at the district level the goods may pass by sale, to Wholesale dealers at the city level and then, ultimately from the wholesale dealers at the city level, the goods may reach the consumers.
The only relevant price for assessment of value of the goods for the Purpose of excise In such a case would be the wholesale cash price which the manufacturer receives from sale to the first wholesale dealer, that is, when the goods first enter the stream of trade.
Once the goods have entered the stream of trade and are on their onward journey to the consumer, whether along a short or a long course depending on the nature of the goods and the conditions of the trade, excise is not concerned with what happens subsequently to the goods.
It is the first immediate contact between the manufacturer and the trade that is made decisive for determining the wholesale cash price which is to be, the measure of the value of the goods for the purpose of excise.
The second or subsequent price, even though on wholesale basis, is not material.
If excise were levied on the basis of second or subsequent wholesale price,, it would load the price with a postman factoring element, namely,.
selling cost and selling profit of the wholesale dealer.
That would be plainly contrary to the true, nature of excise as explained in the Voltas ' case (supra).
Secondly, this would also violate the concept of the factory gate sale which is the basis of determination of value of the goods for the purpose of excise.
There can, therefore, be no doubt that where a manufacturer sells the needs manufactured by him in wholesale to a wholesale dealer at arms length and in the usual course of business, the wholesale cash price charged by him to the wholesale dealer less trade discount would represent the value of the, goods for the purpose of assessment of excise.
That would be the wholesale cash price for which the goods are sold at the factory gate within the meaning of section 4(a).
The price received by the wholesale dealer who purchases the goods from the manufacturer and in his turn sells the same in wholesale to other dealers would be irrelevant to the determination of the value and the goods would not be chargeable to excise on that basis.
The conclusion is, therefore, inescapable that the assessable value of the dye stuffs manufactured by the appellants must be taken to be the price at which they were sold by the appellants to ICI and Atul less 18% trade discount, and not the price charged by ICI and Atul to their dealers.
We, therefore, allow the appeal, reverse the judgment of , the High Court and quash and set aside the Assessments to excise duty made by the Excise Authorities on the dye stuffs manufactured by the appellants.
We direct the respondents to refund to the appellants forthwith the amount collected in excess of the correct duty of excise leviable in accordance with the principle laid down in this judgment.
The respondents will pay to the appellants costs in this Court as well as in the High Court.
P.B.R. Appeal allowed.
| IN-Abs | The appellant, which was a manufacturer of dye stuffs, sold its product to, two wholesale buyers at a uniform selling price described as "the basic selling price" less trade discount of 18%.
The wholesalers in turn sold the product to large consumers such as textile mills and distributors.
One wholesaler sold the dye stuff to the distributors Pat a higher price but allowed 10% discount while the other sold at a lower price and allowed 2 1/2% discount.
The price charged by both however was so adjusted that the net selling price charged to the distributors was almost the same.
The excise duty chargeable under section 3(1) of the Central Excise and Salt Act, 1944 was ad valorem.
Section 4 provided as to how the value of an article chargeable with duty at a rate depending on its value shall be determined for the purpose of assessment of excise duty.
Before the excise authorities the appellants claimed that, for the purpose of assessing the excise duty the value of the dye stuffs should be taken to be the price at which the appellants sold the same to the two wholesale buyers less trade discount allowed to these wholesale buyers.
The Superintendent of Central Excise rejected this contention and took, for the purpose of assessment, the price at which the wholesalers sold the dye stuffs to the distributors.
He did not, however, allow any deduction in respect of the discount given by the wholesalers to the distributors since it was not uniform.
On appeal the Assistant Collector of Central Excise confirmed the assessing authority 's order.
On further appeal, the Collector of Central Excise held that in determining the assessable value, the lower trade discount of 21% allowed by one of the wholesalers to the distributors only should be deducted.
The appellant 's revision application was rejected by the Central Government on the ground that since the dye stuffs manufactured by the appellant were not available to an independent buyer in open market conditions at price at which these were sold by them to the wholesalers these prices could not be adopted as the basis of (id valorem assessment under section 4 of the Act.
It was observed that these dyestuffs were available to any independent buyer in open market conditions at the distributors ' prices, that is, at the prizes charged by the wholesalers to the distributors and,, therefore, these prices should form the basis of assessment after allowing the discount.
Dissatisfied with the decision of the Central Government the appellant filed a petition under article 226 of the Constitution.
The High Court held that where the entire production was sold by a manufacturer to one or more favoured distributors there was no wholesale market in the sense of open market at the site of the factory where an independent buyer could purchase the goods in wholesale and the assessable value must therefore be taken to be the price at which favoured distributors sell the goods in wholesale and if not in wholesale, then, in retail.
The High Court accordingly upheld the view of the Central ' Government.
Allowing the appeal, HELD : (1)(a) The assessable value of the dye stuffs manufactured by the appellants must be taken to be the price at which they were sold by the appellants to the two wholesale dealers less 18% trade discount and not the price charged by the wholesale dealers to the distributors.
[573F G] 564 (b) Where a manufacturer sells the goods manufactured by him in wholesale to a wholesale dealer at arm 's length and in the usual course of business, the wholesale cash price charged by him to the wholesale dealer less trade discount would represent the value of the goods for the purpose of assessment of excise.
That would be the wholesale cash price for which, the goods are sold at the factory gate within the meaning of section 4(a).
The price received by the wholesale dealer who purchases the goods from the manufacturer and in his turn sells the same in wholesale to other dealers would be irrelevant to the determination of the value of the goods and the goods would not be chargeable to excise on that basis.
[573E F] (c) The value of the goods for the purpose of excise must take into account only the manufacturing cost and the manufacturing profit and it must not be loaded with post manufacturing cost or profit arising from post manufacturing ,operation.
[572F] (d) Once the goods have entered the stream of trade and are on their onward journey to the consumer, whether along a short or a long course depending on the nature of the goods and the conditions of trade, excise is not concerned with what happens subsequently to the goods.
[573B C] A. K. Roy vs Voltas Ltd., , followed.
|
minal Appeal No. 325 of 1974.
Appeal by Special Leave from the Judgment and Order dated the 8th April, 1974 of the Bombay High Court in Crl.
Appeal No. 305 of 1974.
Sharad Manchar, B. P. Maheshwari and Suresh Sethi, for the appellants.
section B. Wad and M. N. Shroff, for the respondent.
The Judgment of the Court was delivered by JAGANMOHAN REDDY, J.
We have just now admitted the special leave, petition and after the appeal was registered heard the learned Advocates for the parties.
This is yet another case in which a criminal first appeal against a conviction has been dismissed summarily under Section 421 of the Criminal Procedure Code.
We have heard both sides.
Mr. Wad for the State has strenuously contended that the High Court has power to dismiss summarily and has cited several decisions, but in all these cases there is nothing to the contrary to justify a view different from the one we are taking in this case.
It is submitted that the dismissal, was so summary that even the record was not called for.
No doubt, Section 421, Criminal Procedure Code does vest a power in the High Court to dismiss an appeal summarily but it can do so only on a perusal of the petition and the copy of the judgment.
Inasmuch as under our Constitution any person aggrieved by an order of the High Court can petition to this Court under Article 136 for special leave, it is not only necessary but having regard to the long series of decisions beginning as far back as 1953 (see ; onwards which discourages this practice of dismissal by one word 'dismissed ', the High Court should at least have given some reasons 67 why no arguable case is made out on a perusal of those documents.
Since we are not in a position to ascertain and it is contended before us that arguable points do arise in this case in support of which the statement made in special leave petition has been read to us, we are not in a position to say that an arguable case does not arise.
We would have been able to do so even if we had the slightest inkling in the order of the High Court.
In the absence of any reasons what has been happening in many cases is that special leave is admitted, and after hearing the appeal if this Court has come to the conclusion that the conviction is valid, it has held that the dismissal by the High Court is justified.
But this method, in our view, reverses the process and imposes unnecessary burden on this Court.
What should have been done by the High Court, is now being done by this Court.
It is only after sending for the records, getting the paper books prepared, hearing both parties in the appeal and after appreciation of the evidence that it may be held that in some cases the dismissal, in fact, was ultimately justified.
In many cases the appeals were even allowed.
Long avoidable delay thus ensues during which the person convicted entertains a doubt about his conviction and has to suffer the anxiety caused thereby.
We do hope and trust that the series of decisions over this long period disapproving of the practice of summarily dismissing by one word will be taken note of and this Court will not be ultimately burdened with such appeals arising out of summary dismissals which is really the function of the High Court at the first instance.
The appeal is accordingly allowed.
The order of the High Court is set aside.
The appeal is remanded to the High Court for hearing for admission and disposal in accordance with law and in the light of the directions made here in above.
V.P.S. Appeal allowed.
| IN-Abs | Inasmuch as under the Constitution any person aggrieved by an order of the High Court can petition to the Supreme Court under article 136 for special leave, it is necessary, having regard to the long series of decisions beginning with ; , which discourage the practice of dismissal by the one word 'dismissed, that the High Court should give some reasons why no arguable case is made out on a perusal of the appeal petition and the judgment of the lower court.
In the absence of reasons.
this Court can hold the dismissal to be justified or allow the appeal only after sending for the records, getting the paper books prepared, hearing the parties and appreciating the evidence.
This process involves the Supreme Court being burdened with such appeals and doing what the High Court should do.
Further during such avoidable delay the conviction person entertains a doubt about his conviction and suffers anxiety.
[66H 67D]
|
Appeals Nos. 1883 to 1886 of 1969.
From the judgment & Order dated the 12th July, 1968 of the Mysore High Court in W.P. Nos. 949, 955, 956 and 958 of 1968.
K. Srinivasan and Vineet Kumar, for the appellants.
H. B. Datar (In C.A. No. 1883/69) and M. Veerappa, for the respondents.
The Judgment of the Court was delivered by MATHEW, J.
The appellant was an excise contractor.
He secured the privilege of vending arrack in retail in certain taluks in the State of Karnataka for a period of 18 months beginning from 28 12 1967 and ending on 30 6 1969.
He purchased arrack from the Government at a price of 17 paise per litre and the Government collected besides the sale price of arrack, excise duty, health cess and education cess.
The Government also collected sales tax on the sale price of arrack, on excise duty, on health cess and on education cess for the period from 28 12 1967 to 31 1 1968 and made similar demands for the month of February, 1968 also.
The appellant and other excise contractors filed writ petitions in the High Court of Karnataka challenging the validity of the levy and collection of excise duty, education cess, health cess and sales tax.
The High Court accepted some of the contentions of the appellant, granted him reliefs on that basis but rejected the other prayers.
The appellant has filed these appeals on the basis of certificates granted by the High Court against the order.
The contentions raised by counsel for the appellant before this Court were : that no excise duty can be levied on a licensee in respect of the quantity of arrack purchased by him from Government depots, that the power to fix the rate of excise duty conferred under section 22 of the Mysore Excise Act of 1965 on the Government was bad for the 609 reason that it was an abdication by the state legislature of its essential legislative function and that no sales tax could be levied on the price for sale of arrack since section 19 of the Mysore Sales Tax Act, 1957 under which the tax was levied was beyond the legislative competence of the state legislature.
Section 22 of the Mysore Excise Act, 1965 (hereinafter referred to as 'the Act ') provides for levy of excise duty at such rate or rates as the government may prescribe on excisable articles manufactured or produced in the State under any licence or permit granted under the Act.
Section 23 of the Act deals with the method of levying excise duties.
The first contention of the appelant was that sections 16, 22 and 23 of the Act read with Mysore Excise (Distillery and Warehouse) Rules, 1967 and with Mysore Excise (Excise Duties) Rules, 1968, enables levy of excise duty only when arrack is issued from a distillery or warehouse or other place of storage established or licensed under the Act and since the government depot from which he purchased arrack does not come under the above category, no excise duty can be levied.
The High Court found that though sections 22 and 23 of the Act and Rule 2 of the Mysore Excise (Excise Duties) Rules, 1968, do not expressly state that excise duty levied at the stage of issue of liquor from the government depot should be collected from the issuer or from the person to whom it is issued, it is obvious that excise duty cannot be collected from the State Government which issues liquor from its depots and that the only person from whom it can be collected is the licensee, to whom the State Government issues liquor from its depots.
The material portion of section 16 of the Act provides that the Excise Commissioner may, with the previous sanction of the State Government, establish or license a warehouse wherein intoxicants may be deposited and kept without payment of duty and that without the sanction of the State Government no intoxicant shall be removed from any distillery, brewery, warehouse or other place of storage established or licensed under the Act unless the duty, if any imposed under the Act has been paid or a bond has been executed for the payment thereof.
It is clear from the return filed before the High Court that the Government purchase arrack from the distillers and keeps it in the warehouse established or licensed under section 16 and that any removal of arrack after the purchase of the same will attract the liability to pay excise duty shall be levied on the excisable article issued from a ware Excise Commissioner who is competent to establish or license a warehouse wherein intoxicants may be deposited and kept under clause (e) of section 16 and therefore it is not a warehouse established or licensed by the State Government.
We see no force in this contention.
Section 23 provides that excise duty shall be levied on the excisable article issued from a ware 610 house also.
We see no reason to think that a warehouse established or licensed under section 16(e) is not warehouse within the meaning of that expression in section 23.
The second contention raised by the appellant was that section 22 of the Act provides for delegation of the power to fix the rates of excise duty to the Government by making rules and since no guidance has been furnished to the government by the Act for fixing the rate there was abdication of essential legislative function by the legislature and there fore the section is bad.
The High Court after referring to the preamble of the Act said that it was the policy of the Act both to raise revenue and to discourage consumption of liquor by making the price of liquor sufficiently high, and that that 'would serve as a guidance to fix the rates of excise duty, that the rates fixed will be such as would keep the balance between these somewhat conflicting objects so as to serve the purpose of each.
The Court further said that if the rate of excise duty is too low, not only will the revenue from excise duties suffer but also there will be increase in the consumption of liquor; but if the rate of excise duty on liquor is too high, it is Rely to encourage the production and consumption of illicit liquor and consequently the control and regulation of liquor as well as the revenue from excise duty may be adversely.
The Court therefore held that the need to arrive at such rates of excise duty as will serve the twin objects of the policy underlying the Act operates as guidance for determination of the rates of excise duty.
We are not certain whether the preamble of the Act gives any guidance for fixing the rate of excise duty.
But that does not mean that the legislature here has no control over the delegate.
The legislative control over delegated legislation may take many forms.
In Corporation of Calcutta & Anr.
vs Liberty Cinema(1), the validity of section 548(2) of the Calcutta Municipal Act, 1951, which empowered the Corporation to levy fees "at such rates as may from time to time be fixed by the Corporation" was challenged on the ground of excessive delegation as it provided no guidance for the fixation of the amount.
The majority upheld the provision relying on the decision in Banarsi Das vs State of Madhya Pradesh (2 ) holding that the fixation of rates of tax not being an essential legislative function, could be validly delegated to a non legislative body.
but observed that when it was left to such a body, the legislature must provide guidance for such fixation.
The Court found the guidance in the monetary needs of the Corporation for carrying out the functions entrusted to it under the Act.
In Municipal Board, Hapur vs Raghuvendra Kripal(2) the validity 1916, was involved.
Ile Act had to fix the rate of tax and after having of the U.P. Municipalities Act, empowered the municipalities enumerated the kinds of taxes to be levied, prescribed an elaborate (1) [1965] 2,S.C.R.477.
(2) ; (3) ; 611 procedure for such a levy and also provided for the sanction of the Government., Section 135 (3) of the Act raised a conclusive prerumption that the procedure prescribed had been gone through on a certain notification being issued by the Government in that regard.
This provision, it was contended, was ultra vires because there was an abdication of essential legislative functions by the legislature with respect to the imposition of tax inasmuch as the State Government was given the power to condone the breaches of the Act and to set at naught the Act itself.
This, it was contended, was an indirect exempting or dispensing power.
Hidayatullah, J. speaking for the majority, said that regard being had to the democratic set up of the municipalities which need the proceeds of these taxes for their own administration, it is proper to leave to these municipalities the power to impose and collert these, taxes.
He further said that apart from the fact that the Board was representative body of the local population on whom the tax was levied, there were other safeguards by way of checks and controls by Government which could veto the action of the Board in case it did not carry out the mandate of the legislature.
In Devi Dass Gopal Krishnan vs State of Punjab(1) the question was whether section 5 of the East Punjab General Sales Tax Act, 1948, which empowered the State Government to fix sales, tax at such raters as it thought fit was bad.
The Court struck down the section on the ground that the legislature did not lay down any policy or guidance to the executive in the matter of fixation of rates.
Subba Rao, C.J., speaking for the Court, pointed out that the needs of the State and the purposes of the Act would not provide sufficient guidance for the fixation of rates of tax.
He pointed out the danger inherent in theprocess of delegation : "An overburdened Legislature or one controlled by a powerful executive may unduly overstep the limits of delegation.
It may not lay down any policy at all; it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive; it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation.
This self effacement of legislative power in favour of awther agency either in whole or in part is beyond the permissible limits of delegation." In Municipal Corporation of Delhi vs Birla Cotton Spining and, Weaving Mills(1), the main question was about the constitutionality of delegation of taxing powers to municipal corporations.
The Delhi Municipal Corporation Act (66 of 1957) by section 113(2) had empowered the Corporation to levy certain optional taxes.
Under section 150, power was given to the Corporation to define the maximum rate of tax to be levied, the classes of persons and the description of articler, and property to be taxed, the systems of assessment to be adopted (1) [1967]3, S.C.R. 557.
(2) ; . 612 and the exemptions, if any, to be granted.
The majority of the court held the delegation to be valid.
Wanchoo, C.J. observed that there were sufficient guidance, checks and safeguards in the Act which prevented excessive delegation.
The learned Chief Justice observed that statements in certain cases to the effect that the power to fix ,rates of taxes is not an essential legislative function were too broad and that "the nature of the body to which delegation is made is also a factor to be taken into consideration in determining whether there is sufficient guidance in the matter of delegation".
According to the learned Chief Justice, the fact that delegation was made to an clected body responsible to the people including those who paid taxes provided a great check on the elected councillors imposing unreason.able rates of tax.
He then said : "The guidance may take the, form of providing maximum rates of tax up to which a local body may be given the discretion to make its choice, or it may take the form of providing for consultation with the people of the local area and then fixing the rates after such consultation.
It may also take the form of subjecting the rate to be fixed by the local body to the approval of Government which acts as a watchdog on the actions of the local body in this matter on behalf of the legislature.
There may be other ways in which guidance may be provided." In Sita Ram Bisharnbhar Dayal vs State of U.P.(1) section 3 D(1) of the U.P. Sales Tax Act, 1948, bad provided for levying taxes at such rates as may be prescribed by the State Government not exceeding the maximum prescribed therein.
Hegde, J., in speaking for the Court, observed : "However much one might deplore the 'New Despotism ' of the executive, the 'very complexity of the modern society and the demand it makes on its Government 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.
" In this case, we think that section 71 of the Act which provides for the rule making power imposes the necessary check upon the wide power given to the government to fix the rate.
Sub section (4) of that section provides : "Every rule made under this section shall be laid as soon as may be after it is made, before each House of the State Legislature while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions and if before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule (it ?) shall thereafter have effect only in such modified form or be of no effect, as the case may (1) ; 613 be; so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule." The appellant submitted that section 71(4) does not provide a guarantee for legislative control over delegated legislation.
The argument was that the rules would come into force as soon as they are framed and that the power of the legislature to annul the rules subsequently cannot be regarded as sufficient control over delegated legislation.
That laying of rules before the legislature is control over delegated legislation is implied in the speech of Lord Thankerton in the House of Lords in Minister of Health vs The King(1) where he said : "In this case, as in similar cases that have come before the courts, Parliament has delegated its legislative function to a Minister of the Crown, but in this case Parliament has retained no specific control over the exercise of the function by the Minister, such as a condition that the order should be 'aid before Parliament and might be annulled by a resolution of either House within a limited period.
" In Institute of Patent Agents vs Joseph Lockwood (2) Lord Watson said : "The Legislature retained so far a check that it required that the regulations which they framed should be laid upon the table of both Houses; and of course these regulations could have been annulled by an unfavourable resolution upon a motion made in either House." In Bernard Schewartz 's "An Introduction to American Administrative Law" it is stated : "In Britain, Parliamentary control over delegated legislation is exercised through the various forms of 'laying ' prescribed in enabling Acts.
Through them, the legislature is enabled at least in theory to exercise a continuing supervision over administrative rules and regulations.
" As Dean Landis pointed out, the English techniques for laying the rules before the Houses have several virtues. "For one thing, they bring the legislative into close and constant contact with the administrative.
The legislature may also retain its control over its delegate by exercising its power of repeal.
This was the basis on which the Privy Council in Cobb & Co. vs Kropp(4) upheld the validity of delegation of the power to fix rates to the Commissioner of Transport in that case.
The question there was whether the Queensland Legislature, had legislative authority under the impugned Acts to invest the Commissioner for Transport with power to impose and levy (1) (2) (3) see Landis, "The Administrative Process", 77 (1938).
(4) C.).
614 licence and permit fees.
It was not disputed before their Lordships that .fees imposed are to be regarded as constituting taxation.
Accordingly, it was contended that the legislature had abdicated its exclusive power of levying taxation.
The Privy Council held that Queensland Legislature was entitled to use any agent or machinery that it considered appropriate for carrying out the object and the purposes of the Acts and to use the Commissioner for Transport as its instrument to fix and recover the licence and permit fees, provided it preserved its own capacity intact and retained perfect control over him; that as it could at any time repeal the legislation and withdraw such authority and discretion as it had vested in him, it had not assigned, transferred or abrogated its sovereign power to levy taxes, nor had it renounced or abdicated its responsibilities in favour of a newly created legislative authority and that, accordingly, the two Acts were valid.
Lord Morris of Borth y Gest said : "What they (the legislature) created by the, passing of the Transport Acts could not reasonably be described as a new legislative power or separate legislative body armed with general legislative authority (see R. vs Burah, Nor did the queensland Legislature 'create and endow with its own capacity a new legislative power not created by the Act to which it owes its own existence (see in re the Initiative and Referendum Act (1919) A.C. 945 at 945).
" The point to be emphasized and this is rather crucial is the statement of their Lordships that the legislature preserved its capacity intact and retained perfect control over the Commissioner for T port inasmuch as it could at any time repeal the legislation and with draw the authority and discretion it had vested in him, and, therefore the legislature did not abdicate its functions.
We, therefore, think that the power to fix the rate of excise duty conferred on the government by section 22 of the Act is valid.
The dilution of parliamentary watch dogging of delegated legislation may be deplored but,, in the compulsions and complexities of modern life cannot be helped.
The last contention raised by the appellant was that section 19 of the Karnataka Sales Tax Act, 1957 is invalid as it purports to levy sales tax upon the sale of arrack made by the Government to licensees.
The appellant submitted that the definition of 'dealer in section 2 of the Act excludes the Government of Mysore and that by virtue of the provisions in section 5(3) of that Act, no tax could be levied on the sale of arrack by government to the appellant.
We see no merit in this contention.
Section 19 of the Act reads: "19.
State Government entitled to collect tax as registered dealers.
Notwithstanding anything contained in this Act the Government of Mysore shall, in respect of any sale of goods effected by them, be entitled to collect by way of tax any amount which a registered dealer effecting such sale would have been entitled to collect by way of tax under this Act.
" 615 This section makes it clear that notwithstanding anything contained in that Act, the Government shall in respect of any sale of goods effected by it be entitled to collect by way of = any amount which a registered dealer effecting such sale would have been entitled to collect by way of tax under the Act.
The section is clear that the Government could collect the tax on the sale made, by it as if it were a registered dealer, not withstanding anything contained in section 2 or section 5.
The section itself creates a right in the State to recover and an obligation on the purchaser from the State to pay the amount.
Any imposition of liability or obligation in respect of sale or purchase of goods will be covered by Entry 54 of List If of the Seventh Schedule of the Constitution.
We do not think that section 19 is ultra vires the powers of the, legislature.
We therefore dismiss the appeals but make no order as to costs.
V.M.K. Appeals dismissed.
| IN-Abs | The appellant.
an excise contractor secured the privilege of vending arrack in retail in certain taluks in the State of Karnataka for a period of 18 months beginning from 28 12 1967 and ending on 30 6 69.
He purchased attack from the Government at a price of 17 paise per litre and the Government collected besides the sale price of arrack.
excise duty.
health cess and education cess. 'rho Government also collected sales tax on the sale price of attacks on excise duty.
on health cess and on education cess for the period from 28 12 1967 to 31 1 1968 and made similar demands for the month of February.
1968 also.
The appellant and other excise contractors filed writ petitions in the High Court at Karnataka challenging the validity of the levy and collection of excise duty, education cess.
health cess and sales tax.
The High Court accepted some of the contentions of the appellant, granted him reliefs on that basis but rejected the other prayers.
The appellant has filed these appeals on the basis of certificates granted by the High Court against the order.
It was contended for the appellant (i) that no excise duty can be levied on a licensee in respect of the quantity of arrack purchased by him from Government depots, (ii) that the. power to fix the rate of excise duty conferred under section 22 of the Mysore Excise Act of 1965 on the Government was bad for the reason that it was an abdication by the state legislature of its essential legislative function and (iii) that no sales tax could be levied on the price for sale of arrack since section 19 of the Mysore Sales Tax Act, 1957 under which the tax was levied was beyond the legislative competence of the state legislature.
Rejecting the contentions and dismissing the appeals, HELD : (i) It is clear from the return filed before the High Court that the Government purchases arrack from the distillers and keeps it in the warehouses established or licensed under section 16 and that any removal of arrack after the purchase of the same will attract the liability to pay excise duty.
Section 23 provides that excise duty shall be levied on the excisable article issued from a warehouse also.
It cannot be said that a warehouse established or licensed under section 16(e) is not warehouse within the meaning of that expression in section 23.
[609G 610A] (ii) The High Court held that the preamble of the Act would serve as a guidance to fix the rates of excise duty.
It cannot be said with certainty that the preamble of the Act gives any guidance for fixing the rate of excise duty.
But that does not mean that the legislature here has no control over the delegate.
In this case, a. 71 of the Act which provides for the rule making power imposes the necessary check upon) the wide power given to the Government to fix the rate.
The laying of rules before the legislature provides control over delegated legislation.
Again the legislature may also retain its control over its delegate by exercising its power of repeal the power to fix the rate of excise duty conferred on the Government by section 22 is valid.
[ 6140E F; 614 E F] 608 Corporation of Calcutta & Anr.
vs Liberty Cinema, [1965] 2.
S.C R 477, Batwrsi Das vs State of Madhya Pradesh, ; , Municipal Board, Hapur vs Raghuvendra Kripal , Devi Dass Gopal Krishan vs State of Punjab, [1967] 3 S.C.R 557, Municipal Corporation of Delhi vs Birla Cotton Spinding and Weaving Mills, [1968] 3 S.C.R. 251, Sita Ram Bisliambhar Dayal vs State of U.P. ; , Minister of Health vs The King, , Institute of Patent Agents vs Joseph Lockwood, [1894] A.C. 347 and Cobb & Co. vs Kropp, , referred to.
(iii) Section 19 of the Karnataka Sales Tax Act.
makes it clear that notwithstanding anything contained in this Act of 1957, the Government shall in respect of any sale of goods effected by it be entitled to collect by way of tax any amount which a registered dealer effecting such sale would have been entitled to collect by way of tax under the Act.
The section is clear that the Government could collect the tax on the sale made by it as if it were a registered dealer, notwithstanding anything contained in section 2 or & 5.
The section itself creates a right in the State to recover and an obligation on the purchaser from the State to pay the amount.
Any imposition of liability or obligation in respect of sale or purchase of goods will be covered by Entry 54 of List II of the Seventh Schedule of the Constitution.
Section 19 is therefore, not ultra vires the powers of the legislature.
[615A C]
|
minal Appeal No. 808 of 1973.
From the judgment and order dated the 30th March, 1973 of the Punjab & Haryana High Court in Election Petition No. 14 of 1972.
R. K. Garg, section C. Agarwala, V. J. Francis add R. C. K. Kaushik, for the appellant.
T. section Krishnamurthi Iyer, K. C. Agarwala, M. M. L. Srivastavta and E. C. Agrwala, for respondent No. 1.
A. T. M. Sampath, for respondent No. 2.
The Judgment of the Court was delivered by BEG, J.
Pritam Singh, the appellant before us under Section 116A of the Representation of the People Act, 1951 (hereinafter referred to as 'the Act '), was elected at an election held on 11 3 1972 for the Haryana State Legislative Assembly, the result of which was declared 47OSCI/75 586 on 12 3 1972.
The Respondent Balbir Singh questioned this election by, means of an election petition alleging that the, election was void as the appellant had committed corrupt practices hit by section 123, sub.
s.4, 5 and 6 of the Act.
The petition was allowed by a learned Judge of the, High Court of Punjab & Haryana, solely on the ground that the corrupt practice, provided for as follows, in Section 123(5) of the Act, was committed by the appellant: " 123(5).
The hiring or procuring, whether on payment or otherwise, of any vehicle or vessel by a candidate or his agent or by any other person with the consent of a candidate or his election agent, or the use of such vehicle or vessel for the free conveyance of any elector (other than the candidate himself, the members of his family or his agent) to or from any polling station provided under section 25 or a place fixed under sub section (1) of section 29 for the poll : Provided that the hiring of a vehicle or vessel by an elector or by several electors at their joint costs for the purposes of conveying him or them to and from any such polling station or place fixed for the poll shall not be deemed to be a corrupt practice under this clause if the vehicle or vessel sp hired is a vehicle or vessel not propelled by mechanical power Provided further that the use of any public transport vehicle or vessel or any tramcar or railway carriage by any elector at his own cost, for the purpose of going to or coming from any such polling station or place fixed for the poll shall not be deemed to be a corrupt practice under this clause".
The appellant assails the judgment of the High Court on the following main grounds with which we will deal seriatim : 1.
That, the High Court erred in relying upon legally unproved entries in what is called a Pukar book or register showing both the hiring out and then payments for the use of certain trucks on 11 31972, the date of election, for purposes of election.
That, the Register itself is inadmissible in evidence under any provision of the Evidence Act.
That, the entries in the Pukar Register are suspicious indicating that the Register itself, or, atleast, the entries involved were not contemporaneous but fabricated after the election was over.
That, the High Court erred in relying upon the evidence of challans by the police on 11 3 1972 of drivers of trucks said to have been used by the appellant when the best evidence in the possession of the police relating to these challans was not forthcoming so that the challans appeared to have been maneuvered for the purpose of supporting a false case.
That, the High Court erred in relying upon merely uncorroborated oral testimony of Motor truck drivers in accepting the respondent 's case which was not really corroborated as the alleged corroborative evidence was not evidence at all in the eye of law, 587 6.
That, the High Court overlooked the well established principle that the charge of a corrupt practice in the course of an election must be treated as quasi criminal in character which has to be proved beyond reasonable doubt.
We will deal with these objections, in the reverse order, starting with the last mentioned ground of attack on the High Court 's judgment.
The judgment rests largely on appreciation of oral evidence.
It could not, therefore, be easily disturbed us as has been repeatedly pointed out by this Court even in first appeals on facts in election cases.
If the High Court overlooks serious infirmities in the evidence adduced to support the case accepted by it or misreads evidence or ignores the principle that a charge of corrupt practice, in the course of an election, is a grave one which, if established, casts a serious reflection and imposes a disability upon the candidate held guilty of it, so that the Court must be satisfied beyond reasonable doubt about its veracity, this Court will not hesitate to interfere.
Learned.
Counsel for the appellant has relied upon the decision of this Court in Rahim Khan vs Khurshid Ahmed & Ors.,(1) where Krishna Iyer, J., speaking for this Court, said (at p. 666) : "An election once held is not to be treated in a lighthearted manner and defeated candidates or disgruntled electors should not get away with it by Ming election petitions on unsubstantial grounds and irresponsible evidence, thereby introducing a serious element of uncertainty in the verdict already rendered by the electorate.
An election is a politically sacred public act, not of one person or _of one official, but of the collective will of the whole constituency.
Courts naturally must respect this public expression secretly written and show extreme reluctance to act aside or declare, void an election which has already been held unless clear and cogent testimony compelling the Court to uphold the corrupt practice alleged against the returned candidate is adduced.
Indeed, election petitions where corrupt practices are imputed must be regarded as proceedings of a quasi criminal nature wherein strict proof is necessary.
The burden is therefore heavy on him who assails an election which has been concluded".
In Rahim Khan 's case (supra) our learned brother Krishna lyre also warned us in the word of Sydney Harris (at p. 666) "Once we assuage our conscience by calling something a necessary evil ', it begins to look more and more necessary and less and less evil".
He then proceeded to observe (at p. 666) "For this very reason the Court has to be stern so as induce in the candidates, the parties and workers that temper and truthfulness so appropriate to the process. (1) 1974 2 SCC p. 660 @ P. 666.
588 After pointing out the difficulty of laying down any past iron or rigid rules for testing the veracity of witnesses, this Court said (at p. 672) there "We regard it as extremely unsafe, in the present climate of kilkenny cat election competitions and partisan witnesses wear ingrobes of veracity, to upturn a hard won electoral victory merely becauselip service to a corrupt practice has been rendered by somesanctimonious witnesses.
The Court must look for seriousassurance, undying circumstances, or unimpeachabledocuments to uphold grave charges of corrupt practice whichmight not merely cancel the election result, but extinguish many a man 's public life".
In that case, this Court found the charge of a corrupt practice to be established upon oral and documentary evidence given to support it.
In the case before us, we find that the High Court accepted the evidence of Uggar Sain, P.W. 24, because, inter alia, it was supported by a "Pukar Register_" kept by the Union of truck drivers of trucks hired in the order said to be determined by their places in the Register.
It relied on this evidence despite certain serious objections to the entries in the Register showing payments for the trucks said to have been used by the appellant.
The High Court, however, held that the testimony of Uggar Sain found sufficient corroboration not only from the entries in Pukar Register but also from the testimony of Khandu Ram, P.W. 25, Harish Lal, P.W. 26, Jai Gopal, P.W. 27, Chokha Namad, P.W. 28, Gurbachan Singh, P.W. 37 and Rajinder Singh, P.W 38, each of whom had deposed that he was paid a sum of Rs. 150/ on 10 3 1972 for performing election duty for the appellant for carrying voters on 11 3 1972.
The learned Judge observed about these drivers : "None of them is shown to be interested in the petitioner or against the returned candidate nor was the deposition of any one of them shaken in cross examination and I do ,act see any good reason for discarding their sworn word.
As would be seen later, they actually plied their trucks for the returned candidate on the 11th of March, 1972. a fact which clinches the matter against him".
The denial of the returned candidate were rejected by the learned Judge on the ground that threw were made by a highly interested party.
After having been taken through the judgment we are not satisfied that the learned Judge did anything more than to rather mechanically accept the oral and documentary evidence given to support the charge.
We certainly do not find there any consideration or discussion of a number of infirmities which have been placed before us both in the oral and documentary evidence adduced to support the, charge.
We think that this is so because the learned Judge seems to have held the view that a mere consideration of probabilities, without applying a strict standard of proof beyond reasonable doubt to a charge of corrupt practice was enough here.
589 After going through the evidence relating to the use of each truck, and repeating, rather mechanically, that this evidence on behalf of the petitioner was acceptable in each instance given, the learned Judge concluded "As a result of the discussion of the evidence under this issue, I hold that the returned candidate hired and used trucks Nos.
HRR 5155, HRR 5161, HRR 5077, HRR 5013, and HRR 597, for the free conveyance of electors to various polling stations and thus committed the corrupt practice defined in clause (5) of section 123 of the Act".
We find no indication anywhere in the judgment that the stricter standard of proof, which is applicable to such charges, was kept in view by the learned Judge.
The fifth ground of objection set out above seems to proceed on the erroneous assumption that oral testimony cannot be accepted when a corrupt practice is set up to assail an election unless it is corroborated by other kinds of evidence in material particulars.
We are not aware of any such general inflexible rule of law or practice which could justify a wholesale condemnation or rejection of a species of evidence which is legally admissible and can be acted upon under the provisions of Evidence Act in every type of case if it is, after proper scrutiny found to be reliable or worthy of acceptance.
There is no presumption, either in this country or anywhere else, that a witness, deposing on oath in the witless box, is untruthful unless he is shown to be, indubitably, speaking the truth.
On the other hand, the ordinary presumption is that a witness deposing solemnly on oath before a judicial.tribunal is a witness of truth unless the contrary is shown.
It is not required by our law of evidence that a witness must be proved to be a perjurer before his evidence is discarded.
It may be enough if his evidence appears to be quite improbable or to spring from such tainted or biased or dubious a source as to be unsafe to be acted upon without corroboration from evidence other than that of the witness himself.
The evidence of every witness in an election case cannot be dubbed as intrinsically suspect or defective.
It cannot be ,equated with that of an accomplice in a criminal case whose testimony has, according to a rule of practice, though not of law, to be corroborated in material particulars before it is relied upon.
This Court pointed out in Rahim Khan 's case (supra) that there are no golden rules for appraising human testimony.
In assessing its worth Judges can err honestly just as witness can make honestly mistaken statements under oath.
The extraction of what should constitute the credible foundation of judicially sound judgment is an art which nothing except sound common sense and prudence combined with experience can teach.
A sound judgment must disclose a fair attempt to "separate the grain from the chaff" as it has often been said.
Section 3 of the Evidence Act lays down: "A fact is said to be proved when after considering the matters before it, the Court either believes it to exist or con 590 siders its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists".
Hence it has sometimes been argued that the same standard of proof applies to all types of cases.
Such a contention seems plausible.
But, what has to be borne in mind is that, in judging the evidence of a grave charge, prudence dictates that the belief in its correctness should form the basis of a judicial verdict of guilt only if that belief reaches a conviction beyond reasonable doubt.
If prudence is the real test, it prescribes differing standards of proof in differing circumstances.
Its requirements preclude any Procrustean a bed of uniformly rigid rules for each type of case.
The circumstances under which reasonable doubt may or may not exist in a case cannot possibly be exhaustively cataloged.
All that one can say is that in deciding whether the stricter standard of proof is satisfied in a case of alleged corrupt practice, resting upon oral evidence only, the Courts should be particularly astute and not omit to examine fairly the effect of every existing substantial ground which could introduce a reasonable doubt in a case.
In doing so, the Court has also to beware of bare suspicion, based on popular prejudices or belief sought to be introduced merely to bias the Court against a witness or a partly of a particular type.
In the case before us, we find that the learned Counsel for the appellant has repeatedly referred to the fact that the respondent, whose election petition succeeded before the learned Judge, was a defeated former Minister of the ruling Congress party.
Learned Counsel wanted us to infer that, because, the respondent had been welcomed and garlanded by the President of the Motor Truck Drivers ' Union of Ganaur,.
the evidence of motor drivers was easily available to him.
In other words, we were asked to assume that the motor drivers would be prepared to commit perjury, at the instance of the President of the Motor Truck Drivers ' Union, only to please a former defeated Minister.
We do not think that it is reasonable to carry such a suspicion to the extent of attributing to every witness appearing in support of the respondent 's case a tendency or desire to commit perjury.
The law does not discriminate against or frown upon a former Minister, belonging to any party, whether in or out of power, so that it must view every witness produced by him with suspicion simply because he had been a Minister.
On the other hand, we think that it would not be unreasonable to believe that a person who has occupied the responsible position of a Minister will be less inclined to suborn witnesses or conspire to produce perjured evidence just because he is defeated in an election which is not the only test of a person 's worth or respectability in society.
We think that a person who has held a responsible office will be acting imprudently if he spoils his public image by deliberately producing perjured evidence.
We are not prepared to uphold the 5th contention of the appellant that, either as a general rule.
in election cases, or on the facts of this particular case, the evidence of the motordrivers must be necessarily rejected simply because it is oral testimony of drivers of trucks who had formed a Union which had once invited 591 and garlanded the respondent.
We, however, think that the evidence had to be more carefully scrutinized than the High Court was disposed to do it.
As was Pointed out in Rahim Khan 's case (supra), evidence considered unsafe to be acted upon by a judicial Tribunal need not be necessarily false.
Turning to the 4th ground of objection, relating the prosecutions of truck drivers by the Police for alleged offenses said to have taken place on 11.3.1972, we find that the High Court accepted the allegation that the ' drivers were challenge on 11.3.
1972 without commenting on some conflicting evidence as to the date on which the motor drivers were challenge.
In reply, it has been contended that witnesses who could have given more, evidence on this question were not only given up by the petitioner respondent but also by the appellant as the date of challans was accepted or not questioned on behalf of the appellant.
Our attention is invited to Miscellaneous application No. 216 E/72 dated 19 10.1972 where learned Counsel for the appellant not merely stated that he did not want to examine either the Mohrir Constable of Police Station Ganaur or a Clerk of the office of the Superintendent of Police, Rohtak, but prayed that "the above two witnesses may kindly be informed telegraphically not to appear on 23.10.72".
It is, therefore, argued, not without force, that the date of the challans was not seriously disputed by the appellant before the High Court so that this question should not be allowed to be argued before us.
It was also contended on behalf of the respondent that there had been some tampering with the record in the Magistrate 's Court which explained the contrary evidence given by Subash Chander, P.W.11, the Ahalmad of a Magistrate 's Court, showing that the challan was dated 17 3 1972.
It was orally prayed that we should summon and examine, at this stage, the original record from the Court of the Magistrate, concerned.
However, as no argument appears to have been addressed on this question in the High Court we think that this as a matter which the High Court can and should itself examine after summoning the record from the Magistrate 's Court as we propose to send the case back to it for reconsideration after taking some further evidence.
It has been argued on behalf of the respondent that there is enough evidence of the motor truck drivers and of the voters carried as well as documentary evidence, including a log book of a driver, to show that the truck used on behalf of the respondent were carrying voters to the election booth, and were, therefore, challaned on 11 3 1972 because carrying of passengers in truck was not permitted.
It was admitted that no entry was made in the general diary of Ganaur Police Station, according to the rules, but this, it was contended for the respondent, is not conclusive as relevant entries relating to some 'petty offences are often missing.
These are, however, some of the matters which the High Court can and should consider.
It appears to us that a number of Points, on the worth of various tems of evidence, which have been raised for the 1st time to question 592 the authenticity.
of the evidence relating to the prosecution of drivers of trucks, said to have been carrying voters for the appellant were not advanced before the High Court.
We think that we ought to have the benefit of scrutiny of the whole evidence on this question by the High Court and its findings thereon.
We are not prepared to proceed on the assumption that the respondent could easily get evidence fabricated as he had been a minister.
We may now deal with the first three grounds of objection, all relating to what is called the Pukar Register.
It is true that Uggar Sain, P.W. 24, who was called to prove the Pukar Register, did not actually depose in %*hose handwriting the entries in it were made, or what could or could not be property entered here.
The trend of cross examination, however, shows that it proceeded on the assumption that Uggar Sain, P.W. 24, was actually making entries in it.
But, neither this fact was proved in the examination in chief nor was the course of business, according to which entries could be made in the Register, including entries of alleged payments by the respondent, proved.
A number of question raised before us,( throwing some suspicion on the authenticity of the entries in this Pukar Register and the dates on which they could be or were made seem to us to be entirely new.
They were not suggested to P.W. 24, Uggar Sain, who might have had some explanations for these suspicious features.
Nor do all these defects seem to have been mentioned in the course of arguments before the High Court.
For example, the truck numbers of trucks said to have been sent to the appellant do not appear against the name of the appellant but seem inserted afterwards above the place where they would be expected to be found.
The exact meaning or effect of such a feature could only have been brought out by cross examination of Uggar Sain, P.W. 24 on behalf of the appellant.
As regards the admissibility of the Pukar Register and evidence of prosecution of the truck drivers, we are unable to accept the submission that these are inadmissible under the Evidence Act.
Even though the course of business under which the Pukar Register was kept was not proved, we think that documents, such as the Pukar Register and those relating to the prosecutions of the drivers, who were said to be carrying voters on 11.
3. 1972, could be proved under section 11 of the Evidence Act.
We think that, in view of the importance of the evidence Uggar Sain, P.W. 24 both his examination in chief and his cross examination are must unsatisfactory.
We may here observe that the election Tribunal is not powerless in such cases in the performance of its duty to ascertain the truth.
There is not only Section 165 of the Evidence Act which enables the Court to put any question it likes to a witness,.
but there are also the provisions of order XVI, Rule 14, Civil Procedure Code which Jay down : "Subject to the provisions of this Code as to attendance and appearance and to any law for the time being in force, 593 where the Court at any time thinks it necessary to examine any person other than a party to the suit and not called as a witness by a party to the suit, the Court may, of its own motion, cause such person to be summoned as a witness to give evidence, or to produce any document in his possession, on a day to be appointed, and may examine him as a witness or require him to produce such document".
We think that the ascertainment of a number of essential facts relating to the charge was neither regular nor sufficiently detailed in the case now before us.
We find that the High Court proceeded on the assumption that facts which ought to have been technically proved had been sufficiently proved.
It too readily accepted the evidence, both oral and documentary, without examining all the defects of it which have been sought to be placed before us.
We are left with an unavoidable impression that important aspects of the case were neither satisfactorily brought out clearly by the evidence in the case nor examined by the High Court despite the voluminous evidence led by the parties and the lengthy judgment delivered by the Tribunal.
We also find that the Court adopted a standard of proof which is not strict enough in appraising the worth of evidence produced to support a charge of corrupt practice.
As it is not the practice of this Court to reassess evidence or to perform the duties of the Trial Court, even in election first appeals, unless no other course is left open to it, we think that this is a fit case in which we should send back the case for reconsideration by the High Court after recalling such witnesses as may be considered necessary by it, and, in particular, Uggar Sain, P.W. 24, so that at least the Pukar Register, assumed to have been duly proved, may be proved in accordance with law.
We think that the objections to the proof of this document, and of entries in it do not go beyond objections to the mode of proof.
The entries in it could be accepted as sufficiently reliable only after a much more rigorous examination of their maker than the parties or the Court subjected him to.
We think that we should not give a finding upon the reliability of these entries before the allegedly suspicious features have been specifically put to P.W. 24, Uggar Sain, who was assumed to have made the entries without even asking him whether he did make them.
In the result, we set aside the judgment and order of the High Court and we remand the case to it for disposal in accordance with law after abduction of such further evidence as may be necessary in the interests of justice.
In view of our order remanding the case to the High Court it is unnecessary to consider the three Civil Miscel 594 laneous Petitions for urging addition grounds, for condonation of delay in filing the application for urging additional grounds, and for permission to file a certified copy of the summary register for 21 3 1972 and 22 3 1972 of the Court 'of Judicial Magistrate 1st Class, Sonepat.
These applications are, therefore, dismissed.
Partics may, however, make appropriate applications in the High Court.
The costs of this litigation in the High Court as well as in this Court will abide the result.
The appellant will continue to function as an elected member subject to the result of the Election Petition.
P. B. R. Appeal allowed.
| IN-Abs | The respondent, in his election petition before the High Court, allegedd a number of corrupt practices hit by section 123(4), (5) and (6) of the Representation of the People Act, 1951 against the appellant, who was the duly elected candidate to the State Assembly.
The High Court allowed the petition and set aside the election.
On appeal to this Court it was contended that the High Court overlooked the well established principle that the charge of corrupt practice must be treated as quasi criminal in character which has to be proved beyond reasonable doubt.
Allowing the appeal and remitting the case to the High Court, HELD : (1)(a) The judgment of the High Court rests largely on appreciation of oral evidence.
It could not, therefore, be easily disturbed by this Court even in first appeal on facts in election cases.
[587B] (b) But if the High Court overlooks serious infirmities in the evidence adduced to support the case accepted by it or misreads evidence or ignores the principle that a charge of corrupt.
practice, in the course of an election, is a grave one which, if established, casts a serious reflection and imposes a disability upon the candidate held guilty of it, so that.
the Court must be satisfied beyond reasonable doubt about its veracity, this Court will not hesitate to interfere.
[587C] In the instant case, the High Court did nothing more than to rather mechanically accept the oral and documentary evidence given to support the charge of corrupt practice.
There was no consideration or discussion of a number of infirmities both in the oral and documentary evidence to support the charge.
Ibis is so because the High Court has held the view that a mere consideration of probabilities, without applying a strict standard of proof beyond reasonable doubt to a charge of corrupt practice was enough.
There is no indication , anywhere in the judgment that the stricter standard of proof, which is applicable to such charges, was kept in view by the High Court.
[588G H] Rahim Khan vs Khurshid Ahmed & Ors. ; @ 666. followed.
2(a) It is difficult to accept the contention of the appellant that oral.testimony could not be accepted in an allegation of corrupt practice unless it is corroborated by other kinds of evidence in material particulars.
There is no such general inflexible rule of law or practice which could justify a wholesale condemnation or rejection of a species of evidence which is legally admissible and can be acted upon under the provisions of the Evidence Act in every type of case if it is, after proper scrutiny, found to be reliable or worthy of acceptance.
There is no presumption that a witness deposing on oath in the witness box, is untruthful unless he is shown to be speaking the truth.
The ordinary presumption is that a witness deposing solemnly on oath before a judicial tribunal is a witness of truth unless the contrary is shown.
The evidence in an election petition cannot be equated with that of an accomplice in a criminal case whose testimony has, according to a rule of practice, though not of law, to be corroborated in material particulars before it is relied upon.
[589D E & F] 585 (b) It is not required by our law of evidence that a witness must be proved to be a perjurer before his evidence is discarded.
It may be enough if his evidence appears to be quite improbable or to spring from such tainted or biased or dubious a source as to be unsafe to be acted upon without corroboration from evidence other than that of the witness himself [589F] (c) There are no golden rules for appraising human testimony.
The extraction of what should constitute the credible foundation of judicially sound judgment is an art which nothing except sound common sense and prudence combined with experience can tear h.
[589G] (d) In judging the evidence of a grave charge, prudence dictates that belief in its correctness should form the basis of a judicial verdict of guilt only if that belief reaches a conviction beyond reasonable doubt.
[590B] (e) In deciding whether the stricter standard of proof is satisfied in a case of alleged corrupt practice, resting upon oral evidence only, the Courts should be particularly astute and not omit to examine fairly the effect of every existing substantial ground which could introduce a reasonable doubt in a case.
[590c] In the instant case the appellants contention that the motor drivers would be prepared to commit perjury at the instance of the respondent who was the defeated Minister and that because the respondent had been welcomed and garlanded by the President of the Motor Truck Drivers ' Union, the evidence of motor drivers was easily available to him cannot be accepted either as a general rule in election cases, or.
on the facts of this particular case.
It is not reasonable to carry a suspicion to the extent of attributing to every witness appearing in support of the respondent,,, case a tendency or desire to commit perjury.
The law does not discriminate against or frown upon a former Minister or view every witness produced by him with suspicion because he had been a Minister.
On the other hand, it is reasonable to believe that a person who has occupied the responsible position of a Minister would be less inclined to suborn witnesses or conspire to produce perjured evidence.
[590E G] Rahim Khan vs Khurshid Ahmed & Ors. ; (a) 666, followed.
(f) Where the examination in chief and cross examination of a witness are most unsatisfactory the Trbunal is not powerless in the performance of its duty to ascertain the truth.
There is not only section 165 of the Evidence Act which enables the Court to put any question it likes to a witness.
but there are also provisions of O.XVI, r. 14 CPC.
The High Court adopted a standard of proof which is not strict enough in appraising the worth of evidence produced to support a charge of corrupt practice.
[592G H]
|
Appeal No. 494 of 1970.
From the judgment and order dated the 24th January, 1969 of the Delhi High Court in Income Tax Ref.
No. 51 of 1966.
V. C. Desai, J. Ramamurthy and R. N. Sachthey, for the appellant.
K. Sen and H. K. Puri, for the respondent.
The Judgment of the Court was delivered by SARKARIA, J.
This appeal is directed against the Judgment, dated 24 1 1969, of the High Court of Delhi answering in the affirmative the following question referred to it under section 66(1) of the Indian Income tax Act, 1922 (for short, the Act) by the Commissioner of Income tax .
"Whether on the facts and in the circumstances of the case the capital loss of Rs. 28,662/ could be determined and carried forward in accordance with the provisions of Section 24 of the Indian Income tax Act, 1922, when the provisions of section 12B of the Income tax Act, 1922 itself were not applicable in the assessment year 1955 56.
" The assessee (respondent) is a Private Limited Company.
The assessment year under reference is 1955 56 and the relevant previous year is from 1 5 1953 to 30 4 1954.
On 10 1 1952 the assessee pur 698 chased 1124 shares of M/s. Intercontinent Travancore Pvt. Ltd. at a cost of Rs. 1,12,400/ from M/s. Escorts (A&M) Ltd. In the relevant accounting year ending on 30 4 195 3 the assessee received 562 bonus shares from the same company.
It thus acquired a total number of 1686 shares.
On 3 9 53, i.e. during the relevant previous year the assessee sold all these 1686 shares to M/s. Escorts (Agents) Ltd. for Rs. 84,300 and claimed a loss of Rs. 84,862/ in the income tax return filed by it.
The Income tax Officer disallowed the entire loss of Rs. 84,862 on the ground that it was a loss of a capital nature.
The assessee carried an appeal to the Appellate Assistant Commissioner and contended that this loss of Rs. 84,862/ was a revenue loss arising out of dealing in shares.
The Appellate Assistant Commissioner found that the assessee 's claim was exaggerated and that the actual lose was to the tune of Rs. 28,662/ only.
He further held that this loss of Rs. 28,662/ was not a 'revenue loss, but a 'capital loss ' arising out of change of investments.
Against the decision of the Appellate Assistant Commissioner the assessee preferred an appeal before the Tribunal, challenging the findings of the Commissioner both in regard to the amount of loss and its nature.
At the stage of arguments before the Tribunal, the assessee 's Counsel did not press these grounds of appeal but took up the plea that the amount of Rs. 28,662/ which had been held to be a "capital loss" by the authorities below, should be allowed to be carried forward and set off against profits and gains, if any, under the head "capital gains" earned in future, as laid down in sub sections (2A) & (2B) of section 24 of the Act.
Despite objection from the Departmental Representative, the Tribunal allowed this new ground to be raised with the observation that It was "a pure question of law and did not require investigation of any fresh fact '.
It further accepted the contention of the assessee and directed that the "capital loss" of Rs. 28,662/ should be carried forward and set off against "capital gains" if any, in future.
At the instance of the Commissioner of Income tax, the Tribunal referred the above question (set out at the commencement of this judgment) to the High Court under section 66(1) of the 1922 Act.
It was contended before the High Court on behalf of the Revenue that the expression "capital gains" in sub section (2A) of section 24 has reference only to section 12B so that the loss suffered in the year in which the profits under the head "capital gains" were not taxable, could not fall within sub section (2A) of section 24, section K. Kapoor J., speaking for the Division Bench, rejected this contention in these terms : "This argument overlooks the fact that the head of income chargeable to income tax are set out in section 6. "Section 12 B deals only with the computation of capital gains and with their taxability if they arise during a particular period.
As a matter of fact, section 12B itself refers to section 6 inasmuch as it says that "the tax shall be payable by an assessee under the bead "capital gains".
This obviously has reference to the VIth head in section 6.
The effect of 699 sub section (2A) and (2B) of section 24 read with section 6 and 12B, therefore, is that if a capital loss is incurred in a year in which a capital gain did not attract tax under section 12B such loss would still be loss under the head "capital gains" and if in subsequent year the assessee has any profit under that head it can still be carried forward and set off against the taxable capital gain.
The Tribunal was in my opinion, right in coming to the conclusion that it did.
" Hence this appeal by the Commissioner of Income tax (Central) Delhi.
Capital Gains Tax for the first time was introduced by the Income tax and Excess Profit Tax (Amendment) Act, 1947 (No. 22 of 1947) which inserted section 12B in the Act.
This section made taxable "capital gains" which arose after March 31, 1946 The same Act of 1947 added as the VIth head "capital gains" in section 6 of the Act.
It also inserted sub sections (2A) and (2B) in section 24 of the Act.
The Indian Finance Act, 1949 virtually abolished the levy and restricted the operation of section 12B to "capital gains" arising before the ' 1st April, 1948.
But section 12B in its restricted form, and the VIth head, capital gains ' in section 6, and sub sections (2A) and (2B) of section 24 were not deleted and continued to form part of the Act.
The Finance (No. reintroduced the "capital gains ', tax with effect from the 31st March, 1956.
It substantially altered the old section 12B and brought it into its present form.
As a result of Finance Act (3) of 1956 "capital gains" again became taxable in the assessment year 1957 58.
The position that emerges is that "capital gains" arising, between 1 4 1948 and 31 3 1956, were not taxable.
The capital loss in question relates to this period.
Mr. V. section Desai, learned Counsel for the appellant contends that according to the scheme of the Act, a "capital loss" occurring in a previous year, could be allowed to be carried forward and set off against the capital gains of a subsequent year, only if the income under that head was taxable in the relevant previous and subsequent years.
Since during the period from 1 4 1948 to 31 3 1956, capital gains (plus) or capital gains (minus) did not enter into computation of the, total income of the assessee chargeable to tax under section 3 read with section 12B of the Act, the question of carrying forward inch loss did not arise, much less could such a loss be set off against the profits of any subsequent year.
As against this, Shri Ashok Sen, learned Counsel for the assessee maintains that a, right to carry forward a loss under any of the heads enumerated in section 6, is not dependent upon the taxability of income under that head it is sufficient if at the relevant time "capital gains" is one of the heads of income recognized by the charging section 6 and the loss is adjustable against "capital gains", if any, in future under section 24.
The argument proceeds, that section 6(vi) was not lying inert on the, statute book but was operative, throughout, for the purpose of calculating the losses under that head.
Shri Sen compared the non taxability of 700 capital gains during the period from 1 4 1948 to 31 3 1956, to a tax holiday for those years.
Another illustration given by the learned Counsel is of a person whose total income falls entirely on the negative side on account of losses suffered by him under any of the heads of income given in section 6.
Such a person notwithstanding the fact that he had no assessable income has a right to file a return and get his losses computed by the Income tax Officer merely for the purpose of carrying forward the loss.
The Income tax Officer, it is added, cannot ignore the return filed by the assessee, voluntarily, showing losses even though such a return is filed beyond time.
In this connection, Shri Sen has referred to Commissioner of Income tax, Punjab vs Kulu Valley Transport Co. Ltd. (1), Jaikishan Gopikishan and Sons vs Commissioner of Income tax, M.P. (2) and Commissioner of Income tax, Madhya Pradesh vs Khushat Chand Daga(3).
Before dealing with the contentions canvassed, it will be appropriate to have a clear idea of the terms 'income ', 'total income ', 'computation of total income ', 'carrying forward ' of a loss and its purpose, in the context of the scheme of the Act.
Section 2 Cl.
(15) defines "total income" to mean total amount of income, profits and gains referred to in sub section (1) of section 4 computed in the manner laid down in this Act.
Section 3, captioned as "Charge of Income tax", emphasises that the income tax shall be charged in respect of the total income of the previous year of every assessee.
Section 4 defines the ambit of that total income.
Section 6 enumerates six heads of income, profits and gains chargeable to income ax.
They are : " (i) Salaries.
(ii) Interest on securities.
(iii) Income from property.
(iv)Profits and gains of business, profession or vocation.
(v) Income from other sources.
(vi) Capital gains.
" Sections7, 8, 9, 10, 12 and 12B relate to payability and computation of taxunder the various heads of income.
The material part of section 12B at the relevant time was as follows: "12B (1) The tax shall be, payable by an assessee under the head "Capital gains" in respect of any profits or gains arising from the sale, exchange or transfer of a capital asset effected after the 31st day of March 1946 and before the, 1st day of April, 1948 and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange or transfer took place.
" (1) 7 (3) (2) 701 Section 22(1) requires a general notice to be published requiring every person whose total income during the previous year exceeds the maximum non taxable limit to Me a return.
Sub section (2) of this section enables the Income tax Officer to issue notice to any such person requiring him to furnish a return.
Sub section (2A) which was inserted by the Income tax Amendment Act 25 of 1953 with effect from 1 4 1952 provides "If any person who has not been served with a notice under sub section (2) has sustained a loss of profits or gains in any year under the head Profits and gains of business, profession or vocation, and such loss or any part thereof would ordinarily have been carried forward under sub section
(2) of section 24, he shall, if he is to be entitled to the benefit of the carry forward of loss in any subsequent assssment, furnish within the time specified in the general notice given under sub section
(1) all the particulars required under the prescribed form of return.
" The material part of section 24 runs thus : "24.(1) Where any assessee sustains a loss of profits or gains in any year under any of the heads mentioned in section 6, he shall be entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year * * * * * Provided that in computing the profits and gains chargeable under the head "Profits and Gains of business, profession or vocation", any loss sustained in speculative transaction which are in the nature of a business shall not be taken into account except to the extent of the amount of profits and gains, if any, in any other business consisting of speculative transactions * * * * * (2) Where any assessee sustains a loss of profits or gains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on the 31st day of March 1940, in any business, profession or vocation, and the loss cannot be wholly set off under sub section (1), so much of the loss as is not so set off or the whole loss where the assessee bad no other head of income shall be carried forward to the following year, and (i) where the loss was sustained by him in a business consisting of speculative transactions, it shall be set off only against the profits and gains, if any, of any business in speculative transaction carried on by him in that year; (ii) where the loss was sustained by him in any other business, profession or vocation, it shall be set off against the profits and gains, if any, of any business, profession or vocation carried on by him in that year pro 702 vided that the business, profession or vocation in which the loss was originally sustained continued to be carried on by him in that year; and (iii) if the loss in either case cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following year and so on. * * * * * * 2A.
Notwithstanding anything contained in sub section (1), where the loss sustained is a loss falling under the head "Capital gains".
such loss shall not be set off except against any profits and gains failing under that head.
Where an assessee sustains a loss such as is referred to in sub section (2A) and the loss cannot be wholly set off in accordance with the provisions of that sub section, the portion not so set off shall be carried forward to the following year and set off against capital gains for that year, and if it cannot be so set off, the amount thereof not so set off shall be carried forward to the following year and so on, so however, that no such loss shall be so carried forward for more than six years : Provided that where the loss sustained in any previous year does not exceed fifteen thousand rupees, it shall not be carried forward.
(3) When, in the course of the assessment of the total income of any assessee, it is established that a loss of profits or gains has taken place which he is entitled to have set off under the provisions of this section, the Income tax, Officer shall notify to the assessee by order in writing the amount of the loss as computed by him for the purposes of this section,.
" Section 2(6C) provides that 'income ' includes (among other things) "(vi) any capital gain chargeable under Section 128.
" From the charging provisions of the Act, it is discernible that the words 'income ' or 'Profits and gains ' should be understood as including losses also, so that, in one, sense 'profits and gains ' represent 'plus income ' whereas losses represent 'minus income '(1).
In other words, loss is negative profit.
Both positive and negative profits are of a revenue character.
Both must enter into computation, wherever it becomes material, in the game mode of the taxable income of the assessee.
Although section 6 classifies income under six heads, the main charging provision is section 3 which levies income tax, as only one tax, on the 'total income ' of the assessee as defined in section 2(15).
An income in order to come within the purview of that definition must satisfy two conditions.
Firstly, it must comprise the "total amount of income, (1) CIT vs Karamchand Prem Chand ; CIT V. Elphinston Spinning & Weaving Mills; 703 profits and gains referred to in s: 4(1).
" Secondly, it must be "computed in the manner laid down in die Act".
If either of these conditions fails, the income will not be a part of the "total income" that can be brought to charge.
Now, capital gains would be covered by the definition of 'income ' in sub section (6C) of section 2, only if they were chargeable under section 12B.
As noticed already, s.12B as modified by the Finance Act, 1949, did not charge any 'capital gains ' arising between 1 4 1948 to 14 1957.
Indeed, section 12B was not operative in these years (1948 57).
During this period, "capital gains", whether on the positive or the negative side, could not be computed and charged under section 12B or any other provisions of the Act.
In the instant case, the second condition, namely, "the manner of computation laid down in the Act" which to use the words of Stone C.J.(1) "f an integral part of the definition of 'total income" ' was not satisfied.
Thus in the relevant previous year and the assessment year, or even in the subsequent year, capital gains or "capital losses" did not form part of the "total income" of the assessee which could be brought to charge, and were, therefore, not required to be computed under the Act.
Before the insertion of sub section (2A) in section 22 by the amendment of 1 4 1952, an assessee was entitled to carry forward a loss even if he had submitted no return for the year in which the loss was sustained.
After the enactment of sub section (2A), it is a condition precent to the carry forward and set off of, the loss, that the assessee must file a return either in response to a general notice under sub section (1) of section 22 or voluntarily, without any individual notice under sub section (2) of that section.
If he does not Me the return for the year in which the loss was incurred and get the loss computed by the Income tax Officer, the right to carry forward the loss will also be lost.
But if the loss is from a source or head of income not liable to tax or congenitally exempt from income tax, neither the assessee is required to show the same in the return, nor is the Income tax Officer under any obligation to compute or assess it, much less for the purpose of "carry forward".
It is noteworthy that in the instant ease, the assessee in his return had not shown any "capital losses".
He had claimed this loss as a revenue loss.
The Income tax Officer could, therefore, reject the assessee 's claim to carry forward the loss, merely on the ground that it was not a "revenue loss".
His further finding that it wag a "capital loss" was only incidental and, in fact, was not necessary.
From what has been said above, it follows as a necessary corollary, that during the period section 12B did not make income under the he ad, ,capital gains ' chargeable, an assessee was neither required to show income under that head in his return, nor entitled to file a return showing "capital losses" merely for the purpose of getting the same computed and carried forward.
Sub section (2A) of section 22 would not give him such a right because the operation of that sub section is, in terms, confined to (i) a loss which is sustained "under the head 'profits and gains, of business, profession or vocation" and would ordinarily (1) In re Kamdar , 21.
704 have been carried forward under sub section (2) of section 24, and (ii) to "income" which falls within the definition of 'total income '.
Both these conditions necessary for the application of the sub section are lacking in the present case.
Nor do we find any substance in the contention that under sub section (2) read with subsection (1) of section 24, the assessee had an independent right to carry forward his capital loss, even if it could not be set off, owing to the non taxibility of capital gains, against future profits, it any, in the immediate subsequent years.
Sub section (2) of section 24 expressly refers to loss 'in any business, profession or vocation '.
It does not cover a "Capital loss", or the minus income under the head 'capital gains ' which at the relevant time, were not chargeable and did not enter into computation of the 'total income ' of the assessee under the Act.
It may be remembered that the concept of carry forward of loss does not stand in vacuo.
It involves the notion of set off.
Its sole purpose is to set off the loss against the profits of a subsequent year.
It presupposes the permissibility and possibility of the carried forward loss being absorbed or set off against the profits and gains, if any, of the subsequent year.
Set off implies that the tax is exigible and the assessee wants to adjust the loss against profit to reduce the tax demand.
It follows that if such set off is not permissible or possible owing to the income or profits of the subsequent year being from a nontaxable source, there would be no point in allowing the loss to be "carried forward".
Conversely, if the loss arising in the previous year was under a head not chargeable to tax, it could not be allowed to be carried forward and absorbed against income in a subsequent year, from a taxable source.
Now let us test the claim of the assessee in the light of the above principles.
The "capital loss" of Rs. 28,662/ in the present case, was, sustained in September 1953, that is, in the previous year 1953 54.
Let us assume that in the subsequent years 1955 56 and 1956 57 when the capital gains were not taxable, he made huge capital gains far exceeding this loss, could he be obliged to show those capital gains ill his return? Could the loss of the year 1953 54 be absorbed or set off against such capital gains of the subsequent years? The answer is emphatically in the negative.
The cases cited by Shri Sen are not relevant.
In all those cases, the heads of income under which the, losses were sustained, were chargeable to tax.
None of them was a case of 'capital loss ' pertaining to the period, 1948 to 1957.
For the foregoing reasons, we are of the opinion that the High Court was in error in answering the question referred to it, in favour of the assessee.
We would reverse that answer in favour of the Revenue.
In the result, the appeal is accepted with costs.
Appeal allowed.
| IN-Abs | By the Income tax and Excess Profit Tax (Amendment) Act, 1947 section 12B was inserted in the Indian Income tax Act, 1922, making capital gains which arise after March 31, 1946, taxable.
The same Act inserted sub sections (2A) and (2B) in section 24 of the Income tax Act.
As a result of the Indian Finance Act, 1949 which restricted the operation of section 12B to capital gains arising before April 1, 1948, and the Finance (No. 3) Act, of 1956 which restored tax on capital gains with effect from April 1, 1948 capital gains arising from 1 4 1949 to 31 3 1956 were not taxable.
For the assessment year 1955 56 which relates to the period when capital gains were not taxable the assessee claimed a loss of Rs. 84,862/ arising from the sale of certain shares.
The Income tax Officer disallowed the loss on the ground that it was a loss of capital nature.
The Appellate Assistant Commissioner, in appeal, held that the assessee 's claim was exaggerated, that the actual loss was only Rs. 28,662/ and agreed with the Income tax Officer that the loss was not a revenue loss but a capital loss.
Before the Tribunal the assessee contended that the amount of Rs. 28,662,/ which had been held to be a capital less by the authorities should be allowed to be carried forward and set off against profits and gains under the head "Capital gains" earned in future as laid down in section 24(2A) and (2B).
The Tribunal held in favour of the assessee.
The High Court.
in reference, confirmed the order of the Tribunal holding that the effect of sub sections (2A) and (2B) of section 24 read with sections 6 and 12B was that if a capital loss was incurred in a year in which a capital gain did not attract tax under section 12B even then such loss would still be loss under the head 'capital gains ' and if in a subsequent year the assessee had any profit under that head it would still be carried forward and set off against the taxable capital gain.
Allowing the appeal to this Court, HELD : (1) From the charging provision of the Indian Income tax Act it is discernible that the words 'income ' or 'profits and gains, should be understood as including losses, so that both must enter into computation, wherever it becomes material, of the taxable income of the assessee.
Although section 6 classifies income under six heads the main charging provision is section 3 which levies income tax as only one tax on the 'total income ' of the assessee as defined in section 2(15).
An income in order to come within the purview of that definition must satisfy two conditions.
(a) it must comprise the 'total amount of income, profits and gains referred to in section 4(1), and (b) it must be computed in the manner laid down in the Act.
If either of these conditions fails the income will not be a part of the total income that can be brought to charge.
[702F 703B] (2)The concept of carry forward of loss does not stand in vacuo.
Its sole purposeis to set off the loss against the profits of a subsequent year.
Set off impliesthat the tax is exigible and the assessee wants to adjust the loss against profit to reduce the tax demand.
It follows that if such set off is not Permissible or possible owing to the income or profits of the subsequent year being from a non taxable source, there would be no point in allowing the loss to be carried forward.
Also, if the loss arising in the previous year was under a head not chargeable to tax it could not be allowed to be carried forward and absorbed against income in a subsequent year from a taxable source.
[704C E] (3) Capital gains would be covered by the definition of income in section 2(6C) only if they were chargeable under s ' 12B.
But section 12B was not operative in the years 1948 to 1956.
Thus in the relevant previous year and the assessment year or even in he subsequent year capital gains ' or 'capital losses ' did not 697 form part of the total income of the assessee which could be brought to charge and were, therefore, not required to be computed under the Act.
That is condition (b) which 'total income ' must satisfy is not satisfied in the present case.
[703B D] (4) Under section 22(2A) it is a condition precedent to the carry forward and set off of the loss that the assessee must file a return either in response to a general notice, under section 22(1) or voluntarily, without any individual notice under subsection (2).
If he does not file the return for the year in which the loss was incurred and get the loss computed by the Income tax Officer, the right to carry forward the loss will also be lost.
But if the loss is from a source or head of income not liable to tax or exempt from tax neither the assessee is required to show the same in the. return nor is the Income tax Officer under any obligation to compute or assess it, much less for the purpose of carry farward.
[703D F] (5) In the instant case.
the, assessee in his return had not shown any ,capital loss ' but claimed the loss as a revenue loss.
The Income tax Officer should have rejected the assessee 's claim to carry forward the loss merely on the ground that it was not a revenue loss and he need not have given a finding that it was a capital loss, because 'capital gains were not taxable during the year.
[703F G] (6) Section 24(2) expressly refers to loss, 'in any business, profession or vocation '.
It does not cover a capital loss under the head 'capital gains ' which at the relevant time were not chargeable and did not enter into computation of the total income of the assessee.
Therefore, under a. 24(1) and (2) the assessee had no independent right to carry forward his capital loss even if it could not be set off owing to the non taxability of capital gains against future profits in the immediate subsequent years.
[704B C] (7) Assuming, therefore, that the assessee in the subsequent years 1955 56 and 1956 57 when the capital gains were not taxable made huge capital gains he would not be obliged to show those capital gains in his return.
Therefore, the loss suffered by him in the relevant assessment year in the instant case could not be absorbed or set off against such capital gains.
[704F]
|
minal Appeal No. 203 of 1973.
Appeal by special leave from the Judgment and Order dated the 14th March, 1973 of the Calcutta High Court in Criminal Revision No. 613 of 1972.
L. N. Sinha, Solicitor General.
G. L. Sanghi and Girish Chandra for the Appellant.
A. K. Sen Mrs. Liela Seth and U. K. Khaitan for the Respondents.
The Judgment of the Court was delivered by MATHEW, J.
The respondents were tried before the Presidency Magistrate, 11th Court for having committed offences under sections 4(3), 20(3) and 22 of the Foreign Exchange Regulation Act, 1947 (hereinafter called 'the Act ') read with section 120 B of the Indian Penal Code and section 23 of the Act.
The Court discharged the respondents in view of the decision of the High Court of Calcutta in M/s. Serajuddin & Co and Others vs Union of India and Others(1) holding that section (1) Civil Rules Nos.
2183 (W), 2184 (W) of 1966 and cases Nos.
1998 and 1999 of 1963 decided on 16 9 1971.
804 23(IA) was violative of Article, 14 of the Constitution.
The appellant filed a revision petition against the order, before the High Court.
The Court concurred with the decision of the trial Court and dismissed the revision.
This appeal, by special leave, is against that order.
The question for consideration is whether section 23(1A) of the Act violates Article 14 of the Constitution.
Section 23 (1) as it originally stood in the Act provided that whoever contravenes any of the provisions of the Act or of any rule, direction or order made thereunder shall be punishable with imprisonment for a term which may extend to two years or with fine, or with both, and any Court trying any such contravention may, if it thinks fit and in addition to any sentence which it may impose for such contravention, direct that any currency, security, gold or silver or goods or other property in respect of which the contravention has taken place shall be confiscated.
Section 23 was amended in 1950 and 1952.
We are not concerned with those amendments.
In 1957, the section was further amended by the Foreign Exchange Regulation (Amendment) Act, 1957 (Act No. 39 of 1957).
This amendment provided for departmental adjudication in respect of contravention of certain provisions of the Act.
The section as amended read as under: "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 times the value of the foreign exchange 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) up on conviction by a Court, be punishable with imprisonment for a term which may extend to two years, or with fine or with both, (IA) 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 sub section (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 section 19 shall, upon conviction by a Court, be punishable with fine which may extend to two thousand rupees.
" By section 23D it was provided that the Director of Enforcement shall for the purpose of adjudicating under clause (a) of sub section (1) of section 23 805 hold an inquiry after notice to the person proceeded against and impose a penalty, but if at any stage of the inquiry he is of opinion that having regard to the circumstances of the case, the penalty he is empowered to impose would not be adequate, he shall, instead of imposing a penalty, file a complaint in writing to the Court.
The argument of the respondents was that section 23 provides for two different procedures for dealing with contravention of the provisions of the Act; that while persons contravening the provisions of the Act specified in section 23(1) (a) have to be dealt with by the Director of Enforcement in the first instance and need face trial in criminal court only if he is of opinion that having regard to circumstances of the case the penalty he is empowered to impose would not be adequate, the persons contravening the other provisions of the Act are liable to be prosecuted in the first instance in criminal court without an injury by the Director of Enforcement which would give them the possibility to escape prosecution in a criminal court.
In other words the argument was that persons who have contravened the provisions specified in section 23 (I) (a) anti are found guilty by the Director of Enforcement need not face prosecution in a criminal court if the Director is of opinion, that the penalty he is empowered to impose would be adequate punishment, whereas, the persons alleged to contravene the other provisions of the Act have necessarily to face prosecution in criminal court without being given the benefit of an inquiry by the Director of Enforcement and the opportunity to the delinquents to convince him that imposition of penalty by him would be adequate punishment even if they are found guilty.
The question, therefore, is whether persons contravening the provisions specified in section 23 (I) (a) are similarly situated with persons contravening the other provisions of the Act with respect to the purpose or object of the Act or whether by reason of the nature of the offences resulting from the contravention of the provisions specified in section 2 3 (I) (a) the persons contravening them form a class by themselves distinct from the persons contravening the other provisions of the Act and therefore the legislative judgment to deal with them under a different procedure was justified with reference to the ultimate purpose of the Act.
The preamble provides the key to the general purpose of the Act.
that purpose is the regulation of certain payments, dealings in foreign exchange and securities and the import and export of currency and bullion in the economic and financial interest of India.
The general purpose or object of the Act given in the preamble may not show the specific purpose of the classification made in section 23(1) (a) and section 23(1A).
Supreme Court has therefore to ascribe a purpose to the statutory classification and coordinate the purpose with the more general purpose of the Act and with other relevant Acts and public policies.
For achieving this the Court may not only consider the language of section 23 but also other public knowledge about the evil sought to be remedied, the prior law, the statement of the purpose of the change in the prior law and the internal legislative history.
When the purpose of a challenged classification is in doubt, the courts attribute to the classification the purpose 806 thought to be Most probable.
Instead of asking what purpose or purposes the statute and other materials reflect, the court may ask what constitutionally permissible objective this statute and other relevant materials could plausibly be construed to reflect.
The latter approach, is the proper one in economic regulation cases.
The decisions dealing with economic regulation indicate that courts have used the concept of 'purpose ' and 'similar situations ' in a manner which give considerable leeway to the legislature.
This approach of judicial restraint and presumption of constitutionality requires that the legislature is given the benefit of doubt about its purpose.
How far a court will go in attributing a purpose which though perhaps not the most probable is at least conceivable and which would allow the classification to stand depends to a certain extent upon its imaginative power and its devotion to the theory of judicial restraint.
At this stage, it is necessary to sharpen the focus to understand the real grievance of the respondents.
As already indicated, their submission is that since they are similarly situated with persons contravening the provisions of the Act specified in section 23 (1) (a), they should have been included in that class and dealt with by the Director Enforcement in the first instance so that they might also have the benefit of inquiry by him with the possible advantage of escaping with penalty even if they are found guilty of the offences.
Their grievance therefore is that the classification made in section 23 (1) is under inclusive and is, therefore, unreasonable.
Often times the courts hold that under inclusion does not deny the equal protection of laws under Article 14.
In strict theory, this involves an abandonment of the principle that classification must include all who are similarly situated with respect to the purpose.
This under inclusion is often explained by saying that the legislature is free to remedy parts of a mischief or to recognize degrees of evil and strike at the harm where it thinks it most acute.
The Courts have recognised the very real difficulties under which legislatures operate difficulties arising out of both the nature of the legislative process and of the society which legislation attempts perennially to reshape and they have refused to strike down indiscriminately all legislation embodying classificatory inequality here under consideration.
Mr. Justice Holmes, in urging tolerance of under inclusive classifications, stated that such legislation should not be disturbed by the Court unless it can clearly see that there is no fair reason for the law which would not require with equal force its extension to those whom it leaves untouched.
See Missouri K. and T. Rly.
vs May(I).
What, then, are the fair reasons for non exten sion ? What should a court do when it is faced with a law making an under inclusive classification in areas relating to economic and tax matters '? There are two main considerations to justify an Linder inclusive classification.
First, administrative necessity.
Second, the legislature might not be fully convinced that the particular policy which it adopts (1) at p. 269.
807 will be fully successful or wise.
Thus to demand application of the policy to, all whom it might logically encompass would restrict the opportunity of a state to make experiment.
These techniques would show that some sacrifice of absolute equality may be required in order that the legal system may preserve the flexibility to evolve new solutions to social and economic problems.
The gradual and piece meal change is often regarded as desirable and legitimate though in principle it is achieved at the cost of some equality.
It would seem that in fiscal and regulatory matters the court not only entertains a greater presumption of constitutionality but also, places the burden on the party challenging its validity to show that it has no reasonable basis for making the classification.
This was the approach of this Court in State of Gujarat vs Ambica Mills(1).
The Court said : "The piecemeal approach to a general problem permitted by under inclusive classifications, appears justified when it is considered that legislative dealing with such problems is usually an experimental matter.
It is impossible to tell how successful a particular approach may be, what dislocations might occur, what evasions might develop, what new evils might be generated in the attempt.
Administrative expedients must be forged and tested.
Legislators, recognizing these factors, may wish to proceed cautiously, and courts.
must allow them to do so (37 California Rev. 341).
" The background of the amendment of section 23 of the Act will be relevant for appreciating the reason for making the distinction between the two classes of contraventions.
From April, 1949 to December, 1952, the Reserve Bank was handling all cases including those relating to unauthorized import, export of gold and silver.
The Bank had an enforcement section.
In 1952, the Central Government authorised the Customs and Central Excise officers to investigate and prosecute cases if import or export of gold and silver in contravention of the provisions relating to them.
In May, 1956, the Central Government took over the work relating to enforcement, i.e., the residuary work done by the Reserve Bank other than those entrusted to Custom.% Department.
A Directorate of Enforcement was set up in May, 1956 with the idea that there should be a specialized agency to deal with specified categories of offences.
Between April, 1949 and April 1956, when the duty of enforcement was with the Reserve Bank, the Bank had completed investigation in about 200 cases but prosecutions could be launched in respect of 66 cases only and out of these 60 cases ended in convictions.
No prosecution could be launched in respect of other cases in view of the fact that evidence legally neces sary to secure conviction in a court was not forthcoming.
When the work was transferred to the Enforcement Directorate of the Ministry of Finance, its experience was also similar.
From May, 1956 till about 1957, the Directorate had handled 832 cases.
But prosecutions could be launched only in respect of 32 cases.
This Was due to the fact that legal evidence necessary for establishing the cases beyond (1) ; 808 doubt in a court of law was not forthcoming partly because it was difficult to secure cooperation of the foreign collaborators in getting the incriminating documents against the suspects and partly because the banks in foreign countries were under no obligation to furnish statements of accounts maintained by the suspects in them.
Faced with this difficulty, the Government had to consider other ways of enforcing the provisions of the Act more effectively.
The Government, after considering the pros and cons decided to provide for departmental enquiry and adjudication of contravention of certain provisions of the Act by an authority specially constituted for that purpose.
In the statement of Objects and Reasons to the Foreign Exchange Regulation Bill, 1957, it was stated ; ".
The most important of these amendments is the one providing for departmental inquiry an adjudication of foreign exchange offences by an authority constituted by Government on the Sea Customs Act.
" In short, the reason for the amendments made in 1957 was the experience gained in the working of the Act till then.
That experience was that persons contravening the provision of the Act specified in section 23 (1) (a) invariably escaped without punishment : firstly because, successful prosecution of these offences in many cases was not possible for want of legal, evidence; secondly because, the criminal courts were not equipped with the training, expertize and experience necessary to deal with the intricate and ingenious methods adopted by the persons contravening them.
The Government therefore thought that imposition of penalty by departmental adjudication would prove a more effective means if checking these types of foreign exchange offences as against the previous system of prosecution of all offences on the basis of the strict standard of proof required for criminal prosecution which proof was by and large, so much within the special knowledge of the offender and so much out of the reach of the department.
It may be noted that after the amendment in 1957, further amendments of section 23 were made in 1964 whereby sections 10, 17, 18(A) and 18(B) were also brought within the purview of section 23(1)(a).
The introduction of these sections within section 23(1)(a) was the result of further experience gained during the succeeding years.
It was only on the basis of the experience gained by the working of the Act that a decision could be taken about the classification of offences in respect of which a trial by a court would be expedient and those in respect of which summary procedure visualized by section 23(1) (a) might be necessary.
Generally speaking, therefore, the basis of the classification was that in cases where there was likelihood of getting sufficiently unimpeachable evidence as, for instance, in cases involving contravention ,of sections 14, 13(2), 15, 18, etc., where the Reserve Bank of India as a specialized agency comes into the picture and be in possession ,of relevant materials, those cases were left to be dealt with under s.23(1A) by criminal courts.
809 In paragraph 17 of the affidavit of Shri M. L. Sharma, Under Secretary, Ministry of Finance, Department of Economic Affairs, filed with the permission of this Court, the reasons why the legislature selected the contravention of certain provisions of the Act for being dealt with by the criminal courts in the first instance have been fully stated.
According to that affidavit, broadly speaking, the classes of offenceswhich have been brought under sections 23(1) and 23A are what maybe termed as 'primary ' offences and those brought under s.23(1A)may be termed as 'secondary ' offences.
Primary offences are those which need detection and action at executive or field level by the concerned specialized agency.
There is greater need fur taking deterrent measures in respect of these offences.
It is not a question of the seriousness or gravity of the offences.
Both primary and secondary offences may be grave or serious and involve large amounts.
But the difference is that primary offences are distinguished by the volume and areas of incidence and may need greater deterrence which sometimes may lie in large pecuniary penalty and sometimes in criminal punishment by way of imprisonment.
A delinquent who has become an insolvent may not feet any deterrent effect however large the pecuniary penalty may be and such a case may call for a sentence of imprisonment.
In respect of secondary offences there are heady built in institutional checks laid down by the Reserve Bank or other Government agencies.
As indicated above, where contraventions do take place in regard to, other sections, there would normally be adequate or reasonable documentary evidence, etc., and these will facilitate prosecution in courts of law.
We do.
not think that there is any merit in the contention that the classification made in s.23(lA) is discriminatory.
Even according to the respondents, it is the classification made in s.23(1)(a) which is under inclusive and is, therefore, unreasonable.
If this Court were_ to declare that the classification made in section 23 (1) (a) is under inclusive and therefore unreasonable, the result would be that contraventions of the provisions specified in section 23(1)(a) would also fall within section 23(1 A) and would have to be dealt with by the Criminal Court a consummation which the respondents devotedly want to avoid.
We do not think that the High Court was right in holding that section 23(1A) was bad.
We set aside the order of the High Court and allow the appeal.
V.M.K. Appeal allowed.
| IN-Abs | The respondents were tried for having committed offences under section 4(3), 20(3) and 22 of the Foreign Exchange Regulation Act, 1947 read with section 120 B of the Indian Penal Code and section 23 of ' the Act.
The Court discharged the respondents in view of the decision of the High Court of Calcutta in M/s Serajuiddin & Co. and Ors.
vs Union of India and Ors.
Civil Rules Nos.
2183 (W) of 1966 and cases Nos.
1998 and 1999 of 1963 decided on 16 9 1971, holding that section 23(AI) was violative of article 14 of the Constitution.
The appellant filed a revision petition against the order, before the High Court.
The High Court concurred with the decision of the trial Court and dismissed the revision.
This appeal, by special leave, is against that order dismissing the revision, It was contended for the respondents that section 23 provides for two different procedures for dealing with contravention of the provisions of the Act.
That is to say, persons who have contravened the provisions specified in section 23(1)(a) and are found guilty by the Director of Enforcement need not face prosecution in a criminal court if the Director is of opinion that the penalty he is empowered to impose would be adequate punishment, whereas, the persons alleged to contravene the other provisions of the Act have necessarily to face prosecution in criminal court without being given the benefit of an inquiry by the Director of Enforcement and the opportunity to the delinquents to convince him that imposition of penalty by him would be adequate punishment even if they are found guilty.
The classification made in section 23(1) is under inclusive and is, therefore, unreasonable.
Allowing the appeal, HELD : (i) When the purpose of a challenged classification is in doubt, the courts attribute to the classification the purpose thought to be most probable.
Instead of asking what purpose or purposes the statute and other materials reflect, the court may ask what constitutionally permissible objective this statute and other relevant materials could plausibly be construed to reflect.
The latter approach is the proper one in economic regulation cases.
The decisions dealing with economic regulation indicate that courts have used the concept of 'purpose ' and 'similar situations ' in a manner which give considerable leeway to the legislature.
This approach of judicial restraint and presumption of constitutionality requires that the legislature is given the benefit of doubt about its purpose.
[805H 806C] (ii) Often times the courts hold that tinder inclusion does not deny the equal protection of laws under Article 14.
In strict theory, this involves an 803 abandonment of the principle that classification must include all who are similarly situated with respect to the purpose.
This under inclusion is often explained by saying that the legislature, is free to remedy parts of a mischief or to recognize degrees of evil and strike at the harm where it thinks it most :acute.
There are two main considerations to justify an under inclusive classification.
First, administrative necessity.
Second, the legislature might not be fully convinced that the particular policy which it adopts will be fully successful or wise.
Thus to demand application of the policy to all whom it might logically encompass would restrict the opportunity of a state to make experiment.
These techniques would show that some sacrifice of absolute equality may be required in order that the legal system may preserve the flexibility to evolve new solutions to social and economic problems.
[806E; H.807B] Missouri &. and T. Rly.
vs May, ; at p. 269 and Gujarat vs Ambica, Mills ; referred to.
(iii) The experience of the Government was that persons contravening the provisions of the Act specified in section 23(1)(a) invariably escaped without punishment.
: firstly because, successful prosecution of these offences in many cases was not possible for want of legal evidence; secondly because, the criminal courts were not equipped with the training, expertize and experience necessary to deal with the intricate and ingenious methods adopted by the persons contravening them.
The Government, therefore, thought that imposition of penalty by departmental adjudication would prove a more effective means of ,checking these types of foreign exchange offences as against the previous system of ' prosecution of all offences on the basis of the strict standard of proof required for criminal prosecution which proof was, by and large, so much within the special knowledge of the offender and so much out of the reach .of the department.
[808D F] The basis of classification was that in cases where there was likelihood of getting sufficiently unimpeachable evidence as, for instance.
in cases involving contravention of sections 14, 13(2), 15, 18 etc., where the Reserve Bank of India as a specialized agency comes into the picture and be in possession of relevant materials, those cases were left to be dealt with under section 23(IA) by criminal courts.
The classification made in section 23(IA) is, therefore, not dis criminatory.
[808H; 809E]
|
No. 118 of 1974.
Petition under article 32 of the Constitution.
R. L. Kohli, for the petitioner.
Dilip Sinha and G. section Chatterjee, for the respondent.
The Judgment of the Court was delivered by CHANDRACHUD, J.
The petitioner was detained by an order dated August 23, 1973 passed by the District Magistrate, Howrah, under the .
The order recites that the petitioner was detained with a view to preventing him from acting in any manner prejudicial to the maintenance of public order.
The particulars of the ground of detention refer to a solitary incident dated March 18, 1973.
It is alleged that at about 2 p.m. on that date, the petitioner and his associates being armed with swords, Ballams and Lathis attacked a group of Bengalees at Rajnarayan Roy Choudhury Ghat Road, Shibpur, Howrah causing severe injuries to them.
It is further stated that this conduct led to a reign of terror 426 in the locality as a result of which the shops and the doors of the read side houses were closed, people of the locality fled away inpanic and the people were generally afraid of coming out of their houses for fear of being assaulted.
Learned counsel appearing on behalf of the petitioner has raised two points for our consideration in this petition fOr the writ of habeas corpus.
The particulars furnished to the petitioner say that the petitioner was detained on the ground: "you have been acting" in a manner prejudicial to the maintenance of public order.
The argument is that the order is founded on a single incident and therefore, the use of language showing that the culpable conduct on the part of the petitioner extended over an appreciably long period of time was wholly inappropriate.
Inferentially; it is urged, the detaining authority had material before it showing that the petitioner was indulging in a criminal course of conduct for a long periOd of time and as such material was not disclosed to the petitioner, he bad no opportunity to meet it, leading thereby to the contravention of Article 22(5) of the Constitution.
We are not impressed by this submission.
It is true that in matters involving the liberty of the subject, the detaining authorities ought to exercise the greatest care in the discharge of their functions.
But that dOes not justify an unrealistic dissection of detention orders.
The counter affidavit filed on behalf of the State Govt.
shows that no other material was taken into account by the detaining authority while passing the order of detention.
Therefore, the use of the expression, "you have been acting" though unfortunate does not support the submission that the order of detention is founded on undisclosed material.
The petitioner was expressly apprised that he had been acting in a manner prejudical to the maintenance of public order "as evidenced by the particulars" furnished to him.
The particulars refer only to a single incident.
The second ground of attack on the detention order is that when the State Government approved the detention on August 30, 1973 it passed an order approving a detention order dated "25 8 73".
As the impugned order of detention is dated August 23, 1973 it is urged that while approving the detention of the petitioner, the State Government had before it some other order of detention.
There is no substance in this contention.
The order of approval contains but a typographical error.
This is clear from the order passed by the State Govt.
on November 8, 1973 confirming the order of detention after obtaining the opinion of the Advisory Board.
The order of confirmation refers to the order of detention dated August 23, 1973.
It must also be stated that as in the order of confirmation so in the order of approval, an express reference is made to the detention order bearing No. 1818 C.
The order of detention passed against the petitioner on August 23, 1973 bears that very number which shows hat the reference to an order dated "25 8 73" in the order of approval is a topographical mistake.
In the result, we confirm the order of detention and discharge the rule in this petition.
P.H.P. Petition dismissed.
| IN-Abs | The petitioner wag detained under the .
The ground of detention referred to a solitary incident.
The particulars furnished to the petitioner however stated that he was detained on the ground: "You have been acting", in a manner prejudicial to the maintenance of public order.
in a petition for habeas corpus it was contended that since the language used showed a culpable conduct over a long period of time, the detaining authority had before it material showing that the petitioner wag indulging in a criminal course of conduct for a long period and as such material was not disclosed to the petitioner, he had no opportunity to meet it resulting thereby in the contravention of article 22(5) of the Constitution It was also contended that since State Government approved a detention order hearing a date different from the one shown in the order served on the petitioner, State Government had before it some other order of detention while approving the petitioner 's detention.
Confirming the order of detention, HELD : In matters involving the liberty of the subject the detaining authorities ought to exercise the greatest care in the discharge of their functions.
But that does not justify an unrealistic dissection of detention orders.
The counter affidavit filed by the State shows that no other material was taken into account.
The use of expression "you have been acting", though unfortunate does not support the submission that the detention order was founded on undisclosed material, [426C E] (2)The order of approval contains a typographical error which is clear from the fact that the number of detention order is correctly given and in the order confirming the detention order, after consultation with the Advisory Board the correct date of the detention order is mentioned.
[426F H]
|
iminal Appeal No. 67 of 1971.
Appeal by special leave from the judgment & Order dated the 17th July, 1970 of the Gujarat High Court in Crl.
A. Nos. 287 and 128 of 1969.
R. H. Dhebar and R. N. Sachthey, for the appellant.
A. section Qureshi, Vinal Deve and Kailash Mehta, for the respondents.
The Judgment of the Court was delivered by UNTWALIA, J.
There is a locality known as Nani Malokoad in the town of Kaloy, District Mehsena, Gujarat.
In this locality is a road (lane) running north to south.
Bai Fatima, respondent No. 1 in this appeal filed on grant of special leave by the State of Gujarat, is the wife of Allarakha Hussemkhan.
He had a younger brother named Gulabkhan Husseinkhan.
The victim of the occurrence is the said Gulabkhan.
Both the brothers had their houses adjacent to each other in this lane facing east.
The northern one was in occupation of and belonged to the deceased and the southern one was of Allarakha.
There are a number of other houses situated around the houses of the two brothers.
One such house is of Sardarkhan Muradkhan facing west abutting the road, two houses north of the house of the deceased.
Jamiyatkhan is the son of Sardarkhan, father in law of the deceased Gulabkhan.
In the month of June, 1968 a complaint. was made to the Kalol Municipality by persons of the locality including the deceased and some of the prosecution witnesses that Allarakha, husband of respondent no.1 was discharging dirty water of his house towards East which collects on the road and causes nuisance to the residents of the locality.
That had caused friction between the families of the two brothers.
On 27.6.1968 according to the prosecution story there were two incidents in the Angana i.e. space on the road in front of the houses of the parties .one was at 5.30 p.m. and the other at 6.30 p.m.
The, prosecution case is that a she goat of Gulabkhan strayed in the house of Fatima. 'She began giving blows to the goat.
There, were altercations between the members of the families of the, two brothers.
Res pondent no.2.
who is a married daughter of respondent no.1 and her son Liyakat who was 15 years old on the date of occurrence were also present at the time of this quarrel.
They threw stones which hit P.W.3 Nannubibi, wife of deceased Gulabkhan, one Rahematbibi and P.W. 4 Noorbibi a neighbourer and a close relation of Nannubibi Respondent no.1 is said to have come out with a stick from her house, and went to Gulabkhan to strike him.
One Allarakha Rehman a close neighbour came there, caught hold of the stick, quietened respondent No. 1 and sent her back to her house The second part of the story is that Gulabkhan and Nannubibi went and sat in the Angana of 995 Jamiyatkhan son of Sardarkhan, father in law of Gulabkhan.
Respondent No. 1 about an hour later went with a stick in her hand and hurled a blow on Gulabkhan.
Nannubibi intervened and got the blow on her right hand finger.
Gulabkhan directed respondent no.1 to go back to her house by gestures of his hand and he also proceeded and pushed her towards her house.
When Gulabkhan reached the Angana of his house, respondent no.1 is said to have put her leg across his legs with the result that he fell down on his back.
Respondent no.2 caught hold of the hands of Gulabkhan.
Respondent no.1 sat on his legs and squeezed his testicles and pulled them.
The boy Liyakat is said to have bitten the deceased on the left shoulder.
Gulabkhan thereafter was made to recline on a cot.
Eventually he.
died of the shock due to the pressing of his private parts by respondent No. 1.
Information was sent to the Police Station.
A complaint of Nannubibi was recorded at about 10.30 p.m.
Liyakat was sent for trial before the Juvenile Court.
Respondent nos.
1 and 2 were tried by the Sessions Judge, Mehsana.
The learned Sessions Judge held the prosecution story to be proved beyond reasonable doubt in all material particulars.
Finding that the injury caused to Gulabkhan in ordinary course of nature may not be sufficient to cause his death but was likely to cause his death, he convicted respondent no.1 under section 304 Part I of the Indian Penal Code and sentenced her to undergo rigorous imprisonment for 7 years.
She was further convicted under section 323 and was given a concurrent sentence for 3 months under this count.
Respondent no.2 was convicted of an offence under section 323 read with section 114 of the Penal Code and was sentenced to undergo rigorous imprisonment for 3 months.
The respondents filed an appeal in the Gujarat High Court from the order of conviction recorded against them and the State went up in appeal for their conviction under section 302 of the Penal Code read with section 114 in the case of respondent no.2 The State appeal was dismissed by the High Court and that of the respondents allowed.
The State came to this Court and obtained special leave from the judgment of acquittal recorded by the High Court in the respondents appeal.
The dismissal of the State appeal by the High Court is final.
The three eye witnesses to the occurrence are P.W.3 Nannubibi, P.W.4 Noorbibi and P.W.6 Jenatbibi.
The latter two are neighbourers and related to Nannubibi.
The Trial Judge believed their evidence.
He also believed the evidence of P.W.7 Gulamanabi Shermohmad a close neighbour of the parties to whom an oral dying declaration is said to have been made by Gulabkhan before his death.
It may be stated here that P.W.8 Rasulbhai was sitting in the Bazar at some distance from the place of occurrence in the evening of the 27th June, 1968.
He got the information at about 9.45 p.m. about the death of Gulabkhan.
He rushed to the Police Station and merely informed about his death.
It is also necessary to note here that respondent no.1 had received some injuries on her person in either of the incidents which took place 996 on the evening of 27th June, 1968.
Prosecution did not explain the injuries on her person but the Trial Judge inferred that they must have been caused in the first incident which took place at 5.30 p.m. and not in the second which was the subject matter of the charge against the respondents.
The High Court has held in favour of the prosecution on the main part of the occurrence, namely, squeezing of the testicles of the deceased by respondent no.1 as a result of which he died.
Yet it has disbelieved the prosecution case in regard to some other aspects.
It has not accepted the prosecution story that there were two incidents in the evening.
Nor has it accepted the version that shortly after the first incident Gulabkhan and Nannubibi had gone to the Angana of Jamiyatkhan.
The, story of falling down of the deceased by the tripping of his legs by respondent no.1 has been discarded by the High Court.
So also the evidence of P.W.7 Gulamnabi.
Even after believing the main part of the occurrence the High Court has exonerated respondent No. 1 of the charges levelled against her and consequently respondent no.2 also on the ground that she must have done so in exercise of her right of private defence in as much as she must have squeezed testicles of the deceased when he was showering blows with a stick on respondent No. 1 in order to protect herself.
In our opinion there are two many conjectures, surmises and contradictions in the judgment of the High Court.
The respondents bad not examined any witness to give any counter version of the occurrence or to justify the assault on testicles of the deceased which resulted in ' his death.
The High Court has said in its judgment : (1) "There is also no doubt that since some days prior to the date of the incident the relations between the deceased and the family of accused no.1 were not cordial." (2) "There is no doubt that a quarrel did arise on that day" (meaning thereby the date of occurrence "between the deceased and accused No. 1 in respect of a goat." (3) "It is very reasonably clear that the squeezing of the testicles of the deceased was in all probability the act of accused no.1" (4) "There is further no doubt that the deceased did die on account of squeezing of his testicles in the evening that day at round about 8.30 p.m." On the findings aforesaid if the claim of right or private defence put forward on behalf of respondent no.1 was untenable as we shall show hereinafter it was wholly so, then it is plain that the High Court ought not to have interferred with the order of conviction recorded by the Trial Court.
Even in face of the said findings the High Court criticized the prosecution case as regards some details of the occurrence or the ,incidents and rejected a good portion of it.
We shall briefly show that the said rejection by the High Court was wholly unjustified.
997 There were two incidents according to the prosecution case which happened in the evening at an interval of about an hour.
High Court says it was not so and says so without any basis.
The prosecution did not stand to gain anything by splitting up the evening incident in two parts.
Even in the First Information Report, Ext.32 recorded at 10.30 p.m. in the night the two incidents were separately narrated.
There was absolutely no reason for the High Court to interfere with the findings of the Trial Court in that regard.
The High Court does not accept the prosecution story that deceased Gulabkhan had gone to the `Angana of Jamiyatkhan and respondent No. 1 went there as an aggressor with a stick in her hand.
This story has been discarded on the ground that it is not mentioned in the First Information Report nor in the statements of the other two witnesses before the police.
We may observe again that the prosecution did not stand to gain anything by unnecessarily or falsely introducing the story of Gulabkhan 's going to the Angana of his father in law.
The main occurrence happened in the Angana of Gulabkhan.
The places are so very near that the story of Gulabkhan going to the Angana of his father in law was not an important one to be remembered by the witnesses to be recited before the police.
It mattered little whether respondent no.1 went as an aggressor to the Angana of the deceased or a bit further North to the Angana of Jamiyatkhan.
High Court also discarded the story of the tripping of the legs of Gulabkhan because it is not mentioned in the First Information Report.
But then it ought to hive been noticed that no such contradiction was to be found in the evidence of P.Ws 4 and 6 in Court and their statements before the police.
It must, therefore.
be presumed that they had given out the tripping story before the police.
The High Court has not thought it safe to rely upon the evidence of the three eye witnesses none of whom was found to be disinterested in the prosecution.
The comment is that Allarakba Rehman and Mansabu who lived in the house opposite to the deceased have not been examined by the prosecution.
According to the prosecution, case the said Allarakha had merely quietened respondent No. 1 in the first incident and Mansabu came after the second incident was over.
In material particulars we find the evidence of the eye witnesses very convincing and natural.
In our opinion the High Court was not justified in thinking that it was not safe to rely on their evidence wholly and specially when the main part of the occurrence which fastened the guilt on respondent no.1 was not disbelieved.
Absence of any details in the statement recorded at the police station on the basis of the information given by P.W. 8 Rasulbhai unnecessarilly led the High Court to remark that no one knew upto 10.00 on as to how Gulabkhan died.
This contradicts the earlier findings of the High Court that he died as a result of the squeezing of his testicles by respondent no.1 Rasulbhai, according to his evidence did not get the details of the occurrence and so did not give any to the police.
998 The High Court has given 3 or 4 reasons for discarding the evidence of P.W.7 Gulamnabi to whom the oral dying declaration is said to have been made by the deceased.
The first reason given by the High Court is that when this witness went near Gulabkhan the three women who claimed to have witnessed the occurrence were sitting near him; none of them related the story to Gulamnabi.
he put a question to Gulabkhan who being in a position to give the answer gave it, it was not necessary for him to talk to the women thereafter.
Gulamnabi was the person who had gone to call Dr. Rao to examine Gulabkhan.
Dr. Rao came at 8.30 p.m. and declared him to be dead.
It was not necessary for Gulamnubi to relate the details of the occurrence to Dr. Rao as he himself had not witnessed it Another reason given for discarding the evidence of Gulamnabi is with reference to the evidence of Rasulbhai that upto 10.00 p.m. no one knew the exact reason for the death of Gulabkhan.
Having accepted the prosecution story about the cause of his death it was unnecessary to dilate upon the matter any further.
The High Court has not disbelieved the lodging of the complaint before the police on the statement of Nannubibi at 10.00 p.m.
The last reason given is the non examination of Dr. Rao by the prosecution.
His evidence was of no use to it and the comment of the High Court is not, therefore, justified.
We have unhesitatingly come to the conclusion that the Trial Court was right in believing the evidence of the prosecution witnesses in regard to both the incidents and the occurrence in question forming part of the second incident.
The High Court differed from the view of the Trial Judge on flimsy and unsustainable grounds.
Now we come to deal with the question of right of private defence.
It is no doubt true that the prosecution did not explain the injuries on the person of respondent no.1.
P.W.5 Dr. section C. Masalia who had examined the injuries on the side of the prosecution also examined ' Fatima, respondent no.1 when she was sent to him by the police.
Fatima Bibi had lodged a complaint before, the police which was; found to be a non cognizable offence at about 8.00 p.m. on 27 6 1968.
That is Ext 44.
In this complaint she stated that her young one of the goat had gone in the Angana of Gulabkhan.
Three persons named ' in the complaint were Gulabkhan, Bai bibi, mother in law of Gulabkhan and Nannubibi, his wife.
The two ladies caught hold of her Odhana and began to give her blows.
of kicks and fists Gulabkhan gave stick blows on the right hand and so she fell down on the ground and began to shout.
The injuries found on the person of Fatima Bibi were 5 in number.
Three contusions on the right forearm, one contusion on posteric parietal part of right side of scalp and one contusion on scapular part of right side of back.
The injuries were all of minor character.
In her statement under section 342 of the Code of Criminal Procedure, 1898 respondent No. 1 stated almost the same story and added that Gulabkhan was drunk while he was abusing her.
Neither in Ext.44 nor in the statement under section 342 there was a whisper by by respondent no.1 of her having squeezed the testicles and the private part of Gulabkhan.
Nothing was stated to give any inkling of her having squeezed the testicles of Gulabkhan 999 in exercise of her right of private defence to protect her from further assault.
Nor was any evidence adduced in Court to give any counter version of the occurrence.
No foundation was laid to enable the court to acquit the respondents granting them a right of private defence.
It did require a pure conjecture and imagination to hold the respondents not guilty by extending to them the right of private defence.
In a situation like this when the prosecution fails to explain the injuries on the person of an accused, depending on the facts of each case, any of the three results may follow : (1) That the accused had inflicted the injuries on the members of the prosecution party in exercise of the right of self defence.
(2) It makes the prosecution version of the occurrence doubtful and the charge against the accused cannot be held to have been proved beyond reasonable doubt.
(3) It does not affect the prosecution case at all.
Question is in which category the present case falls ? In Munhi Ram and others vs Delhi Administration(1) Hegde, J delivering the judgment of this Court has said at page 458 "It is true that appellants in their statement under section 342 Cr.
P.C. had not taken the plea of private defence, but necessary basis for that plea had been laid in the cross examination of the prosecution witnesses as well as by adducing defence evidence.
It is well settled that even if an accused does not plead self defence, it is open to the Court to consider such a plea if the same arises from the material on record see In Re jogali Bhaige Naiks and another A.I,R.
The burden of establishing that plea is on the accused and that burden can be discharged by showing preponderance of probabilities in favour of that plea on the basis of the material on record.
" In the instant case not only the plea of private defence was not taken by the respondents in their statement under section 342 but no basis for that plea was laid in the cross examination of the prosecution witneses or by adducing any defence evidence.
In our opinion the burden of establishing that plea was not discharged in any manner by the respondents even applying the test of preponderance of probabilities in favour of that plea.
There is absolutely no material in the records of this case to lead to any such conclusion.
We do not think that the Trial Judge was right in assuming that respondent No. 1 must have received the injuries in the first incident.
It may well be that she received the injuries in the second incident.
Since prosecution did not come forward to show in what manner she received these (1) 1000 injuries, assumption can be made to the farthest extent in favour of the respondents that respondent no.1 received the injuries with a stick, may be at the hands of Gulabkhan or any other person on his side.
But surely the assumption could not be stretched to the extent it has been done by the High Court.
The High Court is not right in saying that by the tripping of the legs Gulabkhan would have fallen on his face and not on his back.
A man may fall on back or on face depending upon the side and the angle of the tripping.
The other error committed by the High Court is when it says :, "It appears to us to be more probable that while the quarrel was going on in the Angana of the deceased and the deceased was delivering blows of stick on the accused No. 1, she squeezedhis testicles in order to liberate herself from his attack.
It appears that she did so while the deceased was standing and giving blows on her." The deceased was wearing a pant and it is impossible to imagine that the, squeezing of the testicles could be done by respondent No. 1 to the extent of causing his death soon after the squeezing when Gulabkhan was in a standing position.
In that position he could have at once.
moved back and liberated himself.
The extent of squeezing done in this case was possible only if respondent No. 1 could sit on his legs after he bad fallen down at his back.
This lends further support to the prosecution story that respondent No. 2 caught his hands from behind meaning thereby from towards the side of his head, in the front being respondent No. 1 on his legs.
In our opinion, therefore, there was absolutely no basis or material in the records of this case to enable the High Court to record an order of acquittal in favour of the respondents by extending them a right of private defence.
Even going to the maximum in favour of the respondents that respondent no.1 got the blows with a stick at the hands of Gulabkhan and in the second incident it is manifest that her action of assault on him was a deliberate counterattack to cause him such injury which at least was likely to cause his death.
The counter ,attack could in no sense be an attack in exercise of the right of private defence.
In material particulars the evidence of the three eye witnesses as also the evidence of dying declaration of the deceased before P.W. Gulamnabi is so convincing and natural that no doubt creeps into it for the failure of the prosecution to explain the injuries on the person of respondent No. 1.
The prosecution case is not shaken at all on that account.
1n our judgment this is a case which falls in the third category 1001 as enumerated above.
In agreement with the Trial Court, we hold that the guilt of both the respondents have been proved beyond any reasonable doubt.
For the reasons stated above, we allow this appeal, set aside the order of the High Court and restore that of the Trial Court as against respondent No. 1 as respects her convictions and sentences and as against respondent No. 2 only in regard to her conviction.
It is no use sending the young girl back to jail for a few months.
While maintaining her conviction under section 323/114 of the Penal Code, we reduce her sentence to the period already undergone.
P. B. R. Appeal allowed.
| IN-Abs | Respondents Nos. 1 and 2 were mother and daughter.
The deceased was the brother in law of respondent No. 1.
For some days before the date of the Occurrence, the relations between the two families were none too cordial.
On the clay of the occurrence there was a scuffle between the respondents and the deceased.
A little later, when the deceased was sitting in the house of his father in law in the opposite row of houses, respondent No. 1 was alleged to have gone to the deceased with a stick to beat him.
Some neighbours intervened and tried to pacify both the parties.
When the deceased was going out, respondent No. 1 put her leg across the legs of the deceased, as a result of which he fell down on his back.
Respondent No. 2 immediately caught hold of both the hands of the deceased and respondent No. 1 is stated to have squeezed his testicles and pulled them.
Eventually the deceased succumbed to the injury.
After the incident respondent No. 1 lodged a complaint before the police stating that the deceased, his wife and his mother in law caught hold of her and gave her blows and kicks with a stick as a result of Which she fell down.
Holding that the prosecution case was proved beyond reasonable doubt, the Sessions Judge convicted respondent No. 1 under section 304, Part I I.P.C. Respondent No. 2 was convicted under section 323 read with section 144, I.P.C. On appeal, the High Court, even after believing the main part of the occurrence, acquitted respondent No. 1 of the charges levelled against her and consequently respondent No. 2 also on the ground that she must have done so in exercise of her right of private defence inasmuch as she must have squeezed the testicles of the deceased when be was showering blows with a stick on her in order to protect herself.
Allowing the appeal of the State.
HELD : (1) The trial Court was right in believing the evidence of the proSecution witnesses in regard to both the incidents and the occurrence in question forming part of the second incident.
The High Court differed from the view of the trial judge on flimsy and unsustainable grounds.
[998 D E] (2) There was absolutely no basis or material on the record to enable the High Court to record an order of acquittal in favour of the respondents by extending them a right of private defence.
Even going to the maximum extent in favour of the respondents that respondent No. 1 got the blows with a stick at the hands of the deceased and in the second incident it is manifest that her action of assault on him was a deliberate counterattack to cause him such injury which at least was likely to cause his death.
The counterattack could in no sense be an attack in exercise of the right of private defence.
[100 F G] (3) Neither in her complaint before the police nor in the statement under s.342 Cr.
P.C. Was there a whisper by respondent No. 1 of her having squeezed the testicles and private parts of the deceased in exercise of her right of private defence.
Not only was the plea of private defence not taken by the respondents in their statements under section 342, Cr.
P.C. but no basis for the plea was laid in the cross examination of the prosecution witnesses or by adducing any defence evidence.
The burden of establishing that plea was not discharged in any way by the respondents even applying the test of preponderance of probabilities in favour of that plea.
There is absolutely no material on the record to lead to any such conclusion.
[999 G H] Munhi Ram and Others vs Delhi Adtministration [19681 2 S.C.R. 455, followed.
|
minal Appeal No. 359 of 1974.
Appeal by special leave from the Judgment and order dated the 6th August 1974 of the Orissa High Court in Criminal Misc.
Case No. 180 of 1974.
Sharad Manohar, R. N. Nath and V. N. Gaupule, for the appel lant.
Gobind Das, and B. Parthasarathi, for the respondent.
The Judgment of the Court was delivered by : UTNTWALIA, J.
An occurrence took place on the 8th of March 1974 at a place situated in the District of Cuttack, Orissa.
First Information Report was lodged on the 9th March, 74 and a police investigation started in connection with the offences alleged to have been committed under sections 147, 148, 307, 302 simpliciter as also with the aid of section 149 of the Indian Penal Code.
The four appellants in this appeal by special leave were arrested by the police in the course of the investigation on the 8th March and four others who have been enlarged on bail by the Sessions Judge of Cuttack were arrested on the 14th March.
They were produced before the Magistrate who remanded them to jail custody from time to time.
The learned Sessions Judge released on bail four of the accused but refused to grant bail to the appellants.
An argument based upon proviso (a) to sub section (2) of section 167 of the Code of Criminal ,Procedure, 1973 (Act No. 2 of 1974) hereinafter referred to as the New Code, was rejected by the Sessions Judge relying on the saving clause (a) of sub section (2) of section 484.
139 The appellants approached the Orissa High Court and pressed their cases for releasing them on bail on merits as well as on the ground of the provision of law aforesaid contained in the New Code.
A Bench of the High Court by its order dated the 6th August, 1974 has repelled the arguments put forward on behalf of the appellants and dismissed their application for bail.
They have filed the present appeal by special leave of this Court.
This Court is not expected to examine afresh the question of releasing the appellants on bail on merits.
But the question for consideration is whether the appellants are entitled to be released on bail under the proviso (a) of section 167(2) of the New Code.
The New Code came into force on and from the 1st of April, 1974.
Section 484(1) repealed the Code of Criminal Procedure, 1898 hereinafter called the Old Code, But there were certain saving clauses engravers in sub section (2); the relevant clause (a) would be adverted to hereinafter in this judgment.
Before doing so it is necessary to appreciate the position of law in relation to the power of remand by a Magistrate during the course of investigation of a case by the police.
A person arrested without warrant could not be detained by a police officer for a period exceeding 24 hours as provided in section 61 of the Old Code.
Section 167(1) required the police officer to forward the accused to the nearest Magistrate if the investigation could not be completed within the period of 24 hours fixed by section 61 and if there were rounds for believing that the accusation or information was well founded.
Sub section (2) provided "The Magistrate to whom an accused person is forwarded under this section may, whether he has or has not jurisdiction to try the case, from time to time authorise the detention of the accused in such custody as such Magistrate thinks fit, for a term not exceeding fifteen days on the whole.
If he has not jurisdiction to try the case or commit it for trial, and considers further detention unnecessary, he may order the accused to be forwarded to a Magistrate having such jurisdiction : " The Magistrate to whom the accused was forwarded could remand him to police custody or tail custody for a term not exceeding 15 days in the whole under section 167(2).
Even the Magistrate who had jurisdiction to try the case could not remand the accused to any custody beyond the period of 15 days under section 167(2) of the Old Code.
There was no other section which in clear or express language conferred this power of remand on the Magistrate beyond the period of 15 days during the pendency of the investigation and before the taking of cognizance on the submission of Charge Sheet.
Section 344, however, enabled the Magistrate to postpone the corn 140 mencement of any enquiry or trial for any reasonable cause.
The explanation to section 344 of the Old Code read as follows : "If sufficient evidence has been obtained to raise a suspicion that the accused may have committed an offence, and it appears likely that further evidence may be obtained by a remand, this is a reasonable cause for a remand.
" Various High Courts had taken the view that a Magistrate having jurisdiction to try a case could remand an accused to jail custody from time to time during the pendency of the investigation in exercise of the power under section 344 : to wit, The Superintendent and Remembrancer of Legal Affairs, Government of West Bengal vs Bidhindra Kumar Roy and others(1); Chandradi Dubey vs The State ( 2) , Dukhi and another vs State and another(3) ; Shrilal Nandram and another vs R. R. Agrawal, section D. M. First Class, Gwalior and another(1) and State of Kerala vs Madhavan Kuttan(5).
A contrary view was taken by the Orissa High Court in the case of Artatran Mahasuara and others vs State of Orissa(6).
It may be emphasized here that the Court will have inherent power of remand of an accused to any custody unless the power is conferred by law.
In the order under appeal the High Court without reference to section 344 of the Old Code, seems to have assumed that such a power existed.
That is not correct.
There are two decisions of this Court affirming the view expressed by majority of the High Courts and over ruling the one taken by the Orissa High Court in the case referred to above.
In A. Lakshmanarao vs Judicial Magistrate, First Class Parvatipuram and others(7) an argument was advanced that section 344 falling in Chapter 24 of the Old Code which contained general provisions as to enquiries and trials could not apply to a case which was at the stage of investigation and collection of evidence only.
Dua, J deli vering the judgment on behalf of this Court repelled the argument thus at page 506. "This argument appears to us to be negatives by the express language both of sub section (1 A) and the explanation.
Under sub section (1 A) the commencement of the inquiry or trial can also be postponed.
This clearly seems to refer to the stage prior to the commencement of the inquiry.
The explanation makes it clear beyond doubt that reasonable cause as mentioned in sub section (1 A) includes the likelihood of obtaining further evidence during investigation by securing a remand.
The language of section 344 is unambiguous and clear and the fact that this section occurs in Chapter 24 which contains general provisions as (1) A.I.R. 1949, Calcutta, 143.
(2) 1955 Bihar Law Journal Reports, 323.
(3) A.I.R. 1955, Allahabad, 521.
(4) A.I.R. 1960, Madhya Pradesh, 135.
(5) A.I.R. 1964, Kerala, 232.
(6) A.I.R 1956 Orissa.
129 (7) to inquiries and trials does not justify a strained construction.".
In Gouri Shankar Jha vs The State of Bihar and others(1) Shelat, J. delivering the judgment on behalf of the Court has said at page 569 : "In cases falling under section 167, a magistrate undoubtedly can order custody for a period at the most of fifteen days in the whole and such custody can be either police or jail custody.
Section 344, on the other hand, appears in Chapter 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 enquiry or a trial begins it is not proper to let the accused remain under police influence.
Under this section, a magistrate can remand an accusedperson to custody for a term not exceeding fifteen days ata 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.
" Farther says the learned Judge at page 570 : "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.
" It would thus be seen that under the Old Code the Magistrate was given the power under section 344 to remand an accused to jail custody as the section was also applicable to cases in which process of investigation and collection of evidence was going on.
In other words, the power of remand by the Magistrate during the process of investigation and collection of evidence was an integral part of the process.
The power was meant to be exercised, whenever necessary, to aid the investigation and collection of further evidence.
Let us now examine the position of law under the New Code.
No police officer can detain a person in custody, arrested without a warrant, for a period longer than 24 hours as mentioned in section 57 corresponding to section 61 of the Old Code.
Section 167 occurring in Chapter XII bearing the heading "Information to the police and their powers to investigate" the same as in Chapter XIV of the Old Code has made some drastic departure.
Similar, is the position in regard to section 309 of the New Code corresponding to section 344 of the Old Code.
While retaining the provision of forwarding the accused to the nearest Magistrate (of course under the New Code to the Judicial Magistrate), and while authorising the Magistrate to remand the accused to either police or judicial custody for a period not exceeding 15 days, proviso (a) has been added in these terms (1) ; 142 "Provided that (a) the Magistrate may authorise detention of the accused person, otherwise than in custody of the police, beyond the period of fifteen days if he is satisfied that adequate grounds exist for doing so, but no Magistrate shall authorise the detention of the accused person in custody under this section for a total period exceeding sixty days, and on the expiry of the said period of sixty days, the accused person shall be released on bail if he is prepared to and does furnish bail; and every person released on bail under this section shall be deemed to be so released under the provisions of Chapter XXXIII for the purposes of that Chapter ;" The expression "the Magistrate" in the proviso would the Magistrate having jurisdiction to try the case.
Section 309 (2) says "If the Court, after taking cognizance of an offence, or commencement of trial, finds it necessary or advisable to postpone the commencement of, or adjourn, any inquiry or trial, it may, from time to time, for reasons to be recorded, postpone or adjourn the same on such terms as it thinks fit, for such time as it considers reasonable, and may by a warrant remand the accused if in custody : Although the expression 'reasonable cause ' occurring in sub section (IA) of section 344 is no where to be found in section 309 of the New Code, the explanation to section 344 of the Old Code has been retained as Explanation I to Section 309 in the identical language.
The law as engrafted in proviso (a) to sections 167(2) and section 309 (2) of the New Code confers the powers of remand to jail custody during the pendency of the investigation only under the former and not under the latter.
Section 309(2) is attracted only after cognizance of an offence has been taken or commencement of trial has proceeded.
In such a situation what is the purpose of Explanation I in section 309 is not quite clear.
But then the command of the Legislature in proviso (a) is that the accused person has got to be released on bail if he is prepared to and does furnish bail and cannot be kept in detention beyond the period of 60 days even if the investigation may still be proceeding.
In serious offences of criminal conspiracy murders, dacoities, robberies by inter state gangs or the like, it may not be possible for the police, in the circumstances as they do exist in the various parts of our country, to complete the investigation within the period of 60 days.
Yet the intention of the Legislature seems to be to grant no discretion to the court and to make it obligatory for it to release the accused on bail.
Of course, it has been provided in proviso (a) that the accused released on bail under section 167 will be deemed to be so released under the provisions of Chapter XXXIII and for the purposes of that Chapter.
That may empower the court releasing him on bail, if it considers necessary so to do, to direct that such person be arrested and committed to custody as provided in sub section (5) of section 437 occurring in Chapter XXXHI.
It is also clear that after the taking of the cognizance the 143 power of remand is to be exercised under section 309 of the New Code.
But if it is not possible to complete the investigation within a period of 60 days then even in serious and ghastly types of crime, the accused will be entitled to be released on bail.
Such a law may be a " paradise for the criminals," but surely it would not be so, as sometimes it is supposed to be, because of the courts.
It would be so under the command of the Legislature.
But the question in this case is whether during the pendency of the investigation which started before coming into force of the New Code the appellants can press into service proviso (a) to section 167 (2) of that Code and claim to be released on bail as a matter of right when they are prepared to furnish bail.
The answer to this question depends on the interpretation of sections 167 and 484 of the New Code.
Unlike the wordings of section 428 the language of section 167(1) which will govern sub section (2) also, is "whenever any person is arrested", suggesting thereby that the section would be attracted when the arrest is made after coming into force of the Act.
While the expression used in section 428 is "where an accused person has, on conviction, been sentenced. .
Interpreting such a phrase it has been held in the case of Mr. Boucher Pierre Andra vs Superin tendent, Central Jail, Tihar, New Delhi and another(1) by Bhagwati, J. delivering the judgment of this Court at page 166 : "This section, on a plain natural construction of its language, posits for its applicability of fact situation which is described by the clause "Where an accused person has, on conviction, been sentenced to imprisonment for a term".
There is nothing in this clause which suggests, either expressly or by necessary implication, that the conviction and sentence must be after the coming into force of the New Code of Criminal Procedure.
" We may, however, hasten to add that in spite of the phrase "is arrested" occurring in section 167(1), since the Old Code has been repealed by sub section (1) of section 484 of the New Code, the provision would have applied, a fortiori, if the savings provided in subsection (2) would not have applied to the situation with which we are concerned in this case.
In our judgment clause (a) of subsection (2) of section 484 does apply.
It reads as follows "Notwithstanding such repeal, (a)If, immediately, before the date on which this Code comes into force, there is any appeal, application, trial, inquiry or investigation pending, then, such appeal, application, trial, inquiry or investigation shall be disposed of, continued, held or made, as the case may be, in accordance with the provisions of the Code of Criminal Procedure 1898, as in force immediately before such commencement, (hereinafter referred to as the Old Code), as if this Code had not come into force" (1)A.I.R. 1 975 S.C. 164.
144 Immediately before the 1st day of April, 1974 the investigation of this case was pending.
Saving clause (a) therefore enjoins that the said investigation shall be continued or made in accordance with the provisions of the Old Code.
The police officer, therefore, making the investigation has to continue and complete it in accordance with Chapter XIV of the Old Code.
Section 167 of that Code could not enable the Magistrate to remand the appellants to jail custody during the pendency of the investigation.
The police could seek the help of the Court for exercise of its power of remand under section 344, bringing it to the notice of the Court that sufficient evidence had been obtained to raise a suspicion that the appellants may have committed an offence and there will be hindrance to the obtaining of further evidence unless an order of remand was made.
As we have said above, invoking the power of the court under section 344 of the Old Code by the Investigating Officer would be a part of the process of investigation which is to be continued and made in accordance with the Old Code.
That being so, we hold that the appellants in this case cannot claim to be released under proviso (a) to section 167(2 ) of the New Code.
In the result the appeal fails and is dismissed.
Appeal dismissed.
| IN-Abs | In respect of an occurrence which took place on 8th March, 1974, at a place in the District of Cuttack, a police investigation commenced in connection with the offences alleged to have been committed under sections 147, 148, 307, 302 simpliciter as also with the aid of section 149 of the Indian Penal Code.
Of the eight persons arrested during investigation, four have been enlarged on bail by the Sessions Judge of Cuttack, but the learned Sessions Judge refused to grant bail to the four appellants.
Their conten tion based on proviso (a) to sub section (2) of Section 167 of the Code of Criminal Procedure, 1973, was rejected by the learned Judge relying on the saving clause (a) of sub section (2) of section 484.
The High Court also rejected their contention.
This appeal has been filed on the basis of the special leave granted by the Supreme Court.
HELD : (i) A Magistrate having jurisdiction to try a case could remand an accused to jail custody from time to time during the pendency of the investigation in exercise of the power under section 344 of the Code of Criminal Procedure, 1898.
In other words, the power of remand by the Magistrate during the process of investigation and collection of evidence was an integral part of the process.
The power was meant to be exercised whenever necessary to aid the investigation and collection of further evidence.
14 1 E F] A.Lakhmanrao vs Judicial Magistrate First Class Parvatipuram and others; , and Gouri Shankar Jha vs The State of Bihar and others; , , relied on.
The Superintendent and Remembrancer of Legal Affairs Government of West Bengal vs Bidhindra Kumar Roy and others, A.I.R. 1949, Calcutta 143; Chandradin Dubey vs The State, 1955 Bihar Law Journal Reports, 323; Dukhi and another vs State and another, A.I.R. 1955 Allahabad, 521; Shrilal Nandram & Another, vs R. R. Agrawal, section D. M. First Class, Gwalior and another Kuttan, A.T.R. 1964, Kerala, 232; Artatran Mahasuara and others vs State of Orissa, A.I.R. 1956 Orissa, referred to.
(ii)Courts will have no inherent power of remand of an accused to any custody unless the power is conferred by law.
The High Court has crred in assuming, without reference to section 344 of the old Code, that such a power existed.
[140D] (iii)The command of the Legislature in proviso(a) to section 167(2) of the new Code is that the accused person has got to be released on bail if he is prepared to and does furnish bail and cannot be kept in detention beyond the period of 60 days even if the investigation may still be proceeding.
Although the expression 'reasonable cause ' occurring in sub section (1A) of section 344 is no where to be found in section 309 of the New Code, the explanation to section 344 of the Old Code has been retained as explanation 1 to Section 309 in the identical language.
The law as engrafted in 138 proviso (a) to section 167(2) and section 309(2) of the New Code confers the powersof remand to jail custody during the pendency of the investigation only tinderthe former and not under the latter.
Section 309(2) is attracted only aftercognizance of an offence has been taken or commencement of trial has proceeded.
[142G H] Quere : What is the purpose of Explanation 1 in section 309 of the Code of Criminal Procedure, 1973.
(iv)Unlike the wordings of section 428 the language of section 167(1) which will govern sub section (2) also, is "whenever any person is arrested", suggesting thereby that the section would be attracted when the arrest is made after coming into force of the Act of 1973.
The expression used in section 428 is "where an accused Person has, on conviction been sentenced. . ".
To the facts of the present case, clause (a) of subsection (2) of section 484 will apply.
Immediately before the 1st day of April, 1974 the investigation of this case was pending.
Saving clause (a) therefore, enjoins that the said investigation shall be continued or made in accordance with Chapter XIV of the old Code.
Section 167 of that Code could not enable the Magistrate to remand the appellants to jail custody during the pendency of the investigation.
The police could seek the help of the Court for exercise of its power of remand under section 344, bringing it to the notice of the Court that sufficient evidence had been obtained to raise a suspicion that the appellants may have committed an offence and there will be hindrance to the obtaining of further evidence unless an order of remand was made.
[143C D 144B C] Mr. Boucher Pierre Andra vs Superintendent, Central Jail, Tihar, New Delhi and another, A.I.R. 1975 S.C. 164, referred to.
|
Appeal No. 2063 of 1973.
Appeal by special leave from the judgment and decree dated the 25th July.
1973 of the Calcutta High Court in Appeal from Appellate Decree No. 1193 of 1972.
Civil Appeal No. 1304 of 1973.
From the judgment and order dated the 3rd February, 1972 of the Calcutta High Court in L.P.A. No. 14 of 1969.
P. Chatterjee and Rathin Das, for the appellant (In C. A. 2063/73).
Urmila Kapoor and Shobha Dikshit, for the respondent (In C.A. No. 2063/73).
P.K. Chatterjee, G. section Chatterjee, and Sukumar Basu, for the Advocate General for the State of West Bengal.
Sukumar Ghose, for the appellants.
(In C.A. No. 1304/73).
D. N. Mukherjee, for the respondents (in C.A. No. 1304/73).
The judgment of M. H. Beg and V. R. Krishna Iyer, JJ was delivered by Krishna Iyer, J. P. K. Goswami, J. gave a separate Opinion.
KRISHNA IYER, J. Calcutta or Cochin, for the urban people of India, the shocking scarcity of a roof to rest one 's tired bones is an L346SupCI/75 778 unhappy problem of social justice that compels control of rent.
and eviction laws.
In the case now before us, attacking the constitutionality of legislation handcuffing the landlord proprietariat 's right of eviction, the law has to be tested not merely by the cold print of article 19(1)(f) but also by the public concern of article 19(5) and the, compassionate animus of article 39, Parts III and IV of the Constitution together constitute a complex of promises the nation has to keep and the legislation challenged before us is in partial fulfilment of this tryst with the people.
These observations become necessary in limine since counsel for the respondents dismissed the concept of social justice as extraneous to an insightful understanding of the section invalidated by the High Court, while we think that judicial conscience is not a mere matter of citations of precedents but of activist appraisal of social tears to wipe out which the State is obligated under the Constitution.
The two appeals before us, raising substantially identical points, have been heard together and are being disposed of by a common judgment.
Both of them stem from a decision of the Calcutta High Court reported as Sailendra Nath vs section E. Dutt(1).
One of the decisions under appeal (C.A. 2063 of 1973) was rendered by a Single Judge of the High Court following a Division Bench ruling of the same Court (i.e., the one reported as Sailendra Nath vs section E. Dull) since he was obviously bound by it.
A provision imparting some sort of retroactivity to a 1969 legislative amendment implanting additional restrictions on eviction of premises under the earlier West Bengal rent control law has been voided by the High Court in the judgment& under appeal.
The aggrieved tenant in each case has appealed and the State, not being directly a party to the legislation, has entered appearance to support, the legislation and to challenge the Calcutta decision to the extent it has invalidated the retrospective part of the statute.
Welfare legislation calculated to benefit weaker classes, when their vires is challenged in Court, casts an obligation on the State, particularly when notice is given to the Advocate General, to support the law, if necessary by a Brandeis brief and supply of socio economic circumstances and statistics inspiring the enactment.
Courts cannot, on their own, adventure into social research outside the record and if Government lets down the Legislature in Court by not illumining the provisions from the angle of the social mischief or economic menace sought to be countered, the victims will be the class of beneficiaries the State professed to protect.
In this case, we are unable to compliment the State or the Advocate General from this point of view.
It may happen that when the Court decides against the validity of a measure or order because Government fails to bring the socially relevant totality of facts, it is used Is an alibi by (1) A.1 R. 779 he latter for the misfortune.
Courts cannot help cover up the Executive 's drowsy default or half hearted help in making the socioconomic conspectus available.
The West Bengal Premises Tenancy Act, 1956 (Act XII of 956) (for short, referred to as the basic Act) clamped down several restrictions on ejectment of tenants by landlords from buildings, the policy behind it being alleviation of the lot of the weaker segment of the urban community without their own homes in the context of the scarcity of accommodation and the colossal sociceconomic upheaval which would follow if unbridled evictions were allowed.
The temptation to evict or rack rent under scarcity conditions is an irresistible evil in our economic order and it is an all India phenomenon that the social conscience of the State Legislatures has responded to this large scale threat by effective control measures.
Indeed, for decades now, every State in India has on, the statute book rent control law and, what is more pertinent to the present case, tactics of circumvention have compelled the enactment of additional safeguards from time to time by vigilant statutory measures.
West Bengal, a populous State, with an overcrowded city choked by the largest human congregation in the country, enacted the basic Act whereby the plenary right of landlords to recover possession of their buildings was shackled in many ways.
Industrial growth and other factors induced demographic congestion such as was witnessed in the urban areas of that State.
Consequently, the legislature, was faced with a fresh danger in the shape of ingenious transfers of ownership of buildings by indigenous but indigent landlords and the transferees resorting to eviction on a large scale equipped as they were with better financial muscles and motivated as they were by hope of speculative returns from their investments oil eviction.
Presumably, the phenomenal increase of the menance of eviction by the new species of transferee owners of building was countered by a legislative measure the West Bengal Premises Tenancy (Second Amendment) Act, 1969 (Act XXXIV of 1959) (hereinafter referred to as the amendment Act).
By this legislation the new class of transferee landlords was subject to a stringent trammel viz. that they should not sue for eviction within three years of the date of transfer (We are not immediately concerned here with certain other changes effected by the Amendment Act).
The social objective and the practical effect of this fetter will be con Court has upheldthis provision which is now contained in section 13(3A) sidered briefly the little later.
Suffice it to say at this stage the High of the basic Act.
However , while holding the provision substantial intra vires the Court has invalidated the giving effect to the provision to pending suits and appeals.
Such limited retrospectivity had been incorporated by section 13 of the amending Act and, if the law were only prospective the landlords in the two cases who had initiated their litigation several years prior to the enactment of the Amendment Act would be free from the three year interdict and the other extra restrictions.
Once the embargo is out of their way, the decree , for eviction they have secured must stand.
On tile contrary, if the restriction on eviction by the transferee landlords were to operate on 780 pending litigation the appellants tenants are immune to eviction in the current proceedings as they now stand.
Thus the short constitutional issue is as to whether section 13(3A) of the basic Act to the extent it applies to pending litigation on the strength of section 13 of the Amending Act is violative of articles 14 and 19(1)(f) of the Constitution, weapons relied upon for the attack before the High Court, and here.
We will proceed to consider the constitutional vulnerability of this limb of the protective legislation.
By way of anticipating our conclusion we may also pose the problem whether sections 1 3 and 4 of the Amendment Act can be validly implemented vis a vis pending actions in any other just manner which will preserve the additional protection, minimise multiplicity of litigation and make law and justice bedfellows in the &hanged statutory circumstances.
Some background observations to appreciate the contest in court are necessary.
No social realist will deny the frightful dimensions of the problem of homeless families and precarious tenancies; and if the Directive Principles of State Policy are not to be dismissed by the masses as a 'teasing illusion and promise of unreality ', curtailment, in public interest, of such extreme rights of the landlord as are 'red in tooth and claw ' is a constitutional compulsion.
The Court, informed by this sore economic situation and reinforced by the initial presumption of constitutionality, hesitates to strike a socially beneficial statute dead, leading to escalation of the mischief to suppress which the House legislated unless, of course, a plain breach of the fundamental right of the citizen is manifest.
The perspective of the amending Act is sketched by the High Court in lurid language : "The scarcity of accommodation is a burning problem, not only of the State of West Bengal but of the other States as well.
Keeping pace with the needs of the gradually swelling population of West Bengal, new buildings have not been built owing to abnormal high price of land and materials.
A large majority of the people of West Bengal live in those premises at the mercy of the landlords.
" The explosive import of neglecting such a distressing urban development reasonably obliges the State to impose drastic restrictions on landlords ' right to property.
And when circumvention of wholesome legal inhibitions are practised on a large scale the new challenge is met by clothing the law with more effective amount and that is the rationale of the Amendment Act.
The learned Judges rightly refer to the legislative proceedings, notorious common knowledge and other relevant factors properly brought to their ken.
The 'sound proof theory ' of ignoring voices from parliamentary debates, once sanctified by British tradition, has been replaced by the more legally realistic and socially responsible canon of listening to the legislative authors when their artifact is being interpreted We agree with the High Court when it observes : "Proceedings of legislature can be referred to for the limited purpose of ascertaining the conditions, prevailing at 781 or about the time of the enactment in question, which actuated the sponsor of the bill to introduce the same and the extent and urgency of the evil, sought to be remedied.
In the Statement of Objects and Reasons of the West Bengal Premises Tenancy (Second Amendment) Bill, 1969, it is stated that it has been consider necessary that some more reliefs should be given to the tenants against eviction.
It is found from the speech of the Minister at the time of introducing the Bill in the legislature, that the problems of tenants are many : there are landlords of different kinds : there is one class original owners who are the old inhabitants of the city : these owner landlords are Dot affluent: they solely depend upon the rents received from the tenants.
It has been ascertained from experience that two of the, grounds of eviction, namely, of the landlords and for the purpose of building and rebuilding, have been misused by the landlords.
In the city of Calcutta and other towns, there are millions of tenants who are left at the mercy of the landlords.
In this background and after taking into account similar provisions in other States, it has been decided that some restrictions ought to have been imposed upon transferee landlords prohibiting them from bringing ejectment suits against the tenants within three years from their purchase.
On the above two grounds and for that purpose, the said classification has been made.
" The conclusion of the Court, crystellised in the following words, commends itself to us : "Taking an overall view of the various considerations, the statement of, the Minister, the objects of the Bill, matters of common knowledge and state of facts, existing at the time of the legislation, it may be well conceived that underlying policy and objects of the amended provision is to give more protection to the tenants against eviction and the classification of landlords into owner landlords and transfereelandlords is based upon a rational and intelligible differentia and we hold accordingly.
" Proceeding to examine the limited attack on section 13(3A) of the basic Act read with section 13 of the Amending Act, we have to remember die comity of constitutional instrumentalities and raise the presumption that the legislature understands and appreciates the needs of the people and is largely aware of the frontiers of and limitations upon its power.
(See: The State of Bombay vs R. M. D. Chamar baguwala(1) and Shri Ram Krishna Dalmia vs Shri Justice section R. Tendolkar & Others(2).
Some Courts have gone, to the extent of holding that "there is a presumption in favour of constitutionality, and a law will not be declared unconstitutional unless the case is so clear as to be free from doubt; and 'to doubt the constitutionality of a law is to resolve it in, favour of its validity.
"(3) Indeed, the Legis (1) ; (2) ; (3) Constitutional law of India by H. M. Seervai p 54 vol.
1. 782 lature owes it to the Court to make like respectful presumptions.
We therefore view the provision impugned through a socially constructive, not legally captious, microscope to discover glaring unconstitutional infirmity, if any, and not chase every chance possibility of speculative, thought which may vitiate the law.
Stray misfortunes when laws affecting large chunks of the community are enacted are inevitable and the respondents before us may perhaps belong to that category.
Social legislation without tears, affecting vested rights, is impossible.
Statutory construction has a benignant sensitivity and we are satisfied the High Court, in substantially upholding the Amendment Act, has done right, but in striking down the retrospective portion of the section has stumbled into a specious error.
It is helpful to reproduce the relevant portion of section 13 of the basic Act in its unamended state and the amendments dovetailed into it by the 1969 Act, The so called 'retrospectivity ' of this provision has been anathematised by the respondent landlords and annulled by the High Court : "13(1) Notwithstanding anything to the contrary in any other law, no order or decree for the recovery of possession of any premises shall be made by any Court in favour of the landlord against a tenant except on one or more of the following grounds, namely: unamended cl.
(f) : where the premises are reasonably required by the landlord either for purposes of building or rebuilding or for making thereto substantial additions or alterations or for his own occupation if he is the owner or for the occupation of any person for whose benefit the premises are held; cls.
(f) and (ff) substituted therefor (f)subject to the provisions of sub section (3A), and section 18A, where the premises are reasonably required by the landlord for purposes of building or re building or for making thereto substantial additions or alterations and such building or rebuilding or additions or alterations cannot he carried out without the premises being vacated, (ff) subject to the provisions of subsection (3A), where the premises are reasonably required by the landlord for his own occupation if he is the owner or for the occupation of any person for whose benefit the premises are held and the landlord or such person is not in possession of any reasonably suitable accommodation, Sub section
(3A) newly introduced.
13(3A) Where a landlord has acquired his interest in the premises by transfer, no suit for the recovery of possession of the premises on any of the grounds mentioned in clause (f) or clause (ff) of sub section (1) shall be insti 78 3 tuted by the landlord before the expiration of a period of three years from the date of his acquisition of such interest : Provided that a suit for the recovery of the possession of the premises may be instituted on the ground mentioned in clause (f) of sub section (1) before the expiration of the said period of three years if the Controller, on the application of the landlord and after giving the tenant an opportunity of being beard, permits, by order, the institution of the suit on the ground that the building or rebuilding, or the additions or alteration, as the case may be, are necessary to make the premises safe for human habitation.
" Once the substantive restriction super added by section 13(3A) is held valid, we have to focus attention only on the extension of the new ban to pending proceedings.
That legislative competence to enact retroactively exists is trite law and we have only to test its validity on the touchstone of articles 14 and 19 (1) (f) pressed into service before us.
Law is a social science and constitutionality turns not on abstract principles or rigid legal canons but concrete realities and given conditions; for the rule of law stems from the rule of life.
We emphasize this facet of sociological jurisprudence only because the High Court has struck down section 13 of the Amendment Act on surmises, possi bilities and may be rather than on study of actualities and proof of the nature, number and age of pending litigations caught in the net of the retrospective clause.
Judges act not by hunch but on hard facts properly brought on record and sufficiently strong to rebuff the initial presumption of constitutionality of legislation.
Nor is the Court a third Chamber of the House to weigh whether it should legislate retrospectively or draft the clause differently.
We find no foundation for the large assumptions made by the High Court and duly repeated before us by counsel that there may be cases of ejectment instituted prior to 1956 or that a number of suits and decrees perhaps decades old will unjustly be nullified by the previous operation of the new ban.
Recondite instances and casual hardships cannot deflect constitutional construction of social legislation, if the main thrust of the statute relates to a real social evil of dimensions deserving to be antidoted by antedated legislative remedy.
In the present case, indubitably the State was faced with a new, insidious and considerable situation of exploitation, undermining the security of tenancy conferred by the basic Act.
A large number of original landowners living in their own home could not, under the basic Act, claim recovery of possession, being occupants of their own houses.
Likewise, they could not urge the ground of recovery for rebuilding, not being financially able to invest on such a costly venture.
They had to look up to modest old time rentals as the only source of return and lest the penurious tenantry desperately inhabiting little tenements be forced to pay extortionate rents the rent control law of 1956 froze the rates at the 1940 level with gentle increases as provided therein.
However, for now buildings to be constructed 784 special incentive provision was made by deeming the contract rent as fair rent, thus ensuring a high return on building investment.
The social upshot of this scheme was that the old landlords found their ownership a poor return investment, saw a new class of wealthier investors streaming into cities and towns ready to buy the premises evict old tenants, re let on rack rents or re build and reap a rich return.
They had no buildings of their own and could prove plans to rebuild, thus disarming the nonevictability provision of section 13 of the basic Act.
The transferees could thus get decrees for eviction under the basic Act.
Naturally, transfers of buildings to this somewhat speculating class increased and the spectacle of eviction litigation ' or potential eviction proceedings was projected on the urban scene.
The Legislature promptly reacted by the Amendment Act to rescue the lessees by clamping down new restrictions by way of section 13 (3A).
A three year moratorium was given to the tenants from being hunted out of their homesteads by imposing a ban on institution of suits for eviction by transferee landlords.
This would both disenchant speculative purchases and provide occupants time to seek alternative housing.
Presumably, these objects inspired the law makers to extend the embargo backwards to pending eviction proceedings.
Quite conceivably, the tendency to create a transferee class of real estate owners gradually gathered in volume and showed up in rashes of pending actions.
When Government was alerted amending legislation was proposed.
Unfortunately, the State 's legal wing has failed to protect, in Court the class for whose benefit the amending law was made by placing luscent social or statistical materials on these aspect .
As earlier stated by us, Government have a duty, where social legislation to protect the weak are challenged, to exhibit the same activism in the Halls of Court as in the Houses of Legislature.
Failure in the former duty can be as bad as not promulgating the law.
Not an elucidatory affidavit by the State nor even the Minister 's explanatory speech has been filed in this Court.
We make these observations because of the handicaps we have faced and the little help on facts the State has given to sustain the legislation.
The Calcutta High court has upheld the vires of sub section
(3A) but invalidated its application to pending litigation.
So the short issue is whether this projection into the past of the otherwise reasonable restriction on the right of eviction arbitrary, irrational, ultra vires ? If yes, the lethal sting of articles 14 and 19(1) (f) will deaden section 13 of the Amendment Act.
And the High Court has held so on ,he latter Article.
The prospective validity of the restriction under articles 14 and 19(1) (f), the High Court thinks, is vindicated by sound classification and sanctioned reasonably by the interest of the general public.
Having regard to the policy of the legislation, the classification of landlords into two classes of owner landlords and transferee landlords and the imposition of an embargo on the latter minacious class against bringing eviction suits within three years of purchase passes the dual tests of reasonable classification and the differentia having a rational nexus with the statutory object.
Therefore, the High Court had no hesitation and we totally concur that the provision is 78 5 impregnable.
The controversy rages round giving effect to these stringent restraints newly enacted on earlier legal actions.
This, it is contended, is a horrendous invasion of property right,; and unjust anteriority which hits innocent plaintiffs whose, purchases were beyond three years.
Before us respondents ' counsel have contended that article 14 is violated.
by section 3 read with section 4 of the Amendment Act although the high Court has negatived this submission thus : "We have carefully considered the arguments advanced by the learned counsel and we are of the Opinion that the retrospective operation of sub section (3A) on pending suits and appeals does not offend Article 14 of the Constitution.
" Since the argument, dressed, differently, has been urged before us again we will briefly deal with it, agreeing as we do with the High Court.
Plaintiffs whose transfers are twenty years ago or two years before the Act, are lugged together and subjected to the same ban if their suits were instituted within three years of the transfer.
This blanket ban regardless of the varying periods which have elapsed after the transfers and before the Act was passed was unequal treatment or rather harshly equal subjection to restriction of plainly unequally situated transferees.
There is seeming attractiveness in this presentation.
But Courts are concerned not how best to hammer out equal justice but to oversee whether the classification is without rational basis unrelated to the object of the Act.
That is why we are confined to check whether the reasoning on this aspect adopted by the High Court is not tenable.
We may or may not disagree with the wisdom of the Legislature in the grouping adopted or hold views about fairer ways of treatment.
But our powers are judicial, not legislative and arbitrariness and irrationality are not writ large in the method of differentiation the legislature has here chosen.
In the words of A. K. Mukuherji J : "In the instant case, suits of the affected transfereelandlords may be regarded as a sub class, within a class and, if within the said sub class, the suits are not differently treated, they will not be hit by Article 14.
The persons affected are transferee landlords who instituted their suits within three years of their purchase and they form a separate class and, among the suits of that 'affected class ', there is no discrimination.
The law applied equally with respect to the pending suits with regard to this affected class.
" Some hardship is bound to occur peripherally in any mode of classification and a few hard cases (we have not been shown whether many have been struck by this pattern of grouping) cannot guide the Court in upsetting legislative compartmentalisation.
The next attack by the respondents is that the deprivation of the right to sue is absurdly beyond the object of the Act when applied to pending cases where the transfers took place more than three years before the Act.
Were we draftsmen of legislation, may be counsel 's submission could have had more potency.
But our limited power is to 786 examine the reasonableness of the restriction, not by substituting our personal notions but by interfering if the Legislature has gone haywire in unreasonably hamstringing transferee landlords by dismissing suits brought long before the legislative bill was in the womb of time.
In an earlier case this Court observed(1) "Right at the, threshold we must warn ourselves of the limitations of judicial power in this jurisdiction.
Mr. Justice Stone of the Supreme Court of the United States has delineated these limitations in United States vs Butter ; 80 Law.
Ed. 477 thus: The power of courts to declare a statute unconstitutional is subject to two guiding principles of decision which ought never to be absent from judicial consciousness.
One is that courts ire concerned only with the power to enact statutes, not with their wisdom.
The other is that while unconstitutional exercise of power by the executive and legislative branches of the government is subject to judicial restraint, the only check upon our exercise of power is our own sense of self restraint.
For the removal of unwise laws from the statute books appeal lies not to the courts but to the ballot and to the processes of democratic government.
" In short, unconstitutionality and not unwisdom of a legislation is the narrow area of judicial review." The High Court has assumed that even proceedings started prior to 1956 may be affected.
This, admittedly, is wrong as pre basic Act suits will be governed by the, then law as provided in section 40 and the Amendment Act amends only the 1956 Act.
It may also be conceded that in both the appeals before us, thanks to Indian longevity of litigation, more than three years from the date of transfer in favour of the plaintiff has passed and thus the spirit of the protection in that sense is fulfilled.
Indeed, counsel for the.
respondents urged that the validation of the retrospective limb of the law would only drive the parties to fresh suits, thus promoting multiplicity of suits ruinous to both sides with no social gain.
There is force in this submission.
Its relevance to decide, the constitutional issue is doubtful but its influence on our ultimate solution in this case, as will be seen later, is undeniable.
A closeup of the social milieu leading up to the enactment in 1969 of the Amendment Act is useful to identify the substantial, mischief the law was intended to overpower.
Did that evil reasonably necessitate, for effectual implementation of purpose, the extension of the new law to pending suits and appeals ? How many suits, appeals and second appeals by transferees within the three year belt were pending? How long had they been so pending? Were there only stray eviction cases of long ago and was it feasible or necessary to (1) Murthy Match Works vs Asst.
Collector of Central Excise, A.T.R. 1974 8.C. 497, 503.
787 draw a line somewhere to prevent injustice to non speculative and old time buyers of buildings without impairing the limited immunity meant for tenants and intended against now realty investors ? On these facts the State has sat with folded hands and we have been thrown on our own to scan and sustain or strike down.
But here arises the significance of initial presumption of constitutionality.
The High Court has made short shrift of this plea thus : "There is nothing on the record to show that the mischief, sought So be remedied by the amended legislation, was in existence since 1956.
On the other hand, the ministerial speech, referred to above, rather indicates that the said mischief was of comparatively recent origin.
In this context, the application of the restriction on the omnibus scale to ill pending suits and appeals would smack of unreasonableness.
" Who has the onus to place compelling facts, except in flagrant cases of gross unreasonableness, to establish excessiveness, or perversity, in the restriction imposed by the statute? Long ago in Dalmia 's Case(1) this Court held that "there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles"; and 'that it must be presumed that the legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds ," If nothing is placed on record by the challengers the verdict ordinarily goes against them.
Moreover, what is the evil corrected by the Amendment Act? The influx of a transferee class of evictors of tenants and institution of litigation to eject and rack rent or re build to make larger profits.
Apparently, the inflow of such suits must have been swelling slowly over the years and when the stream became a flood the Legislature rushed with an amending bill.
Had it made the law merely prospective, those who bad, in numbers, already gone to Court and induced legislative attention would have escaped the inhibition.
This would defeat the object and so the application of the additional ban to Pending actions could not be called unreasonable.
To omit to do so would have been unreasonable folly.
The question is whether those cases which were filed several years ago should have been carved out of the category of transferees hit by the Act ? Where do you draw the line ? When did the evil assume proportions ? These are best left to legislative wisdom and not court 's commonsense although there may be grievances for some innocent transferees.
(1) ; , 297 propositions (b) and (c).
788 If this be the paradigm of judicial review of constitutionality, we have to ignore exceptional cases which suffer misfortune unwittingly.
The law is made for the bulk of the community to produce social justice and isolated instances of unintended injury are inevitable martyrs for the common good since God Himself has failed to make perfect laws and perfect justice, Freaks have to be accepted by the victims rightly or wrongly as forensic fate: Not that it should be so but human infallibility being unattainable, easily the next best in social justice is to promote the public weal sacrificing some unmerited private hurt as unfortunate but unavoidable.
It must be conceded that prima facie the two landlord respondent 's had purchased the buildings in the early sixties and three time three years or more have now passed since that date.
But while considering constitutionality can we be moved by such accidental instances ? No.
The substantial evil has been substantially met by a broad application of the new ban to pending proceedings.
We see in the Amendment Act no violation of article 19(1) (f) read with 19(5).
The same High Court, in a later case Kalyani Dutt vs Pramila Bala Dassi(1) came to the same conclusion by what it called 'independently considering the question '.
We discern nothing substantially different in the analysis or approach to merit review of our result.
We hold section 13 of the Amendment Act valid and repel the vice of unreasonableness discovered in both the reported rulings of the High Court.
And if reasonable interpretation can avoid invalidation, it is surely preferable.
Here humanist considerations, public policy and statutory purpose may provide guidelines of construction within reasonable limits.
Section 13 of the Amendment Act reads: "13.
Retrospective effect.
The amendments made to the said Act by section 4, 7, 8 and 9 of this Act shall have effect in respect of suits including appeals which are pending at the date of commencement of this Act.
" The Court is called upon 'to give effect to section 4.
of this new Act. ' Section 4 introduced amendments in section 13 of the basic Act which we have set out earlier.
There is no doubt that the purpose of the law is to interdict, for a spell of three years, institution of suits for eviction on grounds (f) and (ff) of sub section
Section 13 of the Amending Act makes it expressly applicable to pending actions, so much so the operation of the prohibition is not simply prospective as in the Kerala case cited before, us (Nealakandhayya Fillai vs Sankaran(2).
Section 13, fairly read, directs that the amendment made by section 4 shall have effect in respect of suits, including appeals, pending at the commencement of the Act.
We are therefore bound to give effect to section 4 in pending actions, regardless of isolated anomalies and individual hardships.
As earlier noticed, section 4 has two limbs.
It amends section 13 of the basic Act by substituting two new clauses (f) and (ff) in place of the old clause (f) of sub section
(1) of section 13 Secondly, it forbids, for a period of three years from the date of acquisition, suits by new acquirers of (1) I.L.R. (2) (1961) R.L.T. 755.
789 landlord 's interest in premises, for recovery of possession on any of the grounds mentioned in cl.
(f) or cl.
(ff) of sub section (1).
The result of the= two mandatory provisions has to be clearly understood.
For one thing although the old cl.
(f) is substantially similar to the present cls.
f) and (ff), the latter imposes more severe restrictions protecting the tenants.
Much more has to be proved by the landlord now before he can get eviction than when he was called upon to under the earlier corresponding provision of the basic Act.
Moreover, the three year prohibition against institution of the suit is altogether new.
It follows, therefore, that on the present allegations and evidence the landlord may not get a decree, his suit having been instituted at a time when he could not have foreseen the subsequent enactment saddling him with new, conditions.
We consider that where two interpretations are possible that which validates the statute and shortens litigation should be preferred to the one which invalidates or proliferates it.
We are guided by that consideration in the interpretative process.
We are satisfied further that originally brought in, is defective since it did not contain and ordinarily could not averments complying with the new cls.
(f) and (ii) of sub section
(1) of section 13 and we are making it effectively by construing the word 'institute ' in a natural and grammatical way.
The suit is really instituted in compliance with cls.
(f) and/or (ff) only when the new pleading is put in.
The bigger roadblock in the way of the plaintiff is in a pending action lies in the prohibition of the institution of the suit within three years of the transfer from the landlord.
Indeed, such prohibitions are common in rent control legislation as has been noticed by the Calcutta High Court and is found even in agrarian reforms laws (vide Malaber Tenancy Act, as amended by Act VII of 1954, Madras).
Section 13 of the Amendment Act compels the postponement of the institution of the suit (including appeal) for a period of three years from the date of the transfer.
In both the cases before us, the suits were instituted within the prohibited period of three years.
The argument therefore is that the suits must be straightaway dismissed, the institution being invalid.
We do not think that this consequence is inevitable. 'To institute, is 'to begin or commence ', in plain English.
The question then is whether the suit can be said to begin on the date it was filed in 1961 or 1964 as the case may be.
Here we have to notice a certain nice but real facet of sub section
The prohibition clamped down by sub section
(3A), carefully read, is on suits for recovery of possession by transferee landlords 'on any of the grounds mentioned in cl.
(f) or cl.
(ff) of subs.(1) '.
Obviously the suits with which we are concerned are not for recovery on grounds contained in cis.
(f) and (ff).
They were based on the repealed cl.
(f) of section 13 of the basic Act.
Strictly speaking, sub section
(3A) brought in by section 4 of the Amending Act applies only if (a) the suit is by a transferee landlord; b) it is for recovery of possession of premises and (c) the ground for recovery is what is mentioned in cl.
(f) and cl.
(ff) of sub section
Undoubtedly the third condition is not fulfilled and there fore sub section
(3A) is not attracted.
This does not mean that the suit 790 can be proceeded with and decree for recovery passed, because section 13 of the basic Act contains a broad ban, on eviction in the following words : "13(1) Notwithstanding anything to the contrary in any other law, no order or decree for the recovery of possession of any premises, shall be made by any Court in favour of the landlord against a tenant except on one or more of the following grounds, namely: (emphasis, ours) Since the new cls.
(f) and (ff) are included by the Amendment Act in section 13 of the basic Act and since the suits we are concerned with, as they now stand, do not seek eviction on those grounds they will have to be dismissed on account of the omnibus inhibition on recovery of possession contained in section 13 itself.
A just resolution of this complex situation was put by us to counsel on both sides and the learned Advocate representing the State readily agreed that the policy of the legislation and the conditions in the Amendment Act would be fulfilled if the interpretation we proposed were to be accepted.
We are satisfied that as far as possible courts must avoid multiplicity of litigation.
Any interpretation of a statute which will obviate purposeless proliferation of litigation, without whittling down the effectiveness of the protection for the parties sought to be helped by the legislation, should be preferred to any literal, pendantic, legalistic or technically correct alternative.
On this footing we are prepared to interpret section 13 of the Amendment Act and ,give effect to section 4 of that Act.
How do we work it out ? We do it by directing the plaintiffs in the two cases to file fresh pleadings setting out their grounds under cls.
(f) and/or (ff)_ of sub s.(1) if they so wish.
On such pleading being filed we may legitimately bold that the transferee landlord institutes his suit on grounds mentioned in cls.
(f) or (ff) of sub section
(1) on that '.ate.
It is only when he puts in such a pleading setting out the specific ground covered by sub section
(3A) of section 13 that we can say he, has begun or instituted a suit for the recovery of possession of the premises on that ground.
Institution of a suit earlier has to be ignored since that was not based on grounds covered by cls.
(f) and/or (ff) and is not attracted by sub section (3A).
He begins proceedings on these new grounds only when he puts in his pleading setting out these_grounds.
In spirit and in letter he institutes his suit for recovery on the new grounds only on the date on which he puts in his new pleading.
We cannot be ritualistic in insisting that a return of the plaint and a representation thereof incorpo rating amendments is the sacred requirement of the law.
On the other hand, social justice and the substance of the matter find fulfilment when the fresh pleadings are put in, subject of course to the three year interval between the transfer and the filing of the additional pleading.
Section 13 of the Amendment Act speaks of suits including appeals.
It thus follows that these fresh pleadings can be put in by the plaintiff either in the suit, if that is pending.
or in appeal or second appeal, if that is pending.
Thereupon, the opposite party.
tenant, will be given fin opportunity to file his written statement and the Court 'Will dispose of it after giving both sides the right to lead 791 additional evidence.
It may certainly, be open to the appellate Court either to take evidence directly or to call for a finding.
Expeditious disposal of belated litigation will undoubtedly be a consideration with the court in exercising this discretion.
The proviso to sub section
(3A) can also be complied with if the plaintiff gets the permission of the Rent Controller in the manner laid down therein before filing his fresh pleading.
We, are conscious that to shorten litigation we are straining language to the little extent of interpreting the expression 'institution of the suit ' as amounting to filing of fresh pleading.
By this construction we do no violence to language but, on the other hand, promote public justice and social gain, without in the least imperiling the protection conferred by the Amendment Act.
Ruinous protraction of litigation, whoever may temporarily seem to benefit by delay, bankrupts both in the end and inflicits wounds on society by sterile misuse of money.
Tenant passengers who prolong their expensive flight on the litigation rocket, are buying tickets for financial crash, drugged though they be by the seeming blessings of law 's delays.
Courts, by interpreting the expression 'institution of suits ' cannot authorize reincarnation, all over again, of litigation for eviction.
We save the tenant by applying it to pending cases and save him also from litigative waste.
This consideration is itself germane, to the larger concept of justice which it is the duty of Courts to promote.
Law finds its finest hour when it speaks to justice on fair terms.
In the present case our interpretative endeavour has been imbued with this spirit.
In the process of interpretation where alternatives are possible ' the man in the law influences the law in the man may be and the construction on sections 4 and 13 of the Amendment Act herein adopted, we admit, appeals to us as more, humane.
The calculus of statutory construction relating to complex problems of the community cannot be hide bound by orthodox text book canons.
An obiter, maybe.
More buildings is the real solution for dwelling shortage; freezing scarcer accommodation relieves for a little while.
Tiger balm is no serious cure for brain turnover We make no more comments on the need for dynamic housing policies beyond statutory palliatives.
These belong to legislative 'wisdom ' and administrative ,activism ' and not to judicial 'constitutionalism '.
It was noticed in the course of arguments that a later Amending Act of 1970 purporting to give relief to tenants against whom decrees for eviction bad been passed but dispossession had not ensued, had been put on the statute book.
It is surprising that counsel on either side did not choose to address us any arguments on the basis of those provisions.
We therefore do not go into the impact of that Act on situations where eviction has been ordered by Courts.
We therefore allow the appeals with costs but direct the High Court to dispose of the cases in the light of the directions and obser 792 vations we have made.
It will be open to the, Court seised of the matter to direct, in its discretion, award of costs to be incurred hereafter.
GOSWAMI, J.Civil Appeal No. 1304 of 1973 is by certificate granted by the Calcutta Hi Court and Civil Appeal No. 2063 of 1973 is by Special Leave of this Court.
The first one arises out of Letters Patent Appeal No. 14 of 1969 of the Calcutta High Court dismissed on February 3, 1972, relying upon its earlier decision in Kalyani Dutt vs Pramila Bala Dassi since reported in I.L.R. (1972) 2 Calcutta 660.
A preliminary question had arisen in connection with the aforesaid Letters Patent Appeal along with three other appeals at an earlier stage with regard to the constitutionality of section 13(3A) of the West Bengal Premises Tenancy (Second Amendment) Act, 1969 (briefly the Amendment Act).
A Division Bench repelled the contention of the appellants in decision which has since been reported in A.I.R. (1971) Calcutta 331 (Sailendra Nath Ghosal & Ors.
vs Sm.
Ena Dutt & Others).
The Division Bench had held that sub section (3A) of section 13 in so far as it was retrospective in operation was ultra vires Article 19(1) (f) of the Constitution on the ground of unreasonableness.
Since, however, the Letters Patent Appeal was not completely disposed of, the bar of sub section (3A) was this time pleaded asserting that Article 19 was not at all attracted to the present case on the ground that the right of reversion of the landlord, namely, the right to recover possession of the property from the tenant, is not a right of property which is a condition precedent to the application of Article 19(1) (f) and consequently, the question as to the infringement of fundamental right did not at all rise and that there could not be, any scope for holding that the provision of sub section (3A) offended against Article 19(1)(f).
This second contention which was allowed to be raised by the Letters Patent Bench was also repelled following its earlier decision in Kalyani Dults case (supra) disposed of on September 7, 1971.
Civil Appeal No. 2063 of 1973 arises out of the decision of the High Court in Second Appeal No. 1193 of 1972 disposed of on 25th July, 1973 relying upon Sailendra Nath Ghosal 's case (supra) which is the subject matter of appeal in Civil Appeal No. 1304 of 1973.
The history of tortuous litigation in both the appeals may also be noticed.
In Civil Appeal No 1304 of 1973 the plaintiff (respondent herein) purchased the premises in suit on February 16, 1961.
She instituted Title Suit No. 480 of 1961 in the court of Munsif of Sealdah, District 24 Pargana, for ejectment of the defendant, on July 24, 1961.
The suit was decreed by the Munsif on July 21, 1964, but was dismissed by the lower appellate court on May 17, 1965.
On second appeal at the instance of the plaintiff, the High Court framed an additional issue and remanded the suit to ram a finding on the same.
On receipt of the finding of the court below, the learned single Judge of the High Court, dismissed the second appeal and granted 793 leave to a Letters Patent Appeal.
That appeal was dismissed on February 3, 1972.
The High Court granted certificate to appeal against that decision to this Court on May 24, 1973, referring to the earlier certificate granted by that Court in Kalyani Dutt 's case (supra).
That is how Civil Appeal No. 1304 of 1973 is now before us.
The facts in Civil Appeal No. 2063 of 1973 are these.
The property in suit was purchased by the plaintiff (respondent herein) on February 7, 1964 and the eviction suit No. 76 of 1966 was instituted in February 1965.
The suit was dismissed by the Trial Court on October 11, 1966.
On appeal by the plaintiff, the Additional District Judge allowed the appeal on June 8, 1967, and remanded the suit for disposal after taking additional evidence.
The Munsif thereafter decreed the plaintiff 's suit on December 23, 1968.
On appeal by the defendant the Additional District Judge allowed the same and dismissed the suit on April 8, 1969.
On plaintiff 's appeal to the High Court in Second Appeal No. 968 of 1969, the High Court allowed the same on April 3, 1971 and remanded the suit to the Munsif for retrial.
The Munsif again dismissed the plaintiff 's suit on September 13, 1971.
On appeal by the plaintiff the Additional District Judge allowed the same and decreed the suit on April 29, 1972.
The High Court on appeal by the defendant dismissed the second Appeal on July 25, 1973, relying upon Salindra Nath Ghosal 's case (supra) disposed of on January 28, 1971.
The defendant then obtained special leave.
Thus the life of litigation in Civil Appeal No. 1304 of 1973 is now in the fourteenth year after purchase of the premises by the plaintiff six months earlier.
The second one is a decade old; the property having been purchased about a year earlier.
Both the appeals were argued together and will be governed by this common judgment.
The suits in both the appeals are by what has come to be known as transferee landlords.
They have instituted suits in one case within six months of the purchase in 1961 and in the other within one year of the purchase in 1965.
During the long pendency of the litigation the West Bengal Premises Tenancy (Second Amendment) Act was passed which came into force on November 14, 1969.
and section 4, inter alia, was made applicable to pending suits including appeals.
It amended the West Bengal Premises Tenancy Act, 1956 (West Bengal Act XII of 1956) (briefly the Original Act).
Section 4 of the Amendment Act introduced the following changes in section 13 of Section 13(1) (f) of the Original Act stood as follows the Original Act : "13(1) Notwithstanding anything to the contrary in any other law, no order or decree for the recovery of possession of any premises %hall be made by any Court in favour of the landlord against a tenant except on one or more of the following grounds, namely (f)Where the premises are reasonably required by the landlord either for purposes of building or rebuilding; or 4 L346Sup.
CI/75 794 for making thereto substantial additions or alterations or for his own occupation if he is the owner or for the occupation of any person for whose benefit the premises are held".
After the amendment of section 13 by section 4 of the Amendment Act clause (f) was split up into two clauses (f) and (ff) which read as under : "(f) Subject to the provisions of,sub section (3A) and section 18A, where the premises are reasonably required by the landlord for purposes of building or rebuilding or for making thereto substantial additions or alterations, and such building or re building, or additions or alterations.
cannot be carried out Without the premises being vacated; (ff) Subject to the provisions of sub section (3A), where the premises are reasonably required by the landlord for his own occupation if he is the owner or for the occupation of any person for whose benefit the premises are held and the landlord or such person is not in possession of any reasonably suitable accommodation".
In addition, section 4 of the Amendment Act introduced a new subsection (3A) which reads as follows : "Where a landlord has acquired his interest in the premises by transfer, no suit for the recovery of possession of the premises on any of the grounds mentioned in clause (f) or clause (ff) of sub section (1) shall be instituted by the landlord before the expiration of a period of three years from the date of his acquisition of such interest; Provided that a suit for the recovery of the possession of the premises may be instituted on the ground mentioned in clause (f) of sub section (1) before the expiration of the said period of three years if the Controller on the application of landlord and after giving the tenant an opportunity of being heard, permits, by order, the institution of the suit on the ground that the building or re building or the additions, or alterations, as the case may be, are necessary to make the premises safe for human habitation".
It should be noted that the grounds for ejectment in the earlier sub section (f) ,ire the same as the new grounds in clauses (f) and (ff) except for some additional restrictions.
The common grounds for eviction are, broadly speaking, reasonable requirement for the Purpose of building or rebuilding, etc.
[sub clause (f)] and reasonable requirement for occupation by the landlord, etc.
[sub clause (ff)].
There is, there fore, no particular significance to the mention of " grounds" in clause (f) or clause (ff) of subsection (1) in subsection (3A).
,Section 13 of the Amendment Act which is the bone of contention grants retrospectivity to section 4 of the Amendment Act and, therefore, necessarily to sub section (3A) and section 13(1)(f)(ff).
The grievance centres round retrospectivity of sub section (3A) and 795 section 13(1)(f) and (ff) made applicable by force of section 13 of the Amendment Act to suits and appeals pending on the commencement of the Act.
It may be in order first to deal with the question of retrospectivily of sub section (3A) which is the principal ground of attack in these appeals.
Section 13 of the Amendment Act provides that.
effect should be given to section 4 of the Amendment Act in pending suits including appeal on the date of the commencement of the Act.
The suits of the particular category by transferee landlords, therefore, could be pending on commencement of the Amendment Act and these may have been instituted several years prior to the Amendment Act.
There may also be appeals pending in different appellate courts against decrees in such suits.
The appeals necessarily have to be understood as appeals arising out of suits instituted within the three years ' ban.
The tenants are now permitted to take objection on the score of contravention of section 13(3A), before the courts either in a pending suit or in a pending appeal against decrees in such suits and the point for consideration then would be whether such a suit was instituted within three years ' ban and the appeal was pending against such a banned suit.
When section 13 of the Amendment Act provides that section 4 therein has to be given effect in pending suits including appeals, effect has to be given by the courts.
Now how will effect be given to section 13(3A) ? Retrospectivity to be given under section 13 of the Amendment Act to section 4 broadly requires compliance as follows (1) that no suit for eviction by a transferee landlord shall be instituted within three years of his acquisition of the premises; (2) if eviction is sought on the ground under section 13(1)(f) of the Amendment Act, an additional restriction is put, namely, that "such building or rebuilding or additions or alterations cannot be carried out without the premises being vacated"; (3) if eviction is sought on the ground under section 13(1)(ff), a further restriction is put upon the right of the landlord to evict, viz., that "the landlord or such person is not in possession of any reasonably suitable accommodation".
Under proviso to section 13(3A) a transferee landlord can, however, institute a suit within three years ' ban provided he obtains prior permission from me Controller who on an application by the landlord and after hearing the parties may decide whether permission should be given or not.
Prime facie, a suit which had already been instituted prior to the Amendment Act would not come within the mischief of section 13(3A) since this sub section, in terms, prohibits only institution of suits and does not provide for dismissal of suits already instituted.
Similarly while there is a relaxation in favour of a transferee landlord under the proviso to obtain permission from the Controller this bene fit is out of the way even in a genuine case where the suit had already 796 been instituted within three years of purchase and the same or an appeal therefrom is now pending after the passing of the Amendment Act.
In this regard also it appears sub section (3A) is not intended to be attracted to suits which were already instituted prior to the Amendment Act.
But as will be seen hereafter the above position is altered by the express provision of section 13 of the Amendment Act whereby it is intended that the court should give retrospectivity, inter alia, to section 4 of the Amendment Act.
On the terms of only section 13 (3A) it is difficult to hold that it would bring old sections within the mischief of section 13 (3A) which imposes a ban expressly on institution of suits within three years of the acquisition of ownership of the premises subject to the relaxation contained in the proviso thereto.
This being the correct interpretation of sub section (3A), taken by itself, what is the effect of section 13 of the Amendment Act upon this provision? Section 13 of the Amendment Act in seeking to give retrospective effect to sub section (3A) does exactly what sub section (3A) by itself contra indicates.
The first part of section 13(3A) which provides for a ban against institution of suits for eviction within three years of acquisition of the premises must be given effect to under section 13 of the Amendment Act in pending suits and in pending appeals arising out of the decrees passed in such suits provided the former had been instituted within the period of the ban.
If, therefore, after the Amendment Act it is found in a pending suit or in a pending appeal that the particular suit was instituted within the three years ' ban the same will have to be dismissed and only in that way the court will be able to give effect to sub section (3A).
With regard to the proviso of subsection (3A), when the ground of eviction is relatable to section 13(1)(f) of the Amendment Act the court will have to dismiss the suit in absence of the requisite permission.
That being the practical result of restrospectivity given to subsection (3A), is that sub section, in so far as it is retrospective, violative of Article 19(1)(f) of the Constitution? That takes us to the object and purpose of the Amendment Act.
The Statement of Objects and Reasons as quoted in Kalyani Dutt 's case (supra) is as follows "It has been considered necessary that some more relief should be given to the tenants against eviction, that the necessity of tender of rent to the landlord every time the rent is deposited with the Controller during a continuous period should be dispensed with, that the interests of the residents of hotels and lodging houses should be safeguarded and that the penalties for contravention of some of the provisions of the West Bengal Premises Tenancy Act, 1956, should be made more stringent".
In the earlier judgment of the High Court which is also the subject matter of Civil Appeal No. 1304 of 1973 the High Court referred to the statement of the Minister at the time of piloting of the Bill in the following words: 797 "It is found from the speech of the Minister at the time of introducing the Bill in the legislature, that the problems of tenants are many: there is one class original owners who are the old inhabitants of the city; these owner landlords are not affluent; they solely depend upon the rents received from the tenants.
It has been ascertained from experience that two of the grounds of eviction, namely, requirement of the premises for own use of the landlords and for the purpose of building and re building, have been misused by the landlords.
In the city of Calcutta and other towns, there are millions of tenants who are left at the mercy of the landlords.
In this background and after taking into account similar provisions in other States, it has been decided that some restrictions ought to have been imposed upon transferee landlords prohibiting them from bringing ejectment suits against the tenants within three years from their purchase".
The High Court also observed further that "there is nothing on the record to show that the mischief, sought to be remedied by the amended legislation, was in existence since 1956.
On the other hand, the ministerial speech, referred to above, rather indicates that the said mischief was of comparatively recent origin".
Again in Kalyani Dutt 's case (supra) the High Court in para 27 observed that "such suits are not many and at the same time most of them are pending for more than ten years".
The materials relied upon by the High Court stand uncontradicted by any affidavit before US.
On the above materials it is safe to hold that the main object of the Amendment Actis to counteract the "recent" mischief of circumvention of theprovisions of the original Act in order to evict tenants on even bona fide requirements specified under the law of device of transfer of premises held under the occupation of tenants.
Although the Amendment Act has not completely barred institutions of suits by transferee landlords postponement of litigation for a period of three years from acquisition of the premises was provided for under subsection (3A).
This had a twofold purpose, namely, to enable tenants a reasonable respite to arrange their affairs and also to discourage speculative acquisitions with an ulterior motive.
This salutary pro vision for the general body of tenants cannot be called unreasonable.
But the question is whether by applying the provision to pending suits and appeals has that object been achieved in the interest of the general body of tenants which would certainly constitute the general public within the meaning of clause 5 of Article 19? From the fact ,; and circumstances extra fed above from the two judgments of the High Court.
it is not possible to bold that the interest of the general body of tenants would be served by application of sub section (3A) to pending suits and appeals.
If the mischief was of "recent" origin, there is no reason to overshoot the mark and outstretch the long rope of the law beyond the 798 requirements of the situation.
It is clear that in trying to include old actions that may be surviving in courts, per chance, because of laws ' proverbial delay, section 13 of the Amendment Act has gone far in excess of the actual needs of the time and problems and the provisions thereof cannot be said to impose a reasonable restriction on the right of the transferee landlords, albeit a well defined class, amongst tile landlords, to hold and enjoy their property in the interest of the general public.
Such transferee landlords with pending old sections in suits or in appeals are, as observed by the High Court, not likely to be of a large number and necessarily so the tenants of such a sub sec class.
It is not in the general interest of the large body of tenants to impose such restrictions on a few transfree landlords of this sub class subject to unbearable delay in litigation, understandably not on their own account.
If relief in the shape of postponement of a landlord 's suit were the object of sub section (3A) in giving retrospectivity to it, the law did not take count of the inevitable long delay that takes place in pending litigation of this type as a result of man made laws of procedure in courts such as has even been clearly demonstrated by the cases at hand.
The law that misses its object cannot justify its existence.
Besides, it will be a sterile relief if tenants have to face a fresh summons next day.
Hard cases will be on both sides of the line.
law contemplates in terms of generality and is not intended to hit a few individuals by making invidious distinction.
Article 19 of the Constitution confers protection of rights specified therein belonging to all citizens.
Any individual citizen may complain of encroachment of his rights and freedom guaranteed under the Article.
Law 's encroachment upon such rights and freedom of citizens can survive challenge if it passes the tests laid down in the six saving clauses of Article 19.
Coming now to article 19(1)(f), with which we are concerned in these appeals, the said provision confers upon each individual citizen the right to acquire, hold and dispose of property, This right is subject to clause (5) which we may read so far as material for our purpose: "Nothing in sub clauses (d), (e) and (f) of the said clause shall . prevent the State from making any law imposing reasonable restrictions on the exercise of any of the rights conferred by the said sub clauses . in the interests of the general public. .
Even a single citizen may complain against violation of his fundamental rights under Article 19 (1) (f) and his vindication of his right may be defeated only if the impugned infringement brought upon by the law can be considered as a reasonable restriction and the ,aid restriction is also in the interests of the general public.
It is manifest, therefore, under the Constitution.
that an individual 's right will have to yield to the common weal of the general community.
That general community may be in broad segments, but even then must form a class as a whole.
A few individuals cannot take the place of a class and for the matter of that the general public In the present case the particular relief contemplated by the Amendment Act is in favour 799 of tenants in general and the restriction under sub section (3A) must ,be viewed in that context.
It cannot be said that the legislature in applying sub section (3A) restrospectively has achieved that avowed object at all.
The matter would have been different it, in view of any prevailing conditions, a reasonable date for giving retrospective effect were fixed under the law in the light of the known mischief.
In its.
absence, applicability of the blanket ban to pending suits and appeals cannot be said to be a reasonable restriction in the interests of the general public.
It may help a few tenants in litigation but will prejudice the right of transferee landlords locked up in old and costly litigation.
The gain of the few as opposed to the general public cannot be the touchstone for justifying reasonableness of the restriction imposed on the rights of the transferee landlords in applying subsection (3A) to pending suits and appeals.
In the social combat between the interests of a few and the general welfare of the community the latter is the clinching factor to be reckoned and hard cases of a few individuals cannot be assigned a higher place and status than they deserve to the detriment of the fundamental rights of even a single individual.
Therefore, the retrospectivity so far as sub section (3A) is concerned with regard to institution of suits made applicable to pending suits and.
appeals is clearly very wide of a reasonable mark and is, thus, an imposition of an unreasonable restriction on the rights of the transferee landlords in pending suits which had been instituted prior to the Amendment Act and in appeals arising therefrom and it is not saved by the protective clause (5) of Article 19 of the Constitution.
Sub section (3A) so far as it is retrospective and as such applicable to pending suits including appeal is ultra vires Article 19 (1)(f) of the Constitution.
The provision is valid only prospectively.
So far as the retrospectivity of section 13(1)(f) and (ff), the position is entirely different.
Clearly further reliefs have been sought to be given to the tenants as a class by these provisions in the Amendment Act.
These further reliefs are in the general interests of tenants and can be applied without any difficulty to pending suits including appears.
There is nothing unreasonable about such a retrospectivity in applying these provisions for the general welfare of tenants in securing for them a safe and sure tenure as far as practicable untrammelled by inconvenient litigation.
It is well established that the legislature in enacting laws can legislate prospectively as well as retrospectively.
Section 13(1)(f) and (ff) are, therefore, not ultra vires Article 19(1) (f) of the Constitution.
With regard to another contention of the appellants that the right of tile landlords that is affected by sub section (3A) is only a mere right to sue and at best a right of reversion and hence it is not a right to property under Article 19(1)(f) of the Constitution, it is sufficient to state that the question is covered by two decisions of this Court in The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt(1) and Swami (1) ; 800 Motor Transport (P) Limited and Another vs Sri Sankaraswamigal Butt and Another(1).
The right to own and hold property in order to make an effective right under the Constitution must include tine right to possession of the property including the right to evict tenants in accordance with law.
The submission is, therefore, without any force.
The position, therefore, is that in a pending suit or even in a pending appeal a landlord may be given an opportunity to adduce evidence to establish such of the new requirements in 13(1) (f) or (ff) as are relevant to the proceedings.
In that case the tenant will have also an opportunity to produce evidence in rebuttal.
If the matter arises in a pending suit, it will be disposed of by the trial court.
If, however, the matter arises in appeal, it will be open to the appellate court, in order to shorten the life of litigation, to remand the matter to the appropriate court to return a finding on such additional issues as may be framed to meet the requirements of (f) and/or (ff), as the case may be, under order 41, rule 25, Civil Procedure Code.
In the result these appeals are partly allowed.
The judgment of the High Court with regard to invalidity of sub section (3A) so far as it is retrospective and applicable to pending suits and appeals is upheld.
The orders dismissing the appeals are, however, set aside and the appeals are remanded to the High Court for disposal in the light, of the observations with reference to section 13(1)(f) and/or (f) whichever is applicable.
The landlords may now be given by the High Court an opportunity, if they so wish, to adduce evidence with regard to such further requirements under (f) and/or (ff) as may be applicable and the High Court will call for a finding from the appropriate court in that behalf and thereafter dispose of the appeals on merits.
Since success is shared, there will be no orders as to costs in these appeals.
ORDER In accordance with the majority judgment, the appeals are allowed with costs; the cases are remanded to the High Court, and the High Court is directed to dispose of the case in the light of the directions and observations made in the majority judgment.
It will be open to the Court seised of the matter to direct, in its discretion, amount of costs to be incurred hereafter.
P.B.R. (1) [1963] Supp. 1 S.C.R. 282.
| IN-Abs | Section 13(1)(f) of the West Bengal Premises Tenancy Act, 1956 Act XII of 1956) enacted that no order or decree for the recovery of possession of any premises shall be made by any court in favour of the landlord against the tenants except among others, on the ground that the premises are reasonably required by the landlord either for the purpose of building or rebuilding or for making thereto substantial additions or alterations or for his own occupation if he is the owner or for the occupation of any person for whose benefit the premises are held.
Section 13(4) of the Act provides that where a landlord requires the premises on any of the grounds mentioned in cl.
(1)(f) and the Court is of opinion that such requirement may be substantially satisfied by ejecting the tenant from a part only of the premises the Court shall pass a decree accordingly.
In 1969 the Act was amended by West Bengal Premises Tenancy (Second Amendment) Act.
Section 13 of the original Act was amended by introducing sub section (3A) in it.
This sub section prohibits institution of a suit for ejectment of a tenant by a landlord who has purchased the premises for his own use within three years of the purchase.
The Amending Act also enacted that the said Act shall apply to suits and appeals, which are pending at the date of the commencement of the Act.
The respondent purchased the suit premises in which the appellant was a tenant and instituted a suit for ejectment of the tenant under s.13(1)(f) of the original Act.
The suit was decreed by the lower court and affirmed by the lower appellate court.
A single Judge of the High Court dismissed the appeal.
When the Letters Patent Appeal was pending before the High Court, the Amending Act of 1969 was passed, whereupon, the tenant appellant invoked the provisions of the new sub sec.
(3A) and contended that since the landlord had instituted a suit the ejectment within three years of the purchase, the suit should be dismissed.
The High Court held that s.3A was valid prospectively but that the restriction imposed by the sub section.
giving it retrospective effect, was violative of article 1(1) (f) of the Constitution.
Per Beg and Krishna Iyer, JJ: Allowing the appeals and remitting the case to the High Court, HELD : (1) (a) There is no violation of article 19(1) (f) read with article 19(5) of the Constitution in the Amending Act, and s.13 of the original Act, as amended is valid.
The evil corrected by the Amendment Act is to stop the influx of a transferee class of evictors of tenants and institution of litigation to eject and rack rent or re build to make large profits.
Apparently the inflow of such suits must have been swelling slowly over the years and when the stream became a flood the Legislature rushed with an amending bill.
Had it made the law merely prospective, those who had, in numbers, already gone to Court and induced legislative attention would have escaped the inhibition.
This would defeat the object and so the application of the additional ban to Pending actions could not be called unreasonable.
There is no foundation for the assumptions made by the High Court that there may be cases of ejectment instituted prior to 1956 or that a number of suits and decrees, perhaps decades old.
will unjustly be nullified by the previous operation of the new ban.
Recondite instances and casual hardships cannot deflect constitutional construction of social legislation, 775 if the main thrust of the statute relates to a real social evil of dimensions deserving to be antidoted by antedated legislative remedy.
Questions such as whether those cases which were filed several years ago should have been carved out of the category of transferees hit by the Act, and at what point of time the evil assumed proportions were best left to legislative wisdom and not to courts commonsense.
[788C D; 787F G; 783F; 787H] In the instant case the two landlord respondents had purchased the buildings in the early sixties, but while considering the constitutionality the Court would not be moved by such accidental instances.
The substantial evil has been substantially met by a broad application of the new ban to pending proceedings.
[788C] Section 13.
fairly read, directs that the amendment made by section 4 shall have effect in respect of suits, including appeals, pending at the commencement of the Act.
The Court is, therefore, bound to give effect to section 4 in pending actions regardless of isolated anomalies and individual hardships.
[788G] (b)Where two interpretations are possible that which validates the statute and shortens litigation should be preferred to the one which invalidates or proliferates it.
Although the old cl.
(f) is substantially similar to the present cls.(f) and (ff) the latter imposes more severe restrictions protecting the tenants.
Much more has to be proved by the landlord now before he can get eviction than when he was called upon to under the earlier corresponding provision of the basic Act.
Moreover, the three year prohibition against institution of the suit is altogether new.
It follows, therefore, that on the present allegation and evidence the landlord may not get a decree, his suit having been instituted at a; time when he could not have foreseen the subsequent enactment saddling him with new conditions.
[789C; 789B] Though therefore, the suit, as originally brought in, would be defective since it did not and could not contain the averments complying with the new cls.
(f) and (ff) of section 13(1) it is made effective by construing the term 'institute ' in a natural and grammatical way.
[789D] (c) 'To institute is 'to begin or commence '.
The prohibition clamped down by sub section (3A), carefully read, is on suits for recovery of possession by transferee landlords on any of the grounds mentioned in cl.
(f) Qr cl.
(ff) of sub section (1).
[789G] In the instant case the suits were not for recovery on grounds contained in clauses (f) and (ff).
They were based on the repealed cl.(f) of s.13 of the basic Act.
Strictly speaking sub section (3A) brought in by section 4 of the Amending Act applies only if (a) the suit is by a transferee landlord; (b) it is for recovery of possession of premises; and (c) the ground for recovery is what is mentioned in cls.
(f) and (ff) of sub section (1).
Undoubtedly the third condition is not fulfilled and therefore sub section
(3A) is not attracted.
[789H] (d)But since the new cls.(f) and (ff) were included by the Amendment Act in s.13 of the basic Act and since the suits did not seek eviction on those grounds they will have to be dismissed on account of the omnibus inhibition on recovery of possession contained in section 13 itself.
[790C] Per Goswami, J : (1)(a) In trying to include old actions that may be surviving in courts because of laws ' proverbial delay section 13 of the Amended Act has gone far in excess of the actual needs of the time and problems and the provisions therefore cannot be said to impose a reasonable restriction on the right of the transferee landlords, albeit a well defined class amongst the landlords, to hold and enjoy their property in the interest of the general public.
Such transferee landlords with pending old actions in suits or in appeals are not likely to be of a large number.
The imposition of such restrictions on a few transferee landlords cannot be in the general interests of the large body of tenants.
If relief in the shape of postponement of the landlord 's suit were the object of sub section (3A) in giving retrospectivity to it.
the law did not take count of the inevitable long 776 delay that takes place in pending litigation as a result of man made laws of procedure in courts such as have been clearly demonstrated by the cases at hand.
The lawthat misses its object cannot justify its existence.
Besides it will be a sterilerelief if tenants have to face a fresh summons next days.
[798A C] (b)Under the Constitution an individual 's right will have to yield to the commonweal of the general community, That general community may be in broad segments but even then must form a class as a whole.
A few individuals cannot take the Place of a class and for the matter of that the general public.
[798H] In the present case the relief contemplated by the Amendment Act is in favour of tenants in general and the restriction under sub section (3A) must be viewed in that context.
It cannot be said that the legislature in applying sub section (3A) retrospectively has achieved that avowed object at all.
The applicability of the blanket ban to pending suits and appeals cannot be said to be a reasonable restriction in ,he interest of general public.
[799A B] (c)Sub section (3A) so far as it is retrospective and as such applicable to pending suits including appeals is ultra vires article 19(1) (f) of the Constitution.
The provision is valid only prospectively.
The retrospectivity so far as subsection (3A) in concerned with regard to institution of suits made applicable to pending suits and appeals is clearly very wide of a reasonable mark and is an imposition of an unreasonable restriction on the right of the transferee landlords in pending suits which had been instituted prior to the amendment Act and in appeals arising therefrom and it is not saved by the protective clause (5) of article 19 of the Constitution.
[799D E] (2)On the terms of only section 13 (3A) it is difficult to hold that it would bring old actions within the mischief of section 13(3A) which imposes a ban expressly on institution of suits within three years of the acquisition of ownership of the premises subject to the relaxation contained in the proviso thereto.
[796B C] (3)Section 13(1)(f) and (ff) are not ultra vires of article 19(1)(f) of the Constitution.
Further reliefs have been sought to be given to the tenants as a class by these provisions in the Amendment Act.
These further reliefs are in the general interests of tenants and can be applied without any difficulty, to pending suits including appeals.
There is nothing unreasonable about such a retrospectivity in applying these provisions for the general welfare of tenants in securing for them asafe and sure tenure as far as practicable untrammelled by inconvenient litigation.[799F G] Arguments for theappellants In C.A. 2063/73 by P. C. Chatterjee There is no vestedright to eject on determination of the tenancy but it is conditioned by section 13, Cl.
(a) to (k) and therefore right to eject is not vested in the landlord until a decree is passed.
Upto that stage it is contingent depen ding on the satisfaction of cl.
(a) to (k) of s.13.
If there is no vested property right, no question of article 19(1)(f) of the Constitution will arise.
By denying the right to eject for three years from the date of purchase the right to property is not restricted or burdened.
The approach of the High Court of separately treating prospectivity and retrospectivity is not correct.
The correct approach adopted by this Court is that in considering the reasonableness of any provision retrospectivity of the law is a factor to be considered.
Retrospective operation is not bad because it covers a period of 10 years or so.
For respondent (In C.A. 1304 of 1973.) The object of the new sub section (3A) being to give protection to tenants for a limited period of three years from the date of purchase of the premises by the landlord, by giving retrospective effect to ' the said sub section the period limited by the subsection cannot be enlarged.
Therefore, s.13 of the Amending Act which gives retrospective effect to the said sub section (3A) should be construed in a manner so as to keep the effect of retrospectively within the period 777 limited by the said new sub section 3A. Sections 4 and 13 of the Amending Act have to be construed harmoniously keeping the object of the Act in view and in doing that if the court has to supply some words to make the meaning clear, it should prefer the construction which is more in consonance with reason and justice.
at 745.
The language of sub section
3A and the object and reason for introduction of the said sub section make it clear that Only Prospective effect could be given to the sub section and in any case its effect cannot go beyond three years of purchase of the premises by the landlord.
If, s.13 of the Amending Act means that section 4 of the Amending Act applies to all pending suits including appeals filed by a transferee landlord after the principal Act came into force, then it is clearly violative of art 19(1)(f) of the Constitution.
The High Court therefore, rightly struck down s.13 giving retrospective effect to section 4 of the , Act.
Further no law can impose restrictions retrospectively on fundamental rights.
Arguments for the respondent in C.A. No. 2063 of 1973.
The impugned section cannot be so interpreted as to give it retrospective effect so as to bring within its mischief all suits and proceedings including appeals which may be pending since the enforcement of the Act.
This Court can depart from the general rule to apply the law as it is on the date of institution of the suit and apply the law as on the date when the appeal comes up for disposal specially because no injustice is going to be caused between the parties and as such a course would avoid multiplicity of proceedings.
Section 13 of the Amending Act is ultra vires of article 19, because, construed literally the section cannot give protection to such of the tenants against whom proceedings are pending for more than 10 years or so, a protection for a period more than what is envisaged by the Amending Act.
This is clearly not what is intended or contemplated by the legislature.
Giving retrospective effect to the section would only benefit a few and is not in the public interest of the tenants of the transferee landlords.
The restriction is arbitrary and invades the right to property and is not saved by cl.
(5) of article 19.
The restriction is not reasonable.
|
Appeal No. 43 of 1954.
Appeal under Article 132(1) of the Constitution of India from the Judgment and Order dated the 22nd November 1952 of the Judicial Commissioner 's Court, Ajmer, in Misc.
Petition No. 226 of 1952.
N. C. Chatterji (I. N. Shroff, with him) for the appellant.
Porus A. Mehta and P. G. Gokhale for the respondents.
December 3.
The judgment of Mehr Chand Mahajan C.J., Mukherjea, Vivian Bose, Bhagwati and Venkatarama Ayyar JJ.
was delivered by Bose J.
The judgment of Das and Jagannadhadas JJ.
was delivered by Jagannadhadas J. BOSE J.
The appellant is the Istimrardar of Kharwa.
According to him, be has held a cattle fair on his estate every year for some twenty years.
On 8 1 1951 the Chief Commissioner of Ajmer framed certain rules for the regulation of cattle and other fairs in the State of Ajmer.
He purported to do this under sections 40 and 41 of the Ajmer Laws Regulation of 1877 (Reg. III of 1877).
One of the rules required that persons desiring to hold fairs should obtain a permit from the District Magistrate.
Accordingly the appellant applied for a permit.
This was refused on the ground that no more permits were to be issued to private individuals.
The appellant thereupon applied under article 226 of the Constitution to the Judicial 1067 Commissioner 's Court at Ajmer for the issue of a writ directing the authorities concerned to permit the appellant to hold his fair as usual.
He contended that his fundamental rights under the Constitution were infringed and also that the rules promulgated by the Chief Commissioner were ultra vires the Regulation under which he purported to act.
The learned Judicial Commissioner refused to issue the writ but granted leave to appeal under article 132(1) of the Constitution in the following terms: "I am of opinion that the question whether the regulation and the bye laws framed thereunder amount to a reasonable restriction on the appellant 's fundamental right to hold a cattle fair in his own land involves a substantial question of law as to the interpretation of the Constitution".
The leave is confined to the vires of the Regulation and the bye laws but we allowed the appellant to attack the, validity of the District Magistrate 's action as well.
It is admitted that the land on which the fair is normally held belongs to the appellant.
That being so, he has a fundamental right under article 19(1)(f) which can only be restricted in the manner permitted by sub clause (5).
The holding of an annual fair is an occupation or business within the meaning of article 19 (1) (g), therefore, the appellant also has a fundamental right to engage in that occupation on his land provided it does not infringe any law imposing "reasonable restrictions on that right in the interests of the general public", or any law "relating to (i) the professional or technical qualifications necessary for practising. . . or carrying on" the occupation or business in question.
(Article 19(6) as amended in 1951).
The only law relevant here is sections 40 and 41 of Regulation III of 1877.
Under section 40, the Chief Commissioner is empowered, among other things, to make rules about 137 1068 "(a) the maintenance of watch and ward, and the establishment of a proper system of conservancy and sanitation at fairs and other large public assemblies; (b) the imposition of taxes for the purposes mentioned in clause (a) of this section on persons holding or joining any of the assemblies therein referred to; (b) the registration of cattle".
Section 41 provides for penalties in the following terms: "The Chief Commissioner may, in making any rule under this Regulation, attach to the breach of it, in addition to any other consequences that would entire from such breach, a punishment, on conviction before a Magistrate, not exceeding rigorous or simple imprisonment for a month or a fine of two hundred rupees, or both".
These sections were not impugned in the argument before us nor were they attacked in the petition made to the Judicial Commissioner, so we will pass on to the rules made by the Chief Commissioner.
The first three sub rules of Rule I deal with permits.
They prohibit the holding of a fair except under a permit issued by the District Magistrate, and the District Magistrate is enjoined to "satisfy himself, before issuing any permit, that the applicant is in a position to establish a proper system of conservancy, sanitation and watch and ward at the fair".
The fourth sub rule empowers the District Magistrate to "revoke any such permit without assigning any reasons or giving any previous notice".
When the appellant applied for a permit on 9 7 1952) the District Magistrate replied: "It has been decided that as a matter of policy permits to hold fairs will be issued only to local bodies and not to private individuals.
It is, therefore, regretted that you cannot be permitted to hold the fair and you are therefore requested to please abandon the idea".
In our opinion, the rules travel beyond the Regu 1069 lation in at least two respects.
The Regulation empowers the Chief Commissioner to make rules for the establishment of a system of conservancy and sanitation.
He can only do this by bringing a system into existence and incorporating it in his rules so that all concerned can know what the system is and make arrangements to comply with it.
What he has done is to leave it to the District Magistrate to see that persons desiring to hold a fair are in a position "to establish a proper system of conservancy, etc.
" But who, according to this, is to determine what a proper system is: obviously the District Magistrate.
Therefore, in effect, the rules empower the District Magistrate to make his own system and see that it is observed.
But the Regulation confers this power on the Chief Commissioner and not on the District Magistrate, therefore the action of the Chief Commissioner in delegating this authority to the District Magistrate is ultra vires.
Further, under the fourth sub rule of Rule I the District Magistrate is empowered to revoke a permit granted "without assigning any reasons or giving any previous notice".
This absolute and arbitrary power uncontrolled by any discretion is also ultra vires.
The Regulation assumes the right of persons to hold fairs, and all it requires is that those who do so should have due regard for the requirements of conservancy and sanitation; and in order that they may know just what these requirements are, the Chief Commissioner (not some lesser authority) is given the power to draw up a set of rules stating what is necessary.
If they are in a position to observe these rules, they are, so far as the Regulation is concerned, entitled to hold their fair, for there is no other law restricting that right.
Therefore, the Chief Commissioner cannot by Rule invest the District Magistrate with the right arbitrarily to prohibit that which the law and the Constitution, not only allow, but guarantee.
As these sub rules of Rule I are ultra vires, the District Magistrate 's order, which in effect prohibits the holding of the fair, is also bad for, without the aid of these rules or of some other law validly 1070 empowering him to impose the ban, he has no power in himself to do it.
The matter is covered by the decision of this Court in Tahir Hussain vs District Board, Muzafarnagar(1).
The appeal is allowed and the order of the Judicial Commissioner is set aside.
We declare that the rules are void to the extent indicated above and we quash the order of the District Magistrate dated 18 9 1952.
But we make no order about costs because the point on which we have proceeded was not taken in proper time in this Court.
JAGANNADHADAS J.
The order of the District Magistrate dated the 18th September, 1952, declining to grant a permit to hold the cattle fair on the ground that it has been decided to issue permits only to local bodies and not to private individuals is bad for two reasons.
The rules under which he is to grant or refuse permits in this behalf only authorise him to satisfy himself that the applicant is in a position to establish a proper system of conservancy, sanitation and watch and ward at the fair and also to impose such terms and conditions as he may deem fit.
But they do not authorise him to reject an application on the ground on which he has done.
The rules themselves under which the permit has been asked for and with reference to which the District Magistrate declined to grant the permit are not within the ambit of the rule making power.
These rules purport to have been framed in exercise of the powers conferred by sections 40 and 41 of the Ajmer Laws Regulation, 1877.
Section 40 authorises the framing of the rules "for the maintenance of watch and ward and the establishment of a proper system of conservancy and sanitation at fairs and other large public assemblies".
But the actual rules as framed are to the effect (1) that no such fair can be held except under a permit of the District Magistrate, (2) that before issuing a permit the District Magistrate is to satisfy himself that the applicant is in a position (1) A.I.R. 1954 S C. 630, 1071 tion and watch and ward at the fair, (3) that when issuing a permit the District Magistrate can impose such terms and conditions as he may deem fit.
The net effect of these rules is merely to establish a system of ad hoc control by the District Magistrate through the issue of a permit and by the vesting of other powers in him under the rules.
These cannot be said to be rules which in themselves constitute a system of conservancy, sanitation and watch and ward.
Thus the result that is brought about is not within the intend ment of the section which authorises the making of the rules.
A system of ad hoc control of responsible officers may, possibly be one method of regulating the sanitary and other arrangements at such large gatherings.
But if it is intended to constitute a system of ad hoc control with reasonable safeguards, the power to make rules in that behalf must be granted to the rule making authority by the legislative organ in appropriate language.
The impugned order of the District Magistrate being bad on both the above grounds, this is enough to dispose of the appeal and it is not necessary to express any opinion as to whether the impugned order infringes also the appellant 's fundamental rights under article 19.
The appeal must accordingly be allowed.
Appeal allowed.
| IN-Abs | Under section 40 of the Ajmer Laws Regulation of 1877 (Reg. III of 1877) the Chief Commissioner is empowered, among other things, to make rules about. . . . the establishment of a proper system of conservancy and sanitation at fairs. . . . .
The first three sub rules of Rule 1, framed by the Chief Commissioner prohibit the holding of a fair except under a permit issued by the District Magistrate and the District Magistrate is enjoined "to satisfy himself, before issuing any permit that the applicant is in a position to establish a proper system of conservancy, sanitation and watch and ward at the fair".
The fourth sub rule empowers the District Magistrate "to revoke any such permit without assigning any reasons or giving any previous notice".
The appellant 's application for a permit to hold a fair was refused by the District Magistrate on the ground that no more permits were to be issued to private individuals.
Held, that under the Regulation it is the Chief Commissioner and not the District Magistrate who has power to frame rules, that the Chief Commissioner had no authority to delegate that power and that the Rules made by the latter are therefore ultra vires; Held further, that the Rule is also ultra vires for the reason that in authorising the District Magistrate to revoke a permit granted " without giving any reason or previous notice" it invests him with a power to prohibit the exercise by the citizen of the constitutionally protected right to bold fairs.
The District Magistrate 's order, which in effect prohibits the holding of the fair, is therefore bad, for, without the aid of these rules or some other law validly empowering him to impose the ban, he has no power in himself to do it.
1066 Per JAGANNADHADAS J. (DAS J. concurring): The impugned order of the District Magistrate is bad: (i)because the rules do not authorise him to reject an application on the ground on which lie has done; (ii)because the not effect of the rules is to establish a system of ad hoc control by the District Magistrate through the issue of a permit and by the vesting of other powers in him under the rules.
This result is not within the intendment of the section which authorises the making of the rules.
Tahir Hussain vs District Board, Muzafarnagar (A.I.R. referred to.
|
Appeal No. 75 & 76 of 1974.
Appeal by special leave from the Common Judgment and Order dated 27 /28 9 1973 of the Bombay High Court, Nagpur Bench, in Spl.
Civil Applications Nos.
826 of 1968 & 389 of 1971.
Sardar Bahadur Saharya and Vishnu Bahdur Saharya, for the appellants.
M.N. Phadke and A. G. Ratnaparkhi, for respondent No. 1 and 2 (in Appeal No. 75/74).
Niren De, Attorney General of India, M. N. Phadke and A. G. Ratnaparkhi, for respondent No. 1 (In Appeal No. 76/74).
K.L. Rathi and M. N. Shroff, for respondents Nos.
(In Appeal No. 75/74) and respondent No. 3 (in appeal No. 76/74).
The Judgment of P. N. Bhagwati and A. C. Gupta, JJ. was delivered by Bhagwati, J. N. L. Untwalia, J. gave a separate Opinion.
But we are writing a separate judgment as we feel that the discussion in the judgment of our learned brother Untwalia, J., in regard to delivery of 'symbolical ' and 'actual ' possession under rules 35, 36, 95 and 96 of Order XXI of the Code of Civil Procedure, is not necessary for the disposal of the present appeals and we do not wish to subscribe to what has been said by our learned brother Untwalia, J., in that connection, nor do we wish to express our assent with the discussion ' of the various authorities made by him in his judgment.
We think it is enough to state that when the Government proceeds to take possession of the land acquired by it under the Land Acquisition Act, 1894, it must take actual possession of the land, since all interests in the land are sought to be acquired by it.
Nor would possession merely on paper be enough.
How such possession may be taken would depend on the natureof the land.
Such possession would have to be taken as the natureof the land admits of.
There can be no hard and fast rule laying down what act would be sufficient to constitute taking of possession of land.
We should not, therefore, be taken as laying down an absolute and inviolable rule that merely going on the 'pot and making a declaration by beat of drum or otherwise would be sufficient to constitute taking of possession of land in every case.
It appears that the appellant was not present when this was done by the Tehsildar, but the presence of the owner or the occupant of the land is not necessary to effectuate the taking of possession.
It is also not strictly necessary as a matter of legal requirement that notice should be given to the owner or the occupant of the land that possession would be taken at a particular time, though it may be desirable where possible, to give such notice before possession is taken by the authorities, as that would eliminate the possibility of any fraudulent or collusive transaction of taking of mere paper possession, without the occupant or the owner ever coming to know of it.
We are of the view, on the facts and circumstances of the present case, that the Tehsildar took actual possession of that part of the land which was waste or arable and handed it over to the Principal of the Agricultural College.
It is true that the Special Land Acquisition Officer in his letter dated 13th December, 1961 to the Commissioner stated that possession of the entire land was still with the appellant and it was not actually taken possession of by the Principal, Agricultural College.
But it is obvious that this statement was made by the Special Land Acquisition Officer because he thought that actual possession of the land could not be regarded as having been taken, unless the appellant was excluded from the land and since the appellant immediately, without any obstruction, entered upon the land and continued in possession, "the land was not Actually taken possession of by the Principal, Agricultural College".
This was plainly erroneous view, for the legal position is clear that even if the appellant entered upon the land and resumed possession of it the very next moment after the land was actually taken possession of and became vested in the Government, such act on the part of the appellant did not have the effect of obliterating the consequences of vesting.
There can, therefore, be no doubt that actual possession of 19 acres 16 gunthas of waste and arable land was taken by the Tehsildar on 3rd April, 1959 and it became vested in the Government.
Neither the Government nor the Commissioner could thereafter withdraw from the acquisition of any portion of this land under section 48(1) of the Act.
There will be only one set of costs.
These two Civil Appeals filed by Shri Balwant Narayan Bhagde on grant of special leave by this Court arise out, of a common judgment of the Bombay High Court allowing Special Civil Application No. 826/1968 filed by Shri M. D. Bhagwat and Shri E. R. Mahajani, respondent Nos. 1 and 2 in Civil Appeal No.75 of 1974 and Special Civil Application No. 389/1971 filed by thePunjabrao Krishi Vidyapeeth (hereinafter called the AgriculturalCollege) to quash the order of the Commissioner 254 Nagpur purporting to give sanction for withdrawal of the acquisition by his letter dated 8 8 1968 in respect of a portion of the land comprised in Survey No. 30/2 in village Umari, District Akola.
The High Court has held that possession of the land in question was taken by the Collector, Akola and given to the Principal, Agricultural College.
It was, therefore, not open to the Commissioner to withdraw from the acquisition of the land under section 48(1) of the Land Acquisition Act, 1894 as it stands amended by the Land Acquisition (Maharashtra Extension and Amendment) Act hereinafter called the Act.
It is well settled and nothing to the contrary was canvassed before us, that after possession of the land forming the subject matter of acquisition has been taken in accordance with section 16 or section 17(1) of the Act, the land vests in the Government and the Government or any other authority is not at liberty to withdraw from the acquisition of any land of which possession has been taken; vide, State of Madhya Pradesh and Ors.
The controversy, therefore, centered round the question as to whether possession of the land which was released by the Commissioner under section 48(1) of the Act had been taken or not.
For the purpose of the Agricultural College a large area of land was acquired near Akola.
The total area of this plot is 20 acres 33 gunthas.
As the land was urgently required for the purpose of College, action under section 17 of the Act was taken dispensing with the following of the procedure under section 5A.
A notification under section 6 of the Act was issued on the 17th February, 1959.
A direction was given for taking possession of the land under section 17(1) on the expiration of 15 days from the publication of the notice under section 9(1).
Notice under section 9(1) of the Act was subsequently published on 6 3 1959.
After expiry of_15 days from the publication of the notice under section 9(1) on 24 3 1959 the land Acquisition Officer ordered the Tehsildar, Akola to deliver possession of the land to the Principal, Agricultural College or his nominee in the presence of the Sub Divisional Officer, P.W.D. Building and Roads Section, Akola and directed him to report compliance alongwith the possession receipt obtained from the Principal by 2 4 1959.
The Tehsildar took and handed over possession on 3 4 1959 and made a report.
An area of 19 acre 17 gunthas which contained a double storied house of the appellant and a well etc. was for the time being left and possession of the same was not taken.
It appears, just after the issuance of the notification under section 6 of the Act, the appellant who claimed to be the tenant of the land, the owners admittedly being respondents 1 and 2 in Civil Appeal No. 75 of 1974 made a representation to the Government that his field in Survey No. 30/2 should not be acquired and the acquisition should be withdrawn.
He seems to have filed an application to that effect before the State Government on 18 2 1959.
Some stay order thereupon is said to have been passed staying the proceeding in respect of the appellant 's land.
Following upon this correspondence took place and reports came to be made in April, 1959 and thereafter until the withdrawal from the acquisition of 12 acres and 23 gunthas of the land in Survey No. 30/2 was directed to be made by the Commissioner in the year 1968.
As already stated the withdrawal was challenged by filing two writ petitions in the Bombay High Court.
On behalf of the Governmental authorities two counters were filed in the two Writ Petitions.
In the owners ' petition the petitioners had stated that pursuant to the relevant notifications, Government took possession of 19 acres 16 gunthas of land on 3 4 1959 And gave possession of the same to the Principal, Agricultural College.
The Government in its return filed in the said case denied that possession as alleged was taken from the appellant and given to the Principal, Agricultural College.
In paragraph 3 of Special Civil Application No. 389/1971 it wasstated on behalf of the Agricultural College that the Tehsildar took possession only of 19 acres and 16 gunthas out of the field as the remaining area was found in the meantime on spot inspection not to be waste or arable to which the provision of section 17 of the Act could apply.
Actual possession of 19 acres 16 gunthas alongwith the other pieces of land measuring 200 acres and odd was delivered to the Principal, Agricultural College.
In the return filed on behalf of the Officers of the Government the contents of paragraph 3 of the petition were admitted.
But it was asserted that Government had taken only symbolical possession and the physical possession of the land remained with the appellant.
On consideration of the relevant materials placed before the High Court it has come to the conclusion that actual possession of the land in question was taken and handed over on 3 4 1959 on the spot ; and, even symbolical possession, if land is occupied by a person other than the owner.
would be good possession for the purpose of section 48 of the Act.
Mr. Sardar Bahadur Saharya, learned counsel for the appellant, submitted that possession of any portion of the land comprised in Survey No. 30/2 was not taken by the Government or given to the Principal, Agricultural College, it was all a paper delivery of possession, no notice was ever given to the appellant as to the date and time of taking possession of the land on the spot, and the sym bolical delivery of possession, even if any bad not the effect of divesting the appellant from the Actual possession over the land.
Counsel further submitted that the order of withdrawal which is confined to 256 an area of 12 acres 23 gunthas only out of Survey No. 30/2 leaving a further balance of 6 acres 33 gunthas to the College was valid.
Mr. Hathi appearing for the Government and its authorities struck to their stand that only symbolical possession was taken and actual possession remained with the appellant.
Learned Attorney General for the Agricultural College, followed by Mr. Phadke for the owners, submitted that no where the appellant had challenged the taking of possession of the land on the spot on 3 4 1959.
The effect of taking possession of the land was to vest it in the Government and no portion of it could be released under section 48(1) of the Act.
It was further submitted that there is no provision in the Act requiring the giving of any notice to the possessor of the land of the exact date and time of taking possession on the spot and notice published under section 9(1) is sufficient.
It may be stated at the outset that there does not seem to be any dispute as respects the fact that Bhagwat and Mahajani were the owners of the land at the time of the issuance of the notification under section 4 of the Act and the appellant was in its occupation or actual possession as a tenant.
There is no controversy that the Agricultural College not only needed the land in question but subsequently steps were taken for acquiring an additional area of 340 acres for the needs of the College.
The Commissioner in his order dated 17th February, 1959 had directed that the possession of the land may be taken on the expiration of 15 days from the publication of the notice mentioned in section 9 (1 ) of the Act.
The order recorded on 11 3 1959 shows that the notice in form 'D ' under section 9(1) of the Act was published on 6 3 1959, so the possession of the land could be taken on 21 3 1959 or there after.
On 24 3 1959 various other persons including the appellant appeared before the Land Acquisition Officer.
Appellant 's counsel prayed for time to file his written statement.
He was directed lo do so by 5.00 p.m. on 24 3 1959.
On this date the land Acquisition Officer recorded the order in presence of the parties including the appellant directing Tehsildar Akola to take possession of the land and hand it over to the Principal, Agricultural College, in the presence of S.D.O., P.W.D., Akola and to report compliance with possession receipt by 2 4 1959.
A written statement on behalf of the appellant was filed by 4.20 p.m. on 24 3 1959.
It is necessary to refer to the claim of the appellant made in the written statement aforesaid.
He stated that he was interested in the field as be was its protected lessee and as such 'he was entitled to receive compensation that may be granted.
But be said that he was entitled to the said amount.
Finally, the prayer in the written statement was to stay the delivery of possession of the bungalow at least for two months.
It would thus be seen that in his written statement filed on 24 3 1959 the appellant did not deny the publication of notice on the spot under section 9(1) nor did he propose to put any impediment in the taking of possession of the land comprised in Survey No. 30/2.
He merely wanted the stay of taking possession in respect of the house.
The total area mentioned in this letter is 234 acres 31 gunthas including 19 acres and 16 gunthas in Survey No. 30/2.
The Revenue Inspector endorsed "handed over as above." On the facts and in the circumstances of this case it is difficult to accept the argument put forward on behalf of the appellant that the taking and giving of possession on 3 4 1959 was only on paper and not on the spot.
The High Court in its judgment has referred to a letter dated 7 4 1959 by the Land Acquisition Officer to the Collector, Akola to say that the appellant represented before him that a stay order had been passed in respect of Survey No. 30/2 by the Minister for Agriculture and the proceedings for taking possession of this land may be deferred pending further instructions from the higher authorities ; but before any step could be taken on the representation of the appellant, the land Acquisition Officer got the information that possession had been taken and given but in spite of that in the letter dated 7 4 1959 a direction was given to the Tehsildar to withhold taking possession of the field in Survey No. 30/2 of village Umari temporarily.
Thereupon, the Tehsildar made a report dated 11 4 1959 stating therein "possession has already been delivered to the Principal, Agricultural College.
Akola and the possession receipt is enclosed.
In case possession of section No. 30/2 is still to be withheld, the Principal, Agricultural College, S.D.O., P.W.D. and the lessee of the field would be approached in this respect and necessary action would be taken accordingly.
" As a matter of fact it would appear from the letter dated 16 4 1959 written by the Assistant Secretary of the Government of Bombay to the appellant in reply to his letter addressed to the Minister for Agriculture a copy of which was forwarded to the Collector, Akola that for the first time in this letter he was requested to stay the proceedings until further orders.
Then comes the letter dated 4 5 1959 written by the Land Acquisition Officer to the Collector, Akola.
Reference was made to all these 258 documents on behalf of both the parties.
The S.D.O. and the Land Acquisition Officer sought instructions of the Collector as to what action was to be taken in respect of land measuring 19 acres 16 gunthas out of Survey No. 30/2 "the possession of which has already been delivered to the Agricultural Department".
The next letter is one from the Principal of the College to the Land, Acquisition Officer dated the 27th May, 1959 asking clarification of the stay order received in regard to Survey No. 30/2.
The reply is dated 4 6 1959 informing him that clarification will be made on receipt of further communication from the Collector.
The next letter is dated 18 7 1959 from the Principal of the College to the Director of Agriculture stating therein that possession of the whole field No. 30/2 excluding the area of 1 acre 16 gunthas which was also required for the purpose of the College, was delivered on 3 4 1959 but in view of the Government order contained in their letter dated 16 4 1959 the land was not being cultivated and was lying as a sort of no man 's land.
Then comes an important letter again referred at the Bar on behalf of both the parties written by the Special Land Acquisition Officer, Akola to the Commissioner, Nagpur on the 13th December, 1961.
The difficulty in releasing the land under section 48 (1) was pointed out and further, in this letter it is stated "Taking over possession of IA 15G of land to be acquired under urgency clause was deferred as on joint spot inspection made by the then Sub Divisional Officer, Principal Agricultural College and S.D.O. (P.W.D.) Akola, it was thought that acquisition of this portion which contains one double storied building, some converted land etc. would entail heavy expenditure.
" It Would thus be clear beyond any shadow of doubt that possession was taken on the spot.
On spot inspection the area of 1 acre and odd only was left out of possession.
But then in this very letter there is a statement "The Collector Akola was directed to stay the acquisition proceedings in respect of this field until further orders, though possession receipt for section No. 30/2 was passed on 3 4 1959, the possession (physical) of the entire field section No. 30/2 of Umari is still retained by the lessee of that field and the land was not actually taken possession of by the Principal, Agricultural College, Akola.
" Learned counsel for the appellant submitted that physical possession of the entire land comprised in Survey No. 30/2 remained with the appellant and the possession delivered was either on paper or merely symbolical ; it therefore, could not prevent the release of the land from acquisition under section 48(1) of the Act.
It is not necessary to refer to the further correspondence which ensued.
It may, however, be stated that because of the stay order and the dispute raised in respect of the land comprised in Survey No. 30 in the award prepared by the Collector on 30 1 1960 compensation for the said land was not determined.
And eventually in the year 1968 an area of 12 acres 23 gunthas was sought to be released from acquisition.
The question for consideration is was the release valid and proper ? 259 In order to appreciate what is meant by taking possession of the land under section 16 or 17(1) of the Act and what is the mode of taking such possession in regard to the waste or arable land with which we are concerned in this case, it is necessary to refer to certain provisions of the Code of Civil Procedure hereinafter called the Code, and some decisions thereon.
The Code does not prescribe that in respect of a particular property there can be two modes of giving possession either to a decree holder or to an auction purchaser one ,. symbolical" and the other "actual".
These Rules prescribe that if the property is in the occupation of the judgment debtor or some one on his behalf the possession shall be given if necessary by removing the judgment debtor and placing the decree holder or the auction purchaser in occupation of the same.
On the other band if the property is of such a nature that the judgment debtor cannot be in actual occupation of it, as for instance, property in the possession of a tenant, the only mode of giving possession is by proclaiming on the spot that the possession has been given to the decree holder or the auction purchaser.
In some decisions the former mode of possession has been called "actual '9 and the latter "symbolical".
Really speaking even the delivery of so called "symbolical" possession is delivery of "actual" possession of the right title and interest of the judgment debtor.
It completely dispossess him.
It does not affect the physical occupation of the property by a person who is not bound by the decree or whose interest is not affected by sale of the judgment debtor 's interest in execution of a decree.
If the property is land over which does not stand any building or structure, then delivery of possession over the judgment debtor 's property becomes complete and effective against him the moment the delivery is effected by going upon the land, or in case of resistance, by removing the person resisting unauthorisedly.
A different mode of delivery is prescribed in the Code in the rules aforesaid in regard to a building, with which we are not concerned in this case.
Sometimes the expression symbolical or formal delivery of possession has been used in decisions to connote the actual delivery of possession effective against the judgment debtor leading to his dispossession in the eye of law even though the duration of the dispossession may be momentary or temporary.
In the other, the delivery is effected by the officer of the Court by going through a certain process prescribed by section 224, and proclaiming to the occupants of the property that the plaintiff has recovered it from the defendant.
This is the only way in which the decree of the Court, awarding possession to the plaintiff, can be enforced ; and as, in contemplation of law, (1) I.L.R. 5 Calcutta 584.260
both parties must be considered as being present at the time when the delivery is made, we consider that, as against defendant, the delivery thus given must be deemed equivalent to actual possession."
As against third parties, of course, this symbolical possession (as it is called) would be of no ' avail ; because they are no parties to the proceeding.
But if the defendant should, after this, again dispossess the plaintiff by receiving the rents and profits, we think that the plaintiff would have twelve years from such dispossession to bring another suit."
Another Full Bench consisting again of live learned Judges of the Calcutta High Court presided over by Petheram, C.J., in the case of Joggobnudhu Mitter vs Purnanund Gossami and another (1) reaffirmed teh view taken in Juggobundhu Mukherjee 's case (I.L.R. 5, Calsutta,584)in the following words : "The Full Bench held that symbolic.
possession obtained by the plaintiff 's vendor was effective as against the judgment debtor, defendant, and that the suit brought against him within 12 years of that event was not barred by limitation.
The plaintiffs had filed a suit to recover possession of the said land.
The principal defendant who was the appellant before the Privy Council was an idol by shebiats who was in actual possession of the land by their tenants.
The predecessors of the defendants in the suit were parties to an earlier mortgage action.
In due course a decree was obtained.
The property which, according to the finding, included the disputed land was sold.
The mortgagee decree holders were the purchasers of the property.
"The land being in occupation by cultivating tenants under an apparently bona fide title they received formal possession as usual after due proclamation by beat of drum in 1898."(vide page 200 column 2).
Lord Sumner delivering the judgment of the Board said At the same page "This interruption, if such it was, of the defendants ' actual possession was not of long duration.
Hence the necessity for the present suit.
Hence also the defence of adverse possession for more than twelve years before suit began.
" It would thus be seen that formal possession of the land in actual occupation of the tenants, which in a sense was symbolical, was ' characterised as interruption of defendant 's actual possession.
And finally the ratio of the decision of the Full Bench of the Calcutta High Court in Juggobundhu Mukherjee 's case (I.L.R. 5, Calcutta, 584) was approved thus at page 201, column 1 : "In the High Court and before their Lordships it was further argued that symbolical possession would not avail against the defendants, but that only actual dispossession would interrupt their adverse possession.
The High Court (1) I.T.R. 16 Calcutta 530.(2) A.T.R. 1917 Privy Council 197 (2).261 following a decision of the Full Bench in Juggobundhu Mukherjee vs Ram Chandra Bysack (1880) 5 Calcutta, 584=5 C.L.R. 548 (F.B.) held that symbolical possession availed to dispossess the defendants sufficiently, because they were parties to the proceedings in which it was ordered and given.
This decision is one of long standing, and has been followed for many years.
Their Lordships see no reason to question it or to hold that this rule of procedure should now be altered.
" In the case of joint possession the decision of the Privy Council in Sri Radha Krishna Chanderji 's case [A.I.R. 1917 Privy Council, 197(2)] has been referred with approval by this Court in the case of M. V. section Manikayala Rao vs M. Narasimhaswami and others(1) in paragraph 7 at page 474 in the judgment of Sarkar, J, as he then was, as also in paragraph 20 at page 478 is that of Ramaswami, J. I may just quote a sentence from paragraph 7 which says : "By the delivery of symbolical possession under the order of November 6, 1939, the adverse possession of the defendants was interrupted." Mohammad Noor, J.,in the case of Ram Prasad Ojha and others vs Bakshi Bindeshwari Prasad and others(2) has considered the point in his separate but concurring judgment with 'reference to the relevant provisions of the Code at page 147.
In that case the question of defendants adverse possession arose with reference to a property which was not in occupation of any tenant.
The suit for possession after the mortgage sale and delivery was being resisted by a person who was in.
no better position than the mortgagor judgment debtor.
The learned Judge pointed out at pages 147 and 148 "When it is said that symbolical possession is not binding upon a third party but actual possession is, it is only meant that when a decree bolder or an auction purchaser has been put in actual occupation of the property every body else has been ousted from it, and consequently dispossessed.
This is an obvious fact and not a question of law.
On the other had if the Court simply proclaims that the decree holder or auction purchaser has been given possession but on account of the nature of the property they have not been placed in physical occupation of the property itself, such a delivery of possession can be binding only upon those who are parties to those proceedings or on those who claim through them.
The difference, as I have said, is due to the nature of the property and not on account of the difference in the nature of possession.
The question will always be not what was the mode of delivery of possession but who has in fact been ousted by it." (1) ; (2) A.I.R. 1932 Patna 145.
262 The same learnedJudge had the occasion to consider the question again in the case ofMahabir Singh and others vs Emperor(1).
And that too with reference to a property which was not in possession of any tenant but of the judgment debtor.
The question arose in a criminal case and the confusion arising out of the use of the expressions "the actual" and "symbolical" possession was again discussed at page 568.
The writ of delivery was issued in the previous litigation under Order 21, Rule 95 of the Code and in that connection the different modes of delivery of possession over a piece of land were discussed.
The momentary possession given to the purchaser was characterised as delivery of symbolical possession by the Additional Sessions Judge and not actual possession.
The learned Judge pointed out at page 569, column 1: "It issued its writ under Rule 95, and the peon formally put the auction purchaser in possession of the property.
It is wrong to think that there Are two kinds of delivery of possession ; one actual and the other symbolical independent of the nature of possession of the judgment debtor.
Even if the delivery of possession was symbolical, its effect against the judgment debtor was the same.
" The so called paper possession or possession on paper is no delivery of possession, actual, formal or symbolical.
A Bench of the Madras High Court consisting of Rajamannar, C.J. and Rajagopala Aiyangar, J. has stated at page 762 in the case of Pathaperumal Ambalam vs Chidambaram Chettiar(2) : .lm15 "The next question is whether it makes any difference in legal effect if possession is taken through court.
The Code contemplates no notice to the judgment debtor at that stage or any objection being raised by him to the delivery of possession under Rule 95, or Rule 96, and as the full title to the property has passed from the judgment debtor to the auction purchaser, he has no interest in the property to protect.
" It has further been pointed out "The characterisation of possession taken under Order 21 Rule 96, as "paper possession" is hardly justified and runs counter.
to the principle on which the provision is based.
Symbolical possession obtained under Order 21, Rule 96 is quite a different thing from paper possession, which might correctly describe only the possession obtained by a party who being entitled to actual possession, the judgment debtor himself being in possession, obtains delivery of possession on paper without actual possession ; or those cases where without complying with the requisites of the statute a false return is made as if they were complied with." (1)A.I.R. 1934 Patna 565.
(2) A.T.R. 1954 Madras 760. 263 It would thus be seen that a symbolical or formal delivery ' of possession as understood in law has the effect of dispossessing the judgment debtor from his right title or interest in the property.
It does not dispossess the person in ' actual possession in his own right not liable to be evicted under the decree or in pursuance of the auction sale.
A symbolical or formal delivery of possession against the judgment debtor is giving of actual possession of the property in the eye of law and has the effect of dispossessing him although as a matter of fact he may have succeeded in resuming back, possession as before shortly after dispossession.
In a proceeding under the Act for acquisition of land all interests are wiped out.
Actual possession of the land becomes necessary.
for its use for the public purpose for which it has been acquired.
Therefore, the taking of possession under the Act cannot be "symbolical" in the sense as generally understood in Civil Law. ' Surely it cannot be a possession merely on paper.
In the eye of law the taking of possession will have the effect of transferring possession from the owner or the occupant of the land to the Government.
Section 9(1) of the Act reads as follows "The Collector shall then cause public notice to be given at convenient places or near the land to be taken, stating that the Government intends to take possession of the land, and that claims to compensation for all interests in such land may be made to him.
" When a public notice is published at a convenient place or near the land to be taken stating that the Government intends to take possession of the land, then ordinarily and generally there would be no question of resisting or impeding the taking of possession.
Delivery or giving of possession by the owner or the occupant of the land is not required.
The Collector can enforce the surrender of the land to himself under section 47 of the Act if impeded in.
taking possession.
On publication of the notice under section (1) claims to compensation for all interests in the land has to be made ; be it the interest of the owner or of a person entitled to the occupation of the land.
On the taking of possession of the land under section 16 or 17 (1) it vests absolutely in the Government free from all incumbrances.
It is, therefore, clear that taking of possession within the meaningof section 16 or 17(1) means taking of possession on the spot.
It isneither a possession on paper nor a "symbolical" possession as generally understood in Civil Law.
But the question is what is the mode of taking possession ? The Act is silent on the point.
Unless possession is taken by the written agreement of the party concerned the mode of taking possession obviously would be for the authority to go upon the land and to do some act which would indicate that the authority has taken possession of the land.
It may be in the form of a declaration by beat of drum or otherwise or by hanging a written declaration on the spot that the authority 10 SC 75 18 264 has taken possession of the land.
The presence of the owner or the occupant of the land to effectuate the taking, of possession is not necessary.
No further notice beyond that under section 9(1) of the act: is required.
When possession has been taken, the owner or the occupant of the land is dispossessed.
Once possession has been taken the land vests in the Government.
In the instant case in agreement with the findings of the Court, I hold that the eye of law actual possession of the land in question was taken by the Tehsildar on the spot and the possession was handed over to the Principal of the Agricultural College.
It appears that the appellant on his part thought that he never gave up possession and claimed to continue in actual possession of the disputed land, because of the stay order passed by the Government on or about the 16th April, 1959.
Viewed in the light of the discussion of law I have made above, it would be noticed that possession of the land, in any event, was taken on the spot and it vested in the Government.
The appellant 's resuming possession of the land after once it was validly taken by the Government had not the effect of undoing the fact of the vesting of the land in the Government.
The Government or the Commissioner was not at liberty to withdraw from the acquisition of any portion of the land of which possession had been taken, under section 48(1) of the Act.
In the result the appeals fail and are dismissed with costs.
One set of hearing fee.
V.P.S. Appeals dismissed.
| IN-Abs | For the purpose of acquiring land for an Agricultural College a notification was issued under section 4 of the Land Acquisition Act, 1894, in January 1959, with respect to several pieces of land one of which belonged to the res pondents and was in possession of the appellant as tenant.
After the issue of the notification under section 6, in February 1959, the Commissioner directed that possession of that land may be taken under section 17(1) on the expiry of 15 days from the publication of the notice under section 9(1).
On March 24, 1959, the appellant filed a statement before the Land Acquisition Officer.
In that statement, he did not deny the publication of notice on the spot under section 9(1) nor did he put any impediment to the taking of the land.
He merely wanted the compensation amount to be paid to him and wanted stay of the taking possession of his house on the land.
The Land Acquisition Officer passed orders in the presence of the appellant directing the Tahsildar to take possession of the land and hand it over to the Principal of the Agricultural College.
The Tahsildar went to the spot, inspected the land for the purpose of determining what part was waste and arable and should therefore be taken possession of and took possession of the land, leaving out the small portion containing the house of the appellant, and handed over possession of the land so taken over to the Principal of the Agricultural College.
The appellant was not present at the time when the Tahsildar took possession.
There was, thereafter, correspondence between the appellant and the Government.
and various reports had been made by the officers of the Government and on April 16, 1959, a stay order was passed by the Government.
On December 13, 1961, the Land Acquisition Officer wrote to the Commissioner that possession of the land was still with the appellant, and on August 8, 1968, withdrawal from the acquisition of that part of the land under section 48(1) of the Act, was directed by the Commissioner.
The respondents and the Agricultural College filed writ petitions in the High Court, challenging the release of the land.
The High Court allowed the petitions holing that possession of the land was taken (even though the Government took the stand that they had taken only 'symbolical ' possession) and given to the Principal of the College and that, therefore, it was not open to the Commissioner to withdraw from the acquisition under section 48(1) as amended by the Land Acquisition (Maharashtra Extension and Amendment) Act.
Dismissing the appeal to this Court, HELD : (Per Curiam) : Neither the Government nor the Commissioner could withdraw under section 48(1) from the acquisition of any portion of the land which had been taken over by and vested in the Government.
[253 F] (Per P. N. Bhagwati and A. C. Gupta JJ) : When Government proceeds to take possession of the land acquired by it under the Act.
it must take actual Possession since all interests in the land are sought to be acquired by it, and there is no question of taking 'symbolical ' possession as understood 251 under the C.P.C. Nor would possession merely on paper be enough.
How such actual possession may be taken would depend on the nature of land.
It is not an absolute and inviolable rule that merely going on the spot and making a declaration by beat of drum or otherwise would be sufficient to constitute taking possession of land in every case.
It is also not strictly necessary as a matter of legal requirement that notice should be given to the owner or occupant of the land that possession would be taken at a particular time, though it may be desirable to do so in order to eliminate the possibility of a fraudulent or collusive transaction of talking of mere paper possession, without the occupant or the owner ever knowing about it.
[252E H, 153A B] On the facts and circumstances of the present case, the Tahsildar had taken actual possession of that part of the land which was waste or arable and handed it over to the Principal of the College.
The Land Acquisition Officer thought that actual possession could not be regarded as having been taken unless the appellant was excluded from the land, and, since the appellant, without any obstruction entered on the land and continued in possession, he mistakenly stated that actual possession was not taken.
The legal position is that even if the appellant entered upon the land after actual possession had been taken by and the land vested in, the Government, the appellant 's possession would not obliterate the consequence of vesting in the Government.
[253 B E] [Discussion regarding delivery of 'symbolical ' and 'actual ' possession under the C.P.C. is not necessary for the disposal of the appeals], [252 D] (Per Untwalia J.) : (1) Under the C.P.C., a symbolical or formal delivery of possession has the effect, of dispossessing the judgment debtor from his right, title or interest in the property, although, as a matter of fact, he may have succeeded in resuming possession shortly after dispossession.
It does not, however, dispossess the person in actual possession in his own right not liable to be evicted under the decree or in pursuance of the auction sale.
[263A B] (2)When a public notice under section 9(1) of the Act is published at a convenient place or near the land to be taken that Government intends to take possession, ordinarily there would be no question of resisting or impeding the taking of possession.
Delivery of possession by the owner is not required and the Collector can enforce surrender under section 47 if impeded.
On taking possession either under section 16 or section 17(1), the land vests absolutely in the Government free from all encumbrances.
Therefore, in a proceeding under the Land Acquisition Act for acquisition of land all interests are wiped out, and hence, the taking of possession must be taking actual possession on the spot and not symbolical possession; and surely it cannot be a possession merely on paper.
[263E G] (3)As to the mode of taking possession, the Act is silent.
Unless possession is taken by the written agreement of the party concerned the mode of taking possession obviously would be for the authority to go upon the land and do some act which would indicate that the authority has taken possession of the land.
It may be in the form of a declaration by beat of drum or otherwise or by hanging a written declaration on the spot that possession has been taken.
The presence of the owner or the occupant is not necessary to effectuate the taking of possession.
[263H, 264A] (4)In the instant case, actual possession of the land was taken by the Tahsildar on the spot and the possession was handed over to the Principal of the College.
The Land Acquisition Officer 's statement that the land was not actually taken possession and the Government 's stand that, only symbolical possession was taken, should be viewed from the correct legal position.
So viewed, the appellant 's resuming possession after once the land was validly taken by the Government would not have the effect of undoing the fact (if vesting in the Government.
[264B, E F] 252
|
Appeal No. 43 of 1968 Appeal by special leave from the judgment and order dated the, 11th December, 1967 of the Bombay High Court at Bombay ill Second Appeal No. 1428 of 1967.
V. M. Limiyae, V. N. Ganpule,R. N. Nath and Urmila Sirur for the appellant.
Y. section Chitale and A. G. Rainaparkhi, for respondents.
The Judgment of the Court was delivered by KRISHNA IYER, J.
There is more than meets the eye in the seemingly simple legal issue raised in this ejectment suit, if we probe the deeper public and professional implications of the limitations on a pleader 's implied power to enter into a compromise of a case bona fide can behalf of his client, bat in his interest, although without his consent.
The facts to use trite phraseology, fall within a narrow compass.
The landlords.
, Respondents 1 to 3, brought an action for eviction of the tenant appellant (Regular Suit 141 of 1964) under the rent control law extant in Maharashtra.
Litigation is often so harassingly long that even ",here recovery of possession is sought for immediate 338 bona fide need of the owner, the judicial process takes its slow motion course that settlement of the dispute is not infrequently preferred by both sides to protracted adjudicatory justice.
In the present case, although parties had engaged lawyers and gone to trial, they took several adjournments from court to compose their differences, The last such was granted in these terms : "19 4 65 Parties as before present "Application by defendant for adjournment granted.
Suit is adjourned for hearing to 21 4 65.
Sd/ R. H. Maslekar, Joint Civil Judge Junior Division." Eventually, on April 21, 1965 the court recorded a compromise, signed by the pleader of the tenant, giving 18 months time to give vacant possession and decreed the suit on the agreed terms.
But at heart the tenant harboured the intent to resist eviction; the impropriety of breaching she compromise was overpowered by the tempting plea of the illegality of the decree on consent.
So she, started some miscellaneous proceedings which were carried right upto this Court although dismissed in every court as incompetent.
Then she inaugurated this, the third chapter of litigation, Regular Civil Suit No. 422 of 1966 for a declaration that the decree based on a compromise entered into by her pleader without authority was not binding on her and consequently she was not liable to be dispossessed.
This last spell of litigation, after the first compromise in Court, has taken long ten years.
Socio legal research may well prove that legal justice may soon reach a point of no return if fundamental structural reform of the whole forensic process were not launched upon and frivolous litigation screened so as not to discredit faith in court justice.
Anyway, in the present case, the hierarchy of courts has held against the appellant and she has come up, by special leave, conscious of adverse findings of fact by courts below, to this Court.
The only point urged by Shri Limaye for the appellant is that Respondent 4 the pleader, Shri Palshikar, who signed the razi, bad no authority to do so, especially because the client 's consent so to do had not been secured and an advocate respondent 5 before us had also been retained in the case who had neither signed the document not represented to the Court about the settlement.
It is common case that the tenant was absent in court although her litigation agent was present (and consented) when the order was made.
Shri Limaye has raised the principal plea that Respondent 4 being a mere pleader, had no power to compromise the suit unless expressly authorised by the party and here admittedly no such express authorisation existed.
He seemed to make a distinction between advocate and pleader although at some stages he read this limitation as applicable to advocates too.
A second point faintly raised was prudently abandoned for the reason that it had not been set up in the pleadings or urged at earlier stages.
Last minute ingenuity is not fairplay in court and 339 we cannot and did not permit him to argue that the court had no material in the recitals of the compromise to make out the mandatory grounds required under the relevant 'rent control ' law for a court to direct dispossession of a tenant of a building.
We do not examine the materials of the contention of all.
Now to the only contention canvassed before us.
Although vintage rulings and relevant books have been cited and voyages to Anglo American legal systems made, we have to decide the issue in the light of Indian statute law and decisions against the backdrop of Indian conditions.
Foreign aid is helpful but in law, as in life, Indian genius must speak.
In this perspective, first we have to look tit the pertinent provisions of the Civil Procedure Code, the and the Bombay Pleaders Act.
Even before that we may reproduce the terms of the compromise which resulted in the decree for eviction in the prior suit (Regular Civil Suit No. 141 of 1964) : "IN THE COURT OF THE CIVIL JUDGE , JUNIOR DIVISION AT JALGAON Regular Suit No. 141/64 SHANKARLAL GULABCHAND Plaintiff V. ABDUL KADAR H. WELDER Defendant A compromise has been arrived at mutually between the plaintiff and the defendant and it is agreed as under : The defendant is to give to the plaintiff actual possession of the suit properties on or before the date the 30 10 66.
In case the defendant fails to deliver actual possession of the said suit properties according the plaintiff is to take actual possession of the said properties by filing a Darkhast.
The defendant is liable to pay at the rate of Rs. 55.90 the amount of the loss sustained in the form of arrears of rent inclusive of the municipal tax and education cess subsequent to the filing of the suit, from the date 1 4 64 until delivery of actual possession of the plaintiff, and accordingly, the defendant is to pay at the said rate the damages for the intervening period.
In case the defendant fails to pay (the same), the plaintiff is to recover the amount by filing a Darkhast.
The defendant is to bear his own costs and to pay to the plaintiff the latter 's costs of this suit.
The plaintiff is to take the amount of refund in respect of the Court fee stamp that may be paid.
It is agreed as above.
A decree may therefore be passed in terms thereof.
Sd/ Shankarlal Gulabchand.
Sd/ R. C. Agarwal.
Reagular Suit No. 422/66 Produced on behalf of the plaintiff on the date 30 1 67 (Signature illegible) Advocate for the plaintiff 340 (In English) Sd/ D. B. Choudhari.
Advocate for Plaintiff.
with authority to Compromise.
Sd/ B. H. Falashikar Plaintiff with authority to Comp.
No. 1 and 2 and plaintiff Shankarlal Gulabchand with pleader and defendant Abdul kadar with pleader admitted before me the compromise.
It is verified and admitted.
Sd/ R. H. Maslekar.
C. J. 24 4 65" Although the Civil Judge mentions in the order that 'defendant Abdul Kadar ' with pleader admitted before him the compromise, it was not the defendant but his agent who was actually present.
That this is an error is conceded by Sri Chitale appearing for respondents 1 to 3.
The trial court as well as the District Court went into the question whether the plaintiff appellant had made out that express directions were given to the pleader Shri Falshikar (respondent No. 4) not to compromise the suit and have come to the conclusion that no such positive instruction 'not to compromise ' was given by the party.
This being the concurrent finding of fact and the High Court having dismissed the Second Appeal in limine we may proceed on the footing that Sri Palshikar, the pleader, had not been affirmatively informed not to enter into a compromise.
The second question on which also both the Courts of fact have negatived the plaintiff appellant 's version is that the compromise was an act of sharp practice, a fraud played by the pleader on his client and on the court.
We therefore exclude the possibility of dubiety and assume bona fides on the part of the pleader.
We mention this to narrow the scope of the controversy which really turns on the existence or otherwise of the implied authority of a pleader to compromise a suit in the interests and on behalf of his client although without actual reference to him where his vakalat is silent on the point.
There is no statutory provision decisive of this issue and we have to garner the principles from various factors like the status and significance of the legal profession in society, the wider powers conferred on lawyers as distinguished from ordinary agents on account of the triuna facets of the role of an advocate vis a vis the client, the court and the public and its traditions and canons of professional ethics and etiquette.
Above all, the paramount consideration that the Bench and the Bar form a noble and dynamic partnership geared to the great social goal of administration of justice puts the lawyer appearing in the court in a class by himself and to compare him with an ordinary agent may be to lose sight of the lawyer as engineer of the rule of law in society.
National integration at the lawyer 's level was statutorily achieved by the whereby the Indian Bar, with a classless orientation, came into existence permitting enrollment of various categories of legal practioners like vakils and pleaders (see section 29).
It 341 must be noted, however, that Shri Palshikar has not been enrolled as an Advocate.
On the contrary, the party had briefed, apart from Shri Palshikar (just a pleader with a sanad under the Bombay Pleaders Act, 1920 for short, the Bombay Act), an Advocate Shri Khatib, 6th respondent.
Section 55 of the provides that every pleader who does not elect to be enrolled as an Advocate under that Act shall continue to enjoy the same rights as respects practice in any court as he had before that Act came, into force.
Thus his rights as respects practice in any court are what he had enjoyed under the Bombay Act, notwithstanding its repeal by the .
Our attention was drawn to sections 9 and 16 of the Bombay Act but neither section helps us much in regard to the controversy bearing on the competence of a pleader, to enter into a compromise without the consent of the, concerned party.
Even so, section 9 illumines the area to some extent and the relevant portion may be extracted "9.
No person shall appear, plead or act for any party in any civil proceeding in any court unless he is a pleader as defined in this Act and is entitled and duly empowered to appear, plead and act for such party in such proceeding;" Shri Chitale contends and this argument has found favour with the courts below that a pleader has power to act for any party and to settle a dispute involved in a suit is ancillary to or implied in this power to act.
When he settles his client 's suit he acts for him as much as he does so when he gives up a point as meritless.
We will examine this matter more in depth a little later.
There is force in the suggestion that even though a pleader or ' vakil might not have chosen to get himself enrolled , in their very eligibility to be enrolled as advocates, there is implicit statutory acceptance of the position that all these categories of legal practioners have substantially the same powers vis a vis client and court.
The egalitarian ethos injected by the makes for parity of powers between pleaders and advocates to act on behalf of their client.
We think if right to read into the complex of provisions bearing on legal practitioners this activist identity of power to act.
After all, every legal practitioner labels apart, is an officer of the court and aids in the cause of justice.
Logically and sociologically and, indeed, legally, their responsibility to their clients and to the Court have to be the same even though some of them may be entitled to appear only in District Courts while others in the High Courts, and Advocates in any Court in the whole of the country.
The quality of the power limitaions on the courts in which appearance is permissible being ignored for the time being cannot stand differentiation.
This stand is reinforced by a reference to the Civil Procedure Code which regulates the legal process in Indian courts.
Order III, r. 1, reads : " 1.
Any appearance, application or act in or to any Court, required or authorised by law to be made or done by a party in such Court, may, except where otherwise 442 expressly provided by any law for the time being in force, be made or done by a PartY in person, or by his recognised agent or by a pleader appearing, applying or acting on the case may be,.on his behalf We may also read r. 4(1) of the same order "(1) No pleader shall act for any person in any Court, unless he has been appointed for the purpose by such person by a document in writing signed by such person Both these provisions clothe the pleader with the power to act in any court provided he has been empowered by a vakalatnama in this behalf.
The Code has defined 'pleader ' in these general terms : "Sec.
2(15) 'Pleader ' means any 'person entitled to appear and plead for another in Court, and includes an advocate, a vakil and attorney of a High Court.
" It is obvious that this definition obliterates any status wise distinction between an advocate and any other legal practitioner like a vakill or pleader entitled to appear in court on behalf of his client.
A profession whose founding, fighting faith is equal justice under the law does not practice inequality within its fold deaf to the mood music of non discrimination.
The broad conclusion, having due regard to the perspective 'we have set out right at the beginning, is that lawyers, be they Advocates, vakils or pleaders, stand on the same footing in regard to their power to act on behalf of their clients.
The cases cited before us, discerningly understood, confirm the soundness of this equating principle.
As earlier clarified, the sole issue is the delineation of the scope and ambit of 'action.
Does the power to 'act ' cover the right to settle the suit without getting the client 's consent, or is it implied in the engagement ? To clear possible confusion we may straightaway state that both sides agree and that is the undoubted law that if a suitor countermands his pleader 's authority to enter into a compromise or withholds, by express recital in the vakalat, the power to compromise the legal proceeding, the pleader (or, for that matter, the Advocate, cannot go against such advice and hind the principal, his client.
This is as illegal as it is unprofessional.
Shri Limaye has relied on a few decisions both of the Privy Council and of the Indian High Courts, in his endeavor to make out that pleaders cannot compromise suits unless expressly authorised 'by the vakalatnama.
To substantiate the contrary position, Shri Chitale has drawn our attention to other rulings.
These citations may he briefly surveyed and they are : Sourindra vs Heramba(1) ; Sourendra Nath vs Tarubala Dasi(2); Jiwibai vs Ramiuwar (FB) (3); Supaji vs (1) A.I.R. 1923 PC 98.
(2) A.I.R. 1930 PC 158.
(3) A.I.R. 1947 Nag.
343 Nagorao(1); Ramaswami vs Jai Hind Talkies(2); Govindammal vs Marhmuthu Maistry (3); Laxmidas Ranchhoddas vs Savitabai(4); section section walker vs L. section Walker(5); and C. section Nayakam vs A. N. Menon(6) .
Although, on an analysis of these decisions, some discordant notes may be heard, there is substantial harmony of judicial opinion on the proposition that the different classes of legal practitioners have the same rights in relation to the case in which they have been engaged.
Indeed, even if there be any marginal doubt, we have to interpret the law in such manner as to promote the integration of the Indian Bar in tune with the spirit of section 29 of the which categorically states that subject to the provisions of that Act and any rules made thereunder, there shall, as from the appointed day, be only one class of persons entitled to practice the profession of law, namely, advocates.
Shri Limaye placed great reliance on the Judicial Committee 's statement in Sourindra (supra) where Sir John Edge observed; "A pleader, who does not hold and has not filed in the suit before the Court his client 's general power of attorney authorising him generally to compromise suits on behalf of his clients, cannot be recognised by a Court as having any authority to compromise the suit unless he has filed in the suit his client 's vakalatnama giving him authority to compromise the suit before the Court.
" Superficially understood, this supports the appellant in wriggling out of the compromise, because the pleader Shri Phalsikar had not been given any authority to compromise the suit, in the vakalatnama, but we do not think that this is a disability specially attaching to a pleader as distinguished from an Advocate.
We go further and consider that these observations have to be construed in the context of the fact that in the facts of that case some of the defendants had not filed vakalatnamas at all and that, ultimately, the Judicial Committee had upheld the compromise after special valalatnamas were filed for the unrepresented parties.
The question of the powers of a pleader, as distinguished from the larger powers of an Advocate did not come up for consideration in that appeal and we cannot treat the ruling as authority for the position taken up by the appellant.
Lord Atkin, speaking for the Judicial Committee in Sourendra Nath (supra) also had to deal with agreement to compromise a suit and the implied power of an advocate to settle the suit on behalf of his (1) A.I.R, 1954 Nag.
(2) A.I.R. 1956 Mad.
(3) A.I.R. 1959 Mad.
(4) (5) A.I.R. 1960 Bom.
(6) A.I.R. 1968 Ker.
10 SC 75 23 444 client. '.he statement of the law is instructive and may well extracted: "They are of opinion that Mr. Sircar, as an advocate of the High Court, had, when briefed on behalf of the defendant, in the Cou rt of the Subordinate Judge of Hoogly, the implied authority of his client to settle the suit.
Their Lordships have already said that he must be treated as though briefed on the trial of the suit.
Their Lordships regard the power to compromise a suit as inherent in the position.
of an advocate in India.
The considerations which have led to this implied power being established in the advocates of England, Scotland and Ireland apply in equal measure to India.
It is a power deemed to exist because its existence is necessary to effectuate the relations between advocate and client, to make possible the duties imposed upon the advocate by his acceptance of the cause of his client.
The advocate is to conduct the cause of his client to the utmost of his skill and understanding.
He must in the interests of his client be in the position, hour by hour, almost minute by minute, to advance this argument, to withdraw that; he must make the final decision whether evidence is to be given or not on any question of fact ; skill in advocacy is largely the result of discrimination.
These powers in themselves almost amount to powers of compromise ; one point is given up that another may prevail.
But in addition to these duties, there is from time to time thrown upon the, advocate the responsible task of deciding whether in the course of a case he shall accept an offer made to him, or on his part shall make an offer on his client 's behalf to receive or pay something less than the full claim or the full possible liability.
Often the decision must be made at once.
If further evidence is called or the advocate has to address the Court the occasion for settlement will vanish.
In such circumstances, it the advocate has no authority unless he consults his client, valuable opportunities are lost to the client." (emphasis, ours) Their Lordships referred to the apparent authority that counsel has in England to compromise in all matters connected with the action.
The jurisprudential basis as a branch of the Law of Agency has been thus expressed by Lord Atkin : "Two observations may be added.
First, the implied authority of counsel is not an appendage of office, a dignity added by the Courts to the status of barrister or advocate at law.
It is implied in the interests of the client, to give the fullest beneficial effect to his employment of the advocate.
Secondly, the implied authority can always be countermanded by the express directions of the client.
No advocate has actual authority to settle a case against the express instructions of his client.
If he considers such express instructions 345 contrary to the interests of his client, his remedy is to return his brief.
" The Judicial Committee equated the Indian Advocate and his duties to his client in the conduct of the suit as in no wise different from those of his counter parts in the United Kingdom : "There are no local conditions which make it less desirable for the client to have the full benefit of an advocate 's experience and judgment.
" There is an obscure passage in the judgment which, according to Shri Limaye supports him : True, the Board has observed : "Where the legal representative in Court of a client derives his authority from an express written authority, such as a vakalatnama, different considerations may well arise, and in such cases their Lordships express no opinion as to the existence of any implied authority of the kind under discussion.
" We are unable to see anything here to contradict the general power, actual though implied, of counsel (be he advocate or pleader) to settle the suit of his client as part of his duty to protect the interests of his client.
We may now move on to the Indian decisions, none of which specifically uphold the absence of implied authority of a pleader qua pleadegr to enter into a compromise binding on his client.
Perhaps the clearest pronouncement against the degrading differentiation of pleaders is that by a Full Bench of the Nagpur High Court in Jiwibai (supra).
After an exhaustive discussion, which we need not repeat, the Court concluded at p. 26 : "Our answer to the second question is that counsel in India, whether Barristers, Advocates, or pleaders, have inherent powers, both to compromise claims, and also to refer disputes in Court to arbitration, without the authority or consent of the client, unless their powers in this behalf have been expressly countermanded, and this, whether the law requires a written authority to 'act ' or 'plead ' or not." (emphasis, ours) The legal deduction is contained in these emphatic words : "Brush unrealities aside and what do we get but a contract ? How much more is that the case in those parts of India where no solicitor intervenes and counsel and client meet face to face ? How much more when there is an actual instrument of engagement or a power of attorney ? How much more when the law requires writing ?" (p. 24) 346 "The Privy Council tells us that there is inherent in the position of counsel an implicit authority to do all that is ex pedient, proper and necessary for the conduct of the suit and the settlement of the dispute." (p. 25) "Turning next to 0.3, R. 4, consider again the case in which a pleader is appointed simply to 'act ' without any attempt to set forth the scope of his acting.
(That incidentally is in substance the power given to the plaintiff 's counsel in the case).
Is compromise not an acting ?" (p. 25) Our attention has been drawn to Supaji (supra) which, while affirming implicit authority of an Advocate, doubts the application of the same principle to pleader.
We unhesitatingly prefer the Full Bench view (supra).
A little reflection will unfold the compelling necessity of giving a comprehensive meaning to the expression 'act ' and for the inclusion of all categories of legal practitioners as repositories of this.
ample agency, bound yet broadened by obligatory traditions, professional control and public confidence in the Bar as a massive social instrumentality of democracy.
To act for the suitor involves myriad intricate actions often so legal that the client may not even understand the implication, sometimes so sudden that time for taking instructions is absent.
Representation in court may be so demanding and so transforms forensic obligation that a lawyer may have ethical difficulties in mechanically obeying all the directions of his principal.
The legal skill that is hired by the client may, for its very effective exercise, need an area of autonomy and quickness of decision that to restrict the agency to express authorisation is to ask for an unpredictable and endless enumeration of powers such as what to ask a witness and what not to, what submissions to make and what points to give up and so on.
To circumstances the power to act is to defeat the purpose of the engagement.
Those who know how courts and counsel function will need no education on the jurisprudence of lawyer 's position and powers.
Of course, we hasten to enter a caveat.
It is perfectly open to a party, like any other principal, to mark out in the vakalat or by particular instructions forbidden areas or expressly withhold the right to act in sensitive matters, the choice being his, as the master.
If the lawyer regards these fetters as inconsistent with his position, he may refuse or return the brief.
But absent speaking instructions to the contrary, the power to act takes in its wings the right and duty to save a client by settling the suit if and only if be does so bona fide in the interests and for the advantage of his client.
This amplitude of the power to act springs from the builtin dynamism, challenge and flux of the very operation of legal representation as felicitously expressed, if we may say so with great respect, in the noble words of Lord Atkin (Sourendra Nath 's Case (supra).
We may supplement the grounds for giving this wider construction by the fact that the legal profession is a para public institution which deserves the special confidence of and owes greater responsibility to the community at large than the ordinary run of agency.
347 This reasoning has been high lighted by the Kerala High Court in its Full Bench decision in Nayakaim (supra).
Mathew J., examined the English authorities and applied it to Indian conditions.
The learned Judge observed "The construction of a document appointing an agent is different from the construction of a vakalat appointing counsel.
In the case of an agent the document would be construed strictly and the agent would have only such powers as are conferred expressly or by necessary implication.
In the case of counsel the rule is otherwise because there we are dealing with a profession where well known rules have crys tallised through usage.
It is on a par with a trade where the usage, becomes an additional term of the contract, if not contrary to the general law or excluded by express agreement." (p. 215) More importantly, Mathew, J. placed accent on the special position of the Bar "That counsel is not a mere agent of the client would be made clear if we look at the nature of his duties and relationship with the public and the court.
Counsel has a tripartite relationship : one with the public, another with the court, and the third with his client.
That is a unique feature.
Other professions or callings may include one or two of these relationships but no other has the triple duty.
Counsel 's duty to the public is unique in that he has to accept all work from all clients in courts in which he holds himself out as practicing, however unattractive the case or the client." (p. 216) The passages quoted from Lord Dearing M. R. in Ronadel 's Case bear repetition when considering the public justice role of the Bar : "A barrister cannot pick or choose his clients.
He is bound to accept a brief for any man who comes before the courts.
No matter how great a rascal the man may be.
No matter how given to complaining.
No matter how undeserving or unpopular his cause.
The barrister must defend him to the end.
Provided only that he is paid a proper fee, or in the case of a dock brief, a nominal fee.
He must accept the brief, and do all he honorably can on behalf of his client.
I say I all he honorably can ' because his duty is not only to his client.
All those who practice at the Bar have from time to time been confronted with cases civil and criminal which they would have liked to refuse, but have accepted them as burdensome duty.
This is the service they do to the public.
Counsel has the duty and right to speak freely and independently without fear of authority, without fear of the judges and also without fear of a stab in the back from his own client.
To some extent, he is a minister of justice.
" 348 "It is a mistake to suppose that he is the mouth piece of his client to say what he wants : or his tool to do what he directs.
lie is none of these things.
He owes allegiance to a higher cause.
It is the cause of truth and justice.
He must not consciously misstate the facts.
He must not knowingly conceal the truth.
He must not unjustly make a: charge of fraud, that is, without evidence to support it.
He must produce all the relevant authorities, even those that are against him.
He must see that his client discloses, if ordered, the relevant documents, even those that are fatal to his case.
He must disregard the most specific instructions of his client, if they conflict with his duty to the court.
The code which requires a barrister to do all this is not a code of law.
It is a code of honour.
If he breaks it, he is offending against the rules of the profession and is subject to its discipline." (p. 216) A Division Bench of the Bombay High Court (where Chagla C.J., spoke for the Court) takes a pragmatic view of a lawyer 's powers to settle as is reflected from the head note which is sufficient for our purpose (see head note in Ranchhoddas (supra); "It is impossible for a member of the Bar to do justice to his client and to carry on his profession according Lo the highest standards unless he has the implied authority to do everything in the interests of his client.
This authority not only consists in putting forward such arguments as be thinks proper, but also to settle the client 's litigation if he feels that a settlement would be in the interests of his client and it would be foolish to let the litigation proceed to a judgment, This implied authority has also been described as an actual authority of counsel or an advocate.
This authority may be limited or restricted or even taken away.
If a l imitation is put upon counsel 's authority, his implied or actual authority disappears or is destroyed.
In such a case he has only an ostensible authority as far as the other side is concerned.
When the actual authority is destroyed and merely the ostensible authority remains, then although the other side did not know of the limitation put upon the authority of an advocate, the Court will not enforce the settlement when in fact the client had withdrawn or limited the authority of his advocate.
" The Madras decisions have not been consistent.
In Ramaswami 's Case (supra) it was observed "It has been laid down in Jagpati Mudaliar vs Ekabara Mudaliar that it is not competent to a pleader to enter into a compromise on behalf of his client without his express authority to do so.
See also Thermal Ammal vs Sokkammal and Sarath Kumari Dasi vs Amulyadhan 349 As the vakalat did not give counsel authority to compromise, Kesrvaraman Chettiar and the two other directors who sail with him would not be bound by the compromise." (p. 589) The reference to 'pleader ' here is not really in contradistinction to 'advocates '.
But in Govindammal (supra) Ramaswami, J., after an elaborate examination of the Indian and Anglo American cases and books sums up thus : "An examination of these authorities and extracts from standard publications on professional conduct, leads us to the following deductions : The decisions appear to be fairly clear that even in cases where there is no express authorisation to enter into a compromise, under the inherent authority impliedly given to the Vakil, he has power to enter into the compromise on behalf of his client.
But in the present state of the clientele world and the position in which the Bar now finds itself and in the face of divided judicial authority and absence of statutory backing, prudence dictates that unless express power is given in the vakalat itself to enter into compromise, in accordance with the general practice obtaining, a special vakalat should be filed or the specific consent of the party to enter into the compromise should be obtained.
If an endorsement is made on the plaint etc., it would be better to get the signature or the thumb impression of the party affixed thereto, making it evident that the party is aware of what is being done by the vakil on his or her behalf." (p. 1 2) In the American system there is only a single class of attorney unlike in Great Britain, but the implied power to compromise has, not been upheld.
American Jurisprudence section 98 (pp. 318 320) has the following to say : "The rule is almost universal that an attorney who is clothed with no other authority than that arising from his employment in that capacity has no implied power by virtue of his general retainer to compromise and settle his client 's claim or cause of action, United States vs Beebe ; , Holkar vs Parker ; , Golder vs Bradley (C.C.A. 4th) , Anucas, 1917 A 921 (ZI9) : In re Sonyder , Ward vs Orsini , except in situations where he is confronted with an emergency and prompt action is necessary to protect the interests of the client and there is no opportunity for consultation with him.
Generally, unless such an emergency exists, either precedent special authority from the client or subsequent rati 350 fication by him is essential in order that a compromise or settlement by an attorney shall be binding on his client." (p. 12) We are impressed by the eloquent and luminous observations of Lord Reid, if we may say so with great deference, in Rondel vs Worsley (1) : "Every counsel has a duty to his client fearlessly to raise every issue, advance every argument, and ask every question, however distasteful, which he thinks will help his client 's case.
But, as an officer of the court, concerned in the administration of justice, he has an overriding duty to the court, to the standards of his profession, and to the public, which may and often does lead to a conflict, with his client 's wishes or with what his client thinks are his personal interests.
Counsel must not mislead the court, be must not lend himself to casting aspersions on the other party or witnesses for which there is no sufficient basis in the information in his possession, he must not withhold authorities or documents which may tell against his clients but which the law or the standards of his profession require him to produce.
And by so acting he may well incur the displeasure or worse of his client so that if the case is lost, his client would or might seek legal redress if that were open to him." (Cases and Materials on The English Legal System by Geoffrey Wilson Sweet & Maxwell 1973,p. 124) We may now deal with the properties whichmay bear upon thebona fides of the lawyer 's conduct if he settles a suit, without client 's consent, Powers are one thing, prudence is another and indeed the latter sometimes bears upon the former.
Mathew J set the record straight, if we may say with respect, in Nayakam (supra) : "Although we see no reason to limit or restrict the implied authority of counsel to compromise an action or confess judgment unless expressly done so by his client, we think that both in the interest of the client and the good reputation of counsel, it is always advisable that he should get specific instructions before taking such a radical step." (p. 216) Another facet of the limit on lawyer 's powers is articulated in the Bombay view, if we may use that expression for convenience, the ruling viz.
, Waikar (supra ) being one relating to the implied of an advocate to compromise.
Certainly, as pointed out there, the power cannot extend to matters extraneous to the action.
Mudholkar J. has uttered a caution that, as far as possible, irrespective of the (1) [1969] 1 A.C. 191.
351 scope of the power the lawyer must prefer to get his client 's concurrence to the settlement.
The reasons are obvious.
If the compromise is not bona fide in the client 's interests, the power is exceeded and it is rash to bind a party to razi without his knowledge when there is time to consult and the terms affect him adversely.
The Privy Council 's observation in Sheonandan Prasad Singh vs Abdul Fateh Mohammed Reza (11) serve as reminder : "But whatever may be the authority of counsel, whether actual or ostensible, if frequently happens that actions are compromised without reference to the implied authority of counsel at all.
In these days communication with actual principals is much easier and quicker than in the days when the authority of counsel was first established.
In their Lordship 's experience both in this country and in India it constantly happens that counsel do not take upon themselves to compromise a case without receiving express authority from their clients for the particular terms : and that this position in each particular case is mutually known between the parties." (p. 22) (s upra) Ramaswami J., also in Govindammal (supra) in the paragraph already extracted, has referred to a disturbing aspect which must alert the public and the profession to the lurking dangers of a carte blanche to counsel to compromise a case without client 's precedent permission.
The learned Judge quotes, what may be a cautionary signal.
from Thenal Ammal vs Sokkummal (ILR , 235AIR "It is not the ordinary duty of an Advocate to negotiate terms, without reference to his client, with the opposite party.
Such an action is calculated to place the practitioner in a false position.
We do not think it is desirable that such a power should vest in him in the interest of the profession.
From the point of view of the client, we think that it is not safe that he should be regarded by engaging a vakil to have given him authority to dispose of his right in any way he chooses.
Therefore we think that the general power claimed is not in consonance with the highest ideals of the profession or of justice.
For these reasons we think that a very strict interpretation should be placed upon vakalat containing powers of this kind.
" Ramaswami, J. has adverted to the wiser alternative of counsel seeking client 's consent before compromising the litigation, having regard to the 'position in which the Bar finds itself ' these days.
(1) AIR 1935 P.C. 119.
352 While we are not prepared to consider in this case whether an Advocate or pleader is liable to legal action in case of deviance or negligence, we must uphold the actual, though implied, authority of a pleader (which is a generic expression including all legal practitioners as indicated in section 2(15), C.P.C.) to act by way of compromising a case in which he is engaged even without specific consent from his client, subject undoubtedly to two over riding considerations : (i) He must act in good faith and for the benefit of his client ; otherwise the power fails (2) it is prudent and proper to consult his client and take his consent if there is time and opportunity.
In any case, if there is any instruction to the contrary or withdrawal of authority, the implicit power to compromise in the pleader will fall to the ground.
We need hardly emphasise that the bar must sternly screen to extirpate the black sheep among them, for Caesar 's wife must be above suspicion, if the profession is to command the confidence of the community and the court.
On the facts of the present case we have little doubt that the pleader has acted substantially with the knowledge of and encouraged by his client.
The several adjournments taken by the appellant specifically for settling the suit speak better when we read the penultimate application for postponement on this score.
Exhibit 21, d/17 2 65 runs: "In the Court of the Joint Civil Judge, J. D. at Jalgaon Reg.
Suit No. 141/64 Shankarlal Gulabchand More & Ors. . . . .
Plaintiffs Versus A.Kadarr H. Welder. . . .
Defendant The respectful application on behalf of the Plaintiffs and the Defendant is as follows : In the said matter, talks regarding compromise are going on mutually between the plaintiffs and the defendants.
The talks have not concluded as yet.
Hence be pleased to adjourn the hearing fixed for today and give another date for hearing.
This is the application.
Date : 17 2 1965 Sd/ D. H. Chaudhri Advocate for plaintiff Sd/ B. H. Palshikar Advocate for defendant.
Allowed Sd/ R. H. Maslekar 17 2 65.
" We feel no doubt that the broad sanction for the compromise came from the tenant, that no shady action is imputable to respondent 4 and that his conduct has been motivated by the good of his client.
353 The last posting was for reporting the compromise.
But, on that date, the Court declined further adjournment and the party being absent and away, the pleader for the appellant had no alternative but to suffer an eviction decree or settle it to the maximum advantage of his Ordinarily when a junior and senior appear in the case, it would be an adventurist act exposing himself to great risk on the part of the junior to report a compromise without consulting his senior, even assuming that the party was not available.
Nevertheless, we have had an over all view of the facts of the present case and do not feel inclined to the view that the implied authority of the pleader has been abused.
The courts below were right in fastening the settlement of the suit upon the appellant.
Nevertheless, it is right to stress that counsel should not rush in with a razi where due care will make them fear to tread, that a junior should rarely consent on his own when there is a senior in the brief, that a party may validly impugn an act of compromise by his pleader if he is available for consultation but is by passed.
The lawyer must be above board, especially if he is to agree to an adverse verdict.
As for classes of legal practitioners, we are equally clear that the tidal swell of unification and equalisation has swept away all professional sub castes.
Anyway, that is the law.
Such artificial segregations as persist are mere proof of partial survival after death and will wither away in good time.
Anyway, that is our hope.
We dismiss the appeal, but in view of divided judicial opinion in the High Courts and the Constitutional obligation of this Court under article 141 to resolve and settle the law we direct the parties will bear their costs in this Court.
| IN-Abs | The appellant engaged a pleader to fight her case in a Court.
The case was adjourned from time to time for the parties to compose their differences.
Eventually, the Court recorded a compromise, signed by the pleader of the appellant.
At the time of signing the compromise, though the appellant was not present in Court, her litigation agent was present and was consulted when the order was made.
The appellant later filed a suit for a declaration that the decree based on a compromise entered into by her pleader was without authority and was not binding on her.
The suit was dismissed.
The appeal was dismissed in limine by the High Court.
On appeal to this Court, it was contended that the respondent, being a mere pleader, had no power to compromise a suit unless expressly authorised by the party.
Dismissing the appeal ` HELD : (a) Lawyers, be they advocates, vakils or pleaders, stand on the same footing in regard to their power to act on behalf of their clients.
By the , the Indian Bar came into existence permitting enrollment of various categories of legal practitioners like vakils and pleaders.
Section 55 of the Act provides that every pleader, who did not elect to be enrolled as 'an advocate tinder that Act, shall continue to enjoy the same ,is rights respects practice in any Court as be had before that Act came into force.
[340 H, 341 A] In the instant case, though the respondent.
bad not enrolled himself as an advocate, his.
rights respects practice, in any Court are what he had enjoyed under the Bombay Pleaders Act, 1920 notwithstanding its repeal P. by the .
[341 B].
(b) Every legal practitioner is an officer of the Court and aids in the cause of justice.
The responsibility of the advocates to their clients and to the Court has to be the same even though some of them may be entitled to appear only in District Courts while others in High Courts.
The quality of power cannot stand differentiation.
[341 GH] (2) If a suitor countermands his pleader 's authority to enter into a compromise or withholds, by express recital in the vakalat, the power to compromise the legal proceeding, the pleader or the advocate cannot go against such advice and bind the principal, his client.
This is as illegal as it is unprofessional.
[342 FG] Jiwibai vs Ramjuvar, AIR 1947 N4g.
17, approved.
(3) To act for the suitor involves myriad intricate actions often so legal that the client may not even understand ' the implication.
Representation in Court may be so demanding and so transforms forensic obligation that a lawyer may have ethical difficulties in mechanically obeying all the directions of his principal.
The legal skill that is hired by the client may, for its very effective exercise, 'need in area of autonomy and quickness of decision that to restrict the agency to express authorisation is to ask for an unpredictable and endless enumeration of powers.
To circumscribe the power to act is to defeat the purpose of the engagement.
It is perfectly open to a party, like any 337 other principal, to mark out in the vakalat or by particular instructions forbidden areas or expressly withhold the right to act in sensitive matters, the choice being his, as the master.
The legal profession is a para public institution which deserves the special confidence of and owes greater responsibility .to the community at large than the ordinary run of agency.
[346 D G, H] Sourindra vs Heranba, AIR 1923 PC 98, followed.
Laxmidas Ranchhodrlas vs Savitabai, , section section Waiker vs L. section waiker, AIR 1960 Bom.
20 and C. section Nayak vs A. N. Menon AIR 1963 Ker. 213 approved.
Rondel vs Morsley [1969] 1 A. C. 191 referred.
(4) The Advocate or pleader has authority to act by way of compromising at case in which he is engaged even without specific consent from his client subject to two over riding considerations : (i) He must act in good faith and for the benefit of his client; otherwise the power fails.
(ii) It is prudent and proper to consult his client and take his consent if there is time and opportunity.
In any case, if there is any instruction to the contrary or withdrawal ' of authority, the implicit power to compromise in the pleader will fall to the ground.[352 B] In the present case, the 'pleader had acted substantially with the knowledge of and encouraged by his client.
The several adjournment taken by the appellant specifically for settling the suit speak for themselves.
There is no doubt that the broad sanction for.
the compromise came from the appellant, that no shady action was in imputable to the respondent and that his conduct had been motivated by the good of his client.
[352 H] [Counsel should not rush in with a compromise where due care will make them fear to tread, that a junior should rarely consent on his own when there is a senior in the brief, that a party may validity impunge an act of compromise by his pleader if he is available for consultation but is by passed.
The lawyer must be above board, especially if he is to agree to an adverse verdict.] [353 C D]
|
N: Criminal Appeal No. 284 of 1974.
From the judgment and order dated the 12th April, 1973 of the Madhya Pradesh High Court in Criminal Appeal No. 43 of 1971.
F. section Nariman, Addl.
Solicitor General of India, P. P. Rao and R. N. Sachthey, for the appellant.
The respondent appeared in person.
The Judgment of the Court was delivered by FAZAL ALI, J.
This is an appeal by State of M.P. by certificate granted by the High Court of Madhya Pradesh under article 134(1)(c) of the Constitution against its judgment and order dated April 12, 1973 by which the respondent who was convicted by the Special Judge, Indore, under section 220 I.P.C. and s.5(2) read with section 5(1)(d) of the Prevention of Corruption Act, 1947 and sentenced to one year rigorous imprisonment on each count, was acquitted by the High Court.
Briefly put, the prosecution case against the respondent was that he was an employee in the Heavy Electricals (India) Ltd, Bhopal which is a Government company and was working at the relevant time as Personal Assistant to Shri C. Rae, Manager, Purchasing & Main Stores of the Company.
Mr. Rae was allotted a new Fiat Car at Bombay on priority basis and the respondent and Mr. Rae had arrived at Bombay to take delivery of the car on March 14, 1965 and they stayed there till March 13.
Mr. Rae, however, left on the morning of March 13, 1965 directing the respondent to obtain delivery of the Fiat Car on March 14, 1965 and then proceed to Indore.
Ultimately the car was brought to Bhopal on March 16, 1965 at about 2 30 P.M.
On March 23, 1965 the respondent submitted his T.A. bill Ext.
P 21 showing his departure from Bombay on March 16, 1965 by car at 2 00 P.M. 8 and arrival at Bhopal on March 17, 1965 at 6 30 P.M. and claimed daily allowance at the rate of Rs. 12/ per day for halt at Bombay.
The respondent accordingly received the full amount of the T.A. Bill on April 3, 1965.
The allegation against the respondent was that he had prepared a false T.A. Bill and had cheated the Government Company and was guilty of serious criminal misconduct as envisaged by the Prevention of Corruption Act.
The learned Special Judge, Indore, accepted the prosecution case and convicted the respondent as indicated above.
The respondent then filed an appeal before the High Court of Madhya Pradesh which allowed appeal, mainly on the ground that as the respondent was not a public servant as contemplated by the provisions of the Prevention of Corruption Act, his trial under the said Act was without jurisdiction.
The High Court, however, left it open to the Government to prosecute the respondent under the relevant law, if necessary.
It is against this order of the High Court that the State of M.P. has filed this appeal before us after obtaining certificate of fitness from the High Court.
The short point taken by the respondent before the High Court was that as the word "public servant" has not been expressive defined in the Prevention of Corruption Act, 1947, it has borrowed the definition from section 21 of the Indian Penal Code, such a definition amounts to legislation by incorporation, and therefore any subsequent amendment, addition or alteration in the Indian Penal Code would not at all affect the incorporated provision in the Prevention of Corruption Act.
The High Court seems to have readily accepted this contention and has accordingly held that as the various amendments to section 21 of the Indian Penal Code cannot apply to the provisions of the Prevention of Corruption Act, and therefore the respondent being only an employee of the Government Company does not fall within the ambit of public servant as defined in section 21 of the Indian Penal Code prior to the amendment.
In order of appreciate this point, it may be necessary to set out the scheme of the Prevention of Corruption Act hereinafter referred to as 'the Act ' with particular reference to section 21 of the Indian Penal Code hereinafter referred to as 'the Penal Code ' which has been incorporated in the Act.
To begin with, the preamble to the Act clearly shows that the Act has been passed for more effective prevention of bribery and corruption, bribery being a form of corruption.
Section 2 of the Act runs thus: "For the purpose of this Act, "Public servant" means a public servant as defined in section 21 of the Indian Penal Code.
" It would be seen that section 2 of the Act completely incorporates the provision of section 21 of the Penal Code in order to define a "public servant".
The Legislature in its wisdom did not think it necessary to give a separate definition of "public servant" in the Act, but in order to achieve brevity in legislation incorporated the provision of section 21 of the Penal Code into it.
before the Criminal Law (Amendment) Act, 1958 (Act No. 11 of 1958) was passed section 21 of the Penal Code consisted only of eleven clauses and an employee under the 9 Corporation or a Government Company did not fall within the purview of any of the clauses of section 21 of the Penal Code.
Thus when the Legislature incorporated the provisions of section 21 of the Penal Code in the Act in the year 1947, cl. 12 was not there at all on the statute book of the Penal Code.
The High Court took the view that as the Act had incorporated the definition of the Penal Code prior to its amendment, therefore, it became an integral and independent part of the Act and would remain unaffected by any repeal or change in the previous Act, namely the Penal Code.
It appears, however, that by virtue of the Criminal Law (Amendment) Act, 1958, twelfth clause was inserted in section 21 of the Penal Code, which runs as follows: "Twelfth.
Every officer in the service or pay of a local authority or of a corporation engaged in any trade or industry which is established by a Central, Provincial or State Act or of a Government company as define in section 617 of the ." This Act also amended certain provisions of the Prevention of Corruption Act, 1947 in enlarging the concept of criminal misconduct but it did not at all amend any portion of section 2 of the Act, perhaps the reason being that in view of the enlargement of the definition of "public servant" in section 21 of the Penal Code express amendment of section 2 of the Act was not necessary.
By virtue of the Anti Corruption Laws (Amendment) Act, 1964 (Act No. XL of 1964), clause 12 of s 21 of the Penal Code was substituted as follows: "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 617 of the ," It would thus appear that by virtue of these two amendments the Parliament sought to enlarge the definition of "public servant" so as to include even an employee of a Government company or a corporation with the avowed object of stamping out corruption at various levels prevailing in the country.
The question that arises for consideration is whether the sub sequent amendments to section 21 of the Penal Code after its incorporation in the Act would have to be read into the Act or not.
It is true that if the doctrine of legislation by incorporation is strictly applied in this 10 case, then the definition of section 21 of the Penal Code prior to its amendment by Act 11 of 1958 and Act XL of 1964 would alone stand and, if this is so, the respondent would not be a public servant within the meaning of section 21 of the Penal Code.
It is well settled that where the subsequent Act incorporates a provision of the previous Act, the position is that the borrowed provision is bodily lifted from the previous Act and placed in the subsequent Act and becomes an integral and independent part of it so as to remain unaffected by any repeal, change or amendment in the previous Act.
In Clarke vs Bradlaugh,(1) Brett, L.J., observed as follows: ". . but there is a rule of construction that, where a statute is incorporated by reference into a second statute the repeal of the first statute by a third does not affect the second." These observations were noticed and approved by this Court in Ram Sarup vs Munshi and others(1), where this Court made the following observations: "Where the provision of an Act are incorporated by reference in a later Act the repeal of the earlier Act has, in general, no effect upon the construction or effect of the Act in which its provisions have been incorporated.
The effect of incorporation is stated by Brett, L.J., in Clarke vs Bradiaugh: "Where a statute is incorporated, by reference into a Second statute the repeal of the first statute by a third does not affect the second.
" In the circumstances, therefore, the repeal of the Punjab Alienation of Land Act of 1900 has no effect on the continued operation of the Pre emption Act and the expression 'agricultural land ' in the later Act has to be read as if the definition in the Alienation of Land Act had been bodily transposed into it." F The doctrine of incorporation by reference to earlier legislation has been very aptly described by Lord Esher, M. R., in In re Wood 's Estate, Ex parte Her Majesty 's Commissioners of Works and Building(3) where he observed as follows: "If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act just as if they had been actually written in it with the pen, or printed in it, and, the moment you have those clauses in the later Act, you have no occasion to refer to the former Act at all For all practical purposes, therefore, those sections of the Act of 1840 are to be dealt with as if they were actually in the Act of 1855.
" 11 Craies on Statute Law, (7th Edition), while referring to the observations of Brett, L.J., observed at p. 361 as follows "There is a rule of construction that where a statute is incorporated by reference into a second statute, the repeal of the first statute by a third does not affect the second, as the incorporated provisions have become part of the second statute." The Privy Council in Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd. (1), while amplifying this doctrine, observed as follows: "Their Lordship regard the local Act as doing nothing more than incorporating certain provisions from an existing Act, and for convenience of drafting doing so by reference to that Act, instead of setting out for itself at length the provisions which it was desired to adopt.
The independent existence of the two Acts is therefore recognized; despite the death of the parent Act, its offspring survives in the incorporating Act.
Though no such saving clause appears in the General Clauses Act, their Lordships think that the principle involved is as applicable in India as it is in this country.
" Thus, the position is that after the provision of the previous Act is incorporated in the subsequent Act, the off spring, namely the incorporated provisions, survives even if the previous Act is repealed, amended, declared a nullity or erased from the statute book.
The High Court appears to have relied on all these decisions in order to come to its conclusion that as the Act has incorporated the provisions of section 21 of the Penal Code in section 2 thereof, any amendment in the previous Act, namely the Penal Code, will not affect the subsequent Act, namely the Prevention of Corruption Act.
It was argued before the High Court as also before us that the Act and the Penal Code are statutes in pari materia and form part of one system and they should, therefore, be interpreted as enforcing each other.
Thus any change in the definition of section 21 of the Penal Code would have to be implicitly read into s.2 of the Act.
The Additional Solicitor General Mr. Nariman appearing for the State, however, conceded later on, and in our opinion rightly.
that it may not be possible to hold that the Act and the Penal Code were statutes in pari materia.
It would appear that the Act is a completely self contained statute with its own provisions and has created a specific offence of criminal misconduct which is quite different from the offence of bribery as defined in the Penal Code.
Both these statutes have different objects and create offences with separate ingredients.
No authority has been cited before us in support of the proposition that the Act, namely, the Prevention of Corruption Act, and the Penal Code are statutes in pari materia so as to form one system.
12 In the State of Madras vs Vaidyanath Aiyar, (1) this Court while construing the meaning of the phrase 'it shall be presumed ' appearing in section 4 of the Act utilised the construction placed on the phrase shall presume ' in the Evidence Act by holding that the Evidence Act was a statute in pari materia with the Prevention of Corruption Act.
There can be no doubt that the Evidence Act and the Prevention of Corruption Act form part of one system, because the rules of the Evidence Act, with minor exceptions, apply to trials of offences created under the Act.
This principle, however, cannot apply to the present case, where, as we have already stated the areas of the two statutes, namely the Act and the Penal Code are entirely different.
Secondly, while the Indian Penal Code is essentially a penal statute of a much wider scope than the Act, the Act no doubt contains a penal flavour but it is in effect a piece of social legislation directed towards eradication of the evil of corruption amongst the services alone In other words, public servants alone fall within the mischief of the Act i.e. the Prevention of Corruption Act, and no one else.
Mr. Nariman then argued that having regard to the preamble and the object of the Act and the Penal Code there can be no doubt that the Act was undoubtedly a statute supplemental to the Penal Code and that being the position any amendment in the definition of section 21 of the Penal Code would have to be read into section 2 of the Act, because once the definition of s.21 of the Penal Code was incorporated in the Act it had to be imported into the other Act and considered pari passu the Penal Code.
In our opinion, this argument is well founded and must prevail.
We have already indicated that the object of the Act was to eradicate corruption from various levels either in Government services or in services under the Corporations or Government companies.
The Penal Code no doubt creates offences like those mentioned in sections 161 and 165 of the Code but they were not found sufficient to cope with the present situation and the expanding needs of the nation.
In these circumstances, it was considered necessary to evolve a quick, expeditious and effective machinery to destroy the evil of corruption existing in any from.
If, therefore, the Penal Code with the same object enlarged the definition of s.21 by adding the twelfth clause by virtue of the Criminal Law (Amendment) Act, 1958 and the Anti corruption Laws (Amendment) Act, 1964, there is no reason why the extended meaning to the provision of s.2 of the Act as borrowed from section 21 of the Penal Code be not given to that section.
This Court in section Gangoli vs The State of Uttar Pradesh(2) while interpreting section 2 of the Prevention of Corruption Act, that the accused were public servants within the meaning of the Act, being employees of the East Indian Railway, which was managed and owned by the Government of India, observed as follows: "The East Indian Railway which has employed the appellants was at the material time owned by the Government of India and managed and run by it, and so if the status of the appellants had to be judged at the material date solely 13 by reference to s.21 of the Code there would be no difficulty in holding that they are public servants as defined by the said section.
" Even while discussing the exact ambit and scope of the Prevention of Corruption Act, this Court observed in M. Narayanan Nambiar vs Slate of Kerala(1) as follows: "The preamble indicates that the Act was passed as it was expedient to make more effective provision for the prevention of bribery and corruption.
The long title as well as the preamble indicate that the Act was passed to put down the said social evil i.e. bribery and corruption by public servant. .
It also aims to protect honest public servants from harassment by prescribing that the investigation against them could be made only by police officials of particular status and by making the sanction of the Government or other appropriate officer a pre condition for their prosecution.
As it is a socially useful measure conceived in public interest, it should be liberally construed so as to bring about the desired object, i.e. to prevent corruption among public servants and to prevent harassment of the honest among them.
" These observations regarding the object of the Act obviously were based on the footing that the Act must be read as supplemental to the Penal Code, and therefore the definition borrowed from the Penal Code must be read into section 2 of the Act not only at the time when it was borrowed but even at the material date when the offence is committed.
This being the position it is manifest that by virtue of the amendments referred to above in the Penal Code which inserted twelfth clause to s.21 of the Penal Code the respondent clearly comes within the meaning of "public servant" and the High Court was in error in taking a view to the contrary.
Further the Prevention of Corruption Act being a social legislation its provisions must be liberally construed so as to advance the object of the Act.
This can only be done if we give extended meaning to the term "public servant" as referred to in section 2 of the Act by applying the enlarged definition contained in clause 12 inserted in the Penal Code by the two amendments referred to above.
There is yet another aspect of the matter which is spelt out from the decision of the Privy Council in the Hindustan Co operative Insurance Society 's case (supra) which has been relied upon by the High Court itself.
While reiterating the principle that after certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act can be made, their Lordships of the Privy Council made it clear that this principle would not apply where the subsequent Act is rendered unworkable or is not able to function effectually.
In this connection their Lordships observed.
as follows: 14 "It seems to be no less logical to hold that where certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act, which is not expressly made applicable to the subsequent Act, can be deemed to be incorporated in it, at all events if it is possible for the subsequent Act to function effectually without the addition " On a consideration of these authorities, therefore, it seems that the following proposition emerges: Where a subsequent Act incorporates provisions of a previous Act then the borrowed provisions become an integral and independent part of the subsequent Act and are to tally unaffected by any repeal or amendment in the previous Act.
This principle, however, will not apply in the following cases: (a) where the subsequent Act and the previous Act are supplemental to each other; (b) where the two Acts are in pari materia; (c) where the amendment in the previous Act, if not imported into the subsequent Act also, would render the subsequent Act wholly unworkable and ineffectual; and (d) where the amendment of the previous Act, either expressly or by necessary intendment, applies the said provisions to the subsequent Act.
The Additional Solicitor General vehemently contended that if the enlarged definition by the insertion of clause 12 in section 21 of the Penal Code is not imported into section 21 of the Act, then the Act would become wholly unworkable.
For instance, if two persons are serving under a Government company and have committed an offence of accepting illegal gratification, and if one is prosecuted under section 161 of the Penal Code and the other under the Act, it is obvious that the prosecution against the employee under the Penal Code would succeed on proof of facts, whereas the employee of the same company who is prosecuted under the Act will fail because such an employee will not be a public servant, according to the extended meaning given by the amendments to section 21 of the Penal Code.
This will, therefore, defeat and frustrate not only the object of the Act but will render it absolutely unworkable.
In view of these circumstances, therefore, we are inclined to hold that in the facts and circumstances of the present case and having regard to the nature and scope or the Prevention of Corruption Act, the extended definition of s.21 of the Penal Code would have to be imported into section 2 of the Act.
That being the position there can be no doubt that the respondent was a public servant within the meaning of section 2 of the Act and his conviction by the learned Special Judge, Indore, did not suffer from any legal infirmity.
There is yet another aspect of the matter.
lt seems to us that even if section 2 of the Act had not applied the provisions of the Penal Code and had not defined public servant, then the provisions of the 15 Penal Code would have come into operation by implied reference because the.
Act was a supplemental Act to the Penal Code.
It was only by way of abundant caution that section 2 of the Act incorporated the definition of public servant" as mentioned in section 21 of the Penal Code and in that sense alone the Act can be treated as being pari materia with the Penal Code.
For these reasons therefore for are clearly of the opinion that the judgment of the High Court holding that the respondent was not a public servant is legally erroneous and cannot be allowed to stand.
The other point is regarding the question of sentence.
The High Court has itself pointed out that the respondent had been forced under duress exercised by his superior officer in drawing the inflated travelling allowance.
The High Court has also expressed the view that having regard to the fact that as the accused had to face a trial for a numher of years, the Government will consider the desirability of not prosecuting him again.
In view of these circumstances, therefore, we feel the respondent has committed only a technical offence and a token sentence is called for We, therefore, allow the appeal, set aside the judgment of the High Court dated April 12, 1973, acquitting the respondent.
We convict the respondent under section 420 I.P.C. and section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act but reduce his sentence to the imprisonment already served.
V.M.K. Appeal allowed.
| IN-Abs | Section 2 of the Prevention of Corruption Act, 1947, provides that, for the purposes of this Act, "Public servant" means a public servant as defined in section 21 of the Indian Penal Code.
Before the Criminal Law (Amendment) Act, 1958 (Act No. 11 of 1958) was passed adding clause 12 to this section, section 21 of the Penal Code consisted only of eleven clauses and an employee under the Corporation or a Government Company did No. fall within the purview of any of the clauses of section 21 of the Penal Code.
Clause 12 was further amended by the Anti Corruption Laws (Amendment) Act, 1964 (Act No. XL of 1964) enlarging the definition of "public servant".
The respondent who was an employee in the Heavy Electricals (India) Ltd. Bhopal, which is a Government Company, was convected by the Special Judge Indore, under section 420 I.P.C. and section 5(2) read with section 5(1)(d) of the Act and was sentenced to one year rigorous imprisonment on each count.
The appeal filed by the respondent before the High Court of Madhya Pradesh was allowed mainly on the ground that as the respondent was not a public servant as contemplated by the provisions of the Act, his trial under the Act was without jurisdiction.
The High Court took the view that as the Act had incorporated the definition of the Penal Code prior to its amendment, it became an integral and independent part of the Act and would remain unaffected by any repeal or change in the previous Act, namely, the Penal Code.
This appeal has been preferred on the basis of the certificate granted by the High Court.
Allowing the appeal, ^ HELD: (i) It is well settled that, after the provision of the previous Act is incorporated in the subsequent Act, the off spring, namely, the incorporated provisions, survives even if the previous Act is repealed, amended, declared a nullity or erased from the statute book.
But the Act being a social legislation its provisions must be construed liberally so as to advance the object of the Act.
Though the Act and the Penal Code are not statutes in pari materia there can be no doubt that the evidence Act and the Prevention of Corruption Act form part of one system, because the rules of Evidence Act, with minor exceptions, apply to trials of offences created under the Act.
The Act, no doubt, contains a penal flavour but it is in effect a piece of social legislation directed towards eradication of the evil of corruption amongst the services alone.
In other words, the public servants alone fall within the mischief of the Act and no one else.
[11E; 12A C] Clarke vs Bradlaugh, ,69, Ram Sarup vs Munshi and other ; , 868 869, In re Wood 's Estate, Ex parte Her Majesty 's Commissioners of Works and Buildings, [18861 , 615 616, Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd. L.R. 58 I.A. 259.
266 267. referred to.
State of Madras vs Vaidyanath Aiyar, A.I.R. 1958 S.C. 61, relied on.
(ii) The object of the Act is to eradicate corruption from various levels either in Government services or in service under the Corporation or Government Companies.
The Penal Code no doubt creates offences like those mentioned in sections 161 and 165 of the Code but they were not found sufficient to cope with the present situation and the expending needs of the nation.
In these circumstances, 7 it was considered necessary to evolve a quick, expeditious and effective machinery to destroy the evil of corruption existing in any form.
If, therefore, the Penal Code with the same object enlarged the definition of section 21 by adding the twelfth clause by virtue, of the Criminal law (Amendment) Act, 1958 and the Anti corruption Laws (Amendment) Act, 1964, there is no reason why the extended meaning to the provision of section 2 of the Act ns borrowed from section 21 of the Penal Code be not given lo that section.
Otherwise the Act would become wholly unworkable.
[12D F] Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd. L.R. 58 I.A. 259, 266 267.
section Gangoli vs The State of Uttar Pradesh, [1960] 1 section C. R. 290 and M. Narayanan Nambiar vs State of Kerala, [1963 Supp. 2 S.C.R. 724.
referred to.
(iii) Even if section 2 of the Act had not applied the provisions of the Penal Code and had not defined public servant, then the provisions of the Penal Code would have come into operation by implied reference because the Act was a supplemental Act to the Penal Code.
It was only by way of abundant caution that section 2 of the Act incorporated the definition of "public servant" as mentioned in section 21 of the Penal Code and in that sense alone the Act can be treated as being pari meteria with the Penal Code.
[15A B]
|
Civil Appeal No. 2166 of 1970.
of 1970 From the Judgment and Order dated the 31st October, 1968 of the Allahabad High Court in W.P. No. 3233 of 1968.
section C. Manchanda and A. G. Ratanaparkhi, for the appellant.
T. A. Ramachandran, for the respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The freak but few facts of this appeal appear to highlight an issue of morality versus legality.
But closer scrutiny whittles down this conflict and induces us to dismiss the appeal, subject to certain observations warranted by the circumstances of the case.
We may proceed straight to a miniaturised statement of the circumstances giving rise to the controversy before us.
The appellant has been the owner of a mango grove of long ago from which he has been deriving income by way of fruits and fallen trees.
Way back in 1939 40 he claimed this income to be agricultural and therefore immune to Central income tax.
His plea was over ruled by the Income tax officer, but adverse orders notwithstanding, the assessee reached the High Court undaunted by the disappointment he met with as he steered through the statutory spiral of authorities.
Unfortunately, on account of the zigzag course of this litigation which had its deck by deck slow motion, more than two decades passed before the High Court could pronounce at long last in favour 5 of the appellant holding that the income in dispute was agricultural t income and therefore could not be taxed.
The State did not carry the case further to this Court and thus the decision of the Allahabad High Court rendered on March 21, 1963 became final.
As a proposition of law, on the facts of the case the ruling was that such income as arose from mango fruits and fallen trees was agricultural income and therefore outside the pale of the 51 Income tax Act (vide s.4(3) of the Income tax Act).
We have no reason to disagree with this view and proceed to dispose of this writ appeal which has come to us by certificate under article 133(1)(a) of the Constitution on the footing that for all the assessment years with which we are concerned as will be explained presently what has been taxed and is in dispute is agricultural income.
Some more facts are necessary to bring out the real grievance of the appellant.
We have already mentioned that although the first assessment related to the year 1939 40, the final pronouncement by the High Court came only in 1963.
During this protracted pendency, years rolled on.
and, at the base, the tax officer was busy ritually repeating annually, by his orders, the tax impost on similar income accruing year after year treating it as non agricultural income.
In deed, the assessee had been assessed to tax for 21 years on this assumption but he filed appeals only for 8 years, and even that only upto the Appellate Assistant Commissioner 's level where he left it off apparently in the hope that if ultimately the High Court upheld his contention for one year, the tax authorities would give effect to that holding for all the years not a fantastic assumption if Government were a virtuous litigant.
At this stage we may state that for the years 1940 41, 1941 42, 1947 48, 1949 50, 1950 51 and 1958 59 to 1961 62 appeals had been preferred most of which were dismissed although in one year or so the appellate authority gave relief accepting the plea of agricultural income.
So far as the Income tax officer was concerned, he uniformly adopted the hostile line of treating the income as non agricultural and, except for the years referred to above, the assessee did not think it necessary was it wise or otherwise the sequel proves to challenge these assessment orders.
But when the High Court held in his favour in 1963 for the assessment year 1939 40, he applied for refund to the Central Board of` Direct Taxes of the tax paid by him for the other years on the glib ground that, limitation apart, the income having been found by the High Court to be agricultural, had to be excluded from the tax.
The Central Board of Revenue, however.
declined to oblige him and when on May 11, 1968 his petition was rejected, the assessee moved the High Court under article 226 seeking many reliefs including a direction to the Central Board to issue 'necessary instructions to the Income tax officer, Faizabad,. for the purpose of passing final assessment orders for the assessment years 1940 41 to 1961 62 and for another writ 'quashing the order of the Central Board of Direct Taxes dated 11th May 1968 wherein the Board declined to interfere in the matter in dispute '.
A Division Bench of that Court dismissed the writ petition on two grounds: (a) that the assessment orders for the relevant years had become final the assessee not having taken advantage of his remedy provided for in the statute; (b) that several years had lapsed between the last impugned order which related to the assessment year 1961 62 and the writ petition which was filed in September 1968.
However, the Court made an observation that if so advised, the petitioner may file appeals under section 30 of the Indian Income tax Act, 1922 and pray for condonation of delay under section 30(2) of the said Act.
Surely discomfited.
52 the assessee has come up to this Court hopefully and urged that the various assessment orders were void, that the State was bound to refund what had been illegally levied, that the Central Board should have exercised its power to give proper directions for refund and that in and case justice should be done to the party who should not be penalised for not having filed appeals and second appeals and references to the High Court year after year a repeat performance which would add to the totality of avoidable litigation since the High Court was seized of the identical point between the same parties.
At the first flush it may seem that the assessee 's agricultural income having been taxed illegally, a refund was obligatory and the fanatical insistence on the legal 'pound of flesh ' based on limitation and finality was not to be expected from a party like the State.
Indeed, one might go to the extent of quoting the cynical words of the ancient legal wit: "Law and equity are two things which God hath joined, but which Man has put asunder".
We have to examine the merits of the case in the light of the facts we have set out above and of the principles settled by this Court in regard to the exercise of the writ jurisdiction of the High Court.
Shri Manchanda, alive to the spinal weakness of his case in law in that his client had, by option for inaction, permitted the impugned order to become final and listless by lapse of limitation period, played upon judicial sensitivity to justice, equity and good conscience.
He argued that regardless of statutory remedies and rules of limitation, the High Court had power under Art 226 to quash orders loudly illegal, deprivatory of property and promoting unjust enrichment by the State.
He also urged that the assessment orders were void and the routine challenges through prescribed channels could be bypassed and frontal attack made under article 226 in such extraordinary situations.
Sri Ramachandran, appearing for the Revenue, scouted the supplicant plea for equity as unavailable in a court of law.
He also insisted that the orders of assessment having become conclusive could not be invaded by the back door, that the orders were not nullities but good until set aside through the regular statutory processes and that the alleged jab on the face of justice is imaginary, the party himself having been guilty of gross laches.
We will examine these pleas, not in the general terms set out but within the confines of the particular facts of the present case.
We must pause to state one important aspect of the assessment orders since that oxygenates Sri Manchanda 's submission on equity.
The Income tax officer, aware of the pendency in the High Court of the precise question confronting him about the agricultural character of the income, had in some years (e.g. 1952 53) recited in his order under section 23(3) of the Act, words which kindled hope in the assessee somewhat in the following terms: "Income from Mango gul Mahuwa and Kathal have been excluded from the total income and treated as agricultural 11 income by the learned Appellate Asstt.
Commissioner of In come Tax Banaras in this very case but this very point is 53 already under consideration before the Hon 'ble High Court of Judicature at Allahabad.
However with respects to the learned A.A.C. and pending the decision of the Hon 'ble High Court on this point the sum of Rs. 7,960/ is being added back " But the palliative is absent in the orders relating to many other years and, above all, the orders are all made under section 23(3), which means final assessments neither provisional assessments being under section 23(3) nor conditional assessments, such orders being unknown to the scheme of the Act.
The points in controversy may be briefly formulated: (1) Are the orders of assessment, which have not been assailed, amenable to challenge under article 226 of the Constitution, or is such jurisdiction inhibited because the regular statutory remedies have not been pursued ? (2) Is the appellant guilty of laches to such an extent that the extra ordinary remedy in writ jurisdiction `l) should not be exercised in his favour? (3) Are the orders of assessments nullities since they are taxes levied on agricultural income, and if so, is the appellant entitled to claim a refund ? (4) Is the Central Board of Direct Taxes charged with any statutory duty to grant refunds even in cases where orders of assessment, though illegal, have been allowed to become final by the wilful default of the assessee ? (5) If justice is on the side of the assessee but law against him, can he seek redressal in a Court on that footing ? We may deal with these points more or less as a package submission but not in the order in which they have been itemised.
Counsel has placed considerable stress on the last point which we deal with first.
It is true that two stark facts generate some considerations of conscience in favour of the assessee.
The High Court having declared this kind of income which was taxed by the income tax officer, 'agricultural income ', it is not liable to tax under the Income tax Act (section 4(8)).
In any case, after the Constitution of India came into force, the Union List in the Seventh Schedule expressly excluded agricultural income as forbidden zone for the Centre, so much so it would be an unconstitutional levy if a taxing authority imposed tax on agricultural income purporting to act under the Income tax Act.
It may, therefore, well be argued that all the assessments, notwithstanding that no appeals were filed, were void being beyond the jurisdiction of the officer to tax.
There is a basic difference between the decision in Comm.
of I.T. vs Tribune Trust, 54 Lahore (1) cited by Sri Ramachandran and the present case.
There, one of the exemptions statutorily provided in favour of income derived from property held under trust wholly for religious or charitable purposes, fell for consideration.
The Judicial Committee held that such assessments, regularly made, which failed to give the exemption claimed, were not nullities: "The assessments were duly made, as they were bound to be made, by the Income tax officer in the proper exercise of his duty.
It does not appear to their Lordships that they were a 'nullity ' in any other sense than that if they had been challenged in due time they might have been set aside.
" True, mere exemptions from taxation of income otherwise competently taxable fell wholly within the jurisdiction of the officer for determination.
There is a fundamental difference where the claim is that agricultural income is beyond the legislative competence of Parliament to enact and altogether outside the jurisdiction of the Income tax officer.
It may well be contended that the impost is ultra vires his powers and therefore a nullity.
Merely because an order has been passed by the officer and has not been appealed against, it does not become legal and final if otherwise it is void; for instance, if there is a flagrant violation of natural justice, the order by a Tribunal may be a nullity.
However, we need not explore this penumbral area because we are satisfied, for reasons to be set out below, that the writ petition itself is misconceived and is bad for unexplained delay.
Even so we may state that the levies for the various years would have undoubtedly been set aside and refund ordered if only the assessee had been diligent enough to make annual appeals to higher authorities.
In that sense there is some justice on his side.
What is more, in some of the orders, as earlier indicated, the Income tax officer himself has stated that he is making the assessments finally but he takes note of the pendency of the identical question before the High Court.
He has vaguely quickened wishful thinking in the assessee that in the event of his winning in the High Court he may somehow get a refund.
We have set out what Mr. Manchanda has pressed before us as the 'justice ' of his case.
Assuming for a moment that 'justice ' is on his side, law is against him because the assessment orders are now unassailable except perhaps under article 226 or article 32 with which we will deal separately.
Can a court over ride law to effectuate what it conceives to be justice ? Any legal system, especially one evolving in a developing country, may permit judges to play a creative role and innovate to ensure justice without doing violence to the norms set by legislation.
But to invoke judicial activism to set at nought legislative judgment is subversive of the constitutional harmony and comity of instrumentalities.
So viewed, the appeal of Sri Manchanda, for relief in the name of justice must fail.
If the statute speaks on the subject the judge has to be silent and stop.
In a contest between morality and legality.
the court, in clear cases has no option.
Here, both sides agree that 55 the assessments are final, that limitation has long ago run out, that the Central Board has no judicial power to upset what has been decided by lesser tribunals.
Not being a fringe area for judicial activism to play the submission must suffer rejection.
The surviving issue of some moment is whether the writ jurisdiction is muzzled by statutory finality to orders regardless of their illegality.
We think not.
If the levy is illegal, the constitutional remedy goes into action.
The Privy Council ruling does not contradict this rule of law because for one thing there the case was income taxable but for a statutory exemption; here the income is agricultural and beyond the orbit of the Income tax Act.
For another, the Judicial Committee was not considering the sweep of the constitutional remedy de hors statutory changes but was construing the plea of 'nullity ' with reference to an order Passed, erroneously may be but within jurisdiction and impugned before the statutory tribunals.
Even so, the journey of the appellant is beset with insurmountable hurdles.
article 226 is not a blanket power, regardless of temporal and discretionary restraints.
If a party is inexplicably insouciant and unduly belated due to laches, the court may ordinarily deny redress.
And if the High Court has exercised its discretion to refuse, this Court declines to disturb such exercise unless the ground is too untenable.
To awaken this Court 's special power gross injustice and grievous departure from well established criteria in this jurisdiction, have to be made out.
In the present case, long years have elapsed not only after the impugned orders but even after the High Court held the taxed income agricultural.
The reason for the inaction is stated to be an illusory expectation of suo moto modification of assessment orders on representation by the party.
The High Court has examined and dismissed the plea and consequentially refused relief.
We do not think that in so refusing relief on ground of laches the High Court exercised its discretion arbitrarily or improperly.
And the sorry story must thus close.
When at the end of the legal tether, the appellant made a plaintive plea for considerateness based on good conscience.
No doubt, we feel this is a case where, had the party not been optimistically asleep but had diligently appealed, the tax could not have been recovered by the State.
We equally see some compassionate merit in his complaint that a few of the assessment orders made misleading reference to the pendency of the High Court being seised of the identical legal issue.
But it is no good alibi in expiation of the sin of gross delay in coming to the High Court.
It is doubtful if the Central Board can exercise any judicial power and direct refund.
Nor is there a statutory duty cast on it to consider applications for refund and so a writ of mandamus could not issue from the Court.
Even so, it is always open to the State, where the justice of the case warrants reconsideration of the levy of a tax illegally imposed to view the situation from an equitable standpoint and direct refund wholly or in part.
This perhaps is case where a liberal approach may well be justified.
The Court has, however, jurisdiction only when there is a statutory duty.
There being 56 none, the issuance of a writ hardly arises.
We endorse the observations of the High.
Court that, despite inordinate delay, the appellate authority, if moved under section 30(2), will give due regard to the happenings in between, in exercising its power of condonation of delay in filing appeals.
We also make it clear that no observation made in this judgment with regard to delay on the part of the assessee in moving the High Court under article 226 shall be taken into account to the prejudice of the assessee while considering the condonation of the delay on his part in preferring the appeal/appeals, if any, filed by him to the.
appropriate authority under the Act.
The appeal fails and is dismissed.
The circumstances are such that the parties may appropriately be, directed to bear their respective costs.
We direct accordingly.
P.H.P. Appeal dismissed.
| IN-Abs | The appellant an owner of a mango grove has been deriving income by was of fruits and fallen trees.
In the year 1939 40 he claimed this income to be agricultural income and therefore immune to income tax.
The Assessing Authorities negatived the claim of the appellant.
The High Court in the year 1963 held the income to be agricultural income and therefore exempt from income tax.
The State did not challenge the decision of the High Court.
The appellant did not challenge the orders of the Assessing Authorities for the subsequent years i.e. 1940 to 1962 in the hope that if ultimately the High Court upheld his contention for one year the Tax Authorities would give effect to that holding for all the years.
The appellant thereafter approached the Central Board of Revenue for refund of the tax paid by the appellant in respect of the subsequent years.
The Central Board rejected the petition in 1968.
The appellant moved the High Court under article 226.
The High Court refused to interfere both on the ground of delay as well as on the ground that the assessment orders for the relevant years had become final, the assessee not having taken advantage of his remedy provided for in the statute.
The High Court.
however, made an observation that if so advised the appellant might file appeals under section 30 of the Income Tax Act, 1922 and pray for condonation of delay under section 30(2) of the said Act.
appeal by Special leave to this Court, it was contended by the appellant.
(1) Since various assessment orders were void the State was bound to refund what had been illegally levied.
(2) The Central Board should have exercised its power to give appropriate directions for refund.
(3) Regardless of statutory remedies and rules of limitation, the High l; Court had power under article 226 to quash the illegal orders and to prevent unjust enrichment by the State.
The respondents contended: (1) The appellant is guilty of laches.
High Court has rightly exercised its discretion.
This Court may not interfere with it (2) The assessment orders have become final (3) The Central Board of Direct Taxes has no statutory duty to grant refund even in cases where orders of assessment, though illegal, have been allowed to become final by.
wilful default of the assessee.
Dismissing the appeal.
^ HELD: (1) The imposition of tax on agricultural income is beyond the legislative competence of Parliament and altogether outside the jurisdiction of the Income Tax officer.
It may well be contended that the impost is ultra vires.
its powers, and therefore, a nullity.
We need not consider this aspect especially since the writ petition itself is bad for unexplained delay.
[54C E] 50 (2) The writ jurisdiction is not measured by statutory finality to orders regardless of their illegality.
If the levy is illegal the constitutional remedy goes into action.
However, article 226 is not blanket power regardless of temporal and discretionary restraint.
of a party is inexplicably and unduly delayed due to laches the court may ordinarily deny redress.
If the High Court has exercised its discretion to refuse the redress, this court declines to disturb such exercise unless the ground is too untellable.
The High Court I in refusing relief on ground of laches did not exercise its discretion arbitrarily or improperly.
[55B. D E] (3) It is doubtful if the Central Board can exercise any judicial power and direct refund.
Even so, it is always open to the state where the justice of the ease warrants reconsideration of the levy of a tax illegally imposed, to view the situation from an equitable standpoint and direct refund wholly or in part.
In this case a liberal approach may well be justified The Appellate Authority if moved under section 30(2) will give due regard to the happenings in between exercising its power of condonation of delay in filing appeals and no observations made in this judgment or in the High Court judgment shall be taken into account to the prejudice of the appellant while considering the condonation of delay by the appropriate authority.
[55G 56C]
|
Civil Appeal No. 1264 of 1969.
Appeal by certificate from the judgment and order dated the 12th Feb., 1968 of the High Court of Assam and Nagaland at Gauhati in First Appeal No. 21 of 1963.
D. Mookherjee and section K. Nandy, for the appellant.
M. H. Chowdhury and section N. Chowdhury, for the respondent The Judgment of the Court was delivered by KRISHNA IYER, J.
The concurrent conclusions of fact reached by both the courts below regarding the quantum of compensation payable to the appellant on the acquisition of his land for a public purpose by the State are assailed by Shri D. Mukherjee before us on the ground that the amount is grossly inadequate.
Having heard him in the light of the High Court 's reasoning, we are persuaded to affirm the finding.
100 bighas of land belonging to the appellant (a Tea Planter) were first requisitioned by Government to settle landless people and the owner 'gladly ' agreed to surrender the area which, on his own showing, was lying unused.
Later, the State proceeded to acquire the land under s.7 (1A) of the Assam Land (Requisition and Acquisition) Act, 1948 (Assam Act XXV of 1948).
The sole dispute turns on whether the lesser scale of compensation proceeded under s.7(1A) or the larger one stipulated under s.7(1) is attracted to the situation.
The simple statutory test that settles the issue is to find out whether the land acquired is Lying fallow or uncultivated.
If it is, a small compensation alone is awardable, as laid down in s.7(1A) of the Act.
On the other 69 hand.
if it is ten garden, the quantum is as under section 23 of the Land Acquisition Act, 1894.
This decisive factor lends itself to easy decision, because a plethora of evidence, to most of which the appellant is a party, proceeds on the basis that the land in question is fallow.
The High Court has collected and considered the prior statements and other materials leading to the reasonable holding that s.7(1A) appropriately applied to this case.
It follows that the appeal has no merit and deserves to be dismissed.
We order both parties to bear their respective costs.
Subject to this direction, the appeal is dismissed.
V. M. K. Appeal dismissed.
| IN-Abs | 100 bights of land lying unused were requisitioned by Government to settle landless people.
The appellant, a tea planter, willingly surrendered the same.
But, when the State proceeded to acquire the land under section 7(1A) of ' the Assam Land (Requisition and Acquisition) Act, 1948 he disputed the payment of lesser scale of compensation prescribed under section 7(1A) of the Act. 'The Courts below concurrently held against him.
Dismissing the appeal, ^ HELD: The simple statutory test that settles the issue is lo find out whether the land acquired is Lying fallow or uncultivated.
If it is, a small compensation alone is awardable, as laid down in section 7(1A) of the Act.
On the other hand, if it is tea garden, the quantum is as under section 23 of the Land Acquisition Act, 1894.
Plethora of evidence adduced in this case clearly proceeds on the basis that the land in question is fallow.
The High Court has, therefore, rightly held that section 7(1A) appropriately applied to this case.
[68H 69B]
|
Civil Appeal No. 98 of 1975.
From the Judgment and order dated 25 7 1974 of the Madras High Court of Judicature at Madras in Writ Appeal No. 519 of 1968.
K. section Ramamurthi and A. T. M. Sampath, for the appellant.
M. K. Ramamurthi and Vineet Kumar, for respondent No. 1.
The Judgment of the Court was delivered by KRISHNA IYER, J.
A spiral of reversals is the fate of this litigative battle between the appellant and the first respondent over a permit to ply a bus on the route between Madurai and Paramakkudi, Tamil Nadu.
While its admission into this Court was by special leave, the first round of the contest was fought before the RTA (Regional Transport Authority) which, on an evaluation of the relative merits and demerits of the rivals, granted the permit to the present appellant, but this victory was short lived because, at the second stage of the legal bout, the STAT (State Transport Appellate Tribunal) held that the 103 respondent before us had better claims.
The worsted appellant, invoked the writ jurisdiction of the High Court under article 226 and the learned Single Judge, who heard the petition, re judged the relevance and weight of the points, pro and con, and as a result of this adjudicatory exercise of facts, demolished the order of the STAT.
The learned Judge disagreed with the conclusion of the STAT instead of sending the case back for a fresh look at the merits of the matter, set aside the permit granted to the respondent and affirmed the award in favour of the appellant.
Thereupon, the respondent moved a Division Bench of that Court which felt that a full scale re appraisal of the points for and against such claimant was in excess of the jurisdiction of the Single Judge under article 226, although it noticed that certain factors not relevant to the adjudication had been taken into consideration by the STATE.
Consequently, the order of the learned Judge was set aside, the result being that the respondent 's permit was restored. 'the appellant urged that the decision of the Division Bench of the High Court was utterly wrong and somewhat casual, while that of the learned Single Judge was careful, elaborate and correct.
Of course, this view of the matter was hotly controverted by counsel for the 1st respondent but, after having heard both Shri K. section Ramamurthy, for the appellant, and Shri M. K. Ramamurthy.
for the respondent, we are satisfied that the reluctant course of remitting the whole case to the STAT for a de novo disposal is called for as a matter of law and in the interests of justice The boundaries of the High Court 's jurisdiction under article 226 are clearly and strongly built and cannot be breached without risking jurisprudential confusion (Shri Rama Vilas Service (P) Ltd. v, C. Chandrasekharan(1).
The power is supervisory in nature, although the Judges at both the tiers, in the instant case, have unwittingly slipped into the subtle, but fatal, error of exercising a kind of appellate review.
Shri M. K. Ramamurthy, for the respondent, was right in pointing out that the learned Single Judge went into the factum and weight of the claims which could be put in the scales in choosing the better of the two applicants for the permit.
However, the Court rightly pointed out that some relevant factors had been ignored by the STAT (for example.
that the first respondent 's history sheet was not clean) and included in the judicial verdict factors which were extraneous, such as `that the bus of the petitioner did not, in fact, ply from 2 9 65 to 4 12 65, this being attributable to non payment of surcharge rather than operational inefficiency.
A reading of the learned Single Judge 's judgment leaves us in no doubt that he had undertaken an evaluation of the merits on his own.
This, undoubtedly, was beyond the jurisdiction of the High Court.
Nor is it possible to support the direction that if there were errors of law vitiating the STAT 's finding, the case need not to back for fresh consideration but could be finally decided by the High Court itself.
In Writ Appeal, the leaned Chief Justice, speaking for the Division Bench of the High Court, disposed of the case in a short paragraph which hardly did justice to the order appealed against.
May be that 104 order was wrong and unsustainable, but while reversing it valid reasons had to be adduced.
All that we find in the appellate judgment is a partial admission that extraneous considerations were inputs of the order of the STAT and a brief disposal of the whole matter in a single sentence, as it were "Even so, there is nothing in the order of the Tribunal to support it.
" While the Division Bench was perhaps justified in.
Observing that while sitting on the writ side, judicial review should have been more restricted that while sitting on the appellate side, its own judgment was vulnerable because of the plain finding that what was not pertinent was taken into consideration by the STAT.
For instance, The learned Chief Justice observed: 'It is no doubt true that the non performance of service after the grant was made, cannot go into the computation and the reference relating to night halt might will have been avoided in its discussion. ' 'The non performance of service ', which is slightly obscure, but we read it in the context as meaning the failure to ply the bus on the route is question subsequent to the grant of the permit.
We express no opinion on the soundness of the observation but it is clear that the Division Bench itself has plainly accepted the position that what was not, according to it, relevant had gone into the reckoning when the STAT awarded the permit to the appellant.
In this view, this judgment cannot also be sustained.
1 The fair course would, therefore, be to set aside the judgment under appeal and send the whole case back to the STAT to hear the case afresh, consider relevant factors bearing upon 'public interest ' as highlighted in s.47 of the Motor Vehicles Act and dispose of the appeal before it in accordance with law, guided by the decisions of this Court and untrammeled by any observations made either by the Single Judge or by the Division Bench.
Currently, the respondent is plying his bus on the route and we direct that the status quo be maintained and he will continue to operate on the route until the appeal is disposed of by the STAT.
Of course, the RTA passed its orders as early as 1966 November and is it thinks that public interest demands the need for an extra bus to ply on the route to cope with the traffic, it will be open to the RTA to grant a permit, pending disposal of the appeal, to the present appellant.
The fluctuating fortunes of the combatants for the permit have been such that it is appropriate to direct both parties to bear their costs throughout.
P.B.R. Case remanded.
| IN-Abs | The Regional Transport Authority granted a permit to the appellant but this decision was reversed by the State Transport Appellate Tribunal.
In a petition under article 226 of the Constitution a single Judge of the High Court, on an examination of the merits of the case, reversed the view of the Stale Transport Appellate Tribunal.
On appeal, a Division Bench of the High Court held that a full scale reappraisal of the points was in excess of the jurisdiction of the single Judge under article 226.
the Division Bench restored the order of the State Transport Appellate Tribunal.
On appeal to this Court, remitting the, case to the State Transport Appellate Tribunal, ^ HELD: The boundaries of the High Court 's jurisdiction under article 226 of the Constitution are clearly and strongly built and cannot be breached without risking jurisprudential confusion.
The power of the High Court under article 226 be supervisory in nature.
[103E] Sri Rama Vilas Service (P) Ltd. vs C. Chandrasekharan ; referred to.
The single judge had undertaken an evaluation of the merits on his own which was beyond his jurisdiction.
The Division Bench disposed of the case in a short paragraph which hardly did justice to the order appealed against.
But while reversing the order appealed against valid reasons had to be adduced.
While the Division Bench was justified in observing that, sitting on the writ side, judicial review should have been more restricted than while sitting on the appellate side, its own judgment was vulnerable because of the plain finding that what was not pertinent was taken into consideration by the Appellate Tribunal.
[103G, H; 104A B]
|
Appeal No. 535 of 1974.
Appeal by special leave from the Judgment and order dated the 14th January, 1974 of the Calcutta High Court in Award Case No. 181/1973.
section T. Desai, B. P. Maheshwari, Sharad Manohar and Suresh Sethi, for the appellant.
Somnath Chatterjee, and P. K. Mukherjee, for the respondent.
The Judgment of the Court was delivered by 138 MATHEW, J.
This appeal.
by special leave, is directed against an order of a learned judge of the ' Calcutta High Court allowing an application filed under section 37(4) of the (hereinafter called the Act) for extension of time to refer the matter of arbitration.
The facts are these.
The appellant is a company doing business in general insurance.
The respondent carries on business as a common carrier of goods.
The respondent had taken out three transit policies of insurance renewable every year.
The policy which is relevant for the purpose of the present appeal is freight policy No. CL1/RE P/257 taken by the respondent in January, 1969 from the appellant against risk of loss or damage to any goods or merchandise during transit.
In June 1971, the respondent declared to the appellant that it had received for transit a consignment of 185 packages of general merchandise alleged to be of the total value of Rs. 1,10,000 (approx) for transportation from Calcutta to various places in Assam and Tripura and paid the requisite premium on the value of goods and the goods stood insured under the said policy.
According to the respondent, on the evening of 29 6 71, the consignment of 185 packages was loaded in Truck No. WGH 8261, and the truck left Calcutta on the same day for Gauhati.
It is alleged that the owner of the truck informed the respondent that after the truck reached Barasat on the night of 29th June, 1971, there was a robbery and neither the truck, nor the driver, nor the merchandise could be traced.
On 1 7 1971, the respondent sent letters to the officer incharge of Jarabagan Police Station, the Assistant Commissioner of Police, Intelligence Branch, Lall Bazar Calcutta and the Deputy Commissioner of Police, Intelligence Branch intimating them that the truck which left Calcutta on 29th June 1971 had not reached Beniagram at the scheduled time and that the truck, the driver, the assistant and the merchandise could not be traced.
A copy of the letter sent to the Assistant Commissioner of Police, Lall Bazar, Calcutta was sent to the appellant and it was received by the appellant on 2 7 1971.
On 1 7 1971 and 21 9 1971, the respondent lodged the claim for loss with the appellant on the basis that the loss was covered by the policy.
On 3 7 1971, the appellant sent a letter to their respondent calling upon the respondent to furnish the particulars as regards the name and address of the owner of the vehicle, the name and address of the driver and other particulars.
On 21 9 1971, the respondent informed the appellant by a letter that the information and the records asked for in the letter dated 3 7 1971 were already supplied to Mr. A. L. Chopra, the agent of the appellant on 5 7 1971, when he called upon the respondent for that purpose.
On 10 10 1971, the appellant wrote to the respondent informing that until the report of the investigation by the police was produced by the respondent, it would not be possible for the appellant to proceed further in the matter.
The appellant received a copy of the investigation report by the police at Barasat on 12 5 1972.
The report was to the effect that the alleged episode of robbery was false.
On this basis, the appellant sent to the respondent a letter dated 4 8 1972 stating the contents of the investigation report of the police at Barasat asking for the investigation report of Jarabagan 139 Police Lall Bazar Police .
Thereafter the, appellant intimated the respondent by letter dated 16 2 1973 disclaiming its liability under the freight policy as regards the loss of the consignment of 185 packages.
On receipt of the letter, the respondent wrote to the appellant on 30 3 1973 asking for the grounds on which the appellant disclaimed its liability.
The appellant sent a letter after two months on May 30, 1973, stating that it had nothing to add to what had been stated in its letter dated February 16, 1973.
Thereafter, the respondent took the advice of solicitors and counsel.
On 17 8 1973, the respondent filed the application before the High Court under section 37(4) of the Act for extension of time for referring the dispute to arbitration till a date 15 days after the order of the High Court.
In the application, the respondent stated the reasons for the delay in filing the application in court after receiving the letter dated May 30, 1973.
In answer to the application, the appellant contended that section 37(4) of the Act had no, application, that the court had no jurisdiction to extend the time and that even if the court had jurisdiction, there were no valid grounds for extension.
The application came up for hearing before a learned Judge and lie passed the order extending the time to, refer the dispute to arbitration within a fortnight from 14 1 1974.
The, question that arises for consideration is whether the High Court had power to extend the time and if it had power, whether it exercised its power properly in extending the time for preferring the claim to arbitration.
That will depend upon a correct interpretation of the relevant clauses of the policy and of section 37(4) of the Act.
Clause I of the policy states that notice of any accident, loss or damage affecting the insurance shall be given to the Company at the earliest possible date and not later than 30 days from the date of the accident, loss or damage.
Clause 2 of the policy provides that in the event of any loss or damage covered by the insurance shall produce and give to the Company all evidence as may be reasonably required by the Company.
Clause 9 provides that if the insured shall make any claim knowing the same to be false or fraudulent as regards the amount or otherwise the insurance shall become void and all claims thereunder shall be forfeited.
Clause 11 states that all differences arising out of the contract shall be referred to the decision.
of an arbitrator to be appointed in writing by the parties or if they cannot agree upon a single arbitrator, to the decision of two arbitrators, one to be appointed in writing by each of the parties within one calendar month after having been required in writing so to do by either of the parties.
It further provides that the making of an award by the arbitrator or arbitrators shall be a condition precedent to any right of action against the Company.
Clause 12 which is the material '.
clause for the purpose of this case reads : "If the Company shall disclaim liability to the Insured for any claim hereunder and such claim shall not within three calendar months from the date of such disclaimer have been 140 preferred to Arbitration under the provisions herein contained, then the claim shall for ill p urposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder." Section 37(4) of the Act reads as follows "Whether the terms of an agreement to refer future differences to arbitration provide that any claims to which the agreement applies shall be barred unless notice to appoint an arbitrator is given or an arbitrator is appointed or sonic other step to commence arbitration proceedings is taken within a time fixed by the agreement and a difference arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case undue hardships would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper." _ It was not seriously contended that section 37(4) of the Act was not applicable to the agreement embodied in the policy in question and the High Court had no jurisdiction to extend the time.
The only contention pressed on behalf of the appellant was that in the circumstances of the case, there would be no undue hardship to the respondent if the time for preferring the claim to arbitration is not extended and, therefore, the High Court went wrong in exercising the discretion by extending the time.
There are no decisions of this Court or of the High Courts concerning the relevant consideration to be taken into account in exercising the jurisdiction for extending time under section 37(4) of the Act.
Section 16(6) of the English Arbitration Act, 1934 which is practically the same as section 27 of the English Arbitration Act of 1950 is in pari materia with section 37(4) of the Act.
Therefore, the interpretation placed by English Courts upon section 16(6).
and section 27 of the respective ,Acts has great persuasive value.
The English courts originally took a very strict and narrow view ,of the words "undue hardship".
In Steamship Co. of 1912 etc.
vs Indlo American Grain Co. etc.(1) Lord Parkar, C.J. said : "It has been said, over and over again by this Court, that there must be very special circumstances for extending the time.
Of course, if a valid claim is barred, there is hardship, but that is not what is provided for by the clause, and before this Court can extend the time they must be satisfied that the hardship amounts in the particular case to undue hardship. . .
In Watney, Comba, Raid & Co. vs E. Al.
Dower & Co. Ltd.(2) Goddard, C.J. said : "I desire to say in the clearest possible terms that the mere fact that the claimant is barred cannot be held to be an 1. 2. , 131.
141 undue hadship, which is what the section requires to be found by the court before it extends the time.
The section does not mean that this Court can take out of the contract the provision which will bar the claim if it is not pursued in time.
They have no power to do that.
The only thing they have power to do is to extend the time if undue hardship is caused.
One, can visualise certain cases of undue hardship.".
In F. E. Hookway & Co. Ltd. vs H. W. H. Hopper & Co.(1) where the buyers made an application for extension of time under section 16(6) of the English Act of 1934, Denning, L.J. observed That the extent of delay in a relevant circumstances to be considered, that if the delay is not on account of the fault of the buyer, it would no doubt, be an undue hardship on him to hold the clause against him but, if the delay is his own fault, the hardship may not be undue as it may be a hardship which it is due and proper that he should bear.
He further said that another relevant circumstance was whether there was evidence of any loss on any sub contracts and claims by sub buyers or any complaints by them and if there was evidence of such loss or claims, then the court would take a lenient view of the delay and bold that, notwithstanding it, there was undue hardship on the buyer.
In Stanhope Steamship Co. Ltd. vs British Phosphate Commissioners(2), Singleton.
J., in delivering the judgment said "What, then, is the meaning of "undue hardship" ? "Undue", it is said by Mr. McCrindle, means something which is not merited by the conduct of the claimant.
That may be right.
If the result of claimant 's being perhaps a day late is so oppressive, so burdensome, as to be altogether out of proportion to the fault, I am inclined to think that one may well say that there is undue hardship.
Both the amount at stake and the reasons for the delay are material considerations " In Librarian Shipping etc.
vs A King & Sons(3), the facts were these.
A vessel was let on a voyage charter party in Centrocon from containing an arbitration clause under which any claim had to be made in writing and the claimant 's arbitrator had to be appointed within three months of final discharge.
A fire occurred on board the vessel during leading.
Both the owners and the charterers had claims against each other.
The time limit was to expire on June 26, 1966.
The parties were negotiating and.
after considerable correspondence.
a meeting between both parties was arranged for June 27, 1966, with a view to settlement.
The meeting did not result in a settlement.
The charterers first realised that time had expired which the owners sought an extension of it by consent, nine days after the expiry.
The charterers had not contributed to the delay on the part of the owners in relation to the arbitration clause.
The charterers did not consent to the time being extended.
The owner , applied under section 27 of the Arbitration Act.
1950 for an extension of time on the ground that "undue hardship" would otherwise be caused to them.
Their claim 1. 2. 3.
142 amounted to about pound 33.000.
The master granted an extension of time, but on appeal the judge refused it.
On further appeal the court by a majority said that if the time were not extended, undue hardship would be caused to the owners since they would be deprived of what might be a valid claim for pound 33,000 by a delay of only a few days due to excusable inadvertence, that the charterers would not in any way be prejudiced by time being extended and so the court would exercise the discretion conferred by section 27 of the Arbitration Act, 1950, and 'Would extend the time.
In the course of his judgment Lord Denning, M. R. observed that in the past the courts had been inclined to emphasize the word "undue" and to say that if a man does not read the contract and is a day or two late, it is a "hardship": but it is not an "undue hardship", because, it is his own fault but that the interpretation was narrow.
He said that these time limit clauses used to operate most unjustly on claimants for, they found their claim barred by some oversight and it was to.
avoid that injustice the legislature intervened so as to enable the courts to extend the time whenever "in ,the circumstances of the case undue hardship would otherwise be caused".
He also said that the word "undue" in the context simply means excessive hardship greater than the circumstances warrant and that even if a claimant has been at fault himself, it is an undue on him if the consequences are put of proportion to his fault.
He further stated that even if a claimant makes a mistake which is excusable, and is in consequence a few days out of time, then if there is no prejudice to the other side, it would be altogether too harsh to deprive him of ,all chance for ever of coming and making his claim and that is all the more so,, if the mistake is contributed or shared by the other side.
He , then observed "It was said that this was a matter for the Judge 's discretion.
True enough.
We have, however, said time and again that we will interfere with a Judge 's discretion if satisfied that the discretion was wrongly exercised.
In any case the judge was, not exercising an unfettered discretion.
He felt himself fettered by the. trend of the authorities to give the words "undue hardship" a narrow meaning.
I think that we should reverse that trend and give the words their ordinary meaning, as Parliament intended.
It would be "undue hardship" on the owners to hold them barred by the clause.
" In the same case, Salmon, L.J. said that the arbitration clause put it out of the power of the court to grant any relief to a claimant who bad allowed a few days to run beyond the period specified in the clause even although the delay could have caused no conceivable harm to the other side.
He said that it would be hard and unjust if a man with a perfectly good claim for thousands of pounds worth of damage for breach of contract inadvertently allowed a day or two to go by was deprived of the right to be compensated for the loss which he bud suffered, even though the other party bad not been in any way affected by the delay and might perhaps have been guilty of a deliberate breach of contract and that it was to remedy this hardship and injustice that the legislature intervened to alter the Law.
He further said 143 "This enactment was a beneficent reform, liberalising the law in an admittedly narrow sector of the commercial field.
I have heard it said that when people have spent their lives in chains and the shackles are eventually struck off, they cannot believe that their claims are no longer there.
They still feel bound by the shackles to which they have so long been accustomed.
To my mind, that factor may explain the court 's approach in some of the cases to the problem with which we are now faced.
He then summed up his conclusion as follows "In considering this question the court must take all the relevant circumstances of the case into account; the degree of blameworthiness of the claimants in failing to appoint an arbitrator within the time; the amoun t at stake, the length of the.
delay; whether the claimants have been misled, whether through some circumstances beyond their control it was impossible for them to appoint an arbitrator in time.
In the last two circumstances Which I have mentioned, which do not arise here, it is obvious that normally the power would be exercised; but those are not the only circumstances and they are not, to my mind, necessary circumstances for the exercise of the power to exte nd time.
I do not intend to catalogue the circumstances to be taken into account, but one very important circumstance is whether there is any possibility of the other side having been prejudiced by the delay.
Of course ' if there is such a possibility, it might be said that it is no undue hardship on the owners to refuse an extension of time because, if the hardship is lifted from their shoulders, some hardship will fall on the shoulders of the charterers, and, after all, the delay is the owners ' fault.
" Therefore, we will have to take a liberal view of the meaning of the words "undue hardship." "Undue" must mean something which is 'not merited by the conduct of the claimant, or is very much disproportionate to it.
Keeping in view these principles, it has to be seen whether in the facts and circumstances of this case, there was reasonable and sufficient ground for not preferring the claim to arbitration within the time specified in clause 12 of the policy and whether there would be "undue hardship" to the respondent if time not extended.
It may be recalled that it was on July 1, 1971 and September 21, 1971 that the respondent lodged its claim with the appellant to recover the loss suffered.
Thereafter, various letters passed between the parties.
Ultimately, on February 16, 1973, the appellant wrote the letter to the respondent stating that the claim papers submitted in connection with the claim had been scrutinized by the appellant but that it was unable to accept liability for the loss.
The respondent then wrote a letter to the appellant on 30 3 1973 complaining about the uncertain language used in the letter dated February 16, 1973 and calling upon the respondent to point out specifically under which clause of exclusion of liability in the policy and the appellant disclaim the liability.
The appellant kept quiet for 2 months and then on May 144 30, 1973, seat a letter stating that it had I nothing further to add to what had been stated in its letter dated February 16, 1973.
The respondent was having dealings with the appellant in the business of insurance from 1958 onwards and in no instance was the claim made by the respondent rejected by the appellant.
The conduct of the respondent in enquiring of the appellant the grounds on which the claim was rejected was quite reasonable.
It was only after the grounds of rejection were known that the respondent could have decided whether to resort to arbitration or not.
If the grounds of rejection would come within the clause of exclusion of liability under the policy, it would serve no purpose to incur the expense and hardship involved in resorting to arbitration.
The appellant did not give the reason for disclaiming liability even in its letter dated 30 5 1973.
We do not think that there was any lack of promptness on the part of the respondent in waiting for the reply to its letter dated 30.3.1973.
And, in the first week of June, 1973, the respondent made over the papers to the solicitors viz., M/s. Banerji & Co. for the purpose of taking necessary steps for referring the dispute to arbitration in terms of the arbitration clause in the policy.
On or about June 15, 1973, the respondent received the written opinion from the Solicitors wherein they stated that since the letter of the appellant disclaiming liability was vague and since the appellant gave no reason for rejection of the claim even in their letter dated 30 5 1973, the appellant might rely upon clause 12 of the policy of insurance and contend that the reference to arbitration would be beyond time.
The solicitors, however, advised that in view of the delay on the part of the appellant and its failure to specify any reason for the disclaimer, the respondent might take steps for nominating an arbitrator and proceed with the reference.
When the written opinion was received from the solicitors, the respondent had some doubt, because the solicitors did ',lot give a definite opinion.
So, it instructed the solicitors to take the opinion of counsel.
After preparing the necessary case for the opinion, the solicitors briefed counsel for opinion, on June 28, 1973.
The opinion of counsel was to the effect that the respondent should apply for extension of time under section 37(4) of the Arbitration Act and that was received by the solicitors on 16 7 1973.
The respondent was informed of the opinion of counsel and it received a copy thereof on 18 7 1973.
After gathering the facts from the records mentioned in the opinion of the counsel the respondent instructed the solicitors to take steps for filing a petition for extension of time.
It, however took some time to gather the facts indicated in the opinion of counsel.
On 25 7 1973 the respondent 's solicitors sent the brief to counsel to draft the petition and the petition was received by them on 30 7 1973.
Thereafter it took sometime to prepare a statement from available records.
In the facts and circumstances of this case, we think the High Court exercised its discretion properly in extending the time.
The conduct of the respondent was reasonable.
It took all steps it could when it knew about the alleged robbery inform the police and the appellant The fact that the Barasat police reported that the case was false does not necessarily mean that the respondent tried to prac 145 tise any fraud upon the appellant.
The respondent had filed a suit against the owner of the truck in question in July 1972 for recovery of the amount of loss.
The respondent also paid a suit against the owner of the truck in question in July 1972 for recovery of the amount of loss.
The respondent also paid the claims arising out of the loss of goods which were transported through the track.
All these go to show the bonafides and reasonableness of the conduct of the respondent.
Both the amount at stake and the reasons for delay are material in considering the question of undue hardship.
We do not think that any material prejudice would be, caused to the appellant by extending the time.
There would be undue hardship if time is not extended, as the consequences of non extension would in any event be excessive and out of proportion to the fault of the respondent, if any, in not being prompt.
We do not say that the mere fact that a claim would be barred would be undue hardship.
But considering the amount involved and the reasons for the delay, we think it would be undue hardship to the respondent if time is not extended.
We dismiss the appeal but in the circumstances, it is necessary that further time should be given to the appellant to nominate an arbitrator.
We, therefore, extend the time one month from the date of this judgment to enable the appellant to nominate its arbitrator.
We also think that this is a fit case in which the parties should suffer their own costs of the application in the High Court and of the appeal here.
V.M.K. Appeal dismissed.
| IN-Abs | The respondent , a common carrier of goods, had taken out three transit policies of insurance renewable every year from the appellant.
The freight policy taken out in January 1969, was against risk of loss or damage to any goods or merchandise during transit.
In June 1971.
the respondent declared to the appellant that it had received for transit a consignment of 185 packages of general merchandise alleged to be of the total value of Rs. 1,10,000/(approx) for transportation from Calcutta to various places in Assam and Tripura and paid the requisite premium on the value of goods and the goods stood insured under the said policy.
According to the respondent on the evening of 29 6 71, the consignment of 185 packages was loaded in Truck No. WGH 8261, and the truck left Calcutta on the same day for Gauhati.
It is alleged that the owner of the truck reached Barasat on the night of 29th June, 1971, there was a robbery and neither the truck, nor the driver, nor the merchandise could be traced.
On 1 7 1971, the respondent sent letters to the officer incharge of Jorabagan Police Station, the Assistant Commissioner of Police, Intelligence Branch, Lall Bazar.
Calcutta and the Deputy Commissioner of Police Intelligence Branch intimating them that the truck, the driver, the assistant and the merchandise could not be traced.
A copy of the letter sent to the Assistant Commissioner of Police.
Lall Bazar, Calcutta was sent to the appellant and it was received by the appellant on 2 7 1971.
On 1 7 1971 and 21 9 1971, the respondent lodged the claim for loss with the appellant on the basis that the loss was covered by the policy.
On 3 7 1971, the appellant sent a, letter to the respondent calling upon the respondent to furnish the particulars as regards the name and address of the owner of the vehicle, the name and ' address of the driver and other particulars.
On 21 9 1971 the respondent informed the appellant by a letter that the information and the records asked for in the letter dated 3 7 1971 were already supplied to Mr. A. L. Chopra, the agent of the appellant on 5 7 1971 when he called upon the respondent for that, purpose.
On 10 10 1971.
the appellant wrote to the respondent informing that until the report of the investigation by the police was produced by the respondent, it would not be possible for the appellant to proceed further in the matter.
The appellant received a copy of the investigation report by the police at Barasat on 12 5 1972.
The report was to the effect that the alleged episode, of robbery was false.
On this basis, the appellant sent to the respondent a letter dated 4 8 1972 stating the contents of the investigation report of the police at Barasat asking for the investigation report of Jambagan Police Lall Bazar Police.
Thereafter the appellant intimated the respondent by letter dated 16 2 1973 disclaiming its liability under the freight policy as regards the loss of the consignment of 185 packages.
On receipt of the letter, the respondent wrote to the appellant on 30 3 73 asking for the ground on which the appellant disclaimed its liability.
The appellant sent a letter after two months on May 30, 1973, stating that it had nothing to add to what had been stated in its letter dated February 16, 1973.
Thereafter, the respondent took the advice of solicitors and counsel.
On 17 8 1973, the respondent filed the application before the High Court under section 37(4) of the Act for extension of time for referring the dispute to arbitration till a date 15 days after the order of the High Court.
In the application the respondent stated the reasons for the delay in filing the application in court after receiving the letter dated May 30, 1973.
In answer to the application, the appellant contended that section 37(4) of the Act had no application that the Court had no jurisdiction to extend the time and that even if the court had 137 jurisdiction, there were no valid grounds for extension.
The learned Judge of the High Court passed the order extending the time to refer the dispute to arbitration within a fortnight from 14 1 1974.
In this appeal by special leave, it was contended for appellant that there would be no undue hardship to the respondent if the time for preferring the claim to arbitration is not extended and, therefore, the High Court went wrong in exercising its discretion by extending the time.
Rejecting the contention and dismissing the appeal, HELD ; (i) Court has to take a liberal view of the meaning of the words "undue hardship" occurring in section 37(4) of the . 'Undue ' must mean something which is not merited by the conduct of the claimant, or is very much disproportionate to it.
[143E F] Steamship Co. of 1912, etc.
vs Anglo American Grain Co. [1958] 2 Llyod 's Rep. 341; Watney, Comba, Raid & Co. vs E. M. Dower & Co. etc.
, 13 1; F. E. Hookway & Co. Ltd. vs H. W. H. Hopper & Co. ; Stanhope Steamship Co. Ltd. vs British Phosphate Commissioners ; and Librarian Shipping etc.
vs A King & Sorts referred to (ii) The respondent was having dealings with the appellant in the business of insurance from 1958 onwards and in no instance was the claim made by the respondent rejected by the appellant.
The conduct of the respondent in enquiring of the appellant the grounds on which the claim was rejected was quite reasonable.
It was only after the grounds of rejection were known that the respondent could have decided whether to resort to arbitration or not.
If the grounds of rejection would come within the clause of exclusion of liability under the Policy, it would serve no purpose to incur the expense and hardship involved in resorting to arbitration.
The appellant did not give the reason for disclaiming liability even in its letter dated 30 5 1973.
We do not think that there was any lack of promptness on the part of the respondent in waiting for the reply to its letter dated 30 3 1973.
In the facts and circumstances of the case it is clear that the High Court exercised its discretion properly in extending the time.
The conduct of the respondent was reasonable.
It took all steps it could when it knew about the alleged robbery to inform the police and the appellant.
The fact that the Barasat police reported that the case was false does not necessarily mean that the respondent tried to practise any fraud on the appellant.
The respondent had filed a suit against the owner of the truck in question in July 1972 for the recovery of the amount of loss.
It also paid the claims arising out of the loss of goods which were transported through the truck.
All these go to show the bona fides and reasonableness of the conduct of the respondent.
Both the amount at stake and the reasons for delay are material in considering the question of undue hardship.
It cannot be said that any material prejudice would be caused to the appellant by extending the time.
There would be undue hardship if time is not extended, as the consequence of non extension would in any event be excessive and out of proportion to the fault of the respondent, if any, in not being prompt.
It also cannot be, said that the mere fact that a claim would be barred would be undue hardship.
[144B C; 14; 145A B]
|
ition No. 84 of 1975.
Petition under article 32 of the Constitution of India.
A. k. Sell, D. N. Mukherjee, Narayan Gupta and C. section Chatterjee, for the petitioner.
Girish Chandra, for respondent No. 1.
D.P. Uniyal and O. P. Rana, for respondent nos.
The Judgment of the Court was delivered by FAZAL ALI, J.
By an order dated November 8, 1974 passed by the District Magistrate, Badaun, the petitioner was detained under section 3(1)(a)(iii) of the hereinafter referred to as 'the Act ' because the allegations made in the grounds of detention disclosed that he had committed acts prejudicial to the maintenance of supplies and services essential to the community.
The grounds of the order of detention were served on the petitioner by the District Magistrate, Badaun, on November 13, 1974.
The State Government approved the order of detention on 18 November 19, 1974 and made a report to the Government of India on November 22, 1974.
According to the respondents, the Government of U.P. had made a reference to the Advisory Board constituted under the Act on November 22, 1974 but as it had not received The representation from the petitioner, the same was forwarded later.
The representation, according to the respondents, was received on November 28, 1974 which was rejected on December 6, 1974.
The representation was sent to the Advisory Board on December 18" 1974 which gave 13 its report holding that the grounds were sufficient for detention of the petitioner and after receipt of the opinion of the Advisory Board on January 7, 1975 the order of detention was finally confirmed by the Government on January 17, 1975.
We might mention at the very outset that there was some controversy on two points before us.
In the first place the petitioner did not accept the stand of the Government that the reference to the Advisory Board was made on November 22, 1974 but relied on a counter affidavit filed by Mr. section K. D. Mathur, the then District Magistrate of Badaun, in this Court to support his plea that the reference to the Advisory Board was made on December 20, 1974 vide paragraph 2(vi) of the counter affidavit appearing at p. 118 the Paper Book.
It was therefore contended by the learned counsel for the petitioner that as the reference was made to the Advisory Board beyond the period mentioned in section 10 of the Act, there being a violation of the mandatory provision of the statute, the order of detention fell on this ground alone.
We gave an opportunity to the Government to produce before us materials to show the exact position and from the original file produced before us we find that the counter affidavit filed by Mr. section K. D. Mathur in this court to the effect that the reference was made to the Advisory Board on December 20, 1974 was factually incorrect and that the reference was really made on November 22, 1974 by the Government by virtue of letter No. 107/2/48/74.
The file also contains a letter of the Registrar dated January 7, 1975 forwarding the opinion of the Advisory Board wherein also it was mentioned that the reference was made on November 22, 1974.
In view of these cogent materials Mr. Sen learned counsel for the petitioner did not choose to press this point.
We cannot, however.
Leave this matter without expressing our strong disapprobation on the careless and irresponsible manner in which the counter affidavit has been filed by the respondents, particularly by Mr. section K. D. Mathur who happened to be the then District Magistrate, Badaun.
We hope the Government will be careful in future and see that such incorrect affidavit are not filed before this Court, which may create unnecessary confusion and controversy and make a simple issue so very much involved.
The petitioner was admittedly a partner of the firm called Bharat Oil Company which was dealing in the storage and sale of high speed diesel oil since 1965.
According to the petitioner the business was started at Badaun and Ujhani but later a branch was opened at Bareilly and the firm transferred its headquarters to Bareilly in 1971.
We are not, however, concerned with the business at 19 Bareilly in this case.
Under the , the petitioner could have carried on his business only after obtaining a licence from the prescribed authority.
The District Authorities could grant licence only to the extent of 22,000 liters but if the dealer wanted to store high diesel oil to the extent of more than 22,000 litres he had to get a licence from the Chief Controller of Explosives, Nagpur.
The petitioner 's further case is that as high speed diesel oil ran in short supply, the Indian oil Corporation and the District authorities impressed on the dealers the necessity of keeping light diesel oil which was available in sufficient quantities and was necessary for running, crushers and pumps in the rural areas.
The petitioner had undoubtedly secured a licence for storage of li ht diesel oil which was valid upto March 31, 1975 and had applied for renewal of the licence thereafter and had also complied with all the necessary formalities about no objection and the safety certificate to be given by the District Authorities.
But on the date in question the licence of the petitioner had not been renewed so far.
We might intention in this connection that the stand taken by the respondents is that although the petitioner had a licence to stole light diesel oil to the extent of 22,000 litres he did not possess any licence for storing it at Ujhani.
It appears that the godown of the petitioner was searched by the excise authorities on October 17, 1974 and November 5, 1974 and in inspection of the godown about 1.64 lakhs litres of light diesel oil was found stored it Ujhani.
The stock register was produced by the petitioner before the authorities which appeared to be in order and there is no allegation that there was any manipulation or interpolation in the stock register Thus the simple allegation against the petitioner is that he had stocked huge quantity of light diesel oil without waiting for the licence to be cleared by the Chief Controller of Explosives at Nagpur This forms the subject matter of the allegations mentioned in grounds (1)(a) & (b) of the grounds of detention served on the petitioner.
The sheet anchor of the argument of Mr. Sen learned counsel for the petitioner was that in so far as ground No (1) was concerned it was wholly irrelevant and totally unconnected with the nexus of the Act, because even if the grounds be taken at their face value they did not disrupt or disturb the essential supplies to the community.
Before dealing with this contention it may be necessary to quote in extenso the grounds mentioned in (1)(a) & (b) of the detention order: "(1) That you a partner in the firm named Bharat oil Company, Mohalla Ayodhya Nagar, Ujhani District Badaun, on Bareilly Mathura Road, authorised only to deal in High Speed Diesel and Motor Spirit were found hoarding Light Diesel oil, without having obtained a licence for the same from the Chief controller of Explosives, Nagpur as is evident from the following: (a) On 17 10 74 at about 4 P.M. the premises of your aforesaid firm was inspected by Sri section N. Pandey, District Excise officer, Badaun and it was found that in the underground tanks within the premises mentioned aforesaid 96,000 litres of Light 20 Diesel oil was stored, for which no licence could be produced on demand by the District Excise officer aforesaid and thereafter a complaint has also been lodged in the court of the Chief Judicial Magistrate, Badaun by the District Excise officer on 8 11 74 (b) On 5 11 74 the premises of your aforesaid firm Bharat oil Company, Ujhani, was again inspected at about 4.15 P.M. by Sri N. N. Verma S.D.M. Badaun accompanied by District Excise officer Badaun and Sri Fateh Singh, Dy.
S.P. Badaun and it was found that 68,000) litres of Light Diesel oil had during 7th October 1974 to the time of this inspection been added to the store kept by you of the said Light Diesel oil of 96,000 litres, in three underground tanks within the premises mentioned aforesaid and no licence could be produced on demand by the S.D.M. Badaun.
For this also, a complaint has been lodged by the S.D.M. Badaun in the Court of Judicial Magistrate II Badaun on 8 11 74.
" Analysing these grounds it would appear that there is no allegation by the detaining authority that by storing the huge quantity of light diesel oil the petitioner had in any way affected the distribution or sale of that commodity, nor is there any allegation to show that the petition had refused to sell light diesel oil to any body who required it.
The High Court which was moved in the first instance for a writ of habeas corpus, appears to have drawn an inference based purely on speculation that the petitioner had transferred huge quantities of light diesel oil from his depot at Badaun to his godown at Ujhani.
There is, however, no material on the basis of which the High Court could have drawn such an inference.
There is, however, no suggestion.
far less any allegation, in these grounds that the petitioner had tried to divert his stocks of light diesel oil from Badaun to Ujhani and thereby deprived the people of Badaun of their share of the light diesel oil.
In these circumstances, therefore, we arc satisfied that there is absolutely no correlation between the act of the petitioner and the disruption of distribution of the essential supplies to the community.
The learned counsel appearing for the respondents submitted that by storing such huge quantities of light diesel oil in Ujhani the petitioner has committed a clear violation of the mandatory provisions of the and the Rules made thereunder and must be presumed to have disrupted the essential supplies because light diesel oil had been declared by the order of the Government of U.P. to be an essential commodity.
We are, however, unable to agree with this argument.
Mr. Sen appearing for the petitioner does not dispute that the light diesel oil was an essential commodity, but his argument was that he has in no way tried to disrupt the essential supplies of this commodity and he merely committed a technical offence in storing the quantities of light diesel oil in anticipation of the licence which had been cleared by the District Authorities and which awaited the 21 sanction of the Chief Controller of Explosives, Nagpur and which would have in normal routine been granted.
It is also admitted in the ground itself that a complaint had been lodged in the Court of the Chief Judicial Magistrate against the petitioner for the storage.
We have already held in several cases that the commission of an offence at a private place or a violation of a provision of law by itself does not attract the Act unless by the act committed by the petitioner the essential supplies to the community are disrupted or even flow of the life of the community is disrupted.
Reading grounds (1)(a) & (b) we are unable to hold that they are in any way germane or relevant to the disruption of maintenance of essential supplies to the community.
In Manu Bhusan Roy Prodhan vs State of West Bengal and others(1) this Court observed as follows: "This kind of a solitary assault on one individual, which may well be equated with an ordinary murder which is not an uncommon occurrence, can hardly be said to disturb public peace or place public order in jeopardy, so as to bring the case within the purview of the Act.
It can only raise a law and order problem and no more; its impact on the society as a whole cannot be considered to be so extensive, widespread and forceful as to disturb the normal life of the community thereby rudely shaking the balanced tempo of the orderly life of the general public.
This ground is, therefore, not at all relevant for sustaining the order of detention for preventing the petitioner from acting in a manner prejudicial to the maintenance of public order.
The ratio of this case fully tallies with the facts of the present case where also grounds (1) (a) & (b) taken at their face value appear to be irrelevant and do not disclose any causal connection with the disruption of the essential supplies to the community.
We now take up the other ground, namely, ground No. (2), which is as follows: "(2) That you as partner of the firm M/s Bharat oil Company located at Badaun licensed at Badaun to deal with Light Diesel oil and required by rule 9(1) of the U.P. Essential Commodities (Price Display and Control of Supply and Distribution) order, 1971.
as amended by Second Amendment dated ' June 13, 1973 framed under Rule 114(2) of the Defence of India Rules, 1971 to issue every purchaser a correct receipt showing, inter alia, the name and address of the customer were found to have sold Light Diesel Oil repeatedly without complying with the said requirement and with the object make fictitious sale of the 22 Light Diesel Oil a scheduled commodity within the meaning of the said order, as is evident from the following: (i) Cash memo No. 62 dated 8 8 74 | | (ii) Cash memo no, 63 dated 14 8 74 | | (iii)Cash memo no 134 dated 7 10 74 | Name and address | of the customer (iv) Cash memo no, 135 dated 7 10 74| not given" | (v) Cash memo No. 145 dated 7 11 74| | (vi) Cash memo No. 146 dated 7 11 74| This ground no doubt discloses a clear overt act on the part of the petitioner from which an inference can be drawn that the petitioner had made a number of fictitious sales.
The details of the cash memos by which the sales had been made have also been given but the cash memos do not disclose the names and addresses of the customers, as required by the rules.
The petitioner has himself admitted in paragraph 13 of his petition filed in this Court that there had been a violation of the U.P. Sale of Motor Spirit Taxation Act and the Rules made thereunder but he sought to explain the omission on the ground that it was due to the mistake of the Munim and the quantities alleged to have been sold were actually purchased by the petitioner himself for the use of the pumps in his own agricultural farm.
This explanation does not appear to be convincing at all.
From the file produced before us by the respondents it appears that the total amount of sale of light diesel oil under these cash memos mentioned in the ground comes to 21 ,000 litres.
We find it impossible to believe that the petitioner would consume such huge quantity of light diesel oil for his personal agricultural farms particularly when the petitioner had given no details of the number of farms and other machines for which this oil was said to be used.
In these circumstances there can be no doubt that these were fictitious sales made by the petitioner with a view to hoard light diesel oil and by his conduct the persons who were in genuine need of light diesel oil were deprived of the same.
Ground No. (2), therefore is quite specific, but the difficulty is that in view of our finding that ground No. (1) is irrelevant it is not possible to determine as to what extent the subjective satisfaction of the detaining authority was influenced or affected by Ground No. (1) which has been found by us to be extraneous and irrelevant.
It has been held by us in several cases that where out of two grounds one ground is vague or irrelevant, then the entire order of detention falls to the ground.
In this view of the matter the order of detention suffers from this serious infirmity and must be quashed.
Secondly it was argued by the learned counsel for the petitioner that on the materials produced before us the subjective satisfaction of the detaining authority has also not been established.
To begin with it is not clear at all as to who passed the order of detention and who was satisfied regarding the sufficiency of the grounds.
In the second place the grounds appear to have been served by Mr. R. C. Arora the permanent District Magistrate of Badaun who has also signed the same which shows that he was the detaining 23 authority also.
On a consideration of these two points we are of the opinion that the contention of the learned counsel for the petitioner is well founded and must prevail.
Coming to the first point we find that Mr. section K. D. Mathur has clearly alleged in his counter affidavit that Mr. R. C. Arora the permanent District Magistrate of Badaun had proceeded on leave from October 21, 1974 to November 11, 1974 and during his absence the deponent section K. D. Mathur was acting as the District Magistrate of Badaun.
It is further stated in the affidavit that Mr. R. C. Arora rejoined his duty in November 12, 1974 and took charge of his office.
The order of detention, however, appears to have been passed while Mr. section K. D. Mathur was officiating as District Magistrate of Badaun and Mr. Mathur makes no secret of the fact that the order of detention was passed by him after being satisfied of the grounds of detention.
In the counter affidavit submitted by Mr. section K. D. Mathur before the High Court, which is Annexure at p. 66 of the Paper Book Mr. Mathur categorically stated that he himself had passed the detention order after recording his satisfaction.
In this connection paragraph 1 of the counter affidavit before the High Court is as follows: That the deponent was District Magistrate, Badaun on 8 11 1974, and he has passed the detention order against the petitioner after being fully satisfied that the petitioner was acting in a manner prejudicial to the maintenance of supplies and services essential to the community and as such he is well acquainted with the facts deposed to below.
" This allegation is reiterated and over emphasised in paragraph 23 of the same affidavit wherein Mr. Mathur makes a categorical averment which is as follows: ". the deponent submits that in his capacity as the District Magistrate he was fully competent to make the impugned order of detention.
The deponent further submits that on the basis of the evidence and the material placed be before him, to which he has referred above he was personally and fully satisfied as to the existence of sufficient basis to make the impugned order with a view to prevent the petitioner from indulging in activities prejudicial to the maintenance of essential services and supplies.
" In this very affidavit Mr. Mathur goes on to state that he had also farmed draft of the grounds on November 8, 1974 and that Shri R. C. Arora who took over on November 12, 1974 served these grounds on the petitioner which were drawn by the deponent Mr. section K. D. Mathur.
In this connection the averment runs as follows: "Sri R. C. Arora took over charge on November 12, 1974 and under his signature Sri Arora served these same grounds which the deponent had earlier drawn upon the petitioner.
" According to the clear and categorical averments made by Mr, section K. D. Mathur in his affidavit before the High Court the only role which was 24 assigned to Mr. R. C. Arora the permanent District Magistrate was A that he signed the grounds and served them on the detenu.
In other words, according to Mr. section K. D. Mathur, Mr. R. C. Arora was merely the serving officer and did not perform any other function in so far as the order of detention passed against the petitioner was concerned and yet this officer is imprudent enough to allege in paragraph 25 of the counter affidavit filed in this Court that the order of detention was passed not only by him but by the two detaining authorities, namely Mr. R. C. Arora and Mr. section K. D. Mathur.
In this connection Mr. Mathur averred as follows.
"That the order of detention was passed by the detaining authorities after they had fully satisfied themselves about the existence of the grounds.
" It would thus appear from this averment that the order of detention was not passed by one single person but by more than one person and taking the facts mentioned by the deponent it would appear that the order of detention appears to have been passed in two stages in he first instance by Mr. section K. D. Mathur who was full fledged District Magistrate on November 8, 1974 when the order of detention was passed, but who according to his own statement had first prepared a draft of the grounds.
The order of detention was then signed by Mr. R. C. Arora on November 13, 1974 and served on the detenu.
While Mr. section K. D. Mathur took the clearest possible stand before the High Court that he alone had made the order of detention and he alone was satisfied about the sufficiency of the grounds, but in his affidavit before this Court he seems to suggest that there were two detaining authorities both of whom were satisfied.
This shows the casual and cavalier manner in which the order of detention against the petitioner appears to have been passed in this case.
Even if the order had been made by Mr. section K. D. Mathur and signed, by him, there could have been no objection in Mr. R. C. Arora serving the grounds on the petitioner, because the law does not require that the person who actually signs the order or the grounds must also serve the same on the detenu.
But in this case it is not possible to determine as to who in fact made the order of detention.
F It is true that the Court cannot go behind the subjective satisfaction of the detaining authority, but such satisfaction does not confer a blanket power which may authorise the detaining authority to act in a ruthless or arbitrary fashion and the judicial decisions have undoubtedly carved out an area, though limited.
within which the subjective satisfaction of the detaining authority can be tested on the touchstone of objectivity.
It is obvious that the subjective satisfaction of the detaining authority is a sine qua non for the exercise of power of detention and it has got to be exercised properly and discreetly.
In Khudiram Das vs The State of West Bengal and others(1) this Court made the following observations: "The basic postulate on which the courts have proceeded is that the subjective satisfaction being a condition precedent for the exercise of the power conferred on the executive, the 25 court can always examine whether the requisite satisfaction is arrived at by the authority; if it is not, the condition precedent dent to the exercise of the power would not be fulfilled and the exercise of the power would be bad." In the instant case, in view of the contradictory stand taken by the detaining authorities, we are satisfied that the exercise of jurisdiction to detain the petitioner has not been made with due care and caution or in a proper and fair manner.
On this ground also the order of detention stands vitiated.
Section 3(1) of the Act runs.
thus: "3.
(1) The Central Government or the State Government may, (a) if satisfied with respect to any person (including a foreigner) that with a view to preventing him from acting in any manner prejudicial to (i) the defence of India, the relation of India with foreign powers, or the security of India, or (ii) the security of the State or the maintenance of public order, or (iii)the maintenance of supplies and services essential to the community, or (b) if satisfied with respect to any foreigner that with a view to regulating his continued presence in India or with a view to making arrangements for his expulsion from India; It is necessary so to do, make an order directing that such person be detained.
" This power can also be exercised by the officers mentioned in sub section
(2), and in the instant case we are concerned with the District Magistrate.
The words "make an order directing that such person be detained " clearly postulate three conditions (1) that the order must be made by the authority mentioned in section 3; (ii) the order must be duly signed by the said authority; and (iii) that only one authority and one authority alone can pass such order of detention.
The statute does not contemplate a sort of composite or a joint order passed by several authorities.
In the instant case the original order of detention passed by Mr. section K. D. Mathur bears his signature and even the grounds mentioned bear his signature.
In these circumstances we are unable to accept the affidavit of Mr. section K. D. Mathur that the grounds framed by him were merely draft grounds prepared by him which were signed by the permanent District Magistrate later.
It is obvious that unless the order made and the grounds prepared are signed by the authority concerned, the order is not made as contemplated by section 3 of the Act.
Further more, since the order is based on grounds to be served on the detenu, the order of detention could be passed only if the grounds are in existence and are prepared contemporaneously, otherwise the order 26 of detention becomes purely illusory.
In view, however, of the contradictory affidavits given by Mr. section K. D. Mathur, it is difficult to determine whether Mr. section K. D. Mathur or Mr. R. C. Arora passed the order of detention and as to who among them was satisfied regarding the grounds of detention.
This is also a very serious infirmity from which the order of detention suffers and as a result of which the order has to be set aside.
There appears to us to be a clear violation of the provisions of section 3 of the Act in this case.
Lastly we may mention that although the petitioner has pleaded he question of mala fides in the instant case, it is not necessary for us to decide the same in the view we take in this case, and that is why it was not seriously pressed by Mr. Asoke Sen ill the course of his arguments before us.
For the reasons given above, we allow the petition and quash the order of detention passed against the petitioner on November 8, 1974 and direct the petitioner to be released forthwith.
V.P.S. Petition allowed.
| IN-Abs | The petitioner was carrying on business in diesel oil, an essential commodity, in two places.
He was detained under section 3(1)(a)(iii) of the , on the basis of allegations in two grounds that as had committed sets prejudicial to the maintenance of supplies and services essential to the community.
The allegation in the first ground was that he had stocked a large quantity of light diesel oil in one of the places without waiting for the licence to be cleared by the Chief Controller of Explosives in violation of the provisions of the Petroleum Act.
It was also stated in the ground that a complaint had been lodged in the Magistrate 's court for the offence.
The allegation in the second ground was that the petitioner violated the U.P. Sale of Motor Taxation Act and the rules made thereunder, in that the names and addresses of customers who had purchased light diesel from tho petitioner, had not been given in the cash memos.
Allowing The petition, ^ HELD: (1)(a) There is no allegation by the detaining authority in the first ground that by storing the huge quantity of light diesel oil the petitioner had in any way affected the distribution or sale of that commodity; nor is there any allegation to show that the petitioner had refused to sell the oil to anybody who required it.
Also there is no suggestion, far less any allegation, that the petitioner had tried to divert his ' stocks from one place to the other and thereby deprived the people of one place of their share of the oil.
Therefore, there is absolutely no correlation between the act of the petitioner and the disruption of distribution of essential supplies to the community.
[20D E, F G] (b) From the violation of the mandatory provisions of the Petroleum Act and the Rules made thereunder, no presumption can be drawn that there was disruption of supply of the essential commodity.
[20G H] (c) The commission of an offence at a private place or a violation of a provision or a law by itself does not attract the unless, by the Act committed, the supply or an essential commodity to the community is disrupted or the even flow of the life of the community is disrupted.
[21B] Manu Bhushan Roy Prodhan vs State of Bengal and others, A. I. R. , referred to.
(2) The second Ground does disclose a clear overt act from which an inference can be drawn that the petitioner had made a number of fictitious sales.
But, in view of the finding that the first ground is irrelevant it is not possible to determine to what extent the subjective satisfaction of the detaining authority was influenced or affected by the first ground.
When out of 2 grounds one is ague or irrelevant, then the entire order of detention falls to the ground.
[22C, F G] (3) The Court cannot go behind the subjective satisfaction the detaining authority but such satisfaction does not confer a blanket power which may authorise the detaining authority to act in a ruthless or arbitrary fashion.
Judicial decisions have carved out an area though limited, within which, the subjective satisfaction of the detaining authority, which is a sine qua non for the exercise of the power, can be tested on the touchstone of objectivity.
[24F G] 17 (a) The words "make an order directing that such person be detained" in Section 3 (1) of the Act postulates three conditions: (i) that the order must be made by the authority in the section; (ii) The order must be duly signed by the said authority; and (iii) that only one authority and one authority alone can pass the order of detention.
Therefore, unless the order made and the grounds prepared are signed by the authority concerned, the order is not made as contemplated by the section.
[25F G] (b) Further, since the order is based on grounds to be served on the detenu, he order of detention could be passed only if the grounds are in existence and are prepared contemporaneously, otherwise the order of detention becomes illusory.
[25H 26A] In the present case, the District Magistrate who filed the counter affidavit was acting in place of the permanent District Magistrate.
In the High (court which was moved in the first instance for a writ of habeas corpus, the District Magistrate stated that the order of detention was passed by him after being satisfied of the grounds of detention, that he also framed the draft of the grounds and that the permanent District Magistrate, who took over from him merely signed and served those grounds on the detenu.
But, in this Court he stated that the order of detention was passed by the two detaining authorities, namely, both the District Magistrates, after they had fully satisfied themselves about the existence of the grounds.
It is, therefore.
not possible to determine as to who in fact made the order of detention.
and in view of the contradictory stand taken in the counter affidavits filed by the detaining authorities, the exercise of the jurisdiction to detain the petitioner has not been made with due care and caution or in a proper and fair manner.
[23B 24F] Khudiram Das vs The state of West Bengal and Other, A. 1.
R. 1975 section C. 550, referred to.
The Court also expressed strong disapproval of the careless and irresponsible manner in which the counter affidavit had been filed by the District Magistrate because the date on which reference was made to the advisory Board was in correctly stated in the counter affidavit which created unnecessary confusion and controversy over a simple issue] [18F G]
|
Civil Appeal No. 1142 of 1969.
Appeal by special leave from the award dated the 8th November 1968 of the Labour Court, Poona in Reference (IDA) No. 9 of 1967.
B. Pai, O. C. Mathur, D. C. Shroff and O. N. Mishra, for the appellant.
section C. Manchanda and A. G. Ratnaparkhi, for the respondents.
The Judgment of the Court was delivered by ALAGIRISWAMI, J.
This is an appeal by special leave against the award of the Labour Court, Poona directing the reinstatement of the respondent in the service of the appellant company.
The respondent was a watchman in the factory of the appellant at Chinchwad, Poona.
A domestic enquiry was held against him in respect of an incident on the night of 15 16 December 1963 and following the enquiry he was dismissed from service on the 7th January 1964.
His appeal was dismissed after a personal hearing by the appellate authority.
Section 2A of the came into force on 1st December 1965 and on 23rd June 1967 a reference was made by the Government of Maharashtra regarding the dismissal of the respondent to the Labour Court, Poona and the Labour Court held that the domestic enquiry held against the respondent was defective, that the charges against the respondent had not been made out and directed him to be reinstated.
121 There were four charges framed against the respondent in the domes tic enquiry.
They were: (1) Suspected dishonesty in connection with the company 's property.
(2) Gross negligence in performance of his duties.
(3) Disobedience of instructions given by the superiors.
(4) Commission of an act subversive of discipline.
For the purposes of this appeal it is not necessary to consider other charges than charge No. 1.
The chargesheet is rather a bit confused but the statement of facts regarding charge No. 1 is clear and there cannot be any doubt or confusion about it.
The facts stated in the k chargesheet are as follows: "It is reported that while you were on duty in the and shift on Sunday the 15th December, 1963 at about 10.30 P.M. you left the guard room and went into the factory.
While returning from the factory you are reported to have brought out with you a new Fluroscent Tube and to have kept it in the guard room.
Immediately after this you are also reported to have directed one of the two watchmen on duty at that time to take a round with the tel a tel clock.
It is further reported that at about 11.20 P.M. you removed the Fluroscent Tube from the guard room and were carrying it away out of the factory.
At this stage you were challenged by the watchman, Shri M. B. Shinde and consequently you brought back the tube and left it in the guard room.
The Company had, however, not received any report in the matter from you.
You were, therefore, called up when you reported for duty on 16th afternoon and were questioned in the matter.
When you were asked to submit your written report about the incident and about your failure to report immediately to your superiors you stated that you will submit your report after consulting your pleader.
The above mentioned facts and particularly your unwillingness to submit written report when called upon to do so give rise to doubts about your integrity and faithfulness both in regard to the security and property belonging to the Company for which you are responsible while on duty as a person in charge of the security of the Company.
" The Labour Court took the view that the charge of suspected dishonesty in connection with the company 's property did not constitute any misconduct either under Standing order 24 or otherwise and there fore no action could be taken against the respondent on the basis of that charge, and also that the chargesheet was vague.
We can see no vagueness in the chargesheet and on the basis of the facts set out above there could be no doubt that the charge is one of an attempt to steal the 122 company 's property.
The respondent being a watchman the charge is a serious one and if it was held proved he deserves nothing short of dismissal.
The Labour Court was concerned only with the question whether the domestic enquiry held against the respondent was a proper enquiry.
It held that the enquiry was not a proper one on the ground that the respondent had produced a police constable as his witness at the time of enquiry and this witness expressed his inability to give evidence with out the permission of his superiors, that it was clearly the duty of the Inquiry officer to obtain the necessary permission and to help the respondent in the matter of his defence, that the reluctance on the part of the Inquiry officer to pursue the matter further is indicative of the fact that he was not inclined to afford proper opportunity to the respondent to defend himself, that there was no necessity for the respondent to apply again to the Inquiry officer for obtaining the necessary permission, that the passive approach adopted by the Inquiry officer in the matter had undoubtedly resulted in an opportunity to defend himself being denied and the inquiry will therefore be defective in this respect.
It summoned and examined the police constable and taking his evidence also into account held as follows .
"Then there is evidence on the record of the inquiry to show that the relations of the second party with the Security Jamadar Shri David were strained.
As a matter of fact the evidence shows that the reports from the watchmen started coming in at his instance.
The proceedings against the second party started on the report of Shri David.
The said report and the reports made by the other watchman and the second party are not forthcoming though referred to in the record of the inquiry.
Then there is the glaring fact that very ambiguous allegations and charges which do not even constitute any misconduct are made against the second party and in spite of the fact that the evidence in the inquiry is too conflicting and vague the concerned authorities have without affording proper opportunity to defend found the second party guilty of the charges levelled against him.
On a careful reading of the findings of the Inquiry officer, the Works Manager and the Appellate Authority in the light of the recitals in the charge sheet it becomes absolutely clear that they have found him guilty without applying their mind to the facts and circumstances of the case.
All these factors raise a strong presumption that the removal of the second party was predetermined by the first party and that his dismissal is by way of victimization.
For all the aforesaid reasons therefore the dismissal of the second party must be held to be illegal and improper There is nothing adverse the past against him and he is therefore entitled to the relief of reinstatement with back wages.
" The first argument on behalf of the appellant is that the incident took place in December 1963 and the order of dismissal was made on the 7th of January 1964 and as section 2A of the Industrial Disputes 123 Act came into force on 1 12 1965 the reference of this dispute under section 10 of the read with section 2A is bad It is argued that this will amount to giving retrospective effect to the provisions of section 2A.
We are not able to accept this contention Section 2A is in effect a definition section.
It provides in effect that what would not be an industrial dispute as defined in section 2(k) as interpreted by this Court would be deemed to be an industrial dispute in certain circumstances.
As was pointed out by this Court in Chemicals & Fibres of India Ltd vs D. G. Bhoir & Ors.(1) the definition could as well have been made part of clause (k) of section 2 instead of being put in as a separate section.
There is therefore no question of giving retrospective effect to that section in making the reference which resulted in the award under consideration.
When the section uses the words "where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman" it does not deal with the question as to when that was done.
It refers to a situation or a state of affairs.
In other words where there is a discharge, dismissal, retrenchment or termination of service otherwise the dispute relating to such discharge, dismissal, retrenchment or termination becomes an industrial dispute.
It is no objection to this to say that this interpretation would lead to a situation where the disputes would be reopened after the lapse of many years and referred for adjudication under section 10.
The question of creation of new rights by section 2A is also not very relevant.
Even before the introduction of section 2A a dispute relating to an individual workman could become an industrial dispute by its being sponsored by a labour union or a group of workmen.
Any reference under section 10 would be made only sometime after the dispute itself has arisen.
The only relevant factor for consideration in making a reference under section 10 is whether an industrial dispute exists or is apprehended.
There cannot be any doubt that on the day the reference was made in the present case an industrial dispute as defined under section 2A did exist.
Normally the dispute regarding an individual workman is not an industrial dispute unless it is sponsored by the union to which he belongs or a group of workmen.
The change made by section 2A is that in certain cases such a dispute need not be so sponsored and it will still be deemed an industrial dispute.
Supposing in this very case a labour union or a group of workmen had sponsored the case of the respondent before the reference was made, such a reference would have been valid.
All that section 2A has done is that by legislative action such a dispute is deemed to be an industrial dispute even where it is not sponsored by a labour union or a group of workmen.
What a labour union or a group of workmen can do the law is competent to do.
The only question for consideration in considering the validity of a reference is whether there was or apprehended an industrial dispute when the reference was made.
If there was an industrial dispute or an industrial dispute was apprehend.
even though the facts giving rise to that dispute might have arisen before the reference was made the reference would still be valid.
It is to be borne in mind that every reference would be made only some 124 time after the dispute has arisen.
In Birla Brothers Ltd. vs Modak(1) it was pointed out that though the came into force in 1947, reference of an industrial dispute based on the facts which arose before that Act came into force is a valid reference.
The same reasoning would apply to a reference of a dispute falling under section 2A even though the facts giving rise to that dispute arose before that section came into force.
The decision in Birla Brothers case (supra) was approved by this Court in its decision in Jahiruddin vs Model Mills 13 Nagpur(2).
These two decisions clearly establish that the test for the validity of a reference under section 10 is whether there was in existence a dispute on the day the reference was made and there was no question of giving retrospective effect to the Act.
We find that is the view taken by the Delhi High Court in National Productivity Council vs section N. Kaul(3) by the Punjab & Haryana High Court in Shree Gopal Mills Ltd. vs The State of Haryana(4).
The view of the High Court of Mysore in P. Janardhana Shetty vs Union of India(5) to the contrary is not correct Coming now to the other points in the case: the decisions of this Court establish clearly that when a workman is dismissed as a result of a domestic enquiry the only power which the Labour Court has is to consider whether the enquiry was proper and if it was so no further question arises.
If the enquiry was not proper the employer and the employee had to be given an opportunity to examine their witnesses.
It is not the duty of the Enquiry officer in this case to seek permission of the police constable 's superiors.
It was the respondent 's duty to have him properly summoned.
He did not even apply to the Enquiry officer requesting him to seek the permission of the police constable 's superiors.
It is therefore wrong on the part of the Labour Court to have held that the enquiry against the respondent was not a proper enquiry.
Once this conclusion is reached there was no room for the summoning and examination of the police constable by the Labour Court.
The question regarding the jurisdiction exercised by an Industrial Tribunal in respect of a domestic enquiry held by the management against a worker has been elaborately considered by this Court in its decision in D.C.M. vs Ludh Budh Singh(6) and the principles that emerge out of the earlier decisions of this Court have been set out in that decision.
The decision of this Court in Workmen vs Firestone Tyre & Rubber Co.(7) also sets out the principles that emerge from the earlier decisions.
In Tata Oil Mills Co. Ltd. vs Its Workmen(8) it was argued that where the employee is unable to lead his evidence before the domestic Tribunal for no fault of his own, an opportunity should be given to him to Prove his case in proceedings before the Industrial Tribunal.
This Court held that this contention was not well founded.
It was pointed out that the Enquiry officer gave the employee ample opportunity to lead his evidence and the enquiry had been fair.
It was also pointed out that merely because the witnesses did not appear 125 to give evidence in support of the employee 's case it could not be held that he should be allowed to lead such evidence before the Industrial Tribunal and if such a plea was to be upheld no domestic enquiry would be effective and in every case the matter would have to be tried afresh by the Industrial Tribunal.
It was pointed out that findings properly recorded at the enquiries fairly conducted were binding on the parties, unless it was shown that the said findings were perverse, or were not based on any evidence.
We are not able to agree with the Labour Court in this case that the findings of the domestic enquiry arc either perverse or not based on any evidence.
We therefore come to the conclusion that there was no failure on the part of the Enquiry officer to give a reasonable opportunity to the respondent workman, that the enquiry was fair and the Labour Court had, therefore, no right to examine the witness on behalf of the workman and based on that evidence to upset the finding arrived at the domestic enquiry.
We also hold that the punishment imposed in the circumstances is one in which the Labour Court cannot interfere.
The result is that the appeal will have to be allowed and the award of the Labour Court set aside.
It, however, appears that the respondent had attained the age of 60 on 11 6 73 and even if he had been in service he would have re tired on that date.
Under an interim order made by this Court on 29 4 1969 the respondent has been paid Rs. 200/ per month as part of the remuneration payable to him till the hearing and final disposal of the appeal and such payment has been made upto date.
Even if the respondent had succeeded in this appeal he would not have been entitled to any payment after 11 6 73.
In view of this appeal being allowed and the award of the Labour Court being set aside the respondent will have to repay the money he had received in, pursuance of the order of this Court.
The appellant has agreed that it would not take any steps to recover from the respondent the payments already made to him.
There will be no order as to costs.
V.P.S. Appeal allowed.
| IN-Abs | Section 2A of he , provides that where any employer discharges, dismisses, retrenches or otherwise terminates the service of an individual workman, any dispute or difference between that workman and his employer connected with or arising out of such discharges etc., shall be deemed to be an industrial dispute notwithstanding that no other workman nor union is a party to the dispute.
The respondent was a watchman in the factory of the appellant.
He was dismissed from service on Jan. 7, 1964, after holding a domestic enquiry with respect to an incident on the night of December 15, 1963.
In June 1967 the dispute regarding the dismissal of the respondent was referred to the Labour Court.
Directing him to be reinstated, the Labour Court, held that: (1) The charge against the respondent was vague; (2) The suspected dishonesty of the respondent in connection with the appellant 's property did not constitute any misconduct either under Standing orders of the Company or otherwise; and (3) The domestic enquiry held was defective because, the respondent produced a police constable as his witness at the time of the enquiry who expressed his inability to give evidence without the permission of his superiors and the Enquiry officer took no steps for obtaining the necessary permission.
The Labour court summoned and examined the police constable and took his evidence into account.
In appeal to this Court, it was contended: (1) That section 2A came into force only on December 1, 1965 and as the dismissal took place before that date the reference of the dispute was bad; and (2) That the finding of the Enquiry officer was based upon a fair enquiry and the Labour Court should not have interfered with the finding.
Allowing the appeal to this Court on the second contention, ^ HELD: (1) The est for the validity of a reference under section 10 is whether there was in existence a dispute on the day the reference was made.
[124B C] Juhiruddin vs Model Mills, Nagpur , applied.
National Productivity Council vs section N. Kaul [1969] II L.L.J 186 and Shree Gopal Paper Mills Ltd. vs State of Haryana, , approved.
P. Janardhana Shetty vs Union of India [1970] II L.L.J. 738, over ruled.
(a) Section 2A provides in effect that what would not be an industrial dispute as defined in section 2 (k), as interpreted by this Court, would b deemed to be an industrial dispute in certain circumstances.
There is no question of giving retrospective effect to that section in making the reference.
When the section uses the words "discharges dismisses, retrenches etc.
" it does not deal with the question as to when that was done but merely refers to a situation or state of affairs.
[123B D] 120 (b) It is no objection to this to say that.
such an interpretation would lead to an old dispute being reopened after the lapse of many years, Every reference would be made only sometime after the dispute has arisen.
Even in this case, if a labour union or a group of workmen had sponsored the case of the respondent, such a reference after lapse of some time would have been valid.
All that section 2A has done is that by legislative action such a dispute is deemed to be an industrial dispute even where it is not sponsored by a labour union or a group of workmen.
The only consideration in such matters is whether there was or apprehended an industrial dispute when the reference was made.
[123D 124B] (2) The charge is not vague.
[121H] (3) The facts set out show that the charge is one of an attempt to steal the appellant 's property and if proved, the respondent, being a watchman, deserves dismissal.
[121H 122A] (4) When a workman is dismissed as a result of a domestic enquiry the only power which the Labour Court has is to consider whether the enquiry was proper and if it was so, no further question arises.
Findings properly recorded at an enquiry fairly conducted are binding on parties unless is shown that such findings were perverse.
It was not the duty of the Enquiry officer to seek permission of the constable 's superiors and it was the respondent 's duty to have his witnesses properly summoned.
The enquiry was fair and the Labour Court had no right to examine the witness on behalf of the workman and based on that evidence to upset the finding arrived at the domestic enquiry.
[124D 15C] D.C.M. vs Ludh Budh Singh ; Workmen vs Firestone Tyre & Rubber Co. ; and Tata Oil Co. Ltd. vs Its Workmen ; , referred to.
|
Civil Appeals Nos. 299 and 120 to 124 of 1972.
From the Judgment and order dated the 25th March, 1970 of the Punjab & Haryana High Court in Civil Writ No. 325 of 1968, L.P.A. No. 177 of 1969, Civil Writ No. 1534, 1545, 1829 and 2201 of 1969 respectively.
G. L. Sanjay, section K. Mehta, R. L. Batta and M. Qumaruddin, for the appellants (in Civil Appeal No. 299/72).
2 V. C. Mahajan, section section Khanduja and R. L. Bata, for the appellants (In C.As.
120 124/72) D. Mukherjee, Hardev Singh, R. section Sodhi and G. C. Garg, for the respondents.
(In C.A. No. 299/72).
The Judgement of the Court was delivered by GOSWAMI, J.
In these appeals by certificate of the High Court of Punjab and Haryana validity of action taken by the Market Committee, Patiala, under the provisions of the Punjab Agricultural Produce Markets Act, 1961, is under challenge.
The appellants are shop keepers of Gur Mandi, Patiala, and are licensees under section 10 of the Punjab Agricultural Produce Markets Act, 1961 (briefly the Act) and are also pucca arhtiyas.
It is not in dispute that they sell gur and shakkar within the market area notified under the Act.
It is also admitted that they have licences under section 10 of the Act in Form 'B ' as kacha arhtiyas or commission agents.
Since they were found to be selling gur and shakkar in their own shops within the notified market area without submitting accounts and without payment of fees they were asked to show cause by the Market Committee why legal action should not be taken against them for violation of rules 29(3) and 31(1) of the Punjab Agricultural Produce Markets (General) Rules, 1962 (briefly the Rules) and for violation of condition No. 1 of the licence which is to the effect that the licensee shall comply with the provisions of the Act, Rules and Bye laws framed thereunder and instructions issued from time to time.
The appellants disclaimed liability to pay fee under the Act on various grounds.
The Administrator of the Market Committee after some correspondence levied on one of the appellants, M/s Prem Chand Ram Lal, appellants in Civil Appeal No. 120 of 1972, Rs. 5014/ as market fee on the basis of best judgment assessment and imposed equal amount of penalty and a demand notice was issued for payment.
M/s Prem Chand Ram Lal filed a writ application before the High Court for quashing the demand notice.
The High Court allowed the petition quashing the order of assessment as arbitrary and violative of the principles of natural justice.
The High Court, however rejected the other contentions of the said petitioner questioning the validity of the fee levied.
M/s Prem Chand Ram Lal filed a Letters Patent Appeal against the judgment of the learned single Judge rejecting their other substantial points.
The appellants in civil Appeal No. 299 of 1972 had also filed a writ application under articles 226 and 227 of the Constitution in the High Court questions the action taken against them as well as the levy under the Act.
By a common judgement of March 25, 1970 the Division Bench of the High Court dismissed the Letters Patent Appeal of M/s Prem Chand Ram Lal as also the writ application of the appellants and granted certificates to appeal to this Court.
The question is whether the appellants are liable to payment of fee under the Act.
3 Action in this case was taken for violation of rules 29(3) and 31(1) of the Rules.
We will read these rules : R.29(1). 'Under section 23 a Committee shall levy fees on the agricultural produce bought or sold by licensees in the notified market area at the rates fixed by the Board from time to time`. " (3) "The fees shall be paid to the Committee or a paid officer duly authorised to receive such payment on the day of the transaction or on the following day".
R.31(1).
"Every licensed dealer and every dealer exempted under rule 18 from obtaining a licence shall submit to the Committee a return in Form M showing his purchases and sale of each transaction of agricultural produce on each day, on the day on which the transaction takes place or on the following day . . " The fault of the appellants lies in that they have neither paid fees under rule 29(3) nor have they submitted returns in Form 'M '.
A perusal of the above two rules would show that the Committee is authorised to levy fees on agricultural produce brought or sold only by a licensee in the notified market area.
Similarly under rule 31 (1) only a licensed dealer is required to submit a return.
We have now to take note of the scheme disclosed in a few other relevant provisions which are material for our purpose.
Under section 10 of the Act "any person may apply to the authority specified in section 9 for a licence which may be granted for such period, in such form, on such conditions and on payment of such fees not exceeding one hundred rupees as may be prescribed".
There is a proviso to this sub section whereby "if any personal carrying on any business of the nature specified in sub section (3) of section 6 in a notified market area on the date of issue of notification under sub section (1) of that section fails to apply for licence on or before the date specified therein t`or obtaining licence, the prescribed authority may, before a licence is issued, impose on him such penalty not exceeding one hundred rupees as may be prescribed".
By section 5 of the Act the State Government by notification declares its intention of exercising control over the purchase, sale, storage and processing of specified agricultural produce in a specified area.
By section 6(1) the Government by notification notifies a market area for the purpose of the Act.
Section 6(3) may be quoted: 6(3). "After the date of issue of such notification or from such later date as may be specified therein, no person, unless exempted by rules made under this Act, shall, either for him I self or on behalf of another person, or of the State Government within the notified market area set up, establish or continue or allow to be continued any place for the purchase, sale, storage and processing of the agricultural produce except 4 under a licence granted in accordance with the provisions of the Act.
the rules and by laws made thereunder and the conditions specified in the licence. ." As we read the above sub section it is clear that no person shall, unless exempted by rules, inter alia, purchase, sell, store or process the specified agricultural produce except under a licence.
It is not the case of the appellants that they belong to the exempted class.
Rule 17(1) provides that "a person desirous of obtaining a licence under section 10 of the Act shall apply in Form A (to be submitted in duplicate) to the Chairman of the Board through the Committee of the area in which he wishes to carry on his business and shall also deposit with the committee the requisite licence fee".
Sub rule (3) provides that if any person on the specified date fails to apply for a licence, he is liable to penalty in accordance with a certain scale.
Under sub rule (7) "the Chairman may grant a licence to the applicant in Form B.
The licence shall be subject to the conditions mentioned therein".
When we look to Form 'A ' which is the form for application for a licence under section 10 we find that against entry 8, the applicant has to give the "particulars of the business for which the licence is required" under four heads: (1) Kacha Arhtiya (2) Commission Agent (3) Storage (4) Processing Similarly in Form 'B ' which is the form of the licence under section 10, against entry 5, the same particulars of the business as against entry in Form 'A ' appear.
As a matter of fact one of the licences of the appellants was shown to us and it was in accordance with Form 'B '.
It is, therefore, clear that no licence has been issued to the appellants for doing business of buying and selling agricultural produce.
It is the case of the appellants that they make direct purchases and this fact is not controverted.
Although, there are, the appellants are licensees as required for some of the businesses mentioned in Form 'B ', they have no licence for carrying on business of purchase and sale of agricultural produce within the notified market area.
Now under section 23 "a Committee may, subject to such rules as may be made by the State Government in this behalf, levy on ad valorem basis fees on the agricultural produce brought or sold by licensees in the notified market area at a rate not exceeding rupee one fifty paise for every one hundred rupees, provided. . " Section 43 provides for rule making power.
Rule 24 is referable to section 43(2)(v), but we are not concerned with this rule in this case.
Rule 29 provides that under section 23 a Committee shall levy fees on the agricultural produce bought or sold by licensees in the notified market area at the rates fixed by the Board from time to time.
Reading section 23 and rule 29 together it is not possible to escape from the conclusion that the Act 5 authorises levy of fee on agricultural produce bought or sold by licensees only.
The appellants have licence only in respect of the business of kacha arhtiya and commission agent.
While we express no opinion on the point whether the absence of reference to buying and selling of agricultural produce in Form 'A ' and Form 'B ' disables the Committee to issue licences for that purpose, we are of opinion that the present appeals can be disposed of all the sole ground that the appellants have not as a matter of fact been issued such licences and no fees can, therefore, be levied on them in respect of purchases and sales of agricultural produce by them.
The appellants are, therefore, not liable to payment of fee under the Act as demanded.
The appellants also contend that since gur and shakkar are manufactured products they cannot come under the definition of agricultural produce with the meaning of section 2(a) of the Act.
Section 2(a) defines agricultural produce to mean "all produce whether processed or not, of agriculture, horticulture, animal husbandry or forest as specified in the Schedule to this Act" which mentions 85 items of commodities.
These are statutorily agricultural produce under section 2(a).
It is not possible to entertain the argument that the Court will undertake a judicial scrutiny of these items in order to come to a conclusion whether these are agricultural produce or not.
In view of the definition in section 2(a) such an enquiry is out of place.
In this context we may note that under section 38 the State Government may be notification add to the schedule any other item of agricultural produce or amend or omit any such specified item It is because of this power to add to the schedule items of agricultural produce that the first part of the definition under section 2(a) gives guidance as to what agricultural produce means.
The submissions are.
therefore.
devoid of substance.
In the result the appeals are allowed.
The appellants are not liable for payment of fee with regard to their sales in the notified market area other than in the capacity as kacha arhtiyas or commission agents.
In the circumstances of the case there will be no order as to costs.
P.H.P. Appeals allowed.
| IN-Abs | The appellants sell Gur and Shakkar within the market area notified under Punjab Agricultural Produce Markets Act, 1961.
The appellants have obtained licences under Section 10 of the Act in Form as Commission Agents.
Since the appellants were selling Gur and Shakkar in their own shops within the notified market area without submitting accounts and without Payment of fees they were asked to show cause by the Market Committee why legal action should not be taken against them for violation of rules 29(3) and 31(1) of the Punjab Agricultural Produce markets (General) Rules, 1962.
The appellants dismissed their liability to pay the fees under the Act.
The Administrator of Market Community levied fees on the appellants on the basis of best judgment assessment and also imposed penalty.
The High Court allowed the Writ Petitions filed by the appellants and quashed the order of assessment as arbitrary and violative of the principles of natural justice.
The High Court, however, rejected the contention of the appellants questioning the validity of the fees levied.
Under section 10 of the Act any person may apply for a licence which may be granted on such conditions as may be prescribed.
Under section 6(3) after tho issue of a notification under section 6(1) no person can purchase or sell any Agricultural produce except under a licence granted in accordance with the pro visions of the Act.
Section 23 authorizes the Committee to levy fees on the agricultural produce bought or sold by the licensees in the notified market area.
Rule 29 provides that the Committee shall levy fees on the agricultural produce bought or sold by licensees in the notified market area.
Rule 17(1) provides that a per son desirous of obtaining a licence under section 10 of the Act shall apply in form A.
The licence granted to the appellant is in accordance with form B. No licence has been issued to the appellants for doing the business of busing and selling agricultural produce.
Therefore, although the appellants are licensees as required for some of the businesses mentioned in Form B. they have no licence for carrying out business of purchase and sale of agricultural produce within the notified Market Area.
Reading section 23 and rule 29 it is clear that the Act authorises levy of fee on the agricultural produce bought or sold by licensees only.
Allowing the appeal, ^ HELD : The appellants have not as a matter of fact been issued licences as contemplated by section 23 and rule 29, and no fees can, therefore, be levied on them in respect of purchase and sale of agricultural Produce by them.
The appellants are, therefore, not liable to payment of fee under the Act as demanded.
[15B C]
|
Appeals Nos. 92 and 94 of 1950.
24 Appeals from the Judgments and Decrees dated the 20th March 1942 of the Allahabad High Court in First Appeal Nos.
154 and 152 of 1934 arising Out Of the Judgments and decrees dated the 25th August 1932 of the Court of First Additional Subordinate Judge, and First Additional Civil Judge, Moradabad in Original Suit Nos. 90 and 87 of 1931 respectively.
N. C. Chatterji, (section section Shukla with him) for the Appellants.
Gopi Nath Kunzru, (B. P. Maheshwari with him) for Respondent No. 1.
P. C. Agarwala, for Respondent No. 2 in Civil Appeal No. 94 of 1950.
March 22.
The Judgment of the Court was delivered by BosE J.
These appeals arise out of two suits which were heard together along with two other suits with which we are not now concerned.
All four raised the same set of questions except for a few subsidiary matters.
They were tried together and by common consent the documents and evidence in the various cases were treated as common to all.
They were all governed by one common judgment, both in the first Court and on appeal.
The defendants appeal here.
The plaintiff, Mukand Ram, is common to all four cases.
He sues in each suit as the reversioner to one Pandit Nanak Chand who was his materdal grandfather.
The family tree is as below: 25 Nanak Chand d. 23 7 75 W: Mst.
d. Jan. 1875.
Maha Devi Mst.
Durga Devi Mst.
Har Devi d. 1912 d. 1888 d. 10 9 19 H: Nathmal Das H: Jwala Prasad H: Bhawani Shankar Mst.
Ram Pyare Bhukhan Saran Banwari Lal Sital Prasad Shyam Lal Pyare Lal (dead) (dead) (deft.5) Brij Lal Mukand Ram (dead) (Plff.
No.1) 26 The plaintiff 's case is that the properties in the four suits belonged to Nanak Chand who died on 23 7 1856 leaving a widow Mst.
Pato and three daughters, Maha Devi, Durga Devi and Har Devi.
On his death, his widow Mst.
Pato succeeded.
She died in January 1875 and the estate then went to the three daughters.
Of them, Durga Devi died in 1888, Maba Devi in 1912 and Har Devi in 1919.
The plaintiff 's rights as reversioner accrued on Har Devi 's death on 10 9 1919.
But before this came certain alienations which the plaintiff challenges in the present suits.
The suits were filed on 8 9 1931.
In Civil Appeal No. 92 of 1950, the challenge is to a mortgage effected by Durga Devi on 3 3 1887 in favour of Sahu Bitthal Das.
The mortgagee sued on his mortgage, obtained a decree and in execution purchased the properties himself.
The plaintiff 's case is that Durga Devi only had a life estate and, as there was no necessity, the mortgage and the subsequent auction purchase do not bind him.
In Civil Appeal No. 94 of 1950, there are two alienations, both sales.
The first, dated 23 9 1918, was by Pyare Lal (son of Durga Devi) in favour of Shyam Lal, son of Mulchand.
(This is not the Shyam Lal who was Pyare Lal 's brother).
The vendee later sold the properties to the first and second defendants on 5 3 1927.
One of the vendees, the first defendant, is yet another Shyam Lal: Shyam Lal son of Harbilas.
The other sale was by Brij Lal 's guardian on behalf of Brij Lal, Brij Lal then being a minor.
It was on 25 11 1919 in favour of Chheda Lal.
The first and second defendants preempted this sale after a fight in Court and took possession under the decree which they obtained.
The plaintiff 's case is that Har Devi was alive at the date of the first sale and as the reversion had not opened out Pyare Lal bad no power to sell.
In the case of the second sale, the reversion had opened out but Brijlal being more remote than the plaintiff got no title, so that sale is also bad.
The defendants ' case is that the properties in these 27 two suits (as also in the other two suits with which we are no longer concerned) did not belong to Nanak Chand and formed no part of his estate; they belonged exclusively to Mst.
Pato as part of her personal estate.
On 22 1 1864 Mst.
Pato executed a document which she called a deed of agreement but which, if it is anything at all, is a will.
There are no other parties to it and she purports thereby to dispose of her properties after her death.
The defendants in Civil Appeal No. 92 of 1950 have called it a will.
After saying that she will remain in possession and occupation as long as she lives, Pato says that after her death her three daughters will be the owners and will either remain joint possession or will divide the estate in equal shares and, in that event, will take possession of their respective shares and will be the "owners" of them.
But before she died Pato made another disposition of her estate during her life time in the year 1875 which, of course, abrogated the will.
This was done orally.
The defendants say that this was a family arrangement in which each of the three daughters was given certain properties absolutely so that each became the absolute owner of whatever fell to her share.
Pato also gave properties to each of her four grandsons who were then living, namely Kanhaiya Lal, Mukand Ram, Banwari Lal and Sital Prasad.
The defendants asserted that they also took separate and absolute estates immediately and said that each has been holding and dealing with the properties so divided, separately and as absolute owners, ever since.
Thus, at the dates of the transfers now challenged, each alienor had an absolute title to the properties alienated and the plaintiff has none.
The trial Court held that though most of the properties in Pato 's hands came from her husband Nanak Chand, the plaintiff bad not shown that the properties with which his four suits were concerned formed part of Nanak Chand 's estate.
An issue was also framed about the family settlement and one about estoppel.
On both those point 28 the learned Judge found against the plaintiff.
The result was that all four suits were dismissed.
The High Court reversed these findings on appeal and held that all the properties, including the ones in suit, formed part of Nanak Chand 's estate.
The learned Judges also held that though there was a family arrangement, it was a purely voluntary settlement made by Pato and was not made as the result of any dispute and that in any case it did not bind the plaintiff who was not a party to it and who does not claim through any of those who were.
They also held that there was no estoppel.
Accordingly, the plaintiff 's claim was decreed in each of the four suits.
Appeals were filed here in all four suits by the various defendants but Civil Appeals Nos. 91 and 93 of 1950 were dismissed for want of prosecution, therefore the decree of the High Court in the two cases out of which those appeals arose will stand.
We are now only concerned with Civil Appeals Nos. 92 and 94 of 1950.
In the lower Courts much of the effort was concentrated on finding out which items out of a large mass of property belonged to Nanak Chand and which did not.
We do not intend to look into that because it it is unnecessary on the view we take.
We will therefore assume, without deciding, that all the properties in dispute were part of Nanak Chand 's estate.
We will deal first with the family arrangement.
The learned counsel for the plaintiff argued that the defendants never set up a family arrangement though they have used the words "family settlement".
He contended that what they really pleaded was a gift out and out by Pato.
It was pointed out that the defendants never suggested a dispute, neither did they suggest that any one ever questioned or doubted Pato 's absolute title to the property.
Therefore, it was argued, the present case, which is based on the assumption that the property was not Pato 's and that she was laying wrongful claim to it, cannot be allowed because it flies in the face of the defendants ' pleadings.
29 There is not much in this objection.
The defendants did plead a family arrangement and the matter was put in issue and fought out.
The defendants ' case was that all the property was Pato 'section The plaintiff 's case was that it was all Nanak Chand 'section The issues were "4.
Whether Mst.
Pato gave properties separately to each of her three daughters and to daughter 's sons and put them in proprietary possession and they remained absolute owners of their properties and what is its effect on the case? 5.
Whether the arrangement mentioned in issue No. 4 was by way of family settlement and what is its effect on the case?" These issues are broad enough to cover the present point.
If the properties really belonged to Nanak Chand, as the plaintiff claims, then the case for a family settlement becomes all the stronger, for it is clear that Pato laid claim to them as her own properties of which she could dispose by will, for that is what the document of 1864 really is.
If, on the other hand, they were her properties, as the defendants say, then she had the right either to gift them outright or to settle them as the defendants say she did by way of a family arrangement.
In either case, the matter was fully fought out and neither side was misled.
The real question we have to decide is, has the family arrangement been proved? We think it has.
The direct evidence on this point is that of Shyam Lal (D.W. I in C.A. 94/50) and the first defendant there.
He tells us that he had money lending transactions with Har Devi, Kanhaiya Lal, Shyam Lal and Pyare Lal on unregistered bonds from 1902 till 1910 and from 1910 on registered mortgage bonds.
He says that "They" (that is to say, Har Devi, Mukand Ram, Kanhaiya Lal, Shyam Lal and Pyare Lal) "showed one copy of a deed of will and said that Mst.
Pato had given the property to her daughters and grandsons. .
I am illiterate and Kanhaiya Lal brother of Mukand Ram had the deed of will read over to me at 30 the time of mortgaging property in 1909 or 1910.
It was by means of that paper that I came to know that Mst.
Pato had made her daughters and grandsons absolute owners and I know of the property which was mortgaged to me".
Now it is true that the so called will of 1864 does not make provision for the grandsons, nor does it expressly confer an absolute estate on the legatees, but the witness is illiterate and had to depend on what he was told about the contents and meaning of the document, and what we have to test is the truth of his assertion that the plaintiff Mukand Ram and Kanhaiya Lal, and other members of the family, told him that Mst.
Pato had given the property to her daughters and grandsons.
If they told him this, as he says they did, then it operates as an admission against Mukand Ram and shifts the burden of proof to him because he was one of the persons who made the statement.
The statements made by the others are not relevant except in so far as they prove the conduct of the family.
The plaintiff (P.W. 11 in C.A. 91/50) admits that Mst.
Pato divided the estate but says that it was only for convenience of management and that neither she nor her daughters had, or pretended to have, anything more than a life estate.
He denies that there was any gift or family arrangement.
But he had to admit that the grandsons also got properties at the same time.
His explanation is that it was for the purposes of "shradh" and pilgrimage to Gaya and he says that though they were given possession they were not the "owners".
We now have to choose between these two witnesses and see which is telling the truth.
But before doing that we will advert to another member of the family, Pyare Lal, who was examined as a witness (D.W. 17) in C.A. 92/50.
He admits a series of sales made by him but says that he had no wilt of his own and that he did just what Mukand Ram told him.
Now to go back to the year 1864 when Mst.
Pato made the so called will of 1864.
This document was 31 construed by the Privy Council in Mast.
Hardei vs Bhagwan Singh(1) and their Lordships said "In the events which happened this document did not become operative, but it is relevant as showing that at the date of its execution Pato was claiming an absolute right to dispose of the whole of the scheduled property".
Mukand Ram was not a party to that litigation and the decision does not bind him but it operates as a judicial precedent about the construction of that document, a precedent with which we respectfully agree.
She says there that the property "belongs exclusively to me without the participation of anyone else".
That assertion, coupled with the fact that she purported to dispose of the property after her death (which she could not have done as a limited owner), and taken in conjunction with the subsequent conduct of the daughters and that of the grandsons, imports admissions by them that that was her claim and leaves us in little doubt about what she meant.
We therefore reach the same conclusion as the Judicial Committee and hold that Mst.
Pato claimed an absolute estate in 1864.
We will now examine the conduct of the family after Pato 's death and the claims put forward by them from time to time.
First, we have the statement of Mukand Ram in the witness box (P.W. 11 in C.A. 91/50) that on Pato 's death her daughters took separate possession of the properties in the following villages and towns: Har Devi Qutabpur Amawti.
Shakerpore.
Lalpur.
Bagh Alam Sarai.
Houses, Shops, etc.
in Bazaar Kot, Sambhal.
Durga Devi.
Keshopur Bhindi.
Tatarpore Ghosi.
Half Bilalpat.
Qumharwala Bagh.
(1) A.I.R. 1919 P.C. 27.
32 Shehzadi Serai.
Houses, shops, etc.
in Sherkhan Serai, Sambhal.
Maha Devi.
Guretha.
Behrampur Half Bilalpat.
Mahmud Khan Serai.
Houses, etc.
in Kot.
Grove in Alam Serai The plaintiff also admits that the grandsons got some properties but does not give details.
All he says is that they were given properties "for purposes of performance of 'shradh ' and pilgrimage to Gaya".
Next, we have a long series of alienations by different members of the family with claims to absolute ownership which could only have sprung from titles derived either from a gift from Pato or from a family settlement.
We say "family settlement" because we know now that the bulk of the property (and according to the High Court the whole of it) was Nanak Chand 'section We also know that some of it was purchased by Pato after Nanak Chand 's death from the income of the estate.
Pato had the right to purchase properties for herself if she wanted instead of adding them to her husband 's estate and we know she claimed title to the whole as an absolute owner in 1864.
This claim may have been due to a mistaken view of Hindu law that in the absence of sons the widow gets an absolute estate, or it may have been due to other reasons, but that she made the claim is clear, and the subsequent conduct and statements of the family show that they either admitted the correctness of her claim and accepted the properties as gifts from her or they agreed to and acted on a family settlement to avoid disputes on the basis that each got an absolute title to whatever properties fell to his or her share at the time of the division.
The grandsons were minors at the time and were not parties to this arrangement, whatever its origin, and of course the widow and daughters could not enlarge their limited estates so as to bind the grandsons 33 however much they agreed among themselves.
But for the moment we are not considering the legal effect of whatever the arrangement was but whether the conduct of the family gives rise to an inference that there was an arrangement in fact.
A family arrangement can, as a matter of law, be implied from a long course of dealings between the parties: Clifton vs Cockburn(1) and William vs William(1); and we have such a course of dealing here.
First, there is a long series of alienations by Har Devi stretching from 1877 down to 1916.
We tabulate them below with the recitals she made about her title.
17 1 77 Mortgage Qutabpur Amawti "owned by me".
exhibit LL 1 (C.A. 94) 11 1 78 do do Owner: "devolved on me from my exhibit 2J1 mother".
(C.A.91) 20 3 81 do do Owner: "right of Ex.2H1 inheritance from (C.A.91) my father".
7 9 83 Sale.
Lalpur Owner: "right of inheritance".
exhibit 2Gl (C.A. 91) 23 8 87 Mortgage Qutabpur Amawti No recital exhibit
L (C. A. 92) 15 7 05 do do Absolute owner with KanhaiyaEx.
BB 1 (C.A. 94) Laland Mukand Ram.
19 11 08 do do No recital exhibit M 1 (C.A. 94) do 14 11 14 do do do exhibit V (C.A. 92) 23 3 15 do do Owner: with exhibit
X (C.A. 92) Mukand Ram 17 2 16 do do With Mukand exhibit N 1 (C.A. 94) Ram.
No recital 28 3 16 do do Owner: with Mukand Ram and his son exhibit (G.A. 94) Ram Gopal 22 1 18 do Behrampur Owner: with exhibit
DDD 1(C.A. 91) Buzurg Mukand Ram and Bhukan Saran 23 3 18 do do Owner: with exhibit M 1(C. A. 91) Mukand Ram and Pyare Lal It will be observed that Har Devi sometimes claimed to be absolute owner by right of inheritance from her father and at others from her mother in respect of the same village, but whichever way it was, (1) ; (2) 5 34 the claim to absolute ownership Was consistent throughout.
This could only be referable to a family settlement where the origin of the property was in doubt but which was settled by bestowing, or purporting to bestow, an absolute estate on the daughters.
It will also be noticed that in later years Har Devi joined with Mukand Ram but still claimed an absolute estate along with him.
This was for the following reason.
Soon after Mukand Ram attained majority, the mother and sons quarrelled.
On 11 2 1890 they referred their dispute to arbitration, exhibit RR 1 (C.A. 94).
Mukand Ram became a major in 1890 and Kanhaiya Lal in 1884.
It appears from their agreement of 11 2 1890 that Har Deyi claimed an absolute title while her sons said she was only a limited owner.
But the sons agreed to accept a decision to the effect that she had an absolute estate in the whole of the property in dispute between them should the arbitrator so decide.
The properties were Qutabpur Amawti, Shakerpore, Houses, shops, etc.
in Mohalla Kot in Sambhal.
Another significant thing is that in this document both mother and sons agreed that all of Nanak Chand 's grandsons then in being were in separate possession and absolutely entitled to certain other properties which they expressly agreed were not to form the subject matter of the arbitration.
Here again, these titles could only be referable to a family arrangement, for the grandsons could not have got an absolute estate in any other way; nor could Har Devi.
Mukand Ram tells us as P.W. 11 (C.A. 91) that he and his brother Kanhaiya Lal got Shakerpore and some shops in Bazar Kot, Sambhal, as a result of this arbitration, but does not say what happened to Qutabpur Amawti.
But it is significant that Har Devi 's dealings with Qutabpur Amawti after this date were all jointly with Kanhaiya Lal and Mukand Ram.
It may be that the arbitrator awarded it jointly or they agreed to hold it on that basis.
We do not know.
All we know is that they mortgaged it jointly.
35 Behrampur fell to Mukand Ram 's share and in the mortgage of the property in 1918 Har Devi joined with Mukand Ram and Murari Lal 's son Bhukan Saran in one case and with Pyare Lal in the other.
But except for the last two mortgages of 1918 the conduct of Har Devi and her sons for 39 years from 1877 to 1916 as disclosed in these deeds is only consistent with the family arrangement which the defendants allege, for on no other hypothesis could either the mother or the sons have laid claim to an absolute estate.
We will next turn to Durga Devi.
She died in 1888 but before she died she mortgaged Keshopur Bhindi which had fallen to her share on 3 3 1887 by exhibit U 1 (C. A. 93) and claimed to be the owner.
Then there is Maha Devi.
The only direct evidence we have of her conduct is a written statement that she filed in O.S. 177/97, exhibit 2BI (C.A. 91).
She asserted there on 5 1 1898 that she had been in proprietary possession and occupation of her divided share of the property obtained by her from her mother under a deed of will.
The circumstances in which she made this statement are to be found in the judgment in that suit, exhibit GI (C.A. 91).
The suit was by Har Devi against her sister and a transferee who claimed title through the other sister Durga Devi.
Har Devi 's allegation was that Durga Devi had mortgaged Keshopur Bhindi and Tatarpore Ghosi on 3 3 87.
The mortgagee sued on his deed and obtained a decree for sale.
In execution of the decree he purchased the properties himself Durga Devi died in 1888 and Har Devi claimed that Durga Devi had only a limited estate and that Maha Devi and herself were entitled to the properties by survivorship.
Maha Devi refused to support her sister and took up the position that each sister, or at any rate that she, Maha Devi, got an absolute estate in the property that came to her and of which she was placed in separate possession, from Pato.
On 16 12 10 Maha Devi mortgaged Behrampur Buzurg and claimed that it belonged to her, being property left to her by her mother in which no one else had any rights.
The deed 36 is exhibit BB 1 (C.A. 93).
On 2 7 11 she sold Bilalpat and claimed to be its exclusive proprietor, exhibit R 1 (C.A. 93).
We now come to two statements made by Har Devi and Maha Devi as witnesses in that suit.
Strong exception was taken to their admissibility because the plaintiff was not a party to the earlier litigation.
It is a moot point whether they would be admissible under section 32(3) of the Evidence Act, but we need not decide that because we do not intend to use them as proof of the truth of the facts stated in them.
But they are, in our view, admissible to show the conduct of these two ladies.
The conduct of the various members of the family is relevant to show that their actings, viewed as a whole, suggest the existence of the family arrangement on which the defendants rely.
At this distance of time gaps in evidence that would otherwise be available have to be filled in from inferences that would normally have little but corroborative value.
But circumstanced as we are, inferences from the conduct of the family is all that can reasonably be expected in proof of an arrangement said to have been made in 1875.
The statements that Har Devi and Maha Devi made as witnesses are therefore as relevant as recitals made by them in deeds and statements made by them in pleadings.
They do not in themselves prove the fact in issue, namely the family arrangement, because, in the absence of section 32(3), they are not admissible for that purpose, but as their conduct is relevant these statements are admissible as evidence of that conduct.
Maha Devi 's statement is exhibit 2 Al (C.A. 91) and Har Devi 's exhibit 2 Fl (C.A. 91).
Both speak of an arrangement effected by Pato in her life time and say that they entered into separate possession of the properties by reason of that arrangement.
Har Devi says in addition that the grandsons were included in the arrangement and given properties too.
Therefore, we know that this is the title under which each claimed to hold in O.S. No. 177/97.
It is proof of their assertion of this title at that early date and though it is no proof of the truth of those assertions it is proof of the 37 fact that the assertions were made and that is all we need at the moment.
We turn next to the conduct of the grandsons, and first we will consider the plaintiff Mukand Ram and his brother Kanhaiya Lal.
The plaintiff attained majority in 1890 and from that date down to 1922 we have a series of assertions of a title that can only spring from the family arrangement.
First, we have the deed of 11 2 90, exhibit RR 1 (C.A. 94) which we have already considered in connection with Har Devi.
This is the agreement between his brother and himself on the one hand and Har Devi on the other to refer their dispute to arbitration.
We have already commented on the fact that the two brothers asserted an absolute title to properties that were in their possession and acknowledged the absolute title of Pyare Lal and Shyam Lal to the properties of which they were possessed.
The only dispute they were prepared to submit to arbitration was about the properties in Har Devi 's possession and there, they were prepared to accept a decision upholding Har Devi 's claim to an absolute estate.
After this came the following dealings: 20 11 91 Sale Shahzadi Proprietary pos exhibit 2 K1 (C.A. 91) Sarai session "devolved on us by right of inheritance from Pato ".
28 7 93 Sale Dugawatr Proprietary pos exhibit 2 El (C.A. 91) session "by right of inheritance".
2 7 96 Mortgage Qutabpur " ancestral and exhibit KK 1(C.A. Amawti 94) purchased by us": Possessed by us. without the participation of anybody else".
30 1 00 Sale Bazar Mah " Proprietary pos exhibit
U (C.A. 92) mud Khan session" by "right Sarai, Sam of inheritance": bhal " without the par ticipation of anyone else." 15 7 05 MortgageQutabpur Owners:withHarEx.
BB 1(C.A.94) Amawti Devi "without the participation of anyone else".
38 Kanhaiya Lal died about this time and thereafter Mukand Ram continued to make transfers claiming to do so in his own right.
He made the following along with Har Devi.
We have already analysed them.
They were 19 11 08 exhibit
MI (C.A.94) 14 11 14 exhibit
V (C.A.92) 23 3 15 exhibit
X(C A.92) 17 2 16 exhibit
N 1(C.A.94) 28 3 16 EX.MM1(C.A.94) 22 1 18 Ex DDD1(C.A.91) 23 3 18 exhibit
M1(C.A.91) But in addition to these he made the following transfers on his own: 18 2 16 Sale Lashkarpur Absolute owner.
exhibit PP 1 (C.A. 94) 24 4 22 Sale Houses, etc.
do exhibit Y (C.A. 92) in Sambhal 23 11 22 Sale Qutabpur Amawti do exhibit Q (C.A. 92) Next, we come to Shyam Lal.
His alienations were as follows: 19 6 97 Mortgage.
Shops in Sanbhal.
Owner.
exhibit
W 1(C.A. 94) 9 11 07 do House in Sambhal.
No recital exhibit TT 1(C.A. 94) 17 9 09 do Bilalpat.
do exhibit UU 1 (C. A. 94) In addition, he made the following transfers jointly with his brother Pyare Lal: 18 1 06 Mortgage.
Bilalpat & shops No recitals.
exhibit EEE 1 in Sambhal.
(C.A.94) 21 2 10 do Bilalpat & Sabz.
do exhibit AA 1(C.A 94) Pyare Lal also made two transfers on his own 23 9 18 Sale Bilalpat.
"Devolved on exhibit 15(C.A. 94) me"from Nanak Chand by right of inheritance.
2 1 20 do do do exhibit 18 (C. A. 93) Lastly, there is Bhukban Saran, who is Maha Devi 's daughter 's son.
He transferred as follows: 26 3 18 SaleHouses, etc.in Absoluteand Sambhal.
exclusive exhibit MM 1 (C.A.92) owner.
9 1 21 Relinquish Bilalpat do exhibit DD 1 (C.A. 93) ment.
These documents disclose a long line of conduct on the part of the various members of the family and show that from 1877 down to 1922 each dealt with the properties in his or her possession as absolute 39 owner and set up exclusive proprietary title to the properties transferred.
It is true the source of title was not consistently stated, sometimes it was said to be Pato and at others Nanak Chand, but the assertion to a separate, exclusive and absolute title in each is common all through.
There is only one way in which they could have got these exclusive titles and that is by a family arrangement, for whether the property was Nanak Chand 's or whether it was Pato 's, in neither event could any one of these persons have obtained an absolute estate on the dates with which we are concerned: the grandsons, because the reversion had not opened out; the daughters because, either way, they would only be limited owners under the Hindu law.
But if there was a family arrangement assented to by the daughters and later accepted and acted on by the sons when they attained majority, their claim to separate and independent absolute titles is understandable.
It does not matter whether the claims were well founded in law because what we are considering at the moment is not the legal effect of the arrangement but whether there was one in fact.
Now, in spite of all these dealings, the conduct of Har Devi and Mukand Ram and Kanhaiya Lal was not always consistent.
They were greedy and while insisting that they be allowed to hold on to what they had got, they wanted to snatch more if and when they could.
The ball started rolling in 1890 as soon as Mukand Ram attained majority.
There was the reference to arbitration in that year to settle their dispute with their mother Har Devi.
But even there, there was the inconsistency regarding their own properties to which we have already referred.
Mukand Ram 's later explanation in the witness box that they got those properties for shradh purposes and for a pilgrimage to Gaya cannot be believed.
Next, there was the suit by Mukand Ram and Kanhaiya Lal against their aunt Maha Devi in 1895: section No. 21/1895, exhibit 31 (C.A. 91).
That was occasioned by two sales by Maha Devi on 19 2 83 and 20 5 85.
She stoutly maintained that she had an absolute title.
40 The litigation had a chequered career and ultimately the suit was dismissed as barred by time.
Next came suit No. 177 of 1897, exhibit GI (C.A. 91), in which Har Devi sued Maha Devi and a transferee.
This time it was to set aside an alienation by Durga Devi, Durga Devi then being dead.
Har Devi claimed that the property was Nanak Chand 's and that the daughters were limited owners.
But again Maha Devi stood by the family arrangement and asserted an absolute title in all the daughters; exhibit 2BI (C.A. 91).
We have seen that Har Devi entered the box and admitted the arrangement: exhibit 2F 1 (C.A. 91).
The suit very naturally failed, but the result of the litigation is not relevant because the plaintiff was not a party.
What we are examining is the conduct of Har Devi.
In 1913 Har Devi tried again after Maha Devi 's death, this time against alienees from Maha Devi.
This is the suit that went up to the Privy Council, Mst.
Hardei vs Bhagwan Singh(1).
She failed again '.
Having failed against Maha Devi in the 1897 litigation, Har Devi next tried her luck against Maha Devi 's grandson (daughter 's son) Bhukhan Saran, after Maha Devi 's death.
The suit is O.S. 52/14, exhibit 78 (C.A. 94).
This time she succeeded with respect to some items and failed as regards the rest.
But again the result is irrelevant: Exs. 6 and 8 (C. A. 94).
Now what we are examining at the moment is whether Shyam Lal, D. W. I in CA. 94, is to be believed when he says that Mukand Ram, among others, told him about the family arrangement tinder which Pato had divided all her property between her daughters and their sons.
It is evident from what we have said above that Mukand Ram had been consistently asserting such a title for 31 years from 1891 to 1922 despite his aberrations in 1890 and 1895.
In parti cular he did this whenever he wanted to borrow money or to sell property: and he makes a significant admission in the witness box as P. W. 11 in C. A. 91 that (1) A.I.R. 1919 P.C. 27.
41 "In the mortgage or sale of the property over which Mst.
Har Devi was in possession none of her sisters or sisters ' sons joined.
Similarly, in the sale or transfer of the property that came to Durga Devi, none of her sisters or other sisters ' sons joined".
He also admits that there was a division and separate possession from 1876.
He says that it was for convenience of management and says that it was after Pato 's death, but in view of the mass of evidence that we have just analysed, we think it far more likely that he told Shyam Lal just what Shyam Lal says he did.
After all, he was borrowing money from Shyam Lal on each of these occasions; so there is every reason to believe that he would have told Shyam Lal what he had so repeatedly asserted to his other transferees.
We accordingly believe Shyam Lal.
That at once shifts the burden of proof to the plaintiff, and what is his explanation? First, a division of the estate for convenience of management (but that does not explain the long chain of unchallenged transfers bar Har Devi 's efforts in four cases); and second, that the grandsons got property absolutely for the purposes of shradh and pilgrimage: 'an explanation which we disbelieve).
We are therefore left with the plaintiff 's admission to Shyam Lal and that admission, coupled with the conduct and actings of the family, firmly establishes the family arrangement.
We accordingly hold that, whether the property belonged to Pato or to Nanak Chand, Pato claimed an absolute right which the daughters acknowledged, and in return they and their sons were given separate and absolute estates in separate portions of the property immediately.
This arrangement bound the daughters because they were parties to it and received good consideration.
But so far as the sons are concerned, they were minors at that time and were not parties to this arrangement, for no one suggests that they were represented by guardians who entered into it on their behalf.
Therefore, the properties they received were, so far as they are concerned, gifts pure and simple 6 42 from Pato with the assent of her daughters.
It does not matter whether the properties were Pato 's exclusive properties or whether they came to her from her husband because, either way, the title to the properties resided in her and she was the only person competent to pass it on to another.
If her title was absolute, the sons got absolute estates.
If it was the limited title of a Hindu widow, they obtained a limited title good during her life, and, as the daughters consented to the gifts and obtained properties for themselves as a result of the arrangement that resulted in these gifts, they would not be permitted to question the gifts; and the Privy Council so held in Har Devi 's suit against the alienees from Maha Devi: Mst.
Hardei vs Bhagwan Singh(1).
But so far as the grandsons are concerned, the mere, ' fact that each received a separate gift from Pato at a time when they were not competent to assent or to dissent would not in itself bind them.
To achieve that result, there would have to be something more; and it is to that something more that we will now direct our attention.
But before doing that, we will pause to distinguish Rani Mewa Kuwar.
Rani Hulas Kuwar (2); Khunni Lal vs Gobind Krishna Narain (3), and Ramsumran Prasad vs Shyam Kumari (4).
It is well settled that a compromise or family arrangement is based on the assumption that there is an antecedent title of some sort in the parties and the agreement acknowledges and defines what that title is, each party relinquishing all claims to property other than that falling to his share and recognising the right of the others, as they had previously asserted it, to the portions allotted to them respectively.
That explains why no con veyance is required in these cases to pass the title from the one in whom it resides to the person receiving it under the family arrangement.
It is assumed that the title claimed by the person receiving the property under the arrangement had always resided in him or her so far as the property falling to his or her share is concerned and therefore no conveyance is (1) A.I.R. 1919 P.C. 27.
(2) [1874] 1 I.A. 157, 166.
(3) [1911] 38 I A. 87, 102.
(4) [1922] 19 I. A. 342, 348.
43 necessary But, in our opinion, the principle can be carried further and so strongly do the Courts lean in favour of family arrangements that bring about harmony in a family and do justice to its various members and avoid, in anticipation, future disputes which might ruin them all, that we have no hesitation in taking the next step (fraud apart) and upholding an arrangement under which one set of members abandons all claim to all title and interest in all the properties in dispute and acknowledges that the sole and absolute title to all the properties resides in only one of their number (provided he or she had claimed the whole and made such an assertion of title) and are content to take such properties as are assigned to their shares as gifts pure and simple from him or her, or as a conveyance for consideration when consideration is present.
The regal position in such a case would be this.
The arrangement or compromise would set out and define that the title claimed by A to all the properties in dispute was his absolute title as claimed and asserted by him and that it had always resided in him.
Next, it would effect a transfer by A to B, C and D (the other members to the arrangement) of properties X, Y and Z; and thereafter B, C and D would hold their respective titles under the title derived from A. But in that event, the formalities of law about the passing of title by transfer would have to be observed, and now either registration or twelve years adverse possession would be necessary.
But in the present case, we are dealing with an arrangement made in 1875 at a time when the Transfer of Property Act was not in force and no writing was required; an d, as there is no writing, the Registration Act does not apply either.
Therefore, the oral arrangement of 1875 would be sufficient to pass title in this way and that, in our opinion, is what happened.
But these rules only apply to the parties to the settlement and to those who claim through or under them.
They cannot be applied to the minor sons who were not parties either personally or through their guardians and who do not claim title ' either through 44 Pato or her daughters.
So far as they are concerned, what they received were gifts pure and simple and the only assent that could be inferred from mere acceptance of the gift and nothing more would be assent to that particular gift and not assent to the gifts similarly made to others; and for this reason.
When Mukand Ram attained majority he had two titles to choose from.
One from Pato as a limited owner coupled with the assent of the daughters to her gift to him.
In that case, he would hold a limited estate till the reversion opened out.
The gift would be good during Pato 's life time because she had that title to convey, and thereafter, till the three daughters died, because they assented to it and obtained considerable benefit for themselves from the transaction out of which it arose.
The other title would be an absolute one on the basis that Pato was the absolute owner of the properties.
That title could only be referable to the family arrangement, and if Mukand Ram, knowing the facts, assented to the arrangement ex post facto, he will be precluded from challenging it for reasons which we shall now explain.
If the properties were Nanak Chand 's, which is the assumption on which we are deciding this case, then Pato was a limited owner under the Hindu law, but as such she represented the estate and any title she conveyed, whether by gift or otherwise, would not be void; it would only be voidable.
It would be good as against all the world except the reversioner who succeeded when the reversion opened out and he is the only person who would have the right to avoid it; and it would continue to be good until he chose to avoid it.
Therefore, if he does not avoid it, or is precluded from doing so, either because of the law of limitation or by his own conduct, or for any other reason, then no one else can challenge it; and the law is that once a reversioner has given his assent to an alienation, whether at the time, or as a part of the transaction, or later as a distinct and separate act, he is bound though others may not be, and having given his assent he cannot go back on it to the detriment of other persons; all the more so when he himself receives 45 benefit:see Raja Modhu Sudan Singh vs Rooke(1); Bijoy Gopal vs Krishna(1), and Ramgouda Annagouda vs Bhausaheb(3).
Lord Sinha, delivering the judgment of the Privy Council in the last of these three cases, said at page 402: "It is settled law that an alienation by a widow in excess of her powers is not altogether void but only voidable by the reversioners, who may either singly or as a body be precluded from exercising their right to avoid it either by express ratification or by acts which treat it as valid or binding".
This was followed in Dhiyan Singh vs Jugal Kishore(4) though the ground of that decision was estoppel.
We are now founding on another principle which is not grounded on estoppel and which, indeed, is not peculiar to Hindu law.
Estoppel is rule of evidence which prevents a party from alleging and proving the truth.
Here the plaintiff is not shut out from asserting anything.
We are assuming in his favour that Pato had only a life estate and we are examining at length his assertion that he did not assent to the family arrangement.
The principle we are applying is therefore not estoppel.
It is a rule underlying many branches of the law which precludes a person who ' with full knowledge of his rights, has once elected to assent to a transaction voidable at his instance and has thus elected not to exercise his right to avoid it, from going back on that and avoiding it at a later stage.
Having made his election he is bound by it.
So far as the Hindu law is concerned, Lord Dunedin explained in Rangaswami Gounden vs Nachiappa Gounden(5), a case in which a widow gifted properties to her nephew, that though the reversioner is not called upon to exercise his right to avoid until the reversion falls in and so no assent can be inferred from mere inaction prior to the death or deaths of the limited owner or owners, he is not bound to wait and "of course something might be done even before (1) [1897] 24 I.A. 164, 169.
(2) [1906] 34 I.A. 87.
(3) [1927] 54 I.A. 396.
(4) 1952 S.C.R. 478, 488.
(5) [1918] 46 I.A. 72, 86,87. 46 that time which amounted to an actual election to hold the deed good".
Ramgouda case(1) is an illustration of what that something can be, for there the assent was given by the ultimate reversioner before he became in titulo to alienations by a widow, one of which was a gift.
The present case is another illustration.
For the reasons we have given and which we shall now further examine, we hold that the plaintiff, who is in titulo now that the succession has opened out, unequivocally assented to the arrangement with full knowledge of the facts and accepted benefit under it, therefore, be is now precluded from avoiding it, and any attempts he made to go behind that assent when it suited his purpose cannot render the assent once given nugatory even though it was given when he was not in titulo and even though the assent was to a series of gifts.
The real question is whether the plaintiff assented to the family arrangement, and as the plaintiff was not a party to the arrangement his assent to the arrangement itself, and not to something else, must be clearly established, and also his knowledge of the facts.
But we think they have been.
In the first place, there was the express assent in 1890 to the gifts made to the other grandsons on the basis that each grandson got an absolute estate.
Next, there was the long course of dealings by Kanhaiya Lal and Mukand Ram in which they asserted absolute titles.
Mukand Ram tells us in the witness box as P.W. 11 (C.A. 91) that Kanhaiya Lal was the karta of the joint family to which Mukand Ram belonged, therefore Kanhaiya Lal 's dealings with the properties which he and his brother held under a joint and undivided title are also relevant as they will bind Mukand Ram.
And lastly, there is Mukand Ram 's representation to Shyam Lal (D.W. I in C.A. 94) which leaves us in no doubt about his knowledge.
The cumulative effect of this course of conduct leads to a reasonable inference that Kanhaiya Lal and Mukand Ram were holding, not on the basis of a separate and individual gift made by a life owner with the assent of the next set of life 1) [1927] 51 I.A. 396, 402.
47 owners, but on the basis of the family arrangement which was one composite whole in which the several dispositions formed parts of the same transaction under which Mukand Ram himself acquired a part of the estate: see Ramgouda vs Bhausaheb(1).
We are therefore satisfied that the plaintiff 's assent was to this very arrangement.
and that concludes both cases.
In C. A. 94/50 there is, in addition, a direct personal estoppel against the plaintiff.
The transfers that are challenged there are sales of 23 9 18 and 25 11 19 made by two of the grandsons, one personally and the other by the guardian, but the relevant dates for the purposes of the estoppel are later because the representation in this case was not made to the immediate transferees but to the first defendant who obtained title to the properties at a later date, in one case by a sale from the immediate transferee, in the other by pre emption.
But the exact dates do not matter because the representation to the first defendant was made in 1910 before the first defendant 's purchases.
It was made by Kanhaiya Lal and Mukand Ram as as well as by other members of the family.
We have already referred to the first defendant 's evidence.
This case would therefore be governed by Dhiyan Singh vs Jugal Kishore(2) in any event.
But we need not elaborate this further because of the other principle which, in our opinion, is sufficient to dispose of both the present cases.
The result is that both appeals are allowed.
The decrees of the High Court are set aside and those of the first Court dismissing the plaintiff 's claims in those suits out of which Civil Appeals 92 and 94 of 1950 arise are restored.
Costs here and in the High.
Court will be paid by the plaintiff respondent but there will be only one set of costs and they will be divided half and half between the two sets of appellants.
Appeals allowed.
(1) [1927] 54 I.A. 396, 402.
(2) 1952 S.C.R. 478.
| IN-Abs | A family arrangement can, as a matter of law, be inferred from a long course of dealings between the parties.
It is well settled that a compromise or family arrangement is based on the assumption that there is an antecedent title of some sort in the parties and the agreement acknowledges and defines what that title is, each party relinquishing all claims to property other than that falling to his share and recognising the right of the others, as they had previously asserted it, to the portions allotted to them Respectively.
That explains why no conveyance is required in these cases to pass the title from the one in whom it resides to the person receiving it under the family arrangement.
It is assumed that the title claimed by the person receiving the property under the arrangement had always resided in him or her so far as the property falling to his or her share is concerned and therefore no conveyance is necessary.
But in view of the fact that the Courts lean strongly in favour of family arrangements that bring about harmony in a family and do justice to its various members and avoid, in anticipation, future disputes which might ruin them all the Supreme Court, carrying the principle further, upheld an arrangement under which one set of members abandons all claim to all title and interest in all the properties in dispute and acknowledges that the sole and absolute title to all the properties resides in only one of their number (provided he or she had claimed the whole and made such an assertion of title) and are content to take such properties as are assigned to their shares as gifts pure and simple from him or her, or as a conveyance for consideration when consideration is present.
The legal position in such a case would be this.
The arrangement or compromise would set out and define that the title claimed by A to all the properties in dispute was his absolute title as claimed and asserted by him and that it had always resided in him.
Next, it would effect a transfer by A to B, C and D (the other members to the arrangement) of properties X, Y and Z; and thereafter B, C and D would hold their respective titles under the title derived from A. But in that event, the formalities of law about the passing of title 23 by transfer would have to be observed, and under the present state of law either registration or twelve years ' adverse possession would be necessary.
But in the present case the arrangement was made in 1875 when the Transfer of Property Act was not in force and no writing was required; and as there is no writing, the Registration Act does not apply either.
Therefore, the oral arrangement of 1875 would be sufficient to pass title in this way and that is what happened.
Once a reversioner has given his assent to an alienation, whether at the time, or as a part of the transaction, or later as a distinct and separate act, he is bound though others may not be, and having given his assent he cannot go back on it to the detriment of other persons; all the more so when he himself receives a benefit.
It is settled law that an alienation by a widow in excess of her powers is not altogether void but only voidable by the reversioners, who may either singly or as a body be precluded from exercising their right to avoid it either by express ratification or by acts which treat it as valid or binding.
The principle applicable to the present case is a rule underlying many branches of the law which precludes a person who, with full knowledge of his rights, has once elected to assent to a transaction voidable at his instance and has thus elected not to exercise his right to avoid it, from going back on that and avoiding it at a later stage.
Having made his election he is bound by it.
Held, that in the present case the plaintiff who is in titulo now that the succession has opened out, had unequivocally assented to the arrangement with full knowledge of the facts and accepted benefit under it, so he is now precluded from avoiding it, and any attempts he made to go behind that assent when it suited his purpose cannot render the assent once given nugatory even though it was given when he was not in titulo and even though the assent was to a series of gifts.
Hardei vs Bhagwan Singh, (A.I.R. ; Clif ton vs Cockburn ( ; ; William vs William ; Bani Mewa Kuwtivar vs Rani Hutlas Kuwar [1874] L.R.
I I.A. 157); Khunni Lal vs Gobind Krishna ( [1911] L.R. 38 I.A. 87); Bamsumirn Prasad vs Shyam Kumar ( [1922] L.R. 49 I.A. 348); Baia Modhu Sudhan Singh v Booke ( [1897] L.R. 24 I.A. 164); Bijoy Gopal vs Sm.
Krishna [1906] L.R. 34 I.A. 87); Ramgouda Annagowda vs Bhauaheb ( [1927] L.R. 54 I.A. 396); Dhiyan Singh vs Jugal Kishore ( [1952] S.C.R. 478 at 488); Rangaswami Gounden vs Nachiappa Gouinden ( [1918] L.R. 46 I.A. 72 at 86 & 87), referred to.
|
Civil Appeal No. 377 of 1970.
From the Award dated the 22nd October, 1969 of the Industrial Tribunal, Gauhati in Reference No. 16 of ]965.
Anand Prakash and D. N. Mishra, for the appellant.
D.L. Sen Gupta and section K. Nandy, for respondents.
The Judgment of the Court was delivered by FAZAL AL1, J.
This is an appeal by special leave against the award dated October 22, 1969 by Mr. R. Medhi, Presiding officer, Industrial Tribunal.
Gauhati on a reference made to the Tribunal by the Government of Assam by virtue of its notification No. FLR.
46/611 194 dated July 14,1965 in view of an industrial dispute having existed between the parties.
The appellant is the management of the Indian oil Corporations Ltd. which has undertaken what is known as the Assam oil Refineries situated at Gauhati.
The reference to the Tribunal was made by the Government in the following circumstances: By virtue of a notification dated September 3, 1957, the Central Government granted compensatory allowance according to certain rates to all Central Government employees posted throughout Assam.
The appellant set up the refinery some time in the year 1959 and in view of the circular of the Central Government referred to above the management thought it fit in the circumstances to grant compensatory allowance to all its employees some time in September 1959.
The grant of compensatory allowance was not made through any standing order or circular but it is alleged to have been given as an implied condition of service.
Thereafter there was another notification by the Central Government dated December 8, 1 960 by which it was provided that the employees in receipt of the compensatory allowance would be given the option to choose the house rent allowance or compensatory allowance but will not be entitled to draw both.
This order was to remain in force for five years.
By virtue of another notification dated August 9, 1965 the Central Government made it further clear that the employees of the Central Government would have to draw either compensatory allowance at the existing rates or the house 112 rent allowance but not both.
In view, however, of the notification dated December 8, 1960, alluded to above, the management thought that the contents of the circular were binding on the Company and, therefore, they unilaterally, without giving any notice to the workers, withdrew the concession of the compensatory allowance which had been granted to the workers in September 1959.
This concession was withdrawn with effect from July 1960.
The workers moved the Government for making a reference to the Tribunal because a dispute arose between the parties regarding the competency of the appellant to withdraw the concession granted by it unilaterally.
The Government made a reference to the Industrial Tribunal which has held that there was a dispute between the parties and as section 9A of the Industrial Disputes Act, 1947 hereinafter referred to as 'the Act ' has not been complied with by the Company the management was not legally entitled to withdraw the concession of the Assam Compensatory Allowance granted to the employees.
The award of the Industrial Tribunal was published by the Government of Assam in the Gazette dated July 14, 1965.
Dr. Anand Prakash, counsel for the appellant, made the following three contentions before us: (1) that the compensatory allowance was given purely on the basis of the Central Government circular dated September 3, 1957, on the distinct understanding that it was a temporary measure which could be withdrawn at the will of the employer and did not amount to a condition of service at all; (2) that even if the provisions of section 9A of the Act applied, since the management had substituted the house rent allowance for compensatory allowance the workers were not adversely affected and therefore, it was not necessary to give and notice to them before withdrawing the concession of the compensatory allowance: and (3) that even if the provisions of section 9A of the Act were not complied with, the Tribunal should have at least gone into the question on merits instead of basing its award on the question of applicability of section 9A of the Act.
Before, however, dealing with the contentions raised before us, it may be necessary to mention a few admitted facts.
In the first place it 1 is the admitted case of the parties that the circulars of the Central Government were not binding" on the appellant Corporation, but the Corporation chose to follow them in its own wisdom Secondly it is also ` ' ' admitted that at the time well the concession of compensatory allowance was granted to the employees of the Corporation.
there was nothing to show that it was given only by way of an interim measure which 113 could be withdrawn at the will of the employer.
Thirdly it is also not disputed that before withdrawing the concession of compensatory allowance in August 1960 the appellant gave no notice to the workers, not did it consult them in any way before depriving them of the concession originally granted by the employer.
In fact the Tribunal has found very clearly that the act of the Corporation in granting the Assam Compensatory Allowance was an independent one and made out of their own volition, though the circulars of the Central Government may have been one of the factors that swayed the decision of the management.
It is against the background of these admitted facts and circumstances that we have to examine the contentions raised by counsel for the appeal in this appeal.
As regards the first contention that the concession of the compensatory allowance was granted to the workers by way of a temporary 4 measure and would not amount to a condition of service, we find absolutely no material on the record to support the same.
There is no evidence to show that the management before granting the concession of the compensatory allowance had in any way indicated to the workers that this was only a stop gap arrangement which could be withdrawn after the housing subsidy was granted.
Even before the unilateral withdrawal of the concession granted by the appellant no notice was given to the workers nor were they taken into confidence, nor any attempt was made to open a dialogue with them on this question.
Indeed if the circulars of the Central Government are admittedly not binding on the Corporation, then we are unable to appreciate the stand taken by the appellant that the management unilaterally withdrew the concession merely because of the Central Government circulars.
So far as the compensatory allowance is concerned it was given in order to enable P the workers to meet the high cost of living in a far off and back ward area like Assam.
It had absolutely no causal connection with the housing subsidy or house rent allowance which was a different type of concession.
Furthermore, the grant of compensatory allowance by the appellant was indeed a very charitable act which showed that the employers were extremely sympathetic towards the needs of their r workers.
In there circumstances we have no hesitation in holding that the grant of compensatory allowance was undoubtedly an implied condition of service so as to attract the mandatory provisions of s.9A of the Act which runs thus: "No employer, who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule, shall effect such change, (a) without giving to the workmen likely to be affected by such change a notice in the prescribed manner of the nature of the change proposed to be effected; or (b) within twenty one days of giving such notice: Provided . . . . " An analysis of section 9A of the Act clearly shows that this provision comes into operation, the moment the employer proposes to change any condi 114 tion of service applicable to any workman, and once this is done twenty one days notice has to be given to the workmen.
This admittedly was not done in this case.
By withdrawing the Assam Compensatory Allowance the employers undoubtedly effected substantial change in the conditions of service, because the workmen were deprived of the compensatory allowance for all, time to come.
Dr. Anand Prakash however relied on a few decisions in support of the fact that such a change in the conditions of service does not amount to any change as contemplated by section 9A of the Act.
Reliance was placed on a decision of the Andhra Pradesh High Court in Workmen of Hindustan Shipyard (Private) Ltd. vs Industrial Tribunal, Hyderabad and others(J).
In our opinion the facts of that case are clearly distinguishable from the facts in the present case.
In that case a concession was granted to the employees to attend the office half an hour late due to war time emergency, but this concession was conditional on the reservation of the right to change the office hours and it was open to the employer to take a different decision.
Secondly the working hours being fixed at 6 1/2 hours were below the maximum prescribed by the Factories Act which were 8 hours and, therefore, there t was no adverse change in the conditions of service.
Finally in this case there was a clear finding given by the learned Judge that the concession would not amount to a condition of service.
In this connection,: Jaganmohan Reddy, J., observed as follows: "In this case as it cannot be said that the concession which they were enjoying in the winter month was a privilege to which they were entitled before the Act came into force in February 1948.
I have already stated that the concession was subject to the condition of its withdrawal unilaterally and cannot, therefore, be said to have conferred any right on the employees to enjoy it as such.
. . further that section 9A came into play only when the conditions of service were altered, but the workmen having agreed to the reservation of the employer lo alter it, they have made the right to alter it also a condition of service and therefore the action in accordance with the said right can give no cause for complaint.
" In the instant case we have already held that the grant of compensatory allowance cannot be construed to be merely an interim measure.
hut having regard to the circumstances in which this concession was given will amount to an implied condition of service.
Reliance was also placed on a decision by this Court in Bhiwani Textile Mills vs Their Workmen and others(2), where this Court observed as follows: "Sri G. B. Pai, on behalf of the mills, and Sri M. section K. Sastri and Y. Kumar for the two unions representing the workmen, stated before us that the parties are agreed that this 115 direction given in the award may be deleted as no party objects to its deletion.
Consequently, we need not go into the question whether the tribunal was in law competent to make such a direction in the award or not In view of this agreement between the parties, the only question that remains for decision by us is whether the tribunal was right in directing that workmen, who do duty on any Sunday, will be entitled to an extra payment of 20 per cent of their consolidated wages for that Sunday.
" A perusal of the observations made by this Court would clearly show that the case before this Court proceeded on the basis of a consent order as agreed to by counsel for the parties.
Secondly the question for decision was whether the workmen were entitled to additional payment for working on Sundays even if they were given another off day as a substitute for Sunday.
The Court pointed out that this could not be treated as a condition of service because all that the workman were entitled to was that they should take at least one day off in a week and this facility was not disturbed but instead of giving Sunday off they were given some other day as weekly off.
In these circumstances this case also does not assist the appellant.
Dr. Anand Prakash also cited a decision in oil & Natural was Commission vs The Workmen(1).
In this case also there was a finding of fact by this Court that there was nothing to show that 6 1/2 hours per day was a condition of service.
In this connection, the Court observed as follows: "In our opinion, on the facts and circumstances of this it can not be said that 6 1/2 working hours a day was a term of service, for the simple reason that it was only during a period of the first six months, when the factory was being constructed .
at the site of the workshop that, due to shortage of accommodation, the administrative office was, as an interim arrangement, temporarily located in tents at a place about 2 k.m.
away, that the state in this office was not required to work for more than 62 hours per day.
There is no evidence that 6 1/2 hours per day was a condition of service; neither is there any such term of service in their letters of appointment, nor is such a term of service otherwise discernible from other material on the record.
" In view of our finding, however, that the grant of the Assam Compensatory Allowance was undoubtedly a condition of service this case has absolutely no application.
Reliance was placed on a decision of this Court in Hindustan Lever Ltd. vs Ram Mohan Ray and others(2) for the proposition that withdrawal of the concession of the compensatory allowance did not adversely affect the service conditions of the workmen.
In this case this Court observed as follows: 116 "As regards item 11 it was urged that as one department out of three has been abolished, this item applies.
Though to bring the matter under this item the workmen are not required to show that there is increase in the work load, it must be remembered that the 4th Schedule relates to conditions of service for change of which notice is to be given and section 9 A requires the employer to give notice under that section to the workmen likely to be affected by such change.
The word affected ' in the circumstances could only refer to the workers being adversely affected and unless it could be shown that the abolition of one department has adversely affected the workers It cannot be brought under item 11.
The same consideration applies to the question of change in usage under item 8.
" It is true that this Court held on the facts of that case that the Company had abolished one department, but as the work load was not increased the workers were not adversely affected and the abolition of one department could not be brought under item 11.
The contingency contemplated in the aforesaid case, however, cannot be equated with the present case by virtue of the unilateral deprivation of the compensatory allowance which was received by the employees by the withdrawal of which they were undoubtedly prejudiced.
It cannot be contended that the sudden withdrawal of a substantial concession in the conditions of service would not materially or adversely affect the workmen.
We are, therefore, of opinion that the aforesaid case also does not support the contention of the learned counsel for the appellant.
On the other hand Mr. Sen Gupta appearing for the respondents drew our attention to the decision of this Court in M/s. Tata Iron and Steel Co. Ltd. vs The Workmen and others(1) where this Court, while pointing out the object of section 9A, observed as follows: "The real object and purpose of enacting Section 9 A seems to be to afford an opportunity to the workmen to consider the effect of the proposed change and, if necessary, to represent their point of view on the proposal.
Such consultation further serves to stimulate a feeling of common joint interest of the management and workmen in the industrial progress and increased productivity.
This approach on the part of the industrial employer would reflect his harmonious and sympathetic co operation in improving the status and dignity of the industrial employee in accordance with the egalitarian and progressive trend of our industrial jurisprudence, which strives to treat the capital and labour as co sharers and to break away from the tradition of labour 's subservience to capital.
" The observations made by this Court lay down the real test as to the circumstances in which section 9A would apply.
In the instant case, however, we are satisfied (1) that the grant of the compensatory allow 117 ance was an implied condition of service; and (2) that by withdrawing this allowance the employer sought to effect a change which adversely and materially affected the service conditions of the workmen.
In these circumstances, therefore, section 9A of the Act was clearly applicable and the non compliance with the provisions of this section would undoubtedly raise a serious dispute between the parties so as to give jurisdiction to the Tribunal to give the award.
If the appellant wanted to withdraw the Assam Compensatory Allowance it should have given notice to the workmen, negotiated the matter with them and arrived at some settlement instead of withdrawing the compensatory allowance overnight.
It was also contended that the compensatory allowance was only an allowance given in substitution for housing subsidy.
We are, however, unable to agree with this contention.
Mr. Sen Gupta appearing for the respondents rightly pointed out that there is a well knit and a clear distinction between the compensatory allowance and a housing subsidy or house rent allowance.
This distinction is clearly brought out by the Second Pay Commission 's Report (1957 59) in which the Commission observed as follows: "The compensatory allowances considered here fall into there broad groups: (i) allowances to meet the high cost of living in certain specially costly cities and other local areas, including hill stations where special requirements such as additional warm clothing and fuel etc., add to the cost of living; (ii) those to compensate for the hardship of service in certain areas, e.g. areas which have a bad climate, or are remote and difficult of access; and (iii) allowances granted in areas, e.g. field service areas, where because of special conditions of living or service, an employee cannot, besides other disadvantages, have his family with him.
There are cases in which more than one of these conditions for grant of a compensatory allowance are fulfilled.
" The Second Pay Commission also observed: "The rent concessions dealt with here are of two kinds: (i) provision of rent free quarters, or grant of a house rent allowance in lieu thereof; and (ii) grant of a house rent allow ance in certain classes of cities to compensate the employees concerned for the specially high rents that have to be paid in those cities.
The former is allowed only to such staff as are required to reside on the premises where they have to work.
and is thus intended to be a facility necessary to enable an employee to discharge his duties.
In some cases, it is a supplement to pay or substitute for special pay etc., which would have been granted but for the existing of that concession.
In either case, it is not related to the expensiveness of a locality.
The latter, on the other hand, is a compensatory or a sort of a dearness allowance, intended to cover not the high cost of living as a whole but the prevailing high cost of residential accommodation; and it has no relationship to the nature of an employee 's duties.
" 118 The observations made by the Second Pay Commission throw light on this question.
In fact the compensatory allowance and housing subsidy are two different and separate categories of the terms of service conditions and they cannot be clubbed together, nor can the one be made dependent on the other.
The object of these two concessions is quite different and both of them serve quite different purposes.
It was next contended that even if section 9A of the Act applied, the Tribunal should have gone into the question on merits instead of giving the award on the basis of non compliance with the provisions of section 9A.
This argument also appears to us to be equally untenable.
On the facts and circumstances of the present case the only point that fell for determination was whether there was any change in the conditions of service of the workmen and, if so, whether the provisions of section 9A of the Act were duly complied with.
We cannot conceive of any other point that could have fallen for determination on merits, after the Tribunal held that section 9A of the Act applied and had not been complied with by the appellant.
It was also faintly suggested that there was no question of a customary claim or usage because the period during which the compensatory allowance was granted and withdrawn was too short.
It is, how ever, not necessary to take any notice of this argument, because counsel for the respondents Mr. Sen Gupta fairly conceded that he had not based his claim on any customary claim at all.
It was argued by Mr. Sen Gupta that after the Central Government notification of September 3, 1957, the appellant took an independent and voluntary decision on their own to give the facility of the Assam Compensatory Allowance as an implied term of the contract and having done so they could not wriggle out from the provisions of section 9A of the Act.
Thus all the contentions raised by the appellant fail and the appeal is dismissed, but in the circumstances of this case we leave the parties to bear their own costs.
V.M.K. Appeal dismissed.
| IN-Abs | By virtue of a notification dated September 3, 1957, the Central Government granted compensatory allowance according to certain rates to all Central Government employees posted throughout Assam.
The appellant thought it fit in the circumstances to grant compensatory allowance to all its employees in September 1959.
It was not made through any standing order or circular.
Thereafter there was another notification by the Central Government dated December 8, 1960 by which it was provided that the employees in receipt of the compensatory allowance would be given the option to choose the house rent allowance or compensatory allowance but will not be entitled lo draw both.
this was to remain in force for five years.
In view, however, of the notification dated December 8, 1960, the management thought that the contents of the circular were binding on the company and therefore they unilaterally.
without giving any notice to the workers, withdrew the concession of the compensatory allowance which had been granted to the workers in September 1959.
This concession was withdrawn with effect from July 1960.
The workers moved the Government for making a reference to the Tribunal because a dispute arose between the parties regarding the competency of the appellant to withdraw he concession granted by it unilaterally.
The Government made a reference to the Industrial Tribunal which has held that there was a dispute between the parties and as s.9A of the , has not been complied with by the Company the management was not legally entitled to with draw the concession of the Assam Compensatory Allowance granted to.
the employees.
This appeal has been preferred by the management on the basis of the specials leave granted by this Court.
It was contended for the appellant (i) that the compensatory allowance was given purely on the basis of ' the Central Government circular dated September 3, 1957, on the distinct understanding that it was a temporary measure which could be withdrawn at the will of the employer and did not amount to a condition of service at all; (ii) that even if the provisions, of s.9A of the Act applied, since the management had substituted the house rent allowance for compensatory allowance the workers were not adversely affected and, therefore, it was not necessary to give any notice to them before withdrawing the concession of the, compensatory allowance.
Rejecting the contentions and dismissing the appeal, ^ HELD: (i) 'There is no evidence to show that the management before granting the concession of the compensatory allowance had in any way indicated to the workers that this was only a stop gap arrangement which could be withdrawn after the housing subsidy was granted.
Even before the unilateral withdrawal of the concession granted by the appellant no notice was given to the workers nor.
were they taken into confidence, nor any attempt was made to open a dialogue with them on this question.
So far as the compensatory allowance is concerned it was given in order to enable the workers to meet the high cost of living in a far off and backward area like Assam.
It had absolutely no casual connection with the housing subsidy or house rent allowance which was a different type of concession.
Furthermore, the grant of compensatory allowance by the appellant was indeed a very charitable act which showed that the employers were extremely sympathetic towards the need of their 111 workers.
In these circumstances, the conclusion is irresistible that the grant of compensatory allowance was an implied condition of service so as to attract the mandatory provisions of section 9A of the Act.
Twenty one days notice has to be given to the workmen.
This was not done in this case.
[113C 114B] Workman of Hindustan Shipyard (Private) Ltd. vs Industrial Tribunal Hyderabad and others, [1961] 2 L.L.J. 526, Bhiwani Textile Mills vs Their The Workman and others , Oil and Natural Gas Commission vs The Workman ; , Hindustan Lever Ltd. vs Ram Mohan Ray and Other ; , and M/s. Tata Iron and Steel Co. Ltd. vs The Workman and others[1972] 2 S.C.C 383, referred to.
(ii) The compensatory allowance and housing subsidy are two different and separate categories of the terms of service conditions and they cannot be clubbed together, nor can one be made dependent on the other.
the object of these two concessions is quite different and both of them serve quite different purposes.
[118A B] .
|
Civil Appeal No. 561 of 1975.
Appeal by special leave from the judgment and order dated 6 2 1975 of the Karnataka High Court in Writ Petition No. 48 of 1975.
G L. N. Sinha, Solicitor General of India and M. Veerappa, for the appellants.
V. M. Tarkunde,, section section Javali, A. K. Srivastava and B. P. Singh, for respondent Nos. 1 9, 16, 17, 19 21 & 26 30.
H H. B. Datar and R. B. Datar, for respondent Nos. 18 & 25.
59 The judgment of the Court.
was delivered by BHAGWATI, J. There is a town called Gangawati in The State of Karnataka.
It had a Town Municipal Council constituted under the Karnataka Municipalities Act, 1964.
The term of office of the Municipal Councillors elected at the last General Elections expired by efflux of time in 1962, but instead of holding a General Election to constitute a new Town Municipal Council, the State Government appointed an Administrator to exercise the powers and perform and discharge the functions and duties of the Town Municipal Council and also constituted an Advisory Council to advise and assist the Administrator.
The appointment of the Administrator and the constitution of the Advisory Council were challenged by one of the residents of Gangawati in the High Court of Karnataka by Writ Petition No. 2405 of 1972.
The writ petition was, however, settled as the State Government gave an undertaking that it would take the necessary steps for holding a General Election within a reasonable time.
This happened on 6th February, 1974.
The State Government thereafter, in accordance with the undertaking given by it, appointed the Returning Officer on 25th February, 1974 and it looked as if the General Elections was at last going to be held.
But this hope was belied.
Before the Re turning officer could issue a notice fixing the calendar of events forth election, the State Government rescinded the Notification which had been issued by it earlier under s.13 of the Act determining inter alia the territorial divisions into which the Municipality shall be divided.
The result was that no further steps could be taken by the Returning Officer in the matter of holding the election.
Angered and frustrated by this second attempt on the part of the State Government to bulk the holding of the election, the same individual, who had filed the earlier writ petition, preferred another writ petition, namely, Writ Petition No. 2715 of 1974.
for a mandamus to the State Government to hold the election.
The High Court made an order on this writ petition on 7th August, 1974 directing the State Government to hold the election within four months.
This time was later extended to 8th March, 1975.
Pursuant to the direction of the High Court, the State Government issued a Notification dated 3rd December, 1974 under section 13 of the Act determining the territorial divisions into which the Gangawati Municipality shall be divided for the purpose of holding the election and allotting number of seats to each territorial division.
The Gangawati Municipality was divided into six territorial divisions and each territorial division was defined and demarcated by reference to census block numbers, wards and also boundaries.
The Returning officer there after on 7th December, 1974 issued a notice fixing the calendar of events for holding the election.
The Tehsildar, who was the designated officer under section 14, sub section
(2), in the meanwhile, prepared the list of voters for each division from the Mysore Legislative Assembly Electoral Roll (hereinafter referred to as the Electoral Roll) by including in the list parts of the Electoral Roll referable to the census block numbers comprised within the division.
The list of voters for each division so prepared was authenticated by the designated officer and kept open for inspection in the office of the Municipal Council.
A 60 large number of nominations were filed on or before the last date fixed for it in the calendar of events and after scrutiny and withdrawal, a list of the contesting candidates was published by the Returning officer on 21st December, 1974.
The only step which remained to be taken to complete the process of election was the poll which was fixed on 10th January 1975.
However, on 21st December, 1974, when the question of finalisation of polling stations was taken up by the Returning officer, the Secretary of the Congress Party raised an objection that the division wise lists of voters prepared and authenticated by the designated officer were defective "inasmuch as voters who reside in one division are being made to vote in a different division" and that these lists of voters should, therefore, be rectified before fixing up the polling stations.
The Returning officer considered his objection and by an order made on the same date rejected it.
This order is very material and we will, therefore.
reproduce it in full.
It reads inter alia as follows: "It is seen from the list maintained that the population in the parts of voters list tallies with the proposal made to Government for the delimitation of the constituencies.
Further it is seen that the various parts included in the division wise voters list conform to the census block numbers which are mentioned in the notification published in regard to the declaration of delimitation of territorial divisions.
It also fits into the ward wise description of constituencies as declared by Government.
However, it is too late in the day to prefer objections about voters list.
The voters list was open for inspection all along.
Many interested parties have obtained copies of the same.
Nominations have been filed by respective parties on the basis of the same voters list and the scrutiny has been completed and valid nominations have been declared and today at 3.00 p.m.
Last date for withdrawal is also over and the list of polling stations is finalised.
At this juncture, it is regretted to declare that parties cannot be allowed to go back to the period prior to scrutiny of the nomination papers, especially so when there was not one word of objection or protest over the voters list at the appropriate time.
As per section 23(3) of the Representation of the People Act, 1950 no amendment or deletion of any entry in the electoral roll should be made or given effect after the last date for making nominations in that constituency or division.
Any change in the parts of the Division of Voters will amount to an amendment of electoral roll of that division.
" It appears that three of the contesting candidates and a member of the Legislative Assembly belonging to the Congress Party were dissatisfied with this order and they, therefore, made an application to the Deputy Commissioner pointing out what they thought were defects in the division wise lists of voters.
The Deputy Commissioner instructed the 61 Returning officer to make physical verification of these defects and the Returning officer accordingly went to the respective places where the mistakes were alleged to have occurred and after verification, made a report dated 27th December, 1974.
In this report, the Returning officer stated that: "It was found during my random inspection of the various houses on the borders of the different divisions that some voters residing adjacent to one division have been included in another ad joining division and the voters list in respect of each division has been formed accordingly." The Returning officer observed that as a result of this physical verification it was found that 'the number of; voters ill the respective division would undergo considerable change" and gave figures showing that the change in the number of voters in each division would be in the neighborhood of twenty five per cent.
Basing itself on this report, the State Government, by an order dated 30th December, 1974, canceled the calendar of events published by the Returning officer and directed him to issue fresh calendar of event. "after getting the voters lists completed strictly as per the division notified.
" Though this order did not refer to the provision of law under which it was purported to be made, the State Government claimed that the source of its power to make this order lay in rule 75 of the Mysore Municipalities (Election of Councillors) Rules, 1965 (hereinafter referred to as the Rules) made under s.38 of the Act.
The petitioners.
who are residents of Gangawati, finding that the State Government had again tried to fish out some excuse for putting off the general election, preferred the present writ petition questioning the validity of this order made by the State Government.
The High Court, by a judgment and order dated 6th February, 1975 held that the State Government had no power under rule 75 to cancel the calendar of events validly fixed by the Returning officer and set at naught the election process which had already commenced and in this view, quashed and set aside the order of the State Government and directed the Returning officer to hold the elections "from the Stage at which it was interrupted by the impugned Government order after fixing convenient dates for the remaining events so that the election may be completed before 8th ' March, 1975.
" The State Government challenges the correctness or this view in the present appeal brought with special leave obtained from this Court.
The hearing or this appeal concluded on 2nd May 1975 which was the last working day for the Court before the commencement of the summer vacation.
Since the appeal involves the question as to the holding of the election and delay in the pronouncement of the order might defeat the object of filing the appeal, we pronounced our order immediately after the conclusion of the hearing, dismissing the appeal with costs and directing the Returning officer to complete the election before 10 June, 1975.
We now proceed to give our reasons.
The question which arises for determination in the appeal is as to whether the State Government had power under rule 75 to make the impugned order cancelling the calendar of events and thereby in effect setting at naught the entire election process which had proceeded upto the stage of poll.
Rule 75, which is the last amongst the Rules, in the following terms: 62 "Notwithstanding anything contained in these rules, the State Government and subject to the general or special orders of the Government, the Commissioner shall have the power of superintendence, direction and control of the con duct of elections under these rules, and may make such orders as it or he deems fit for ensuring that the elections are held in accordance with the provisions of the Act.
" lt is not necessary for the purpose of the present appeal to embark on a discussion on the wider question as to what are the different circumstances in which the power conferred under rule 75 can be exercised by the State Government and what kind of order can be made by the State Government in exercise of such power.
It would indeed be inexpedient and unwise to draw the precise lines within which the power under rule 75 should be exercisable, for there may be infinite valid circumstances which may call for exercise of such power What we need consider here is only the limited question whether on the facts and circumstances of the present case, the State Government had power under rule 75 should be exercisable, for there may be infinite calendar of events fixed by the Returning officer.
If such power could not be found in rule 75, it was common ground that there was no other provision in the Act or the Rules which would justify the making of the impugned order and it would plainly be invalid.
Now, the only justification pleaded by the State Government in support of the exercise of the power under rule 75 was that the division wise lists of voters prepared and authenticated by the designated officer were defective and if the election were held on the basis of such defective lists of voters, it would not be in accordance with the provisions 1.
` of the Act and hence the impugned order had to be made by the State Government for ensuring that the election was held in accordance with the provisions of the Act as contemplated under rule 75.
This justification, plausible though it may seem, is, in, our opinion, without merit.
To test its validity it is necessary to understand the nature of the defect from which according to the finding of the Returning officer, the divisional lists of voters suffered and see whether that defect brings the case within the scope and ambit of rule 75.
We may first refer to a few relevant sections of the Act.
Sec. 13 provides that for the purposes of election of councillors at a general election, the State Government shall, after previous publication, by notification, determine (a) the number of territorial divisions into which the municipality shall be divided, (b) the extent of each territorial division, (c) the number of seats allotted to each territorial division which shall be not less than three and not more than five, and (d) the number of seats, if any, reserved for the Scheduled Castes and for women in each territorial division.
It was in obedience to the requirement of this section that the State Government issued the notification dated 23rd December, 1974 determining inter alia the divisions in which the Gangawati Municipality shall be divided for the purpose of holding the election.
The extent of each division was defined and demarcated in the Notification with great precision by reference to the 63 census block numbers which had been given to the different areas at the time of the census.
These areas were clearly and definitely identifiable by their census block numbers, particularly as the extent of each census block number was well defined and it was known with definiteness and certitude as to which houses were comprised in it.
There was, therefore, plainly and manifestly no doubt or uncertainty about the extent of each of the division into which the Gangawati Municipality was divided by the Notification.
Section 14 is the next important section which deals with the subject of list of voters.
It has four sub sections of which the first three are material.
They are as follows: "(1) The electoral roll of the Mysore Legislative Assembly for the time being in force for such part of the constituency of the Assembly as is included in a division of a municipality shall, for the purpose of this Act, be deemed to be the list of voters for such division.
(2) The officer designated by the Deputy Commissioner in this behalf in respect of a municipality shall maintain a list of voters for each division of such municipality (3) Every person whose name is in the list of voters referred to in sub section (1) shall unless disqualified under any law for the time being in force, be qualified to vote, at the election of a member for the division to which such list pertains.
" What shall be the qualification of a person to stand as a candidate at an election is laid down in section 15, sub section
That sub section provides that every person whose name is in the list of voters for any of the divisions of the municipality shall, unless disqualified under this Act or any other law for the time being in force, be qualified to be elected to the election for that division or any other division of the municipality and every person whose name is not in such list shall not be qualified to be elected, at the election for any division of the municipality.
Then follows sub section
(2) which is of some importance.
We quote it: "Subject to any disqualification incurred by a person the list of voters shall be conclusive evidence for the purpose of determining under this section whether the person is qualified or is not qualified to vote or is qualified or is not qualified to be elected as the case may be, at an election." Section 38 confers power on the State Government to make rules to provide for or regulate all or any of the matters set out in the section for the purpose of holding election of councillors under the Act.
It was in pursuance of this section that the Rules were made by the State Government.
It will be seen on a plain reading of sub s (1) of section 14 that the electoral roll for the territorial area comprised in a division is to be deemed to be the list of voters for such division.
The designated officer is merely to perform the operation of scissors and paste cut 64 out those portions of the electoral roll which relate to the territorial area included in the division and paste them together so as to form the list of voters for the division.
There is no separate qualification laid down in the Act for being placed in the list of votes for a division laid down in the Act for being placed in the list of votes for a division as was the case in Chief Commissioner, Ajmer vs Radhey Shyam Dani.
In that case, section 30, sub section
(2) of Ajmer Merware Municipalities Regulation, 1925 laid down tow conditions which must be fulfilled in order to entitle a person to be enrolled as an electoral of the Ajmer Municipalities Regulation, 1925 laid down two conditions which must be fulfilled in order to entitle a person to be enrolled as an electoral of the Ajmer Municipalities, namely, (1) that he should be entitled under the Representation of the People Act, 1950 to be registered in the electoral roll for a Parliamentary Constitution, if the constituency had been co extensive with the Municipality, and (2) that his name should be registered in the electoral roll for a Parliamentary Constituency comprised in the Municipality.
It was for this that the name of a person should be registered in the electoral roll of a Parliamentary Constituency.
That did not entitle him straightaway to be included in the electoral roll of the Municipality.
It was further required to be seen whether he was entitled to be registered in the electoral roll of the Parliamentary Constituency.
That enquiry was necessary to be made before the electoral roll of the Municipality could be prepared.
But, here no other qualification is required : the mere fact of a person being in the Electoral Roll for the territorial area comprised in a division is sufficient to include him in the list of voters for such division.
Vide sub section
(1) of section 14.
What is required by this sub section is that the list of voters of a division should correspond ipsissima verba with the Electoral Roll for the territorial area included in the division.
If there is any mistake in the Electoral Roll, in that some voters residing in one area or house number are shown as residing in another, it cannot be corrected by the Returning Officer while preparing the list of voters for each division.
The Returning Officer has to take the Electoral Roll for the territorial area of the division as it is, with whatever mistakes there may be in it and that would be the list of voters for the division.
The only way in which the mistakes, if any, either in the names of the voters or in their addresses, including house numbers in which they reside, can be corrected is by applying for rectification of the Electoral Roll under section 22 of the Representation of the People Act, 1950.
So long as such rectification is not made, the entries in the Electoral Roll would stand and they would necessarily be reflected in the list of voters for the division.
But they would not constitute mistakes, so far as the preparation of the list of voters for the division is concerned.
It is only if the list of voters for the division does not correspond with the Electoral Roll for the territorial area comprised in the division, in the sense that voters shown in the Electoral Roll as residing in the territorial area of the division are omitted to be included in the list of voters, or voters shown in the Electoral Roll as residing in the territorial area of another division are included in the list of voters, that it can be said that the list of voters is defective and not in accordance with the provisions of the Act.
65 Now in the present case, it is clear from the order of the Returning officer dated 21st December, 1974 that the list of voters for each division corresponded fully and completely with the Electoral Roll for the territorial area comprise in such division.
The finding of the Returning officer was that the various parts of the Electoral Roll included in the list of voters for each division conformed to the Census Block numbers of the respective division mentioned in the Notification dated 3rd December, 1974.
Each division was defined and demarcated by reference to Census Block numbers and the parts of the Electoral Roll were also made out on the basis of Census Book numbers.
There could, therefore, be no doubt or confusion as to which parts of the Electoral Roll related to the territorial area comprised in a particular division.
The correspond parts of the Electoral Roll could be easily ascertained and identified by reference to Census Block numbers for preparing the list of voters for each division.
that was admittedly done in the present case and there was no complaint about it.
No defect was also alleged or found in this respect.
The only defect if at all it can be cared a defect which the Returning officer noticed on physical verification was that the voters shown ill the Electoral Roll as residing in the territorial area or one division were in fact residing in another.
But, as already pointed out above that cannot be regarded as a defect in the division wise list of voters and it would not stamp them with the vice of not being in conformity with the requirements of the Act.
The State Government was, there fore, in any view of the matter, not entitled to make the impugned order under rule 75 on the ground that the divisional lists of voters were defective and the election held on the basis of such lists of voters would not be in accordance with the provisions of the Act.
What the State Government did by making the impugner order was to interfere with the election process which was going on in accordance with law and that was clearly not permissible on any interpretation of rule 75.
That takes us to the alternative argument advanced by the learned Solicitor General on behalf of the State Government.
He contended that in any event even if the impugned order was bad and the election process was liable to be continued from the stage at which it was interrupted, the poll could be taken only on the basis of the revised Electoral Roll which had come into being, in the meanwhile, in February 1975 and, therefore it was necessary for the designated officer to correct the divisional lists of voters so as to bring them in accord with the revised Electoral Roll.
This contention is also without force.
lt is true that there is no provision in the Act similar to section 23 sub section
(3) of the Representation of the People Act, 1950 providing that no amendment, transposition or deletion of any entry in the list of voters for a division shall be made and no direction for the inclusion of any name in such list of voters shall be given after the last date for making nomination for an election in the division.
But the scheme of the Act and particularly sections 14 and 15 make it clear that it is one list of voters for each division that is contemplated to be in force during the entire process of election.
The list of voters is to be prepared for the election and 'election ' means the entire process consisting of several stages and embracing several steps by which an elected member is re 66 turned, whether or not it is found necessary to take a poll.
Vide: N. P. Ponnuswami vs Returning officer, Namakkal Constituency & ors.(1) The list of voters must, therefore, a fortiori remain the same throughout the process of election.
There cannot be one list of voters for determining the eligibility to stand as a candidate and another for determining the eligibility to vote, at the sane election.
That would not only be irrational, but would also introduce confusion and uncertainty in the election process.
Candidates would not know at the time when they file their nominations as to what is the strength and composition of the electorate in the division m which they are contesting the election.
They would also be handicapped in canvassing for votes.
It would indeed be a strange and anomalous position if there were two or more different lists of voters at different stages of the same election Sub section
(1) of s.14 does not contemplate a this of voters which keeps on changing from times to time during the election t process.
It deems the Electoral Roll for the territorial area of the division, in force at the relevant time to be the List of voters for the division "for the purpose of the Act", that is for the purpose of election which is the whole process culminating in a candidate being declared elected and not merely polling.
The same list of voters is, therefore, to prevail for all stages in the election.
This we find emphasised also in sub section
(3) of s.14 which enacts that every person whose name is in the list of voters referred lo in sub section
(1) shall be qualified to vote at the election of a member for the division to which such list pertains.
Sub section
(2) of s.15 also points in the same direction.
It says that "the list of voters shall be conclusive evidence for the purpose of determining under this section whether the person is qualified or is not qualified to vote or is qualified or is not qualified to be elected as the case f may be, at an election.
" The reference here, as matter of plain grammar, is indisputably to the same list of voters which is to be conclusive evidence for both purposes.
lt is, therefore, clear, on a proper interpretation of the provision of the Act that the Legislature did not intend that the list of voters should change from time to time during the process of election and the relevant Ellctoral Roll for the purpose of preparation of the list of voters must consequently be taken to be the Electoral Roll in force at the date when the election process commenced, that is, the date when the calendar of events was published.
The same view was taken by a revision Bench of the Mysore High Court in Shivappa Chanamollappa Jogendra vs Basavannappa Gadlappa Banker.
(") We are in agreement with that view.
The poll in the present case must, therefore, be taken on the basis of the list of voters for each division prepared with reference to the Electoral Roll in force on 7th December, 1974, that being the date on which the calendar of events was published by the Returning officer.
One other question was also raised before us, namely, whether the designated officer can be required to rectify the list of voters for a division, if it can be shown that the list of voters does not correspond exactly with the Electoral Roll for the territorial area of the division, as for example, some voters in a particular house in a Census Block number falling in the division, though shown in the Electoral Roll as 67 such, are, through inadvertence, omitted to be included in the list of voters for the division.
It is not necessary for the purpose of the present appeal to decide this question, but we may point out that tall the election process has commenced by the issue of notice fixing the calendar of events, there is no reason why the designated officer should not be entitled to rectify such defect in the list of voters and bring the list of voters in conformity with the Electoral Roll.
But once the calendar of events is published and the election process has begun, it is extremely doubtful whether any changes can be made in the list of voters for the purpose of setting right any such defect.
We, however, do not wish to express any final opinion on this point.
These were the reasons which weighed with us in making the order dated 2nd May, 1975 dismissing the appeal with costs and directing the Returning officer to complete the election before 10th June 1975 on the basis of the Electoral Roll in force on 7th December 1914.
| IN-Abs | Section 13 of the Karnataka Municipalities Act, 1964, provides that for the purpose of election of councillors of a town municipality at a general election the State Government shall, after previous publication by notification, determine, (a) the number of territorial divisions into which the municipality shall be divided.
(b) the extent of each territorial division; (c) the number of seats allotted to each territorial division.
and (d) the number of seats reserved for the Scheduled Castes and women.
Section 14 provides that the electoral roll of the State Legislative Assembly for the territorial area comprised in the division, shall be deemed to be the list of voters of such division Rule 75 of the Mysore Municipalities (Election of Councillors) Rules, 196 empowers the State Government to make such orders as it deems fit for ensuring that the elections are held in accordance with the provisions of the Act.
For holding a general election with respect to a town municipal council, the State Government issued the notification under section 13.
Thereafter the Returning officer issued a notice fixing the calendar of events for holding the election.
The list of voters for each division was prepared exactly according to the Electoral Roll, and kept open for inspection In the office of the municipal council.
A list of the contesting candidates was also published and the poll date was also fixed as January 10, 1975.
At that state it was found that some voters residing in the border of one division had been included in the voters ' list of an adjoining division and the State Government, in purported exercise of the power under r. 75, cancelled the calendar of events published by the Returning officer and directed a fresh preparation of the voters ' list as per the divisions notified.
In a writ petition filed by the respondents, who were residents of the town, the High Court held that the State Government had no power to cancel the calendar of events and quashed the direction of the State Government.
Dismissing the appeal to this Court, ^ HELD: (1) What is required by section 14(1) is that the list of voters of a division should correspond ipsissima verba with the Electoral Roll for the territorial area included in the division.
of there is any mistake in the Electoral Roll in the some voters residing in one area or house number are shown as residing in another, it cannot be corrected by the Returning officer while preparing the list of voters for that division.
The only way in which such mistake can be corrected is by applying for rectification of the Electoral Roll under section 22 of the Representation of the People Act, 1950, but of such rectification is not made the entries in the Electoral Roll would stand and they would necessarily be reflected in the list of voters for the division.
But that would not constitute a mistake so far as the preparation of the list of voters for the division is concerned.
It is only if the list of voters for the division does not correspond" with the concerned Electoral Roll in the sense that the voters shown in the Electoral Roll as residing in the territorial are omitted to be included in the list of voters of that division or voters shown In the Electoral Roll as residing in the territorial area of one division are included in the list of voters of another.
that it can be said that the List is defective and not in accordance with the provisions of the Act [64D H] 58 (2) The scheme of the Act and particularly sections 14 and 15 show that it is only one list of voters that is contemplated to be in force during the entire process of election, and there is no question of correcting the list of voters according to the revised Electoral Roll which had come into being in February, 1975.
[65G H] The list of voters is to be prepared for the election tnd 'election ' means the entire process consisting of the several stages and embracing the several steps by which an elected member is returned.
[65H] Section 14(1) does not contemplate a list of voters which keeps on changing from time to time during the election process.
It deems the Electoral Roll for the territorial area of the division in force at the relevant time to be the list of voters for the division for the purposes of the Act that is, for the purposes of the 'election '.
Section 14(3) enacts that every person whose name is in the list of voters referred to in sub section
(1) shall be qualified to vote at the election of a member for the division to which such list pertains.
Section 15 (2) also says that the list of voters shall be conclusive evidence for the purpose of determining under this section whether the person is qualified or not qualified to vote or to be elected.
The sub sections refer to the same list of voters and it is, therefore, clear that the legislature did not intend that the list of voters should change from time to time during the process of election and the relevant Electoral Roll for the purpose of preparation of the list of voters must consequently be taken to be the Electoral Roll in force at the date when the election process commenced, that is when the calendar of events was published.
[66A F] Chief Commissioner, Ajmer vs Radhey Shyam Dani, ; , explained .
N. P. Ponnuswami vs Returning officer, Namakkal Constituency & Ors, ; , followed Shivappa Chanamallappa jogendra vs Basavannappa Gadlappa Bankar, [1965] Mysore L.J. 289.
approved.
Obiter: Till the election process has commenced by the issue of a notice fixing the calendar of events.
there is no reason why the designed officer should not be entitled to rectify the list of voters for a division if it can be shown that the list of voters does not correspond exactly with the Electoral Roll for the territorial area and bring the list of voters in conformity with the Electoral Roll, but once the calendar of events is published and the election process has begun it is extremely doubtful whether any changes can be made in the list of voters for the purpose of setting right any such defect.
[67 C]
|
Civil Appeal No. 185 of 1973.
Appeal by special leave from the judgment and order dated the 25th April, 1972 of the Calcutta High Court in Second Appeal being appeal No. 859 of 1969.
Sachendra Chowdhary, section K. Dholakia and R. C. Bhatia for the appellant.
P. Chatterjee and Rathim Das, for the respondent.
The Judgment of the Court was delivered by Goswami, J.
In this appeal by special leave directed against the Judgment of the Calcutta High Court the only question that arises for 106 consideration is whether the respondent is a thika tenant under section 2(5) of the Calcutta Thika Tenancy Act 1949.
On June 1, 1956, the predecessor in interest of the appellants (the latter, hereinafter to be described as the landlord) gave the land with which we are concerned in this appeal to the respondent (hereinafter to be described as the tenant) for occupation as a tenant on a monthly rent of Rs. 75/ for one year.
One of the conditions of the tenancy was that "the premises shall not be used for any purpose other than keeping of the lorries as garage." Another condition of the tenancy was that "the lessee will on the expiration of one year peacefully surrender and yield up vacant possession to the lessor.
" on July 29, 1958, the landlord 's advocate sent a notice of eviction to the tenant to vacate and deliver possession of the land on the expire of August 1958.
The tenant through his advocate by a letter of August 29, 1958, denied liability for eviction asserting that there was no violation of any terms and conditions of the tenancy and since there was refusal to accept the rent by the landlord the tenant had been depositing the rent every month from March 1958 under the provisions of the Calcutta Thika Tenancy Act 1949 (briefly the Act) by which the tenancy was claimed to be governed.
Thereafter a suit was filed by the landlord in the court of the 4th Munsif at Alipore on January 15, 1959.
It is not necessary to trace the history of the litigation covering this long period.
it is sufficient to state that the High Court by its judgment on April 25, 1972, allowed the tenant 's second appeal holding that he is a thika tenant within the meaning of section 2(5) of the Act.
According to the High Court the tenant does not require any consent of the landlord to erect a structure on the land.
The result was that the court of Munsif had no jurisdiction to entertain the suit, the matter being within the cognizance of the Controller appointed under the Act: Mr. Sachin Chowdhary appearing on behalf of the appellants fairly and, if we may say so, rightly confined his argument to the principal question of law as set out above Is the tenant a thika tenant under the Act ? If the answer is yes, the landlord is out of court.
Before we proceed further we may briefly note that the tenant constructed certain structures on the land prior to the institution of the suit in 1959.
Mr. Chowdhary, however, drew our attention to an observation in the judgment of the High Court to the effect that "admittedly the defendant (respondent herein) at his own cost constructed in 1962 structures upon the bare land which he took for the purpose of his business." Since the year of construction had not been particularly agitated in the courts below and there is evidence to show that the construction had commenced from 1957, we are not prepared to give undue importance to this observation about the year of construction mentioned in the judgment.
This is particularly so in view of the fact that the tenant through his lawyer in reply to the notice of eviction asserted in August 1958 that 107 "my client has constructed the structures and has done such other things as are needful for the purpose of the keep in lorries and other vehicles in the garages and making of necessary repairs of the same as well as upkeep and main tenance of the same for carrying on his business in transport service ." Further, even so, although there is a reference to this reply of the advocate of August 29, 1958, in para 8 of the plaint, there is no denial of the construction of the structures as asserted in the said reply.
Being: faced with this factual position Mr. Chowdhary strenuously contended that under section 2(5) of the Act erection of structures by the tenant must be with the permission of the landlord.
In other words, says Mr. Chowdhary the erection should be lawfully done and if the tenant does not establish permission or consent of the landlord in the matter there is no erection in the eye of law within the meaning of section: 2(5) .
We will, therefore, read that section.
2(5): " 'thika tenant ' means any person who holds whether under a written lease or otherwise, land under another person, and is or but for a special contract would be liable to pay rent, at a monthly or at any other periodical rate, for that land to that another person and has erected or acquired by purchase or gift any structure on such land for a residential, manufacturing or business purpose and includes the successors in interest of such person, but does not include a person . " As the definition shows (1) a thika tenant must be a person who holds land under another person; (2) it may be under a written lease or otherwise; (3) there is a liability to pay rent to the landlord but for a special contract to the contrary; and (4) he has erected or acquired by purchase or gift any structure on such land for a residential, manufacturing or business purpose.
The tenant here fulfils the requisite ingredients of the above definition clause.
There is no reference to landlord 's permission or consent for erection of structure by the tenant in the definition clause.
Mr. Chowdhary submits that it is implicit in the definition that in order to be lawful erection of structure the tenant must take prior permission from the landlord.
Counsel further submits that whatever is silent in the Act should be supplemented by reference to the Transfer of Property 108 Act (briefly the T.P. Act).
In this context Mr. Chowdhary draws our attention to section 108(0) of the T.P. Act which may be set.
Out: "the lessee may use the property and its products (if any) as a person of ordinary prudence would use them if they were his own; but he must not use, or permit another to use, the property for a purpose other than that for which it was leased, or fell or sell timber, pull down or damage buildings belonging to the lessor or work mines or quarries not open when the lease was granted, or commit any other act which is destructive or permanently injurious thereto." According to Mr. Chowdhary the purpose of the tenancy being that the premises shall not be used for any purpose other than keeping of lorries as garage, construction of structures for the purpose of running a workshop, which is the admitted factual position, would attract section 108(0) of the T.P. Act.
He, therefore, submits that the case is squarely governed by the provisions of the Transfer of Property Act and the court of Munsif had jurisdiction to entertain and decree the suit.
We may, however, note in passing that one of the grounds on which a thika tenant may be ejected under unmended section 3(ii) is that the tenant has used the land in a manner which renders it unfit for any of the purposes mentioned in clause (5) of section 2 or that he has broken a condition consistent with this Act on breach of which he is under the terms of the contract liable to be ejected.
We are unable to agree that the particular condition of the tenancy referred to by Mr. Chowdhary militates against the construction of structures and the use of the land for the purpose of workshop for maintenance of the lorries by the` tenant.
Without being too hypertechnical, ordinarily keeping of lorries as garage would connote the concept of construction of some structures for garaging the lorries.
The Chambers Dictionary gives the meaning of garage as "the building where motor vehicles are housed or tended.
" The Shorter oxford English Dictionary gives the meaning of garage as "a building for the storage or refitting of motor vehicles.
" We are, therefore, unable to accept the submission that even on the terms of the tenancy, as pointed out, the tenant has used the land for a purpose other than that for which it was leased to attract the inhibition of section 108(0) of the T.P. Act.
We are also unable to accede to the contention that section 2(5) of the Act requires a thika tenant under the law to secure prior permission of the landlord for erection of structures on the land.
As the preamble shows the Act is for making better provision relating to the law of landlord and tenant in respect of thika tenancies in Calcutta.
it is a piece of beneficial legislative conferring certain rights upon the tenants.
In dealing with such provision of law we cannot read into the definition some thing which is not already there and the introduction of which will lead to imposing a restriction upon the rights of this class of tenants by judicial interpretation.
This is not permissible in absence of express words to that effect or necessary manifest intendment.
Besides, we do not find any vagueness or uncertainty.
in the definition clause.
The submission is, therefore, of no avail.
109 We are not required to deal with the question whether the structures which stand on the land are permanent or not as this point had not been agitated in the courts below.
But we may in passing notice that in view of section 108(p) of the T.P. Act since the lessee must not, without the lessor 's consent, erect on the property any permanent structure, except for agricultural purposes, the State Legislature has by amending the Act by Act No. 29 of 1969 inserted section 10A conferring a right upon a thika tenant to erect a pucca structure for a residential purpose with the previous permission of the Controller.
We are, however, not required to consider such a question in this appeal.
Mr. Chowdhary also relied upon a contemporaneous letter written by the landlord to the tenant on June 1, 1956, which was found by the courts below to contain interpolation by the tenant with regard to the according of permission to construct structures on the land.
We however, do not think that this would have any bearing on our.
interpretation of section 2(5) .
In the result the appeal fails and is dismissed with costs.
P.H.P. Appeal dismissed.
| IN-Abs | In 1956, the landlord let out for one year the land in question to the tenant on a monthly rent of Rs. 75/ .
One of the conditions of the tenancy was that the promises should not be used for any purpose other than the keeping of the lorries as garage.
The landlord asked the tenant to vacate by a not to quit.
the landlord filed a suit for eviction which was resisted by the tenant on the ground that he was a Thika tenant under Calcutta Thika Tenant, 1949.
The High Court held that the tenant was a Thika tenant.
The definition of a Thika tenant is a tenant who has erected or acquired by purchase or gift any structure on such land for residential, manufacturing or business purpose and includes the successors in interest of such person.
Admittedly, in the present case the tenant has erected a structure.
The counsel for the appellant landlord contents that since the structure was erected by the tenant without the permission or the landlord it is not a lawful erection of structure.
The Thika Tenancy Act does not talk about the consent of the landlord.
The Court, therefore, must look "t the Transfer of Property Act where section 108(o) prohibits the premises to be used for any purpose other than the one for which it is let out.
According to the appellant, the premises were let out for garage and, therefore the erection of ' structures for the purpose of running the workshop would attract section 108(o) of the Transfer of Property Act.
^ HELD: Negativing the contention of the appellant, The tenancy in question does not militate against the construction of structures and use of the land for the purpose of workshop for maintenance of lorries by the tenant.
A garage is a building where motor vehicles are housed.
The tenant has not used the land for purpose other than the purpose for which it was leased.
S.2(5) of the Act does not require a Thika Tenant to secure prior permission of the landlord for erection of structures on the land.
As the preamble shows the Act is for making better provision relating to the law of land lord and tenant in respect of Thika tenancies.
It is a piece of beneficial legislation Conferring certain rights upon the tenants.
in dealing with such a provision of law we cannot read into the definition something which is not already there and the introduction of which will lead to imposing a restriction upon the rights of this class of tenants by judicial interpretation.
Besides, there is no vagueness or uncertainty in the definition clause.
[108 E H]
|
Civil Appeal No. 1588 of 1974.
Appeal by special leave from the Judgment and order dated the 9th July, 1973 of the Madhya Pradesh High Court in Misc.
Petition No. 163/73.
L M. Singhvi and section K. Dhingra, for the appellant.
section C. Manchanda, Urmila Kapoor and Kamlesh Bansal, for respondent.
The Judgment of the Court was delivered by ALAGIRISWAMI,J.
This appeal raises the question of the validity of the appointment of the appellant as a Professor of Zoology in the University of Saugar.
In pursuance of an advertisement dated 31 5 1971 by the University calling for applications for the post of Professor of Zoology five persons including the appellant and the respondent applied.
A Committee of Selection was constituted in accordance with section 47 A of the Saugar University Act 1946 to consider these applications.
On 4 12 1971 the Selection Committee recommended the name of the appellant to the Executive Council, which was competent to make the appointment.
Under the provisions of section 47 A the Executive Council has to take the final selection from among persons recommended by the Selection Committee.
But where the Executive Council proposes to make appointment otherwise than in accordance with the order of merit arranged by the committee the Executive Council should record its reasons in writing and submit its proposal for the sanction of the Chancellor.
In the present case the appellant being the only person whose name had been recommended had ordinarily to be appointed.
The Executive Council, however, refused to accept the recommendation of the Selection Committee on the ground that it would lead to administrative and disciplinary complications.
Thereupon the appellant filed a writ petition for quashing the resolution of the Executive Council and it was quashed by the High Court of Madhya Pradesh.
Thereafter on 18 2 1973 the Executive Council appointed the appellant as Professor of Zoology.
On 9 7 1973 the respondent filed a writ petition for quashing the appellant 's appointment.
The High Court of Madhya Pradesh quashed the resolution dated 18 2 1973 appointing the appellant as Professor of Zoology and indicated that the University may advertise the post afresh if they desire to fill in the vacancy.
The ground on which the resolution was quashed was that the appointment was made more than a year after the re commendation of the Selection Committee was made and this was not 150 permissible.
The High Court relied upon the statute 2 l AA of the Statutes of the University made under s.31 (aa) of the Act for this conclusion.
This section enables statutes to be made, among other things, for the mode of appointment of teachers of the University paid by the University.
The statute in question reads as follows: "Statute, No. 21 AA" (1) All vacancies in teaching posts of the University (except those to be filled by promotion as provided for under sub section (aaa) of Section 31 ) shall be duly advertised and all applications will be placed before the Committee of Selection as provided for under Sub Section (2) of Section 47 A of the University of Saugar Amendment Act, 1965.
(2) If no appointment is made to a post within one year from the date of the nomination by the Selection Committee then the post shall be readvertised before making an appointment as provided for under (1) above." Quite clearly the appointment made more than a year after the date of nomination by the Selection Committee is not in accordance with the statute 21 AA.
The requirement of the statute is that the post should be readvertised before making an appointment if the appointment is not made within a year of the Selection Committee 's recommendation.
On behalf of the appellant it was argued that the statute is directory and not mandatory, that in any case the statute is beyond the rule making power conferred by section 31(aa).
A number of decisions were relied upon in support of the submission that where a provision of law lays down a period within which a public body should perform any function, that provision is merely directory and not mandatory.
The question whether a particular provision of a statute is directory or mandatory might well arise in a case where merely a period is specified for performing a duty but the consequences of not performing the duty within that period are not mentioned.
In this case clearly the statute provides for the contingency of the duty not being performed within the period fixed by the statute and the consequence thereof.
This proceeds on the basis that if the post is not filled within a year from the date of the nomination by the Selection Committee the post should be readvertised.
So unless the post is readvertised and an appointment is made from among those persons who apply in response to the readvertisement the appointment cannot be said to be valid.
Though the reason for the delay in making the appointment was the wrongful refusal of the Executive Council to act in pursuance of the recommendation of the Selection Committee and the pendency of the writ petition filed by the appellant in the High Court, that does not in any way minimise the effect of sub rule (2) of statute No. 21 AA.
The position may well have been otherwise if there had been a stay 151 or direction prohibiting the Executive Council from making the appointment.
Such is not the case here.
We do not therefore think it necessary to discuss the various decisions relied upon by the appellant.
Nor can we agree that the statute in question is beyond the rule making power.
Under section 31(aa) statutes can be made with regard to the mode of appointment of teachers of the University.
The statute provides that the appointment should be made after the post is advertised and the applications received considered by a committee of selection.
It also provides that if no appointment is made to the post with in one year from the date of nomination by the selection committee The post shall be readvertised.
The rule therefore certainly relates to the mode of appointment.
It cannot be said to be unrelated to the mode of appointment.
It apparently proceeds on the basis that after the lapse of a year there may be more men to choose from.
Unless it could be said that the rule has no relation to the power conferred by the rule making power it cannot be said to be beyond the rule making power.
Such is not the position here.
We are also unable to agree that the statute is in conflict with or ill derogation of the provisions of the statute.
It was then argued on behalf of the appellant that the post of the Professor of Zoology is not a public office and therefore a writ of quo warranto cannot be issued.
The decisions in Dr. P. section Venkataswamv v University of Mysore(1) and section B. Ray vs P. N Banerjee(2) were relied upon to contend that the post in question is not a public office and therefore no writ of quo warranto can issue.
But it should be noticed that no writ of quo warranto was issued in this case.
What was issued was a writ of certiorari as the order of the High Court only quashed the resolution of the Executive Council dated 18 2 1973.
In his petition the respondent had asked for (1) a writ of certiorari, (2) a writ of mandamus, and (3) a writ of quo warranto.
What was assumed was a writ of certiorari.
The question whether a writ of quo warranto could issue in the circumstances of this case and whether the office was a public office was not raised or argued before the High Court.
Indeed it was not even raised in the special leave petition filed by the appellant.
We cannot therefore decide the present appeal on the basis that was issued was a writ of quo warranto.
It should also be noticed that the post has since been readvertised and it is open to the appellant to apply again.
We see no merits in this appeal and it is accordingly dismissed.
But in the circumstances of the case there will be no order as to costs.
V.M.K. Appeal dismissed.
| IN-Abs | In pursuance of an adevertisement dated 31 5 1971 by the University of Saugar calling for applications for the post of Professor of Zoology, five persons including the appellant and the respondent applied.
The Selection Committee constituted in accordance with section 47 A of the Saugar University Act 1946 for considering these applications recommended on 4 12 1971 the name of the appellant to the Executive Council, which was competent to make the appointment.
The Executive Council refused to accept the recommendations of the Selection Committee on the ground that it would lead to administrative and disciplinary complications.
Thereupon the appellant filed a writ petition for quashing the resolution of the Executive Council and it was Quashed by the High Court of Madhya Pradesh.
Thereafter on 18 2 1973 the Executive Council appointed the appellant as Professor of Zoology.
On 9 7 1973 the respondent filed a writ petition for quashing the appellants appointment.
The High Court of Madhya Pradesh quashed the resolution dated 18 2 1973 appointing the appellant as Professor of Zoology and indicated that the University may advertise the post a fresh if they desire to fill in the vacancy.
The ground on which the resolution was quashed was that the appointment was made more than a year after the recommendation of the Selection Committee was made and this was not permissible.
The High Court relied upon the Statutes of the University made under section 31(aa) of the Act for this conclusion.
Section 31 (aa) enables statutes to be made among other things, for the mode of appointment of teachers of the University paid by the University.
The requirement of sub rule (2) of statute No. 21 AA is that the post should be readvertised before making an appointment if the appointment is not made within a year of the Section Committee 's recommendation.
In this appeal by special leave it was contended for the appellant that (i) the statute is directory and not mandatory, and (ii) that, in any case, the statute is beyond the rule making power conferred by section 31(aa).
Rejecting the contentions and dismissing the appeal, ^ HELD : The question whether a particular provision of a statute is directory or mandatory might arise in a case where merely a period is specified for performing a duty but the consequences of not performing the duty within that period are not mentioned.
In this case, the statute clearly provides for the contingency of the duty not being performed within the period fixed by the statute and the consequence thereof.
Unless the post is readvertised and an appointment is made from among those persons who apply in response to the readvertisement the appointment cannot be said to be valid.
Though the reason for the delay in making the appointment was the wrongful refusal of the Executive Council to act in pursuance of the recommendation of the Selection Committee and the pendency of the writ petition filed by the appellant in the High Court that does not in any way minimise the effect of sub rule (2) of statute No. 21 AA.
[150F H] (ii) Unless it could be said that the rule has no relation to the power conferred by the rule making power it cannot be said to be beyond the rule making power.
The statute provides that the appointment should be made after the post 149 is advertised and the applications received considered by a committee of selection.
It also provides that if no appointment is made to the post within one year from the date of nomination by the selection committee the post shall be readvertised.
The rule therefore certainly relates to the mode of appointment.
It cannot be said to be unrelated to the mode of appointment.[151A C] Dr. P. section Venkataswamy vs University of Mysore A.I.R. and S.B. Ray vs P.N. Banerjee, , referred to.
|
Civil Appeal No. 1795 of 1970.
From the Judgment and order dated the 15th October, 1968 of the Madras High Court in Writ Petition No. 2252 of 1965.
section T. Desai and T. A. Ramachandran, for the appellant.
N. D. Karkhanis and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by CHANDRACHUD,J.
The appellant filed a writ petition in the High Court of Madras under Article 226 of the Constitution to challenge an assessment order dated August 22, 1963 made by the respondent, levying additional surcharge on its residual income.
The High Court dismissed the writ petition by its judgment dated October IS, 1968 but it has granted to the appellant a certificate to file an appeal to this Court under Articles 133(a) and (c) of the Constitution.
The appellant is a co operative society engaged in the business of banking.
Its total income for the assessment year 1963 64 was computed by the respondent at Rs. 10,00,098.
Out of this, Rs. 9,48,335 was its business income while Rs. 51,763 was its income from other sources.
Since, under section 81(i)(a) of the Income tax Act, 1961 a co operative society engaged in the business of banking is not liable to pay income tax on its business income the tax amounting to Rs. 23,845.47 was charged on Rs. 51,763 only though for the purposes of rate the income was taken at Rs. 9,48,335 in view of section 110 of the Act.
Applying the Finance Act, XIII of 1963, the respondent computed the residual income of the appellant at Rs. 5,39,386 and levied on it an additional surcharge of Rs. 52,828.60.
Thus the total tax levied on the appellant came to Rs. 23,845.47 plus Rs. 52,828.60 i.e., Rs. 76,674.07.
The main grievance of the appellant before the High Court was that whereas its taxable income was only Rs. 51,763, a tax of Rs. 76,674.07 was imposed on it.
The relevant provisions of the Finance Act were accordingly said to be invalid as they could not subject to additional surcharge an income which was exempt from tax under the provisions of the Income tax Act.
The additional surcharge, it was contended, was intended as an additional levy on the income 139 tax and had no independent existence apart from it.
These contentions were rejected by the High Court and hence this appeal.
Section 81 of the Income tax Act, 1961 was deleted by the Finance Act, XX of 1967, with effect from April 1, 1968 but its provisions were incorporated by the same Finance Act in section 80P.
Section 81 (i)(a) read thus: "81.
Income of co operative societies.
Income tax shall not be payable by a co operative society (i) in respect of the profits and gains of business carried on by it, if it is (a) a society engaged in carrying on the business of banking or providing credit facilities to its members;" It is indisputable that by reason of this provision, the tanking income of the appellant amounting to Rs. 9,48,335 is exempt from income tax.
It is equally clear that by reason of section 99(1)(v) of the Act of 1961, the appellant is not liable to pay supertax on its business income.
That section provides that where the assessee is a co operative society, super tax shall not be payable by it on any income in respect whereof no income tax is payable by it by virtue of the provisions of section 81.
The dispute really centers round the provisions of Finance Act, VIII of 1963.
The provisions of that Act which are relevant for our purpose are sections 2(1)(a), 2(8), 3, Paragraph A(ii) of Part I of the First Schedule, and clause (c) of that` portion of Part 1, called ` 'Surcharges on Income Tax." Section 2(1)(a) of the Finance Act, 1963 provides that: 2.
Income tax and super tax (1) Subject to the provisions of sub section (2), (3), (4) and (5), for the assessment year commencing on the 1st day of April, 1963, (a) income tax shall be charged at the rates specified in Part I of the First Schedule and, (i) in the cases to which paragraphs A,C,C and E of that Part apply, shall be increased by a surcharge for purposes of the Union and, except in the cases to which the said paragraph applies a special surcharge, calculated in either case in the manner provided therein; and (ii) in the cases to which paragraphs A and of the aforesaid Part apply, shall further be increased by an additional surcharge for purposes of the Union (hereinafter referred to as additional surcharge) calculated in the manner provided in the said Schedule;" Section 2 (8) provides that: For the purposes of paragraphs A and of Part I of the First Schedule, the expression "residual income" means the amount of the total income as reduced by 140 (a) the amount of the capital gains, if any, included therein; and (b) the amount of tax (exclusive of additional surcharge) which would have been chargeable on such reduced total income if it had been the total income no part of which had been exempt from tax and on no portion of which deduction of tax had been admissible under any provisions of the Income tax Act or this Act.
" Section 3 provides that: "Notwithstanding anything contained in the provisions of Chapter VII or Chapter VIII A or section 110 of the Income tax Act or sub section (5) of section 2 of this Act, in calculating any relief rebate or deduction in respect of income tax payable on the total income of an assessee which includes any income on which no income tax is payable or in respect of which a deduction of income tax is admissible under any of the aforesaid provisions, no account shall be taken of the additional surcharge.
" The First Schedule of the Finance Act, 1963 consists of three parts out of which we are only concerned with Part I. Part I which is called "Income tax and surcharges on income tax" consists of Paragraphs A, B, C, and out of which we are concerned with Paragraph A only.
Clause (ii) of Paragraph A prescribes rate of income tax for incomes accruing, inter alia, to "association of persons".
Since a co operative society is an association of persons, Paragraph A of Part I would apply to the case of the appellant for`the purposes of section 2(1)(a)(ii) of the Finance Act oil 1963, though not for the purpose of bringing its exempted business income to income tax.
That portion of Part I, Paragraph A, called "Surcharges on Income Tax" provides: "The amount of income tax computed at the rates hereinbefore specified shall be increased by the aggregate of the surcharges calculated as under".
Clause (a) provides for a surcharge for the purposes of the Union at the rates mentioned in sub clauses (i), (ii) and (iii).
Clause (b) provides for the levy of a special surcharge.
Clause (c) with which we are concerned provides for the levy of "an additional surcharge for the purposes of the Union calculated on the amount of the residual income" at the rates mentioned therein.
The grievance of the appellant, which appears to have been pressed before the High Court with some earnestness, that the tax levied upon it exceeds its taxable income can afford no true guide to the construction of the relevant provisions of the Income tax Act or the Finance Act.
Harshness of a taxing statute, apart from a possible challenge to it under Article 13 of the Constitution, cannot be an invalidating circumstance.
But the grievance on this score is basically misconceived.
It assumes, what has to be examined, that no part of the income exempted from income tax and super tax under the Income tax Act can be brought to tax by a Finance Act.
The total income of the appellant was computed 141 at Rs. 10,00,098.
By reason of sections 81 (i) (a) and 99 (1) (v) of the Income tax Act, 1961 the appellant enjoys an exemption from income tax and super tax in respect of its business income which amounts to Rs. 9,48,335.
The balance, viz. Rs. 51,763 which was the appellant 's income from other sources was alone taxable under the Act of 1961 and a tax of Rs. 23,845.47 was imposed on that income; The Finance Act of 1963 subjects 'residual income ' to certain charges and such in come was computed, admittedly correctly, at Rs. 5,39,386.
An additional surcharge of Rs. 52,828.60 was levied on the residual income.
Thus on the assumption that the Finance Act, validly and on a true interpretation, imposes the additional surcharge on residual income, the tax imposed on the appellant is Rs. 23,845.47 plus Rs. 52,828.60.
The total tax of Rs. 76,674.07 thus imposed is far less than the.
appellant 's total taxable income arrived at by the addition of its non business income and the residual income.
That leads to the inquiry first as regards the scope of a Finance Act and then as regards the interpretation of the Finance Act of 1963.
Learned counsel for the appellant, during the course of his arguments, gave up the challenge to the power of the Parliament to impose a new charge by a Finance Act.
This concession was properly made.
By Article 246(1) of the Constitution, Parliament has the exclusive power to make laws with respect to any of the matters in List I of the Seventh Schedule.
Entry 82 in List I relates to "taxes on income other than agricultural income".
The Income tax Act, 1961 and the annual Finance Acts are enacted by the Parliament in exercise of the power conferred by Article 246(1) read with Entry 82 of List I.
Once the Parliament has the legislative competence to enact a law with respect to a certain subject matter, the limits of that competence cannot be judged further by the form or manner in which that power is exercised.
Accordingly, though it would be unconventional for the Parliament to amend a taxing statute by incorporating the amending provision in an Act of a different pith and substance, such a course would not be un constitutional.
Much more so can the Parliament introduce a charging provision in a Finance Act.
True, as said in Kesoram Industries and Cotton Mills Ltd vs Commissioner of Wealth Tax, (Central) Calcutta(1), that the Income tax Act is a permanent Act vs while the Finance Acts are passed every year and their primary purpose is to prescribe the rates at which the income tax will be charged under the Income tax act.
But that does not mean that a new and distinct charge cannot be introduced under the Finance Act.
Exigencies of the Financial year determine the scope and nature of its provisions.
If the Parliament has the legislative competence to introduce a new charge of tax, it may exercise that power either by incorporating that charge in the Income tax Act or by introducing it in the Finance Act or for the matter of that in any other Statute.
The alternative in this regard is generally determined by the consideration whether the new charge is intended to be more or less of a permanent nature or whether its introduction is dictated by the financial exigencies of the particular year.
Therefore, what is not 'income ' under 142 the Income tax Act can be made 'income ' by a Finance Act, an exemption granted by the Income tax Act can be withdrawn by the Finance Act or the efficacy of that exemption may be reduced by the imposition of a new charge.
Subject to constitutional limitations, additional tax revenue may be collected either by enhance the rate or by the levy of a fresh charge.
The Parliament, through the medium of a Finance Act, may as much do the one as the other.
In McGregor and Balfour Ltd., Calcutta vs C.I.T., West Bengal(1), which was affirmed by this Court in Chakravartti C.J. delivering the judgment of a Division Bench observed that the Finance Acts though annual Acts are not necessarily temporary Act for they may and often do contain provisions of a general character which are of a permanent operation.
In Hari Krishna Bhargav vs Union of India and Anr.(2) an assessee challenged the scheme of Annuity Deposits of the ground that the Parliament has no competence to incorporate ill the Income tax Act a provision which was substantially one relating to borrowings by the Central Government from a class of tax payers.
That scheme was introduced by Finance Act 5 of 1964 which incorporated Chapter XXII A containing section 28 A to section 28 X in the Income tax Act, 1961.
The challenge was repelled by this Court on the ground that if the parliament had the legislative competence to pass an Act for collecting Annuity Deposits from tax payers, nothing contained in the Constitution disentitled it "as a matter of legislative arrangement to incorporate the provisions relating to borrowing from tax payers in the Income tax Act or any other statute".
This discussion became necessary in spite of the appellant 's concession on the Parliament 's legislative competence because for a proper understanding of the provisions of the Finance Act 1963, it is essential to appreciate that a Finance Act may not only prescribe rates but also introduce a new charge.
We will now proceed to consider the provisions of the Finance Act, 1963 under which the respondent has levied additional surcharge on the appellant 's residual income.
The question for consideration is whether clause (c) of the portion "Surcharges on Income Tax" occurring in Paragraph A of Part I introduces a new charge in the shape of additional surcharge so that the said charge, can be levied even on a part of the appellant 's income which is exempt from income tax and super tax under sections 81(i)(a) and 99(1)(v) of the Act of 1961.
The history of Indian income tax, according to appellant 's counsel, shows that surcharges by way of increase in the amount of income tax are nothing but income tax and therefore the expression "income tax" occurring in sections 4 and 81 of the Act of 1961 and in section 2 and the First Schedule of the Finance Act, 1963 includes surcharges.
To put it differently, the argument is that the exemption granted by section 81(i)(a) extends to surcharges also as a result whereof a co operative society engaged in the business of banking is neither liable to pay income tax nor any of the surcharges on its business income.
143 In C.I.T., Kerala vs K. Srinivasan(1) on which the appellant relies, this Court has traced the history of the concept of 'surcharge ' in tax laws of our country.
After considering the report of the Committee on Indian Constitutional Reforms, the provisions of the Government of India Act, 1935, the provisions of Articles 269, 270 and 271 of the Constitution and the various Finance Acts, this Court held, differing from the High Court, that the word "income tax" in section 2(2) of the Finance Act, 1964 includes surcharges and the additional surcharge.
This case does not touch the point before us.
In that case, the assessee 's income for the accounting year ending March 30, 1964 consisted mainly of his salary.
Section 2(2)(a) of the Finance Act, 1964 did not by itself refer to any surcharge but it provided that in making the assessment for the assessment year commencing on April 1, 1964 the "income tax" payable by the assessee on his salary income shall be an amount bearing to the total amount of "income tax" payable according to the rates applicable under the operation of the Finance Act, 1963 on his total income, the same proportion as the salary income bears t the total income.
The question which arose for consideration was under the total income.
The question which arose for consideration was whether the words "income tax payable according to the rates applicable under the operation of the Finance Act, 1963" included surcharges which were leviable under the Act of 1963.
The question was answered by this Court in the affirmative.
As the judgment shows, "the essential point for determination" was whether surcharge is an additional mode or rate for charging income tax" (p. 351).
The Court held that it was.
The question before us is whether, even if the surcharger is but an additional mode or rate for charging income tax, the Finance Act of 1963 authorises by its terms the levy of additional surcharge on income which is exempt from income tax under the Income tax Act, 1961 In K. Srinivasans case the Court declined to express any opinion on the distinction made by the High Court that surcharges are levied under the Finance Act while income tax was levied under the Income tax Act (p. 351).
In the instant case it is not disputed by the revenue that a surcharge partakes of the essential characteristics of income tax and is an increase in income tax.
What we have to determine is whether the Act of 1963 provides for the levy of additional surcharge.
Granting that the word "income tax" includes surcharges, it may be arguable that the exemption from the payment of income tax under section 81 (i) (a) of the 1961 Act would extend to surcharges.
But the matter does not rest with what section 81 (i)(a) says.
Even if that section were to grant an express exemption from surcharges on business income the Parliament could take away that exemption or curtail the benefit available under it by making an appropriate provision in the Finance Act.
If while legislating on a matter within its competence the Parliament can grant an exemption, it is surely competent to it to withdraw that exemption in exercise of the self same power.
The Finance Act, 1963, like its annual counterparts, contains provisions not only prescribing rates of taxation but making extensive and important modifications in the Income tax Act itself.
By sections 4 to 144 20 of the Act of 1963, various provisions of the income tax Act have been amended.
By these amendments, some of which are given retrospective effect, old provisions are deleted, new ones are added and indeed new concepts of taxation altogether are introduced.
Such innovations fall within the legitimate scope of Finance Acts.
Section 11 (14) of the Indian Finance Act, 1946 made in the amount of excess profits tax repaid under section 28 of the U.K. Finance Act, 1941, "income" for the purpose of the Indian Income tax Act and further provided that "income shall be treated for purposes of assessment to income tax and super tax as the income of the previous year.
It was held by this Court in McGregor and Balfour Ltd. vs C.I.T. West Bengal(1) that section 11(14) charged the amount with a liability to tax by its own force.
It was further held that the particular provision, framed as it was, applied to subsequent assessment years just as it applied to the assessment year 1946 47.
Having seen the nature and scope of Finance Acts, the specific question which we have to consider is whether, as contended by the appellant, section 2 read with Paragraph A, Part I of the First schedule of the Finance Act, 1963 merely lays down a method of computation in cases where income tax is in fact payable or whether, as contended by the revenue, the Finance Act provides for the levy of a new and independent charge.
According to the appellant, these provisions of the Finance Act do not, directly or indirectly, bring about any amendment to section 81(i)(a) of the Income tax Act but merely prescribe that in cases where the income tax is payable, "The amount of income tax. shall be increased by the aggregate of the surcharges".
The heading "Surcharges on income tax" under which provision is made in the Finance Act for the calculation of a surcharge, a special surcharge and an additional surcharge is also said to bear out the contention that the levy of additional surcharge on the residual income cannot be disassociated from the main charge of income tax.
We are unable to accept this contention Article 269(1) of the Constitution provides that the duties and taxes mentioned therein shall be levied and collected by the Government of India but shall be assigned to the States in the manner provided in clause (2).
Article 270(1) provides that Taxes on income other than agricultural income shall be levied and collected by the Government of India and distributed between the Union and the States in the manner provided in clause (2).
By Article 271, notwithstanding anything in Articles 269 and 270, Parliament may increase any of the duties or taxes referred to in those Articles by a surcharge for purposes of the Union.
Surcharges leviable under section 2(1) of the Finance Act.
1963 are relatable to Article 271 of the Constitution.
Section 2(1)(a)(ii) of that Act provides, in so far as relevant, that for the assessment year commencing on April 1, 1963 income tax shall be charged at the rates specified in Part I of First Schedule and in cases to which Paragraph A of Part I applies, the income tax shall further 145 be increased by an additional surcharge for purposes of the Union calculated in the manner provided in the First Schedule.
`Clause (c) of Paragraph prescribes the manner in which the additional surcharge is to be calculated.
It provides that additional surcharge for purposes of the Union shall be calculated "on the amount of the residual income '.
at the rates mentioned in that clause.
Thus both the purpose and concept of the additional surcharge are different from those of income tax.
The additional surcharge is leviable exclusively for purposes of the Union so that the entire proceeds of such surcharge may under Article 271 of the Constitution, from part of the Consolidated Fund of India.
taxes and duties mentioned in Article 269(1), though levied and collected by the Government, have to be assigned to the States in the manner provided in clause (2) of that Article.
Then again, the additional surcharge levied for purposes of the Union is to be calculated not on total income like the income tax but it is to be calculated on the residual income.
Section 2(8) of the Act of 1963 defines residual income as total income reduced by (a) capital gains, if any, included in that total income and (b) the amount of tax (exclusive of additional surcharge) which would have been chargeable on such reduced total income if it had been the total income no part of which had been exempt from tax and on no portion of which deduction of tax had been admissible.
In order that the exemption granted to co operative banks by section 81 (i) (a) may not lose its meaning and content, section 2(8) of the Finance Act introduces the concept of residual income on which alone the additional surcharge is payable.
The residual income is not the same as the business income of a co operative bank, which is exempt under section 81(i)(a) from income tax.
For ascertaining the residual income the total income is reduced by the amount of capital gains and further by the amount of tax (other than additional surcharge) which would have been charged on such reduced total income on the assumption that the whole of it was liable to be brought to tax.
Thus in the instant case the additional surcharge is not levied on the appellant 's business income of Rs. 9,48,335 which is exempt from income tax and super tax.
It is levied on the residual] income of Rs. 5,39,386 which is arrived at after deducting Gross taxes (exclusive of additional surcharge) amounting to Rs. 4,60,712 from the assessee 's gross income of Rs. 10,00,098.
By section 3 of the Finance Act of 1963 no account can be taken of the additional surcharge in calculating any relief, rebate or deduction in respect of income tax payable on the total income of an assessee which includes any income on which no income tax is payable or in respect of which a deduction of income tax is admissible.
Section 3, by its terms, has precedence over anything contained in Chapter VII or Chapter VIII A or in section 110 of the Income tax Act or section 2(5) of the Finance Act itself.
Additional surcharge is treated in this way as falling in a separate category.
Thus, additional surcharge is a district charge.
not dependent for its leviability on the assessee 's liability to pay income tax or super tax.
Such a qualification cannot be read into section 2(1)(a)(ii) of the Act of 1963 as argued by the appellant.
That section uses the language that "income tax. shall further be increased by an additional sur 146 charge", not for making the assessability to surcharge dependent upon Assessability to income tax but for the simple reason that if an assessee`s total income includes income on which no tax is payable, tax has all the same to be computed for purposes of rate Section 110 of the Income tax Act, 1961 provides that where there is included in the total income of an assessee any income on which no income tax is payable, the assessee shall be entitled to deduction, from the amount of income tax with which he is chargeable on his total income, of an amount equal to the income tax calculated at the average rate of income tax on the amount on which no income tax is payable.
The income tax computed at a certain rate is by section 2(1)(a)(ii) to be further increased by an additional surcharge for purposes of the Union.
This becomes clearer still from the language of Paragraph A, under the heading .
Surcharges on Income Tax".
It says: "The amount of income tax computed at the rate hereinbefore specified shall be increased by the aggregate of the surcharges,".
If the intention was to limit the liability to pay additional surcharge to income which can be brought to income tax, appropriate language could have been used to convey that simple sense.
The weakness of the appellant 's contention becomes manifest when it is realised that were the contention right, the appellant would not be liable to pay additional surcharge even on that portion of its non business income which is contained in the residual income.
By the definition in section 2(8) of the Act of 1963, residual income means the total income as reduced and therefore, the non business income which is chargeable to income tax must form a component of the residual income.
Concededly, the appellant is liable to pay additional surcharge on its non business income.
This is so not because additional surcharge is payable by law on non business income but because it is payable on residual income and residual income, by definition, includes non business income as reduced.
In fact, it consists of the amount of total income as reduced by the amounts mentioned in clauses (a) and (b) of section 2(8).
Relying on United Commercial Bank Ltd. vs Commissioner of Income tax, West Bengal(1), East India Housing and Land Development Trust Ltd. vs Commissioner of Income tax West Bengal(2), and K. V. Al.
M. Ramanathan Chettiar vs Commissioner of Income tax, Madras(3), the appellant 's counsel urged that income tax is a single levy, that it is one tax and not so many taxes separately levied on several heads of income.
This partly is the same argument in a different disguise that an assessee who is not liable to pay income tax cannot be made liable to pay additional surcharge under the Finance Act, 1963.
We have rejected that contention.
Partly, the argument is designed to establish correlation with section 146 of the income tax Act, 1961 by which, when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under the Act, the Income tax office has to serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable.
This provision presents no 147 difficulty for, if an assessee is liable to pay additional surcharge but no income tax or super tax, the notice of demand will mention the particular amount payable as tax due.
The appellant being liable to pay tax on its non business income and additional surcharge on its residual income, the demand notice will call for payment of the total amount due from the appellant by way of tax.
The interpretation put by us on the Finance Act, 1963 does no violence to section 4 of the Income tax Act, 1961 under which income tax at the rates prescribed by the Finance Act is to be charged "in accordance with, and subject to the provisions of." the Income tax Act.
The Income tax Act exempts the assessee 's business income from income tax and super tax.
The Finance Act brings to tax its residual income.
The decision of the Allahabad High Court in Allahabad District Co operative Bank Ltd. vs Union of India and Ors.(1) is directly in favour of the appellant and naturally, learned counsel for the appellant relies on it very strongly.
But that case, in our opinion, is incorrectly decided.
The learned Judges were in error in holding that section 2 of the Finance Act, 1963 does not provide for the levy of a tax other than income tax" and that therefore additional surcharge is not payable to the extent of the income which is exempt under section 81 of the Income tax Act.
One of the difficulties which the learned Judges felt in accepting the revenue 's contention was that if "the additional surcharge mentioned in the Finance Act of 1963 was not partake of the nature of income tax it will not be possible to demand and realise it under the provisions of the income tax Act, and the notice of demand and recovery proceedings would be vitiated on that account".
The very assumption of this observation is falacious because additional surcharge indubitably partakes of the nature and essential characteristics of income tax.
It is a tax on residual income and by reason of the definition contained in section 2(8) of the Act of 1963, "residual income" would include non business income which under the Income tax Act is charge able to income tax.
Thus, the additional surcharge, though levied by the Finance Act, 1963 independently of the Income tax Act, is but a mode of levying tax on a portion of the assessee 's income computed in accordance with the definition in section 2(8) of the Act of 1963.
Therefore, the notice of demand under section 156 of the Income tax Act can lawfully call for the payment of amount due from an assessee by way of additional surcharge.
For these reasons, we confirm the judgment of the High Court but in the circumstances there will be no order as to costs.
P.H.P. Appeal dismissed.
| IN-Abs | The appellant is a Cooperative Society engaged in the business of banking According to section 8] (i) (a) of the Income 'Tax Act, 1961, a Cooperative Society engaged in the business of banking is not liable to pay income tax on its business income.
The Finance Act, 1963, however, by section 2(i) (a), 2(8), 3, paragraph A(ii) of Part I of the First Schedule and clause of that portion of Part I called surcharge on Income Tax provides for levy of additional surcharge for the purposes of the Union calculated on the amount of the residual income at the rates mentioned therein.
The total income of the appellant for the assessment year 1963 64 was Rs. 10,00,098.
Out of this Rs. 9,48,335 was its business income. 'The tax amounting to Rs. 23,845 was charged on Rs. 51,763 Applying the Finance Act of 1963, the residual income of the appellant was computed at Rs. 5.39,386 and a surcharge thereon was levied of Rs. 52,828 Thus, the total tax imposed on the appellant came to Rs. 76,674.
The assessment order passed by the Income Tax officer levying the tax as aforesaid was challenged by the appellant in the High Court by a Writ Petition.
The main grievance of the appellant before the High Court was that whereas its taxable income was only Rs. 51,763, a tax of Rs. 76,674 was imposed on it.
The relevant provisions of the Finance Act were challenged as invalid on the ground that(i) they imposed additional surcharge on income which was exempt from tax under the provisions of the Income Tax Act and that (ii) the additional surcharge was intended as additional levy on the income tax and had no independent existence apart from it The High Court rejected these contentions.
On an appeal by certificate, dismissing the appeal, ^ HELD : 1.
It is indisputable that the appellant is not required to pay income tax on the banking income.
In view of section 81.
It is also not liable to pay surcharge on its business income in view of section 99(1)(v).
[139C] 2.
The, grievance of the appellant that the tax levied upon it exceeds its taxable income can afford no true guide to the construction of the relevant provisions of the Income Tax Act or the Finance Act.
Harshness of a taxing statute, apart from a possible challenge to it under article 13 of the Constitution cannot be an invalidating circumstance.
But, the grievance on this score is misconceived.
It assumes what has to be examined that no part of the income exempted from Income Tax and Super Tax under the Income Tax Act can be brought to tax by a Finance Act, [140G H] 3.
The concession of the counsel for the appellant giving up challenge to the power.
of the Parliament to impose a new charge by Finance Act was Properly made.
Under article 246(11) of the Constitution, Parliament has the exclusive power to make laws with respect ' 'o any of the matters in List of the Seventh Schedule.
Entry 82 in List I relates to tax on income other than agricultural income.
The Income Tax Act, 1961 and the annual Finance Acts are enacted by the Parliament in exercise of the powers conferred by Art 246(1) read with entry 82 of List I.
Once the Parliament has the legislative competence to enact a law with respect to certain subject matter, the limits of 136 that competence cannot be judged further by the form or manner in which that power is exercised.
Exigencies of the Financial year determine the scope and nature of the provisions of the Finance Act.
The primary purpose of the Finance Act is to describe the rates at with the Income Tax will be charged under the Income Tax Act but that does not mean that new and distinct tax cannot be charged under Finance Act.
Therefore, what is not income under the Income Tax Act can be made income by the Finance Act.
An exemption granted by the Income Tax A, t can be withdrawn by the Finance Act or the efficacy of that exemption may be reduced by the imposition of a new charge.
[141D E; G H] 4.
The contention of the appellant that surcharges are nothing but income tax and, therefore, expression income tax occurring in Sec. 4 and 81 of the Act includes surcharges and AS such exempted cannot be accepted.
The case of the C.I.T. Kerala vs K. Srinivasan distinguished.
There the essential point for determination was whether surcharge is additional mode or rate for charging income tax.
The Court held there that it was so.
The question before us is whether even if the surcharge is an additional mode or rate for charging income to the Finance Act of 1963 authorises by its terms the levy of additional surcharge on income which is exempt from income tax under the Income Tax, Act, 1961.
The residual income as defined by the 1963 Finance Act is not the same as the business income of a Cooperative Bank which is exempted under see.
The additional surcharge is a distinct charge not dependent for its leviability on the assessee 's liability to pay income tax or Super Tax.
The decision of Allahabad High Court in Allahabad District Co operative Bank Ltd vs Union of India over ruled.
[143D E] 5.
The additional surcharge though levied by the Finance Act 1963 independently of the Income Tax Act is but a mode of levying tax on a portion of the assessee 's income computed in accordance with the definition in section 2(8) of the Finance Act 1963.
[147F] ARGUMENTS For The Appellant 1.
Under section 81 read with section 4 of the Income tax Act, 1961, income tax is not payable by the appellant.
a Co operative Society, in respect of its income from banking business.
Similarly super tax is not payable under section 99(i)(v) read with section 4. 2.
The primary purpose of the annual Finance Acts as envisaged by section 4 of the Income tax Act is to prescribe the rates of income tax on the total income of an assessee, and this function as contemplated by section 4 is to be "subject to the other provisions of this Act", namely, the Income tax Act, 1961, which would include, inter alia, section 81. 3.
The history of Indian income tax shows that surcharges by way of increase to the amount of income tax, which are added to the basic amount, in view of article 271 of the Constitution of India, are nothing other than income tax and a part of income tax alone.
Therefore the expression 'income tax ' in section 4 and 81 of the Income tax Act, 1961, and section and Schedule I, Part 1 of the Finance Act, 1953, includes surcharges.
Section 2 of the Finance Act, 1963, and Schedule I, Part I, Paragraph A all clearly contemplate that the surcharge.
special surcharge and additional surcharge are all only by way of increase of the amount of income tax and not only partake of the character of income tax but are actually a part of income tax.
They are merely rates of income tax.
The main part of section 2(1) (a) says that "Income tax shall be charged at the rates specified in Part I of the First Schedule" and clause (ii) of that section provides in the ease referred to therein that income tax "shall further be increased by an additional surcharge for the purpose of the Union calculated in the manner provided in the First Schedule.
Similarly in Paragraph A of Part I of the First Schedule the heading to the provisions prescribing rates of surcharge is "surcharges on income tax" in the plural.
The main part in the heading also provides that "the amount of 137 income tax. shall be increased by the aggregate of the surcharges calculated as under " Clause (c) thereafter provides for the additional surcharge for the purpose of the Union.
Paragraph A also therefore clearly indicates that the three surcharges are only of the same nature and that all the three surcharges are only by way of increase of the amount of income tax; in other words part of the income tax.
Is either section 2 nor paragraph A of Part I of the First Schedule can even remotely be said to contemplate any separate levy of additional surcharge other than income tax.
From the assessment order it is seen that the following have been charged only on the real taxable income of the appellant namely Rs. 51,763: (i) income tax (ii) surcharge on income tax (iii) special surcharge on income tax (iv) super tax and (v) surcharge on super tax.
These items have not been charged on the total income of Rs. 10,00,098, because income tax is not payable on the balance of the total income under section 81.
The Income tax officer has sought to impose only additional surcharge under clause (c) in respect to the total income of Rs. 10,00,098.
In view of section 81 no additional surcharge is payable on the total income of Rs. 10,00,098.
It is payable only on the taxable income of Rs. 51,763.
Section 2 read with Paragraph A Part I of Schedule I to the Finance Act merely purports to lay down the method of computation where income tax is payable.
It does not either dire thy or by implication make any amendment or modification in section 81. 7.
Section 3 of the Finance Act ]963 also applies to a stage of computation only and in regard to relief, rebate etc.
It does not impose any liability or any tax.
It operates only where additional surcharge is payable and not other wise, and where relief, rebate etc.
is to be given from the tax payable by the assessee, e.g. deduction of tax based on life insurance premia provident fund contribution.
donations to charitable institution etc.
Section 81 does not provide for any such relief or rebate.
Section 2(8) of the Finance Act, 1963, defining "residual income" which requires deduction from the total income of income tax, surcharge and special surcharge to ascertain residual income also does not have the effect of imposing any liability or any tax but merely provides for computation.
In a taxing Act one has to look merely at what is clearly said.
There is no room for any intendment.
There is no equity about a tax.
There is no presumption as to tax.
Nothing is to be read in, nothing is to be implied." "In a case of reasonable doubt.
the construction most beneficial to the subject is to be adopted.
" The court will be very slow in reading an implied amendment in a tax law because there is no intendment.
Income tax is one tax, not several taxes on several heads or several items of income: For the Respondent 1.
It is open to the Parliament to pass an Act relating to more than one topic or field of operation, covered by the Entries in List 1.
It is not as if there must be as many Enactments as the topics which the enactment covers.
The legislature has a wide range of selection and freedom in appraisal not only in the subjects of taxation and the manner of taxation but also in the determination of the rate or rates applicable.
If production were always to be taken into account there will have to be a settlement for every year and the tax will become a kind of income tax.
The burden of proving discrimination is always heavy and heavier still when a taxing statute is under attack.
The burden is on the person complaining of discrimination.
The burden is proving not possible 'inequality ' but hostile 'unequal ' treatment.
This is more so when uniform taxes are levied.
The State cannot be asked to demonstrate equality.
Income which is exempt from taxation is income which is assessable to tax and therefore liable to tax but tax is not imposed on account of the exemp 138 tion.
This exemption can by subsequent legislation be wholly or partially withdrawn both as regards items of income and levies imposed for the purpose of taxation.
Thus where the Income tax Act 1961 says that business income of a co operative society will be exempt from income tax it would be open to the Parliament by enactment of the Finance Act of 1963 to say that this exemption shall be partially withdrawn as regards residual income and this partial exemption will operate only for the purpose of income tax but not surcharge on residual income.
The net result of the partial withdrawn of the exemption would mean that though the business income of a co operative society will be exempt from tax the residual income which is only a part of the exempted business income could be subjected to surcharge on income tax only. 4.
Income tax and surcharge on income tax are two different levies though the computation of the latter is based upon a percentage of the former.
The to are inclusive for the purpose of imposing tax but they are not one levy only.
|
Civil Appeal No. 1877 of 1970.
From the judgment and order dated the 10th January, 1968 of the Madhya Pradesh High Court at Jabalpur in Misc.
Civil Case No. 221 of 1962.
V. section Desai, B. B. Ahuja and section P. Nayar, for the appellant.
M. C. Chagla, B. Sen, A. K. Chitale, A. K. Verma, Ravinder Narain J. B. Dadachanji and O.C. Mathur, for respondent.
The Judgment of the Court was delivered by MATHEW, J.
This is an appeal from the judgment of the High Court of Madhya Pradesh in a reference made at the instance of the assessee M/s. Sutlej Cotton Mills Supply Agency Ltd. (hereinafter referred to as the 'assessee ') by the Income Tax Appellate Tribunal (hereinafter referred to as the 'Tribunal ') under section 66(1) of the Indian Income Tax Act.
The question referred was: Whether the inference of the Tribunal that the profit of Rs. 2,13,150/ arising from the sale of 1,58,200 shares of the Gwalior Rayon Silk Manufacturing (Weaving) Co. Ltd., is assessable as business profit is correct ?".
When the reference came up for hearing before the High Court, the High Court found that although the Tribunal was of the view that the question referred was a mixed question of law and fact, it had not stated all the facts and circumstances on which it based its conclusion that the profit of Rs. 2,13,150/ was a business profit and so the Court called for a supplementary statement of the case and a supplementary statement of the case was submitted to the Court by the Tribunal.
The material facts in the statement of the case were as follows.
The assessee is a public limited company and it is controlled by the Birlas.
the assessee applied for certain shares of the Gwalior Rayon Silk Manufacturing (Weaving) Company Limited (hereinafter referred to as the "Rayon Company"), also a company controlled by the Birlas.
This company was floated on 25 8 1947 with a paid up capital of Rs. 5 lakhs made up of 50,000 ordinary shares of Rs. 10/ each.
in the year ending 31 12 1951, the Rayon Company issued certain new shares for paid up capital of Rs. 1,17,25,000/ made up as follows: Rs. 7,60,000 Ordinary shares of Rs. 10/ each 76,00,000 fully paid up.
1 50,000 Ordinary shares of Rs.10/. each 3,75,000 with paid up at Rs. 2/8/ each.
1,50,000 6% preference shares of Rs. 100/ 37,50,000 each paid up at Rs 25/ each (redeemable at par at the company 's option after specified date by giving one Year 's notice).
129 The assessee which was interested in the Rayon Company and which had already purchased 1,000 ordinary shares, subscribed for 3,49,000 shares of the new issue and paid Rs. 8,72,500/ as application money on the 25th and 21th February, 1951, and paid Rs. 26,17,500/ as final call money on 10 8 1951.
These purchases were authorized by a resolution of the assessee dated 7 2 1951.
The assessee sold a part of its stock viz., 1,58,200 shares at a profit of Rs. 2,13,150/ .
For the assessment year 1956 57 (accounting year ending on 31 3 1956), the Income Tax Officer sought to assess the amount on the basis that it was profit accruing to the assessee from an adventure L in the nature of business.
The assessee contended that the amount re presented capital gain as the shares were purchased by way of investment and that the same cannot be taxed as revenue receipt.
The Income Tax Officer rejected the contention.
the assessee filed in appeal before the Appellate Assistant Commissioner.
He confirmed the order.
The assessee then went up in appeal before the Appellate Tribunal.
The Tribunal came to the conclusion, after considering all the circumstances, that the transaction was in the nature of a business ad venture and that profits were liable to be taxed.
The reasons which induced the Tribunal to come to this conclusion were: The assessee was authorised by clauses 12, 13, 28 and 29 of paragraph 3 of its Memorandum of Association to buy and sell shares; there were specific resolutions of the Company authorising a director of the assessee to purchase and sell these shares; the assessee had included the profit of Rs. 2,13,150/ in the profit and loss account without taking it to any reserve account or specifically set it apart for any other purpose; the assessee had purchased the shares from borrowed funds and not with money readily available to it; the assessee did not make the sales on account of any pressing necessity to meet existing liabilities but had in fact kept a part of the sale proceeds as liquid cash in the United Commercial Bank Ltd.; the assessee had.
in the past, dealt in shares as business transaction and had claimed for the assessment year 1951 52 Rs. 1.29,214/ as loss on account of its dealing in shares of M/s. Titagarh Paper Mills Ltd.; it also claimed Rs. 6,30,000/ as loss on account of devaluation of the shares of M/s. Pilani Investment Corporation though that was not allowed; there had recently grown a business practice of investing large sums of money in shares in new ventures with an eye on their appreciation for obtaining by sale substantial pro fits in future.
The High Court, in its judgment, said that there was no provision in clauses 10, 12, 13, 28 and 29 of paragraph 3 of Memorandum of Association of the assessee which authorised the carrying on of the business of purchasing and selling shares, although some of these clauses did authorise the assessee to acquire and sell shares in other similar companies.
that the inclusion of the profit of Rs. 2,13,150/ in the profit and loss account without taking it into any reserve specifically was not conclusive of the question whether it was a capital asset or a revenue receipt; that the true nature and character of the moneys received was to be determined not by the manner in which the assessee treated it but by its inherent character, and, that it was wholly immaterial 130 as to how the assessee treated the amount in question; and that there was no evidence that the shares were purchased out of borrowed funds as the assessee had a fixed deposit of Rs. 31,75,000/ in the United Commercial Bank Ltd. and a deposit of Rs. 8,76,008 2 0 in the current account of the Bank.
The High Court was of the view that the finding of the Tribunal that the sale of shares in 1955 was made not on account of any pressing necessity to meet existing liabilities was based on materials placed before the Tribunal.
The Court, however, said: "It may be that, at that time, the liabilities of the assessee company existed, but it is quite another matter to say that it was obliged to sell the shares in order to meet those liabilities.
" The High Court was also of the view that the conclusion of the Tribunal that the assessee had claimed Rs. 1,29,214/ as loss on account of dealing in shares of M/s. Titagarh Paper Mills Ltd. for the assessment year 1951 52 and that the claim was allowed by the Income Tax officer must be accepted as correct, but said that this solitary transaction cannot be taken as conclusive of the fact that the sale of shares in question here was an adventure in the nature of trade.
The main reason which impelled the High Court to hold that the transaction was not an adventure in the nature of trade was that the dominant intention of the assessee in acquiring the shares was to boost the shares of a sister concern viz, the Rayon Company, and thus render it assistance for setting it up as a going concern and when that was accomplished, the assessee started selling the investment which had in the mean time enhanced in value.
The question which the Tribunal had to consider in the appeal and which was referred to the High Court was a mixed question of law and fact, namely.
whether the profit from sale of the shares in question was a revenue or a capital receipt.
The distinction between capital accretion and income has been explained by Rowlatt, J. in Thew vs South West Africa Cc.
Ltd.(1).
The learned judge said that for the purpose of ascertaining whether profits made upon a sale of an article are taxable profits.
the question to be asked is: "Is the article acquired for the purpose of trade ?.
If it is, the profit arising from its sale must be brought into revenue account and that the profit is chargeable as capital gains if the sale is of a capital asset, and as business profit if the sale is in the course of business or the transaction constitutes an adventure in the nature of trade.
The line between capital sales and sales producing income has been drawn by Lord Justice Clerk in Californian Copper Syndicate vs Harris(2) in a passage which has become classical: "It is quite a well settled principle in dealing with questions of assessment of income tax that where the owner of an Ordinary Investment chooses to realise it, and obtains a greater price for it than he originally acquired it at, the enhanced price is not profit. assessable to income tax.
but it is equally well established that enhanced values obtained from realisation or conversion of securities may be so assessable where what is done is not merely a realisation or change of investments but an act done in what is truly the carrying on, l I or carrying out, of a business.
What is the line which 131 separates the two classes of cases may he difficult to define, and each case must be considered according to its facts.
the question to be determined being Is the sum of gain that ha been made a mere enhancement of value by realising a security or is it a gain made in an operation of business in carrying, out a scheme for profit making ?" In the absence of any evidence of trading activity in cases of purchase and resale of shares, it has been held that profit arising from the resale is an accretion to the capital.
If a transaction is in the assessee`s ordinary line of business there can be no difficulty in holding that it is in the nature of trade.
But the difficulty arises where the transacting is outside the assessee 's the of business and then, it must depend upon the facts and circumstances of each case whether the transaction is in the nature of a trade.
It is not necessary to constitute trade that there should be a series of transactions both of purchase and of sale.
A single transaction of purchase and sale outside the assessee 's line of business may constitute an adventure in the nature of trade.
Neither repetition nor continuity of similar transactions is necessary to constitute a transaction an adventure in the nature of trade.
If there is repetition and continuity, the assessee would be carrying on a business and the question whether the activity is an adventure in the nature of trade can hardly arise.
A transaction may be regarded as isolated although a similar transaction may have taken place a fairly long time before [see 1.
R. vs Reinhold(1)].
The principles underlying the distinction between a capital sale and an adventure in the nature of trade were examined by this Court In Venkataswami Naidu & Co. vs C.l.
T.(2), where this Court said that the character of a transaction cannot be determined solely in the application of any abstract rule, principle or test but must depend upon all the facts and circumstances of the case.
Ultimately, it is a matter of first impression with Court whether a particular transaction is in the nature of trade or not it has been said that a single plunge may be enough provided it is shown to the satisfaction of the Court that the plunge is made in the waters of the trade; but mere purchase/sale of shares if that is all that is involved in the plunge may fall short of anything in the nature of trade.
Whether It is in the nature f trade will depend on the facts and circumstances.
Where the purchase of any article or of any capital investment, for instance, shares.
is made without the intention to resell at a profit.
a resale under changed circumstances would only be a realisation of capital and would not stamp the transaction with a business character [see C.l.
T. vs P.K.N. Co., Ltd.(3)].
Where a purchase is made With the intention of resale, it depends upon the conduct of the assessee and the circumstances of the case whether the venture is on capital account or in the nature of trade.
A transaction is not necessarily in the nature of trade because the purchase 132 was made with the intention of resale [see Jenkinson vs Freeland(1); Radha Debi Jalan vs C.l.
T.(2); India Nut Co. Ltd. vs C.l.
T.(3); M/s. Sooniram Poddar vs C.l.
T.(4); Ajax Products Ltd. vs C.l.
T.(5); Gustad Irani vs C.l.T.(5); and Mrs. Alexander vs C.l.
T.(7);].
A capital investment and resale do not lose their capital nature merely because the resale was foreseen and contemplated when the investment was made and the possibility of enhanced values motivated the investment [see Leeming vs Jones(8) and also the decisions of this Court in Saroj Kumar Mazumdar vs C.l.
T.(9) and Janki Ram Bhadur Ram vs C.I.T.(10)].
In I. R. vs Fraser(11) Lord Norman said: "The individual who enters into a purchase of an article or commodity may have in view the resale of it at a profit, and yet it may be that this is not the only purpose for which he purchased the article or the commodity nor the only purpose to which he might turn it if favourable opportunity for sale does not occur.
An amateur may purchase a picture with a view to its resale at a profit, and yet he may recognise at the time or afterwards that the possession of the picture will give him aesthetic enjoyment if he is unable ultimately, or at his chosen time, to realise it at a profit . " An accretion to capital does not become income merely because the original capital was invested in the hope and expectation that it would rise in value.
if it does so rise, its realisation does not make it income.
Lord Dunedin said in Leeming vs Jones(8) at p. 360: "The fact that a man does not mean to hold an investment may be an item of evidence tending to show whether he is carrying on a trade or a concern in the nature of trade in respect of his investments, but per se it leads to no conclusion whatever." This Court laid down in Venkataswami Naidu & Co. vs C.l.
T.(12) that the dominant or even sole intention to resell is a relevant factor and raises a strong presumption, but by itself is not conclusive proof, of an adventure in the nature of trade.
The intention to resell would, in conjunction with the conduct of the assessee and other circumstances, point to the business character of the transaction.
In the light of the principles above referred to, it is necessary to examine whether the Tribunal had approached the question from the right perspective, viz., whether on the basis of its finding on questions of fact, the inference that the transaction was an adventure in the nature of trade was justified.
133 The Tribunal relied on the following circumstances for coming to the conclusion.
The assessee has been dealing in shares from 1951 to 1953.
For the assessment year 1951 52, the assessee claimed a sum of Rs. 1,29,214/ which was shown in the profit and loss account and the balance sheet of the company for the year ending 31 3 1951 as a loss in the dealing of shares of M/s. Titagarh Paper Mills Ltd. This claim was allowed by the Income Tax officer.
According to the Tribunal, this would show that the assessee had been buying and selling shares even though as an isolated adventure in the nature of business The High Court has not upset this finding, but has only said that this is an isolated transaction.
That apart, in the same year, a sum of Rs. 6,30,000/ was debited to the profit and loss account on devaluation of the shares of M/s. Pilani Investment Corporation.
Such a debit was permissible only on the footing that the shares constituted the stock in Trade of the assessee.
It is no doubt true that the Department did not allow this claim.
But that was on the basis that the claim that the shares leave fallen in value was not proved to the satisfaction of the Income Tax officer, and not on the basis that the shares were not held as stock in trade as the High Court wrongly thought.
The Tribunal also referred to the resolutions passed by the assessee authorising one of its directors to purchase and sell the shares in the Rayon Company The finding of the High Court that the clauses of the Memorandum o Association viz., clauses 10, 12, 13, 28 and 29 and not authorize the company to acquire and sell shares as business has no relevance in view of the aforesaid resolution of the assessee and of the fact that it had been dealing in shares in a commercial spirit as is evident from its claim for loss in dealings in the shares of M/s. Titagarh Paper Mills Ltd. and devaluation of shares of M/s. Pilani Investment Corporation on the basis that they had fallen in value.
Secondly, the Tribunal said that from 1947 to 1956, no dividend had been declared by the Rayon Company and that the money which went into the purchase of these shares was borrowed by the assessee.
In other words, the view of the Tribunal was, it was with borrowed funds that the assessee purchased the shares.
It is no doubt true that there was no evidence to show that the money was specifically borrowed for the purpose of buying shares.
But there was evidence before the Tribunal for its finding that the liabilities of the assessee exceeded its assets.
The finding, therefore, that the shares were purchased with borrowed funds on which the assessee was paying interest, was a finding supported by evidence.
The reasoning of the Tribunal that it is most improbable that the assessee would be investing borrowed money on which interest would have to be paid in shares which yielded no dividend, was correct.
We cannot say that this was not a relevant circumstance for the Tribunal to take into consideration for coming to the conclusion that the transaction was an adventure in the nature of business.
Looking into all the circumstances, the Tribunal negatived the case of the assessee that it had invested its funds with a view to earn dividend.
The case of the assessee throughout was that the purchase of the shares was by way of investment and the sale was forced by necessity because the creditors were pressing for repayment of the loan.
The 134 Tribunal found that the shares were not sold to liquidate the debts of the assessee as the balance sheet as on 21 3 1956 showed that the proceeds were kept is liquid cash in the United Commercial Bank Ltd. As already stated, the main reason why the High Court came to a different conclusion.
is stated as follows in the judgment : " .
Undoubtedly, there are some elements which are contra indicative of investment but there are other considerations which detract from their value as elements indicating an adventure in the nature of trade, the main being, that the assessee company, which is controlled by the Birlas, purchased the shares with a view to assisting a sister company controlled by the same persons, and not to embark upon a venture in the nature of trade.
" At no time had the assessee a case that the shares were purchased with a view to help a sister company controlled by the Birlas.
No such case was set up by the assessee either before the Income Tax officer or the Appellate Assistant Commissioner; nor was it urged before the Appellate Tribunal.
Nowhere in the statement of case or the supplementary statement of case prepared by the Tribunal and filed in the High Court was there any finding on the question.
The whole conclusion of the High Court is based on unwarranted assumption of facts which must have been taken from the argument of the assessee before the High Court.
The danger of failing to recognize that the jurisdiction of the High Court in these matters is only advisory and that conclusion of facts are conclusions on which the High Court is to exercise the advisory jurisdiction is illustrated by this case.
Mr. Chagla for the respondent contended that the only question to be asked and answered is : What was the dominant intention of the assessee when it purchased the shares ? If the dominant intention was to carry on an adventure in the nature of business, the profit can be taxed.
Otherwise not.
In other words, the question is whether the assessee purchased the shares in a commercial spirit with a view to make profit by trading in them.
The Tribunal found, after taking in to account all the relevant circumstances that the dominant intention of the assessee was to make profit by resale of the shares and not to make an investment.
The finding that loss or profit is a trading loss or profit is primarily a finding of fact, though in reaching that finding the Tribunal has to apply the correct test laid down by law When we see that the Tribunal has considered the evidence on record and applied the correct test there is no scope for interference with the finding of the Tribunal (see C. 1.
T. vs Ashoka Marketing Co.(l).
We do not think that the High Court was right in interfering with the judgment of the Tribunal.
In the result we reverse the judgment of the High Court and allow the appeal with costs.
P.B.R. Appeal allowed.
| IN-Abs | The assessee acquired shares in a newly floated sister concern and later sold a part of its stock at a profit.
The Income tax officer assessed the profit to tax on the basis that i was profit accruing to the assessee from an adventure in the nature of business, and the order was confirmed by the Appellate Assistant Commissioner.
On appeal the Appellate Tribunal held that the transaction was in the nature of business adventure; that the assessee by its Memorandum of Association was authorised to buy and sell shares.
that there was a specific resolution to buy and sell shares.
that the assessee included the profit on the sale of shares in its profit and loss account without showing it in any reserve account, that the shares were purchased from borrowed funds and not with ready cash.
that the sales were not on account of any pressing necessity; that it kept the profit in cash in a bank and that the assessee had in the past dealt with shares as a business transaction.
On reference, the High Court held that there was no provision in the Memorandum of Association which authorised the carrying on or the business of purchasing and selling shares; that the inclusion of the profit in the profit and loss account was not conclusive of the question whether it was capital asset or revenue receipt.
that the nature and character of the money should be determined by its inherent character.
that there was no evidence that the shares were purchased out of borrowed funds; that a solitary transaction could not be taken as conclusive of the fact that the sale of shares was an adventure in the nature of trade and that in any case the dominant intention of the assessee in acquiring the shares was to boost the shares of a sister concern and when once that was achieved the assessee started selling the investments.
On appeal to this Court it was contended by the respondent that the profit can be taxed only if the dominant intention of the assessee was to carry on an adventure in the nature of business and not otherwise.
Allowing the appeal, ^ HELD: The Tribunal found, after taking into account all the relevant circumstances, that the dominant intention of the assessee was to make profit by resale of the shares and not to make an investment.
[134F] (1) (a) The finding that loss or profit is a trading loss or profit is primarily a finding of fact though in reaching that finding the Tribunal has to apply the correct test laid down by law.
When the Tribunal has considered the evidence on record and applied the correct test, there is no scope for any interference with the finding of the Tribunal.
[134G] C.I.T. vs Ashoka Marketing Co. , referred to.
(b) The whole conclusion of the High Court was based on an unwarranted assumption of facts.
The danger of falling to recognise that the jurisdiction of the High Court in these matters is only advisory and that conclusions of facts are conclusions on which the High Court is to exercise the advisory jurisdiction is illustrated by this case At no time had the assessee a case that the shares were Purchased with a view to help a sister concern.
Nowhere in the statement of the case or the supplementary statement of case prepared by the Tribunal and filed in the High Court was there a finding on the question.
[134E; D] 127 (2) The tests for the purpose of ascertaining whether profits made upon a sale of an article are taxable profits are: (i) if a transaction is in the assessee 's ordinary line of business it is in the nature of trade.
[131B C] (ii) it is not necessary, to constitute trade, that there should be a series of transactions, both of purchase and sale.
A single transaction of purchase and sale outside the assessee 's line of business may constitute an adventure in the nature of trade; [131C D] Venkataswami Naidu & Co. vs C.l.T. [1959] 35 I.T.R. 594, followed.
I. R. vs Reinhold , 392 referred to.
(iii) where the purchase of any article or of any capital investment is made without the intention to resell at a profit the resale under changed circumstances would only be a realisation of capital and would not stamp a transaction with a business character.
[131G] C.I.T. vs P. K. N. Co. Ltd. referred to.
(iv) a transaction is not necessarily in the nature of trade because the purchase was made with the intention of resale.
[131H] Jenkinson vs Freeland ; Radha Debi Jalan vs C.l.T. [1951] 20 l.
T.R. 176; India Nut Co. Ltd. vs C.l.
T. Sooniram Poddar vs C.l.T. ; , 478 9; Ajax Products Ltd. vs C.l.
T. I.T.R. 297, 310; Gustad India vs C.l.
T. and Mrs. Alexander vs C.l.
T. 402.
referred to.
(v) a capital investment and resale do not lose their capital nature merely because the resale was foreseen and contemplated when the investment was made and the possibility of enhanced value motivated the investment [132B] Leeming vs Jones ; Saroj Kumar Mazumdar vs C.l.
T. [19591 , 250 1; I. R. vs Fraser 24 T. C. 498, 502.
Jankiram Bhadur Rant vs C.I.T. [1965] 57 I.T.R. 21, referred to.
(vi) the accretion to capital does not become income merely because the original capital was invested in the hope and expectation that it would rise in value.
[132D E] Leeming vs Jones , referred to.
(vii) The intention to resell would, in conjunction with the conduct of the assessee and other circumstances, point to the business character of the transaction.
[132F G] In the instant case, the assessee had been dealing in shares.
(i) In an earlier assessment year the assessee had shown in its profit and loss account and the balance sheet a loss in dealing of shares which showed that the assessee had been buying and selling shares even though as an isolated adventure in the nature of business.
The debit on account of devaluation of shares shown in the profit and loss account was permissible only on the footing that the shares, constituted the stock in trade of the assessee, (ii) in view of the resolution of the assessee authorising the director to purchase and sell shares the view of the High Court that the memorandum of association did not authorise the company to acquire and sell shares had no relevance: (iii) the finding that the shares were purchased with borrowed funds on which the assessee was paying interest was a finding supported by evidence.
The Tribunal was correct in holding that the assessee had not invested its funds with a view to earn dividend: (iv) the Tribunal found that the shares were not sold to liquidate the debts of the assessee as the balance sheet showed that the proceeds were kept as cash in bank.
[133A H] 128
|
Civil Appeal No. 2034 of 1970.
Appeal by special leave from the Judgment and order dated the 8th July, 1969 of Calcutta High Court in I.T.R. No. 60 of 1968.
D. N. Gupta, for the appellant.
G. C. Sharma, O. P. Dua and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by GUPTA, J.
This appeal by special leave turns on the true meaning and scope of explanation 2 to sec.
24(1) of the Income Tax Act, 1922.
The appellant (hereinafter referred to as the assessee) is a private limited company carrying on business in tea garden tools and requisites and also acting as agents for selling tea; in fact the bulk of its income was from selling commission on tea.
The assessment year in question is 1959 60.
in the relevant previous year which ended on June 30,1958, the assessee for the first time in its history entered into certain transactions in jute.
On April 17, 1958 the assessee had contracted to purchase 1100 bales of B Twill and 2500 bales of corn sacks: the contract for B Twill was with two parties, M/s. Raghunath & Sons (P) Ltd. for 500 bales and M/s. Mahadeo Ramkumar for 600 bales.
The corn sacks were all purchased from Tulsider Jeweraj under three contracts for 800 bales, 1000 bales and 700 bales respectively.
On June 18, 182 1958 the assessee entered into a contract with M/s. Lachhminarain Kenoria & Co. to sell the aforesaid quantities of Twill and corn sacks.
The assessee had no godown for keeping the goods and had not handled them.
The goods were in the godown of the mills and only the delivery orders addressed to the mills changed hands.
The amount realised on sale to M/s. Lachhminarain Kanoria & Co. came to Rs. 10,49,865/ .
The assessee had however purchased the corn sacks and B Twill for Rs. 11,48,399.
The transactions thus resulted in a loss of Rs. 98,534/ to the assessee and the assessee claimed adjustment of this loss in the computation of its income for the assessment year 1959 60.
The Income tax officer held that the transactions involving mere transfer of delivery notes and not actual delivery of the goods were of a speculative character as contemplated in explanation 2 to sec.
24(1) and the loss could be set off only against speculation profits, and as there were no speculation profits in that year he held that the loss would be carried forward and set off against speculation profits in the future.
The Appellate Assistant Commissioner on appeal by the assessee held that the transactions were not speculative and the loss should be treated as business loss relying on two decisions of this Court: Bayana Bhimayya and Sukhdevi Rathi vs The Govt.
of Andhra Pradesh (1) and duni Chand Rataria vs Bhuwalke Brothers Ltd. (2) The Department took an appeal to the Tribunal and the Tribunal relied on the decision of the Calcutta High Court in D. M. Wadhwana vs Commissioner of Income tax, West Bengal(3) to hold that this case came within the scope of sec.
24 (1) read with explanation 2 and restored the order of the Income tax Officer.
On the application of the assessee the Tribunal referred to the High Court the following question of law .
"Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the transactions described above entered into by the assessee were speculative transactions within the meaning of explanation 2 to section 24( 1)".
The High Court answered the question in the affirmative and against the assessee.
The correctness of that decision is challenged in this appeal.
Section 24(1) so far as it is material for the purpose of this appeal is in these terms: "Where any assessee sustains a loss of profits or gains in any year under any of the heads mentioned in section 6, he shall be entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year.
Provided that in computing the profits and gains charge able under the head 'profits and gains of business, profession or vocation ', any loss sustained in speculative transactions 183 which are in the nature of a business shall not be taken into account except to the extent of the amount of profits and gains, if any, in any other business consisting of speculative transactions: (The second proviso is not relevant for the present purpose.) Explanation 1: Where the speculative transactions carried on are of such a nature as to constitute a business, the business shall be deemed to be distinct and separate from any other business.
Explanation 2: A speculative transaction means a transaction in which a contract for purchase and sale of any commodity including stocks and shares is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips.
(The rest of the section is also not relevant.)" Before us both sides admitted that the question is covered by the decision of this Court in Raghunath Prasad Poddar vs Commissioner of Income tax, Calcutta(1) where it was held that such transactions were not speculative transactions within the meaning of explanation 2 to sec.
24(1).
The learned counsel for the revenue however prayed for re consideration of the decision on a fresh examination of the problem.
In Raghunath Prasad Poddar vs Commissioner of Income tax, Calcutta (supra) the assessee, a company dealing in jute and jute goods, purchased pucca delivery orders (in short P.D.Os.) in respect of gunny bags from various parties after paying the full price of the goods covered by the delivery orders and transferred those P.D.Os.
to buyers after receiving the price fixed for the sale of those goods.
The Tribunal following the decision in D. M. Wadhwana vs Commissioner of Income tax (supra) held that the sales in question were speculative and consequently the losses suffered by the assessee in these transactions could not be set off against the profits made by the assessee 's non speculative business High Court on reference following its earlier decisions in D. M. Wadhwana 's case and Manalal M. Verma & Co. (P) Ltd. vs Commissioner of Income tax(2) answered the questions referred to it, which are similar to the question formulated in this case, in favour of the revenue.
This Court reversed the decision on appeal.
The view taken in Raghunath Prasad 's case appears to be based on three earlier decisions of this Court.
Duni Chand Rataria vs Bhuwalke Brothers Ltd. (supra) Beyanna Bhimayya and sukhdevi Rathi vs The Government of Andhra Pradesh (supra) and State of Andhra Pradesh vs Kolla Sreeramamurthy(2).
The reasoning in Raghunath Prasad 's case proceeds like this: 184 To effect a valid transfer of any commodity, it is not necessary that the transfer in question should be followed up by actual delivery of the goods to the transferee.
Even if the goods are delivered to the transferee 's transferee, the first transfer also will be a valid transfer.
What has to be seen in such cases is whether the ultimate purchaser of the P.D.Os has taken actual delivery of the goods sold.
lt is erroneous to think that if any transfer of the P.D.Os. is not followed up by actual delivery of the goods to the transferee, that transaction is to be considered as speculative.
The following observation in Duni Chand Rataria vs Bhuwalke Brothers Ltd. (supra) was relied on in support of the view taken: "The sellers handed over these documents (like delivery orders) to the buyers against cash payment, and the buyers obtained these documents in token of (delivery of possession of the goods.
They in turn passed these documents from hand to hand until they rested with the ultimate buyer who took physical or manual delivery of possession of those goods.
The constructive delivery of possession which was obtained by the intermediate parties was thus translated into a physical or manual delivery of possession in the ultimate analysis eliminating the unnecessary process of each of the intermediate parties taking and in his turn giving actual delivery of possession of the goods in the narrow sense of physical or manual delivery thereof." In Duni Chand Rataria 's case this Court was interpreting the words "actual delivery of possession" occurring in sec. 2(1)(b)(i) of West Bengal Jute Goods Future ordinance, 1949.
The question for determination in that case was whether certain contracts between the appellant and the respondents could be called contracts involving actual delivery of possession of the goods concerned.
Referring to the definition of "delivery" in sec.
2(2) of the Indian it was observed that this would include actual delivery as also symbolic or constructive delivery, and having regard to the mischief which was sought to be averted by the promulgation of the ordinance to prevent persons who dealt in differences only and never intended to take delivery under any circumstances it was held that the intendment of the ordinance was that "actual delivery of possession" was actual delivery as contracted with mere dealings in differences and such actual delivery included within its scope symbolic and constructive delivery of possession.
With respect, these observations made in quite a different context do not appear to us to be of assistance in interpreting explanation 2 to sec.
24(1) of the Indian Income Tax Act, 1922 The other decision referred to in Raghunath Prasad 's case, Bayanna Bhimayya and Sukhdevi Rathi vs The Government of Andhra Pradesh (supra) was a case under the Madras General Sales Tax Act, 1939.
The appellant in that case who dealt in gunnies entered contracts with two mills agreeing to purchase gunnies at a certain rate 185 for future delivery and also entered into agreements with third parties by which they charged something extra from the third parties and handed over to them the delivery orders described as kutcha delivery orders.
The mills however did not accept the third parties as contracting parties but only as agents of the appellants.
The tax authorities treated the transaction between the appellants and the third parties as a fresh scale and sought to levy sales tax on this as well, to which 13 the appellants objected saying that there was only one sale.
It was held that a delivery order being a document of title to the goods cover cd by it, possession of the document not only gave one the right to recover the goods but also to transfer them to another by endorsement or delivery, and that there being two separate transactions of sale, one between the mills and the original purchasers, and the other between the original purchasers and the third parties, tax was payable at both the points.
In reaching this conclusion the court observed: "At the moment of delivery by the mills to the third par ties, there were, in effect, two deliveries, one by the mills to the appellants, represented, in so far as the mills were concerned, by the appellants ' agents, the third parties, and the other, by the appellants to the third parties as buyers from the appellants.
These two deliveries might synchronise in point of time, but were separate, in point of fact and in the eye of law.
" Here also the only question was whether on the facts of the case there were two separate transactions of sale so that tax was payable at both the points under the Madras General Sales Tax Act, 1939.
The observation made in this context does not also seem to us relevant to the question under consideration in the appeal before us.
Another authority on which the decision in Raghunath Prasad 's (supra) case relies is State of Andhra Pradesh vs Kolla Sreeramamurthy, (supra) which is also a case under the Madras General Sales Tax Act, 1939.
The respondent in that case, a dealer in gunny bags, purchased gunnies from the mills on terms of written contracts which were on printed forms.
These contracts were entered into by brokers acting for the respondent who sent him 'Bought Notes ' setting out the terms upon which the purchases had been effected from the mills.
The mills having received a part of the purchase money in terms of the contract issued delivery orders directing the delivery of goods as per the contract.
Instead of taking delivery himself, the respondent endorsed the delivery orders and these passed through several hands before the ultimate holder of the delivery orders presented them to the mills and obtained delivery of the gunnies on payment.
The question that arose for decision was whether the transactions entered into by the respondent were mere sales of delivery orders or sales of goods so as to bring them to charge under sec.
3 of the said Act.
At the date of the contract for purchase by the respondent, the goods which were the subject matter of the purchase were not appropriated to the contract so that there was no completed sale since no property passed, but only an agreement for sale.
In considering the effect of 186 the position that the property in the goods passed to the ultimate endorsee of the delivery orders, Mr. Justice Ayyangar speaking for the Court relied on an English decision, Butterworty vs Kingsway(1) to hold that though the respondent and his transferees had not acquired any title to the goods, the title acquired by the ultimate endorsee of the delivery orders went to feed their previously defective titles and ensured to their benefit.
His Lordship further observed that this was the principle that formed the basis of the decision in Bayanna Bhimeyya 's (supra) case.
Here again, the question that was considered has hardly any connection with sec.
24 of the Indian Income Talc Act 1922, and the observations made in this case cannot be a guide to the solution of the problem arising in the case before us Sec.
6 of the Indian Income Tax Act, 1922 enumerates the heads of income chargeable to income tax.
24(1) of the Act provides that where an assessee sustains a loss under any of these heads in any year, he shall be entitled to have the loss set off against his income, profits or gains under any other head in that year.
This general provision is qualified by the first proviso which permits the set off of a loss in speculative business against the assessee 's profits and gains, i any, in a similar business only.
explanation 1 says that where the speculative transactions are of such a nature as to constitute a business, I) the business shall be deemed to be distinct and separate from any other business.
Explanation 2 defines a speculative transaction as a transaction in which a contract for purchase and sale of any commodity is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity.
The words actual delivery in explanation 2 means real as opposed to notional delivery.
For income tax purposes speculative transaction means what the definition of that expression in explanation 2 says.
Whether a transaction is speculative in the general sense or under the Contract Act is not relevant for the purpose of this explanation.
The definition of "delivery" in sec.
2(2) of the which has been held to include both actual and constructive or symbolical delivery has no bearing on the definition of speculative transaction in the explanation.
A transaction which is otherwise speculative would not be a speculative transaction within the meaning of explanation 2 if actual delivery of the commodity or the scrips has taken place; on the other hand, a transaction which is not otherwise speculative in nature may yet be speculative according to explanation 2 if there is no actual delivery of the commodity or the scrips.
The explanation does not invalidate speculative according to explanation 2 if there is no actual delivery meaning to that expressing for purposes of income tax only.
In D. M. Wadhwana vs Commissioner of Income tax (supra) on which the Tribunal 's decision in this case is based, the Calcutta High Court observed: "The explanation to sec.
24(1), however, does not pre vent persons from entering into contracts in which the buyers and sellers may not actually hand over the goods physically.
The explanation is only designed at segregating for 187 income tax purposes loss sustained in transactions of a certain kind.
It may be that such transactions arc not speculative in the light of sec.
30 of the Contract Act.
In enacting the explanation 2 of sec.
24(1) of the Income Tax Act, the legislature did not intend to affect any transaction of sale wherein the goods were not physically delivered by the seller to the buyer but only laid down that if there was no actual or physical delivery, the loss, if any, would be a loss in a speculative transaction which could be allowed to be set off only against a profit in a transaction of the same nature.
The object of the explanation is not to invalidate the transaction which are not completed by actual deli very of the goods but only to brand them as speculative transactions so as to put them in a special category for income tax purposes.
" In our opinion this is a correct statement of the law.
This aspect o the matter was not considered in Raghunath Prasad Poddar vs Commissioner of Income tax, Calcutta.
(supra) we think the law on the point was correctly stated in D. M. Wadhwana vs Commissioner of income tax, (supra) and in our opinion the question referred to the High Court in the present case has been correctly answered.
The appeal is accordingly dismissed but in the circumstances of the case without any order as to costs.
| IN-Abs | The appellant company which carried on business in tea garden tools and requisites and also acted as agents for selling tea, derived the bulk of its income from selling commission on tea.
The assessment year in question is 1950 60.
In the relevant previous year which ended on June 30, 1958 the assessee for the first time in its history entered into certain transactions in jute.
On April 17, 1958 the assessee had contracted to purchase 1100 bales of B Twill and 2500 bales of corn sacks.
the contract for B Twill was with two parties, M/s. Raghunath Sons (P) Ltd. for 500 bales and M/s. Mahadeo Ramkumar for 600 bales.
The corn sacks were all purchased from Tulsider Jewaraj under three contracts for 800 bales, 1000 bales and 700 bales respectively.
On June 18, 1958 the assessee entered into a contract with M/s. Lachhminarain Kanoria & Co. to sell the aforesaid quantities of B Twill and corn sacks.
The assessee had no godown for keeping the goods and had not handled them.
The goods were in the godown of the mills and only the delivery orders addressed to the mills changed hands.
The amount realised on sale to M/s. Lachhminarain Kanoria & Co. came to Rs. 10,49,865/=.
The assessee had however purchased the corn sacks and D Twill for Rs. 11,48,399/ .
The transactions thus resulted in a loss of Rs, 98,534/=/ to the assessee and the assessee claimed adjustment of this loss in the computation of its income for the assessment year 1959 60.
The Income tax officer held that the transactions involving mere transfer of delivery notes and not actual delivery of the goods were of a speculative character as contemplated in explanation 2 to sec.
24(1) and the loss could be set off only against speculation profits, and as there were no speculation profits is that year, he held that the loss would be carried forward and set off against speculation profits in the future.
The appellate Commissioner on appeal by the assessee held that the transaction were not speculative and the loss should be treated as business loss.
In appeal by the Department, the Tribunal held that this case came within the scope of Sec.
24(1 ) read with explanation 2 and restored the order of the Income tax officer.
In reference, the High Court answered the question formulated by the Tribunal in the affirmative and against the assessee.
Section 24(1) of the Indian Income tax Act, 1922, provides 'that where an assessee sustains a loss under any of the heads of income chargeable to income tax as enumerated in 9. 6 of the Act in any year, he shall be entitled to have the loss set off against his income, profits or gains under any other head in that year.
This general provision is qualified by the first proviso which permits the set off of a loss in speculative business against the assessee 's profit and gains, if any, in a similar business only.
Explanation 1 says that where the speculative transactions are of such a nature as to constitute a business, the business shall be deemed to be distinct and separate from any other business.
Explanation 2 defines a speculative transaction as a transaction in which a contract for purchase and sale of any commodity is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity.
This appeal has been preferred by the assessee company after obtaining special leave from this Court, Dismissing the appeal, 181 ^ HELD: The words actual delivery in explanation 2 means real as opposed to notional delivery.
For the income tax purposes speculative transaction means what the definition of that expression in explanation 2 says.
Whether a transaction is speculative in the general sense or under the Contract Act is not relevant for the purpose of this explanation.
The definition of "delivery" in section 2(2) of the which has been held to include both actual and constructive or symbolical delivery has no bearing on the definition of speculative transaction in the explanation.
A transaction which is otherwise speculative would not be a speculative transaction within the meaning of explanation 2 if actual delivery of the commodity or the scrips has taken place; on the other hand, a transaction which is not otherwise speculative in nature may yet 'be speculative according to explanation 2 if there is no actual delivery of the commodity or the scrips.
The explanation does not invalidate speculative transactions which are otherwise legal but gives a special meaning to that expression for purpose of income tax only.
The question referred to the High Court in the present case has been correctly answered.
[186E G; 187D] D. M. Wadhwana vs Commissioner of Income tax West Bengal , approved.
Raghunath Prasad Poddar vs Commissioner of Income fax, Calcutta , over ruled.
Duni Chand Rataria vs Bhuwalka Brothers Ltd. ; Bayana Bhimayya and Sukhdevi Rathi vs The Government of Andhra Pradesh ; and The State of Andhra Pradesh vs Kolla Sreeramamurthy, ; , held inapplicable.
Manalal M. Varma & Co. (P) Ltd. vs Commissioner of Income tax, and Butterworty vs Kingsway, , referred
|
Civil Appeal No. 481 of 1973.
From the Judgment and order dated the 9th February 1973 of the Mysore High Court at Bangalore in W.P. No. 1922 of 1970.
H. B. Datar and K. N. Bhat, for the appellant.
section section Javali and B. P. Singh, for the respondents Nos. 1, 3 13 The Judgment of the Court was delivered by GOSWAMI, J.
This appeal by special leave is directed against the judgment of the Mysore High Court (now High Court of Karnataka) of February 9" 1973, rejecting the appellant 's writ petition under article 226 of the Constitution by which the orders of the State Transport Appellate Tribunal and the Mysore Revenue Appellate Tribunal had been challenged.
189 Briefly the facts are as follows : The appellant was granted a stage carriage permit under section 48 of the (briefly the Act) for the route Devenagere to Shimoga via Honnali by the Regional Transport Authority, Shimoga, by its order dated May 3/4, 1963.
Some of the respondents preferred appeals against the said order to the State Transport Appellate Tribunal and obtained stay of the order The appeals were, however, dismissed on September 27, 1963.
Again, some of the respondents preferred further appeals to the Mysore Revenue Appellate Tribunal against the order of the State Transport Appellate Tribunal.
This time also the appeals met with the same fate and were dismissed on February 27, 1967.
It appears, however, that c no order of stay was granted by the Mysore Revenue Appellate Tribunal.
On April 25, 1967, the Secretary to the Regional Transport Authority, Shimoga, called upon the appellant to produce the relevant documents and the certificate of registration for making necessary entry in the permit.
The appellant produced the same on April 26, 1967, and the permit was issued on the same day.
Against the order of the issue of the permit, respondents 4 to 13 preferred appeals to the State Transport Appellate Tribunal on the ground that the Secretary to the Regional Transport Authority, Shimoga, had no jurisdiction to issue a permit under rule 119 of the Mysore Motor Vehicles Rules, 1963 (briefly the Rules) after a lapse of such a long time from the date of the grant of the permit.
It was contended that the issue of the permit was made beyond the prescribed period of limitation under rule 119.
It may be mentioned that at the time of the grant of the permit the Mysore Motor Vehicles Rules, 1945 (old Rules) were in force and rule 151 of the old Rules was replaced by rule 119 with effect from July 1, 1963.
It was contended by the appellant before the appellate authorities that there was no period of limitation under rule 151 of the old Rules, which was applicable to his case, for the issue of a permit.
The appeals of the respondents were allowed by the State Transport Appellate Tribunal by majority on January 29, 1969.
The District Judge Member, however, dissented.
An appeal filed by the appellant to the Revenue Appellate Tribunal against the order of the State Transport Appellate Tribunal was dismissed which led to the unsuccessful writ application in the High Court and hence this appeal.
The point that arises for consideration is whether any appeal lay under section 64 of the Act to the State Transport Appellate Tribunal against the issue of a permit in pursuance of an earlier resolution of the Regional Transport Authority granting the permit.
It is only necessary to read section 64(1) (a) which is material for the purpose of this appeal: 64(11 (a): "Any person aggrieved by the refusal of the State or a Regional Transport Authority to grant a permit, or by any condition attached to a permit granted to him may within the prescribed time and in the prescribed man 190 ner, appeal to the State Transport Appellate Tribunal constituted under sub section (2), who shall, after giving such person and the original authority an opportunity of being heard, give a decision thereon which shall be final".
We are not required to consider the other clauses of section 64(1) which are admittedly not relevant.
Section 64 has to be read with rule 178 of the Rules which prescribes the procedure for appeal to the various authorities Appeal is a creature of the statute.
There is no dispute that section 64 of the Act is the only section creating rights of appeal against the grant of permit and other matters with which we are not concerned here.
There is no appeal provided for under section 64 against an order issuing a permit in pursuance of the order granting the permit.
Issuance of the permit is only a ministerial act necessarily following the grant of the permit.
The appeals before the State Transport Appellate Tribunal and the further appeal to the Mysore Revenue Appellate Tribunal are, therefore, not competent under section 64 of the Act and both the Tribunals had no jurisdiction to entertain the appeals and to interfere with the order of the Regional Transport Authority granting the permit which had already been affirmed in appeal by the State Transport Appellate Tribunal and further in second appeal by the Mysore Revenue Appellate Tribunal.
There was, therefore, a clear error of jurisdiction on the part of both the Tribunals in interfering with the grant of the permit to the appellant.
The High Court was, therefore, not right in dismissing the writ application of the appellant which ought to have been allowed.
Although arguments were addressed by counsel with regard to old rule 151 and rule 119 of the Mysore Motor Vehicles Rules, 1963 we do not feel called upon to pronounce upon the legal effect of these rules in this appeal.
In the result the appeal is allowed.
The order of the High Court is set aside and necessarily the order of the State Transport Appellate.
Tribunal of January 29, 1969 and the order of the Mysore Revenue Appellate Tribunal of May 8, 1970, also fall.
The order granting the permit to the appellant stands restored There will be no order as to costs .
V.P.S. Appeal allowed.
| IN-Abs | The appellant was granted a stage carriage permit by the Regional Transport Authority in May, 1963.
Appeals against the grant to the State Transport Appellate Tribunal and further appeals to the Mysore Revenue Appellate Tribunal were dismissed.
Thereafter, in April, 1967, the Secretary of the Regional Transport Authority after calling upon the appellant to produce the relevant documents, issued the permit.
Appeals by the respondents of the State Transport Appellate Tribunal against the issue of the permit to the appellant were allowed on the ground of limitation.
The appeal of the appellant to the Revenue Appellate Tribunal was dismissed.
The appellant 's writ petition to the High Court was also dismissed.
Allowing the appeal to this Court, ^ HELD: There was a clear error of jurisdiction on the part of the State Transport Appellate Tribunal and the Revenue Appellate Tribunal in interfering with the issue of permit to the appellant.
The High Court was, therefore, not right in dismissing the writ application.
[190D E] Appeal is a creature of the statute.
Section 64 of the , is the only section creating rights of appeal against the grant of permit and other matters.
But there is no appeal provided against an order issuing a permit in pursuance of an order granting the permit.
Issuance of the permit is only a ministerial act necessarily following the grant of the permit.
Hence, the appeal to the State Transport Appellate Tribunal and the further appeal are not competent under the section.
[190B D]
|
Civil Appeal No. 576 of 1975.
From the judgment and order dated the 6th March, 1975 of the Orissa High Court in E.P. No 3 of 1974.
Somnath Chatterjee, and Ratin Das, for the appellant.
Vinoo Bhagat, for the respondent.
The Judgment of the Court was delivered by CHANDRACHUD, J.
' Six candidates contested the mid term election to the Orissa Legislative Assembly from the Nilgiri constituency.
The polling was held on February 26, 1974 and on March 1 the result of 5; the election was declared.
The appellant who contested the election on the ticket of the Communist Party of India (Marxists) was declared as the successful candidate.
According to the results declared on March ], the appellant secured 14346 votes while respondent 1 who contested the election on the ticket of the Bharti Lok Dal secured 14297 votes.
The other contestants, respondents 2 to 5, secured votes ranging between 12, 312 and 5961.
Respondent 6.is the Returning officer.
On April 13, 1974 respondent 1 filed an election petition under section 81 of Representation of the People Act, 1951 (hereinafter called "the Act") challenging the election of the appellant and praying that, instead, he himself should be declared as the successful candidate.
The appellant 's election was challenged by respondent 1 on the ground mainly, that through an error the Returning officer did not enter the results of the second round of counting on Table No. 13 in Form No. 20, as prescribed by Rule 56(7) of the Conduct of Election Rules 1961.
It was alleged that instead of incorporating the results of the second round of counting on Table No. 13 in Form No. 2, the 214 Returing officer wrongly incorporated the results of the second round of counting on Table No. 14 in the column meant for the corresponding count of Table No. 13.
In other words, the allegation was that the results of the second round of counting on Table No. 14 were erroneously entered twice in Form No. 20, once as against the second round of Table No. 14 and once as against the second round of Table No. 13 The appellant denied this allegation contending that he had secured the largest number of votes and that there was a clear difference of 49 votes between him and respondent No. 1.
The appellant also raised several other contentions touching the maintainability of the election petition on the ground of non compliance with statutory requirements.
on these pleadings, the learned Judge of the High Court of Orissa Cuttack, who tried the election petition framed 8 issues but they were re cast after the evidence was recorded.
Issues Nos. 1 to S pertained to the maintainability of the election petition and on these issues the learned Judge found in favour of respondent 1.
Those findings are not challenged before us and, therefore we must proceed on the basic that the election petition as presented did not suffer from any illegality.
Issues Nos.
6 to 8 are the ones with which alone we are concerned in this appeal and those issues arise out of the contentions in regard to the entries made by the Returning officer in Form No. 20.
The ninth issue is consequential Respondent l examined himself and one Khagendranath Naik who was his Counting Supervisor on Table No. 13.
On behalf of the appellant, an election agent and a counting agent of his were examined as witnesses.
Neither party examined the Returning officer nor indeed did the Returning Officer who was respondent 6 to the petition offer to give evidence on the question as to whether the results of the second round of counting of Table No. 14 were erroneously entered as against the corresponding column of Table No, 13.
During the hearing of the petition, the learned Judge inquired of the parties whether they were agreeable to a recount being taken of all the ballot papers.
Counsel appearing for the appellant and respondents 1 and 2 agreed to the course suggested by the learned Judge.
Respondents 3 to 5 who had contested the election but were defeated did not appear at the trial nor indeed did the Returning officer.
On February 3. 1975 the learned Judge passed an order directing that "the entire ballot papers should be recounted".
The ballot papers were accordingly sent for.
Twenty one sealed trunks were received by the court and the recounting was done by the Deputy Registrar of the High Court in the presence of the counsel for the contending parties.
After the recount was taken, the, Deputy Registrar submitted a detailed report which was made a, part of the record under an order passed by the learned Judge on February 21, 1975, 215 In view of ' the fact that the findings recorded by the learned Judge in favour of respondent 1 on issues 1 to 5 are not challenged before us.
, the only question for decision is whether respondent 1 has discharged the onus of proving that the result of the second round of counting on the 13th Table was not at all recorded in Form No, 20 and whether the result of the second round of counting on Table No. 14 was erroneously entered as against the second round of Table No. 13.
Section 64 of the Act provides that at every election where a poll is taken, votes shall be counted by or under the supervision and direction of the returning officer and each contesting candidate his election agent and his counting agents, shall have right to be present at the time of counting.
Section 169 of the Act which empowers the Central Government after consultation with the Election Commission to make rules for carrying out the purposes of the Act provides by sub section (2)(g) that such rules may provide for the scrutiny and counting of votes.
Rule 56(7) of the Conduct of Election Rules, 1961 provides that after the counting of all ballot papers contained in all the ballot boxes used in a constituency has been completed, the returning officer shall make the entries in a result sheet in Form 20 and announce the particulars.
Form 20 called the "Final Result Sheet" requires the returning officer to enter therein the total number of valid votes recorded for the various candidates as also the total number of rejected ballot papers, at each round separately.
In order to avoid errors in counting of votes, the Election Commission has compiled a hand book for the use of returning officers containing instructions for their guidance at various stages of the elections.
Before the results of the election are entered in Form No. 2.
it is necessary that a record be maintained of the result of counting of each round.
Paragraph 14 B in Chapter VIII of the hand hook directs that the officer in charge of distribution of the ballot papers for counting should take out a sufficient number of bundles from the drum so as to make up 1000 ballot papers and distribute them to each table for counting at each round.
After the counting of every such thousand ballot papers is over, the bundles are given back to the supervisor of the counting table with the "Check Memo" duly filled in and signed by the assistant.
The Check Memo shows the votes polled by the various candidates in the particular round as also the total number of rejected votes.
When the distribution and counting of bundles is thus completed on all the counting tables, one round of counting is said to be over.
the next round of counting will then begin.
The same procedure is required to be followed for every round of counting so that the result of each round of counting on each table is reflected in the Check Memo relating to each round.
As many Check Memos as many rounds of counting.
The form of the Check Memo is at annexure XII A and a sample form duly filled in is at annexure XII B of the Hand book.
These forms are not prescribed by the Act or the rules made thereunder but the directions in regard thereto have to be carried out on the instructions of the Election Commission in which the overall ' control and supervision of elections is vested.
The directions and 216 forms contained in the hand book for the use of returning officers are intended to facilitate the holding of fair and error free elections and no objection can be taken to either, The original Check Memo of the 13th Table in which results of the second round were entered was not produced during the trial but a certified copy thereof was admitted in evidence as exhibit 1, subject to the objection raised by the appellant as to its admissibility.
There is no substance in that objection.
Section 74 of the Evidence Act provides that documents forming the acts or records of the acts of public officers are public documents.
Section 76 provides that every public officer having the custody of a public document which any person has a right to inspect shall give that person a copy of it together with the certificate that it is a true copy of the document.
By section 77, such certified copies may be produced in proof of the contents of the documents of which they purport to be copies.
The Check Memo which is required to be maintained by the officer in charge of the counting table is a document forming record of the acts of a public officer and therefore, a certified copy thereof given by the Collector in whose custody the document is kept, can be admitted in evidence in proof of the contents of the original document.
The certified copy (exhibit 1) of the Check Memo concerning the second round of counting on Table No. 13 shows that 40 bundles each containing 25 ballot papers (i.e. 1000 ballot papers), were distributed for counting in the second round.
Part I of exhibit 1 contains these details.
Part II of exhibit 1 shows the result of counting at the second round.
According to the entries contained therein, the appellant secured 21 valid votes, respondent 1 secured 86, while respondents 2 to 5 secured 304, 7, 15 and 524 votes respectively.
Forty two ballot papers were rejected, thus making up a total of 999 ballot papers.
Evidently, there was an error regarding one ballot paper either at the stage of distribution or at the stage of counting.
What is relevant is not that there was an error in the counting of one ballot paper but that the result of counting which is entered in the Check Memo ought to have been incorporated in Form No. 20 in the appropriate column Surprisingly in Form No. 20, the votes secured by the various candidates in the second round of counting on Table No. 13 were shown as: the appellant 144 votes instead of 21; respondent 1 109 votes instead of 86; respondent No. 2_360 votes instead of 304; respondent No. 3_ 19 votes instead of 7; respondent No. 4 74 votes instead of 15, and respondent No. 5 225 votes instead of 524.
In short, whereas the appellant had truly secured 21 votes only in the second round of counting on Table No. ]37 the Final Result Sheet, Form No. 20 showed that he had secured 144 votes; and whereas respondent No. 1 had secured 86 votes, he was shown to have secured 109 votes.
The error was favourable to both the parties but whereas the error in favour of the appellant was to the extent of 123 votes, that in favour of respondent 1 was to the extent of 23 votes only.
As the appellant was declared to have won the election by a margin of 49 votes only over respondent 1, it is plain that respondent 1 and not the appellant had polled the largest number of votes.
217 A mere look at the entries in Form No. 20 relating to the second round of counting on Table Nos. 13 and 14 would disclose the error committed in making the entries therein. 'the entries made in respect of Table No. 14 were accurate, but precisely those very figures were through some error carried to the second round of Table No. 13.
It can seldom happen that five contesting, candidates would secure precisely the same number of votes in the same round of counting on two different tables, when a thousand ballot papers are distributed to the two tables by picking them up at random from a common drum or receptacle.
It is, however, unnecessary to speculate about any such possibility because it is incontrovertible that entries in the Check Memo relating to the second round of counting on Table No. 13 were not transferred to the appropriate column of Form No. 20.
We therefore up hold the finding of the learned Judge that the result of the second round of the 14th Table came to be recorded twice and that the true result of the second round of counting on Table No. 13 was entirely omitted while making entries in Form No. 20.
It must follow that respondent 1 has secured the maximum number of valid votes and is therefore entitled to be declared as the successful candidate.
This really should be an end of the matter because the only ground on which respondent l had challenged the appellant 's election was that the relevant entries in Form No. 20 did not reflect the true picture.
But the order passed by the learned Judge that a recount shall be taken of all the ballot papers has furnished to the appellant an opportunity to raise a doubt, here and a doubt there regarding the manner in which the, votes were counted and the ballot papers preserved.
In our opinion the learned Judge was in error in directing, merely because his suggestion was accepted by the panties appearing before him.
that the court should take a recount of all the ballot papers.
Respondent 1 who filed the election petition had not asked for such a recount and the defence of the appellant to the petition was, that the entries in Form No. 20 reflected a true picture and contained no error.
The consent to the recount was given only by the appellant and respondents 1 and '.
The other respondents who had contested the election did not appear at the trial of the election petition but they certainly had no notice that, a recount would be suggested or accepted when there was no plea. about ,it in the pleadings of the parties.
The learned Judge widened unduly the scope of the election petition and landed himself into an unforeseen difficulty or having to decide point on which there was neither a pleading nor an issue.
After the Deputy Registrar submitted his report, the learned Judge felt "serious doubts about the correctness of the recount" but all that he did in order to allay those doubts was to take a re recount of a packet of votes where he thought the error of the recount could with assurance be located.
And so we have to countenance an argument based on no pleadings, arising out of no issues and founded solely on errors, real or supposed, which are said to have happened to see the light of the day as a result of the recount and the recount.
Even election petitions must end at some stage and they cannot, for the reason that elections are a democratic venture, be permited to procreate points during the course of their pendency.
As we were listening to the 218 appellant 's argument, we thought we were hearing all independent election petition filed by the appellant in order to challenge the result of, the recount.
Mr. Somnath Chatterjee, appearing for the appellant, argued that the facts which have emerged out of the recount throw considerable doubt on the manner in which the election was held and therefore instead of declaring respondent No. I as the successful candidate we should order that a fresh election be held.
Elections, says the learned counsel, are not a matter of technicalities and the court must satisfy its conscience that the election before it was free and Fair.
Justice may.
be a matter of the Judge 's conscience but even a strong and sensitive conscience must not brook an endless litigation in which parties will fish for new challenges based on accidental discoveries of no more than plausible points to ponder.
The new errors on which the appellant now relies have an air of plausibility and no more.
The new argument founded on those errors must therefore fail.
As, respondent I truly secured the maximum number of votes and as the appellant was, through an error, shown to have secured the maximum.
number of votes, we must uphold the judgment of the Orissa High Court setting aside the appellant 's election and declaring respondent I as the successful candidate.
The appeal is accordingly dismissed with costs in favour of respondent P.H.P. Appeal dismissed.
| IN-Abs | Six candidates contested the mid term election to the Orissa Legislative Assembly from Nilgiri Constituency.
The appellant was declared elected by a margin of 49 votes over respondent No. 1.
Respondent No. 1 filed an Election Petition challenging the election of the appellant and praying that instead of the appellant he should be declared as the successful candidate. 'the appellant 's election was challenged by respondent No. 1 mainly on the ground that through an error the returning officer did not enter the results of the second round of counting, on table No. 13 in Form No. 20 as prescribed by rule 55(7) of the Conduct of Election Rules 1961.
The allegation was that the results of the second round of counting on table No. 14 were erroneously entered twice in form No. 20, once against as the second round of table No. 14 and once against the second round of table No. 13.
During the hearing of the petition, the learned Judge enquired whether the parties were agreeable to a recount being taken of all ballot papers.
Counsel appearing for appellant and respondents Nos. 1 and 2 agreed to the course suggested by the learned Judge.
Respondents Nos. 3 to S did not appear at the trial.
After the recount was taken the Deputy Registrar submitted a detailed report which was made a part of the record of the Court.
Section 64 of the Act provides that in every election where a poll is taken votes shall be counted by or under the supervision of the returning officer and each contesting candidate his election agent and counting agent shall have a right to be present at the time of counting Section 169 of ' the Act empowers the Central Govt.
after consultation with the Election Commission to make rules for carrying out the purposes of the Act. ' Rule 56(7) of the Conduct of Election Rules 1961 provides that after the counting of all ballot papers contained in all the ballot boxes used in a constituency has been complete the returning officer shall make the entries in a result sheet in form No. 20 and announce the particulars.
The Election Commission has compiled a hand book for the use of the returning officers in order to avoid errors in counting of votes.
Para 14 B in chapter VIII of the hand book directs that the officer in charge of distribution of the ballot paper for counting should take out sufficient number of bundles from the drums so as to make up 1000 ballot papers and distribute them to each table for.
counting at each round.
After the counting of every suck 1000 ballot papers is over the bundles are given back to the supervisor of the counting table with the Check Memo duly filled in and signed by the Assistant. 'the form of the check Memo is at Annexure XII A and a sample form is at Annexure XII B of the handbook.
The original check memo of the 13th table in which the results of the second round was entered was not produced during the trial but a certified copy thereof was admitted in evidence. 'the appellant objected to its admissibility.
Dismissing the appeal, ^ HELD: The certified copy of the check memo is admissible in evidence Under section 74 of the Evidence Act, documents forming acts or records of the acts of public officers are public documents.
By section 77, such certified copies may be produced in proof of the contents of the documents of which they purported to be copies.
The check memo is a document forming records of the acts of a public officer and, therefore, a certified copy thereof given by the Collector in whose custody the document is kept can be admitted in evidence in proof of the contents of the original document [216A D] 213 In form No. 20 voles secured by the various candidates in the second round of counting on table 13 was wrongly mentioned.
Whereas the appellant had secured 21 votes only in the second round of counting on table No. 13, the final result sheet form No. 20 showed that he had secured 144 votes and whereas respondent No. 1 had secured 86 votes he was shown to have secured 109 votes.
The error was favourable to both the parties.
But whereas the error in favour of the appellant was of) the extent of 123 votes, that in favour of respondent No 1 was to the extent of 23 votes only.
As the appellant was declared to have won; the election by a margin of 49 votes only, it is respondent No. 1 and not the appellant who polled the largest number of votes.
It must follow that respondent No. 1 has secured the maximum number of valid votes and is, therefore, entitled to be declared as the successful candidate.
[216G H; 217C D] The High Court was in error in directing that the Court will recount all the ballot papers.
In the election petition filed by respondent No. 1 there was no request for recount.
The consent to the recount was given only by respondents No. 1 and 2.
The other respondents had no notice that recount would be suggested or accepted, when there was no plea about it in the pleadings of the parties.
The High Court widened unduly the scope of the election petition and landed itself into an unforeseen difficulty of having to decide points on which there was neither a pleading nor an issue.
True, that elections are not a matter of technicalities but even a strong and sensitive conscience must not book an endless litigation in which parties will fish for new challenges based on accidental discoveries of no more than plausible points to ponder.
The new errors on which the appellant relied had an air of plausibility and no more.
The new argument founded on those errors had therefore to fail.
[217E 218C]
|
Civil Appeal Nos.
1988 1989 of 1970.
From the Judgment and order dated the 29th day of October, 1968 of the Kerala High Court in W.P. No. 156 of 1967.
V. A. Seiyed Muhamad and K. M. K. Nair, for the appellant (In C.A.No. 1988/70.
K. M. K. Nair, for the appellant (In C.A. No. 1989/70) G. B. Pai, A. G. Meneses, for the respondent.
The Judgment of the Court was delivered by KHANNA, J.
This judgment would dispose of civil appeals No. 1989 and 1989 of 1970, Filed on certificate against the judgment of the Kerala High Court, whereby that court held that it was beyond the competence of the State Legislature to enact law contained in sub section (3) of section 22 of the Kerala General Sales Tax Act, 1963 (Act 15 of 1963) (hereinafter referred to as the Act) in so far as it related to payment of an amount collected as tax on transactions not liable to tax under the Act or in excess of the tax leviable under the.
We may now set out the facts giving rise to one of the appeals.
Both the learned counsel are agreed that the decision in that would also govern the other appeal.
Under section 5 of the Act, tax is payable by a dealer on his tax able turnover. "Taxable turnover` ' is defined in section 2(xxv) of the Act as the turnover on which a dealer is liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed by the rules under the Act.
It does not, however, include the turnover of purchase or sale in the course of inter State trade or commerce or in the course of export or import of goods.
The Kerala General Sales Tax Rules have been framed be the State Government in exercise of the powers conferred by section 57 of the Act.
According to clause (i) of rule 9 of the sail rules.
in determining the taxable turnover the following amount shall be deducted from the total turnover of the dealer: "the excise duty, if any paid by the dealer to the Government of Kerala or the Central Government in respect of the goods sold by him".
It may be stated that clause (i) was omitted subsequently but we are concerned with the period when that clause was an integral part of the rule.
The respondent is an incorporated company engaged in the manufacture and sale of soaps, toilets and other goods.
The respondent 's accounts disclosed that it had collected from the persons to whom it sold goods a sum of Rs. 30,591.71 as sales tax in excess of the tax which the respondent was liable to pay under the Act.
The respondent, it would appear, paid Rs. 6,62,958 as excise duty and deducted the same from its total turnover for the purpose of determining the taxable turnover.
When, however, the respondent company sold the 154 goods it collected sales tax from the purchasers on the invoice price without deducting there from the excise duty paid in respect of the said goods.
This resulted in the respondent company realising Rs. 30,591.71 in excess of the sales tax payable in respect of the goods sold by it: The sales tax officer held that the respondent was liable to pay the aforesaid amount of Rs. 30,591.71 to the Government under section 22(3) of the Act.
The respondent then filed writ petition in the Kerala High Court to challenge its liability to pay the aforesaid amount on the ground that the provisions of section 22 in so far as they imposed a liability on a dealer to pay over to the Government any amount collected by him as sales tax, even though that amount was not payable as tax, was unconstitutional.
The learned single Judge dismissed the petition filed by the respondent.
On appeal, however, the Division Bench held, as already mentioned earlier, that the impugned provision was beyond the legislative competence of the State Legislature.
Sub section (3) of section 22 of the Act reads as under: "(3) If any dealer or person collects tax on transactions not liable to tax under this Act or in excess of the tax leviable to under this Act, such dealer or person shall, unless it is established to the satisfaction of the assessing authority that the tax so collected has been refunded to the person who had originally paid tax, pay over to the Government, in addition to the tax payable the amount so collected within such time and in such manner as may be prescribed.
" The learned Judges of the High Court in holding the above provision.
in so far as it related to payment of an amount collected as tax on transactions not liable to tax under the Act or in excess of the tax leviable under the Act to he beyond the legislative competence of the State Legislature, referred to entry 54 of the State List in the Seventh Schedule to the Constitution upon which reliance had been placed on behalf of the State.
It was held that the State Legislature was incompetent to enact the impugned provisions contained in sub section (3) of section 22 of the Act under the above entry.
In appeal before us Dr. Seiyed Muhammad on behalf of the appellants has assailed the judgment of the Division Bench of the High Court.
As against that, Mr. Pai on behalf of the respondent has canvassed for the correctness of the said judgment.
After hearing the learned counsel, we are of the opinion that there is no merit in these two appeals.
A State Legislature is competent to make a law under entry 54 of List II in Seventh Schedule to the Constitution in respect of "taxes on the sale or purchase of goods other than newspapers subject to the provisions of entry 92A of List I".
Entry 92A of List I relates to taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter State trade or commerce, and we are not concerned with this entry.
155 Entry 54 enpowers State Legislatures to make law, except i certain cases with which we are not concerned, in respect of taxes on the sale or purchase of goods.
As long as the law relates to taxes on the sale or purchase of goods, it would be within the competence of the State Legislature to enact such a law.
It would not, however, b permissible for the State Legislature to enact a law under entry 54 for recovery by the State of an amount which could not be recovered as sales tax or purchase tax in accordance with the law on the subject and which was wrongly realised by a dealer as sales tax or purchase tax.
Such a law plainly would not be a law relating to tax on the sale or purchase of goods but would be one in respect of an amount wrongly realised by a dealer as sales tax or purchase tax.
It looks perhaps odd that a dealer should recover in the course of business transactions certain sums of money as sales tax or purchase tax payable to the State and that he should subsequently decline to pay it to the State on the ground that the same amount is not exigible as sales tax or purchase tax.
Whatever might be the propriety of such a course, the question with which we are concerned is whether the State Legislature is competent to enact a law under entry 54 for recovery by the State of an amount, which though not exigibie under the State law as sales tax or purchase tax was wrongly realised as such by a dealer.
The answer to such a question has to be in the negative.
The matter indeed is not res integra and is concluded by two decisions of this Court.
A Constitution Bench of this Court examined in the case of R. Abdul Quader & Co. vs Sales Tax officer, Hyderabad(1) the validity of section l l (2) of the Hyderabad Sales Tax Act, 1950 which reads as under: "(2) Notwithstanding anything to the contrary contained in any order of an officer or tribunal or judgment, decree or order of a Court, every person who has collected or collects on or before 1st May, 1950, any amount by way of tax otherwise than in accordance with the provisions of this Act shall pay over to the Government within such time and in such manner as may be prescribed the amount so collected lay him, and in default of such payment the said amount shall be recovered from him as if it were arrears of land revenue.
" The appellant in that case collected sales tax from the purchasers of betel leaves in connection with the sales made by it.
The appellant however, did not pay the amount collected to the government.
The Government directed the appellant to pay the amount to the Government.
The appellant thereupon filed a writ petition in the High Court questioning the validity of section 11(2).
The main contention of the appellant before the High Court was that section 11(2) which authorised the Government to recover a tax collected without the authority of law was beyond the competence of the State Legislature because a tax collected without the authority of law would not be a tax levied under the law and it would therefore not be open to the State to collect (1) ; 156 under the authority of a law enacted under entry 54 of List II of the Seventh Schedule to the Constitution any such amount.
The High Court upheld the validity of section 11(2).
On appeal to this Court it was observed by the Constitution Bench as under: "The first question therefore that falls for consideration is whether it was open to the State legislature under its powers under entry 54 of List II to make a provision to the effect that money collected by way of tax, even though it is not due as a tax under the Act, shall be made over to Government.
Now it is clear that the sums so collected by way of tax arc not in fact tax exigible under the Act.
So it cannot be said that the State legislature was directly legislating for the imposition of sales or purchase tax under entry 54 of List II when it made such a provision, for on the face of the provision.
the amount, though collected by way of tax, was not exigible as tax under the law." An attempt was made on behalf of the State in that case to sustain the validity of section 11(2) of the Hyderabad Act on the ground that the Legislature had enacted that law as part of the incidental and ancillary power to make provision for the levy and collection of sales or purchase tax.
This contention was repelled and it was observed that the ambit of ancillary or incidental power did not go to the extent of permitting the legislature to provide that though the amount collected may be wrongly by way of tax is not exigible under the law.
as made under the relevant taxing entry, it shall still be paid over to Government, as if it were a tax.
The question again arose in this Court before a Bench consisting of six Judges in the case of Ashoka Marketing Ltd. vs State of Bihar & Anr.(1).
In that case in determining the appellant 's turnover for assessment to sales tax for the year 1956 57, the Superintendent of Sales Tax included an amount representing Railway freight in the appellant 's sales of cement.
The appellate authority set aside the orders directing the inclusion of the Railway freight in the turnover.
After the introduction of section 20 A of the Bihar Sales Tax Act the Assistant Commissioner issued a notice under section 20 A(3) of the Act requiring the appellant to show cause why an amount representing sales tax on the Railway freight which became refundable under the orders of assessment be not forfeited.
The appellant 's contention that section 20 A was ultra vires the State Legislature was rejected by the Assistant Commissioner as well as by the High Court in a writ petition under article 226 of the Constitution.
On appeal filed by the assessee this Court held that sub sections (3), (4) and (5) of section 20 A were ultra vires the State legislature.
As a corollary thereto, sub sections (6) and (7) of that section were also held to be invalid.
Subsection (3) of section 20 A of the Bihar Sales Tax Act read as under: "(3)(a) Notwithstanding anything to the contrary contained in any law or contract or any judgment, decree or order of (1) 157 any Tribunal, Court or authority, if the prescribed authority has reason to believe that any dealer has or had, at any time, whether before or after the commencement of this Act, collected any such amount, in a case in which or to an extent to which the said dealer was or is not liable to pay such amount, it shall serve on such dealer a notice in the prescribed manner requiring him on a date and at a time and place to be specified therein neither to attend in person or through authorised representative to show cause why he should not deposit into the Government treasury the amount so collected by him.
(b) On the day specified in the notice under clause (a) or as soon thereafter as may be, the prescribed authority may.
after giving the dealer or his authorised representative a reason able opportunity of being heard and examining such accounts and other evidence as may be produced by or on behalf of the dealer and making such further enquiry as it may deem necessary, order that the dealer shall deposit forthwith into the Government treasury, the amount found to have been so collected by the dealer and not refunded prior to the receipt of the, notice aforesaid to the person from whom it had been collected.
" In holding sub section (3) and other impugned provisions of section 20 A to be beyond the legislative competence of the State Legislature, this Court in the case of Ashoka Marketing Ltd. (supra) relied upon the decision of this Court in Abdul Qadar 's case (supra).
Dr. Muhammad has, however, tried to distinguish the above two cases on the ground that the present case relates to an amount realised in excess of the tax leviable under the Act and not to an amount which was not payable at all as tax under the Act.
This fact, in our opinion, would not prevent the applicability of the principle laid down in the cases of Abdul Qadar and Ashoka Marketing Ltd. (supra).
Any amount realised by a dealer in excess of the tax leviable under the Act stands, for the purpose of determining the legislative competence under entry 54, on the same footing as an amount not due as tax under the Act.
Dr. Muhammad 's argument involves inventing a category of a "deemed tax" which is not there in the Act.
The provisions of the Act contain a definition of "tax".
This necessarily means that every thing outside it collected by the dealer would be an exaction not authorised by the Act.
"Tax", according to section 2(xxiv) of the Act, means the tax payable under the Act.
The amount which was realised by the respondent in excess of what was due as tax cannot 158 be held to be "tax", because such excess amount was not tax payable under the Act.
If the State Legislature cannot make a law under entry 54 of List II of the Seventh Schedule to the Constitution directing the payment to the State of any amount collected as tax on transactions not liable to tax under the Act, it would likewise be incompetent to make a law directing payment to the State of an amount realised be a dealer in excess of the tax payable under the Act.
The amount realised in excess of the tax leviable under the Act would not stand for this purpose on a footing different from that of the amount realised as tax, even though the same could not be recovered as tax under the Act.
We would, therefore, dismiss the two appeals with costs.
One hearing fee.
V.P.S. Appeals dismissed.
| IN-Abs | According to r. 9(1) of the Kerala General Sales tax Rules framed under.
the Kerala General Sales tax Act, 1963, in determining the taxable turnover of a dealer the excise duty, if any, paid by the dealer to the Government of Kerala or to the Central Government in respect of the goods sold by him shall be deducted.
Section ,22(3) of the Act provides that if any dealer or person collects tax on transactions not liable to tax under the Act or in excess of the tax leviable under the Act such dealer or person shall pay to the Government.
in addition to the tax payable, the amount so collected unless it was refunded to the person from whom it was collected.
The respondent deducted the sum paid by it as excise duty from its total turnover for the purpose of determining the taxable turnover.
The respondent, however, when it sold the goods.
had collected, sales tax from the purchasers on the invoice prices without deducting therefrom the excise duty paid in respect of the said goods.
This resulted in the respondent realising a sum in excess of the sales tax payable in respect of the goods sold by it.
The Sales tax officer held that the respondent was liable to pay that amount to the Government under section 22(3).
The writ petition filed by the respondent was allowed by the High Court on the ground that section 22(3) was not covered by Entry 54 of the State List in the VII Schedule to the Constitution, and hence, beyond the competence of the Slate Legislature.
Dismissing the appeal to this Court.
^ HELD: (1) Entry 54 empowers the State Legislatures to make laws, except in certain cases, in respect of taxes on the sale or purchase of goods.
As long as the law relates to taxes on the sale or purchase of goods, it would be within their legislative competence.
But, it would not be permissible for.
the State legislature to enact a law under Entry 54 for recovery by the State of an amount which could not be recovered as sales tax or purchase tax in accordance with the law on the subject and which was wrongly realised by a dealer as sales tax or purchase tax.
Such a l. would not be a law relating to tax of the sale or purchase of goods but would be one in respect of an amount wrongly realised by a dealer as sales tax or purchase tax.
[1 55A C] (2) The ambit of ancillary or incidental power would not go to the extent of permitting the Legislature to provide that.
though the amount collected, may be wrongly, be way of tax,, was not tax, it shall still be paid over to the Government as if it were a tax.
[156D E] (3) The fact that the amount realised is in excess of the tax leviable and not as amount which was not at all payable as tax, would not make any difference.
Any amount realised by a dealer in excess of the tax leviable, stands, for the purpose of determining the legislative competence under Entry 54, on the same footing as an amount not due as tax under the Act.
Tax, according to section 2(xxiv) of the Act, means tax payable under the Act.
This necessarily means that everything outside it, collected by the dealer.
would be an exaction not authorised by the Act.
The amount which was realised by the respondent in excess of what was due as tax cannot be held to be tax, because, such excess amount was not tax payable under the Act.
If the State Legislature cannot make a law under Entry 54 directing payment to the State of any amount collected as tax on transactions not liable to lax under the Act, it would likewise be incompetent to make a law directing payment to the State of an amount realised by a dealer in excess of the tax payable under the Act.
[157G 158C] 153 R. Abdul Quader & co. vs Sales Tax Officer , Hyderabad and Ashoka Marketing Ltd. vs State of Bihar & Anr. followed.
|
on No. 40 of 1955.
Under Article 32 of the Constitution for a Writ of Habeas Corpus.
208 Purshottam Trikumdas, (K. B. Asthana, Syed Murtaza Fazl Ali and Rajinder Narain, with him) for the petitioner.
M.C. Setalvad, Attorney General for India and C.K Daphtary Solicitor General for India (Porus A. Mehta and R.H. Dhebar, with them) for the respondents.
April 7.
The Judgment of Mukherjea C. J., Das, Vivian Bose and Imam JJ.
was delivered by Das J. Sinha J. delivered a separate Judgment.
DAS J. This is a petition for a writ in the nature of a writ of habeas corpus calling upon the respondents to show cause why the petitioner, who is now confined in the Central Jail at Rewa, should not be set at liberty.
The petitioner 's grievance is that he has been deprived of his liberty otherwise than in accordance with procedure established by law.
A rule nisi having been issued, the respondents have filed an affidavit by way of return to the writ.
The question for our decision is whether the return is good and sufficient in law.
The facts leading up to the present petition are few and simple.
In the years 1948 and 1949 the petitioner was the Minister of Industries in the Government of Vindhya Pradesh which was at that time an acceding State within the meaning of section 6 of the Government of India Act, 1935 as amended in 1947.
On the 11th April, 1949 the petitioner was arrested in Delhi on the allegation that he had accepted illegal gratification in order to show favour to Panna Dia mond Mining Syndicate in the matter of the lease of the Diamond Mines at Panna.
In December, 1949 the petitioner along with one Mohan Lal, who was the then secretary in the Ministry of Industries, was put up for trial before the Court of Special Judge, Rewa, constituted under the Vindhya Pradesh Criminal Law Amendments (Special Courts) Ordinance No. V of 1949.
The charges were under sections 120 B, 161 465 and 466 of the Indian Penal Code as adapted for Vindhya Pradesh by the Indian Penal Code (Application to Vindhya Pradesh) Ordinance No. XLVIII of 209 1949.
By his judgment pronounced on the 26th July 1950 the Special Judge acquitted both the accused.
The State preferred an appeal against that acquittal to the Judicial Commissioner of Vindhya Pradesh.
By his judgment pronounced on the 10th March 1951 the Judicial Commissioner reversed the order of acquittal, convicted both the accused and sentenced them to different terms of rigorous imprisonment under the different sections in addition to the payment of certain fines.
On the application of the petitioner and his co accused the Judicial Commissioner on the 12th March 1951 issued a certificate to the effect that four points of law raised in the case and formulated by him in his order Were fit for the consideration of this Court in appeal under article 134 of the Constitution of India.
A petition of appeal was filed in this Court on the strength of this certificate of fitness and it was registered as Criminal Appeal No. 7 of 1951.
As the case involved a substantial question of law as to the interpretation of the Constitution, it was, in April 1953, placed before a Bench of five Judges of this Court as required by article 145(3) of the Constitution.
For convenience of reference we shall call a Bench of five or more Judges as the Constitution Bench.
The validity of the convictions and sentences was challenged before the Constitution Bench on the ground that there had been infringements of articles 14 and 20 of the Constitution.
A further point of law was raised that no appeal lay to the Judicial Commissioner from the acquittal by the special Judge.
By their judgment pronounced on the 22nd May 1953 the Constitution Bench rejected all these objections.
The judgment concluded with the following direction: "The appeal is accordingly directed to be posted for consideration whether it is to be heard on merits".
This was evidently done in view of the fact that the certificate of fitness granted by the Judicial Cormmissioner was limited only to four points of law.
The constitutional points having been disposed of, the appeal was placed before a Division Bench of three Judge who on the 20th October 1953 ordered 27 210 the appeal to be heard on the merits.
The appeal was accordingly put up for hearing before another Division Bench consisting of three Judges.
On the 5th March 1954 this Division Bench allowed the appeal of Mohan Lal and acquitted him but dismissed the appeal of the petitioner with respect to his conviction under sections 161, 465 and 466, Indian Penal Code, as adapted in Vindhya Pradesh, but set aside his conviction on the charge under section 120 B.
The sentence of three years ' rigorous imprisonment was maintained but the sentence of fine was set aside.
On the 18th March 1954 a petition for review was filed on behalf of the petitioner.
It was directed against the judgment of the Constitution Bench pronounced on the 22nd May 1953 repelling the constitutional points as well as against the judgment of the Division Bench dated the 5th March 1954 dismissing the petitioner 's appeal on the merits.
On objection being taken by the Registry against one application being filed for the review of two judgments one of which had been pronounced much earlier than the period allowed for filing a review application, the petitioner filed a second application for review of the judgment of the Constitution Bench and prayed for condonation of the delay in filing the same.
On the 5th April 1954 the application for review was put up for hearing before the same Division Bench which had pronounced the judgment on the merits dated the 5th March 1954.
After considering the points of review relating to that judgment the Division Bench on the same day came to the conclusion that no ground had been made out for review of that judgment and accordingly dismissed the petition.
An order was drawn up as of that date directing the petitioner who had been previously enlarged on bail to surrender and serve out his sentence.
On the 12th April 1954 another petition was filed on behalf of the petitioner praying that the review matter relating to the judgment of the Constitution Bench delivered on the 22nd May 1953 be placed before a Constitution Bench for final disposal.
That review application was put up before a Constitution 211 Bench which on the 17th May 1954 declined to entertain the same.
In the meantime the petitioner had in the last week of April 1954 surrendered and has since then been confined in the Central Jail at Rewa.
The present application has, therefore, been made for a writ of habeas corpus on the allegation that the petitioner has been and is being deprived of his liberty otherwise than in accordance with procedure established by law.
In the present petition the petitioner has again urged that the Court of the Judicial Commissioner of Vindhya Pradesh was not the proper forum for entertaining the appeal against the judgment of the Special Judge and consequently the judgment of the Judicial Commissioner setting aside the acquittal of the petitioner convicting and imposing sentence of imprisonment was void and inoperative.
Alternatively, it has been urged that, assuming that the Judicial Commissioner had jurisdiction to hear the appeal from the Special Judge and his judgment was in accordance with procedure established by law, the appeal filed by the petitioner in this Court against the judgment of the Judicial Commissioner should have been, under article 145(3) of the Constitution, beard and completely disposed of by the Constitution Bench.
As regards the first point as to the incompetency of the Court of the Judicial Commissioner to entertain the appeal from the decision of the Special Judge the same has been fully dealt with by the Constitution Bench and cannot be reagitated.
Indeed, learned counsel appearing in support of this petition has not pressed the same.
The only point urged before us is the alternative plea mentioned above which depends for its decision on a true construction of article 145.
Article 145 by clause (1) authorises this Court, subject to the provisions of any law made by Parliament and with the approval of the President to make rules for regulating generally the practice and procedure of the Court, including, amongst others, rules as to the procedure for hearing appeals, as to the entertainment of appeals under sub clause (c) of clause (1) of article 212 134 and as to the conditions subject to which any judgment pronounced or order made by the Court may be reviewed and the procedure for such review.
Clauses (2) and (3) of the article are in the terms following "(2)Subject to the provisions of clause (3), rules made under this article may fix the minimum number of Judges who are to sit for any purpose, and may provide for the powers of single Judges and Division Courts.
(3)The minimum number of Judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of this Constitution or for the purpose of hearing any reference under article 143 shall be five: Provided that, where the Court hearing an appeal under any of the provisions of this Chapter other than article 132 consists of less than five Judges and in the course of the hearing of the appeal the Court is satisfied that the appeal involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the appeal, such Court shall refer the question for opinion to a Court constituted as required by this clause for the purpose of deciding any case involving such a question and shall on receipt of the opinion dispose of the appeal in conformity with such opinion".
The contention of the petitioner is that the question whether a particular case involves a substantial question of law as to the interpretation of the Constitution is to be examined at the time when the case first comes before this Court.
If at that stage it is found that it is a case involving a substantial question of law as to the interpretation of the Constitution it becomes irrevocably impressed with that character and quality and the minimum number of Judges who are to sit for the purpose of deciding such case must be a Constitution Bench, that is to say, a Bench of at least five Judges.
The argument then proceeds to say that once the Constitution Bench takes seisin of the case and starts the hearing that 213 Bench and that Bench alone must decide the whole of such case, that is to say, decide all questions, constitutional or otherwise, arising in the case.
Sri Purshottam Trikumdas who appears in support of this petition has strongly relied on the language used in clause (3) and contends that "the case" cannot be split up and that the clause requires the entire case to be disposed of by the Constitution Bench.
He, therefore, urges that the Division Bench had no jurisdiction to take up the case involving substantial ques tions of law as to the interpretation of the Constitution and consequently the judgment of that Division Bench pronounced on the 5th March, 1954 was illegal and void.
According to him, his client 's appeal, in the eye of the law, remains undisposed of and as he had been let out on bail until the disposal of his appeal, his detention in jail pursuant to the judgment of the Division Bench, which is a nullity, amounts to deprivation of his personal liberty otherwise than in accordance with procedure established by law and is an infringement of his fundamental right under article 21 of the Constitution.
The argument at first sight certainly appears to be plausible but on a deeper consideration of the constitutional provisions bearing on the subject and the general principles regulating the procedural powers of Courts we are unable to accept the same as sound or well founded.
In this very case the Judicial Commissioner of Vindhya Pradesh had granted a certificate of fitness under article 134(1)(c).
Consequently under the proviso to clause (3) of article 145 the appeal might well have been placed before a Division Bench consisting of less than five Judges.
In that situation, being satisfied that the appeal involved a substantial question of law as to the interpretation of the Constitution the determination of which was necessary for the disposal of the appeal, that Division Bench could refer the question for the opinion of a Constitution Bench and on receipt of the opinion dispose of the appeal in conformity with such opinion; but to accede to the argument of Sri Purshottam Trikumdas will lead us to hold that while a Division Bench of three 214 Judges could split up this very case, had it been posted before it in the first instance, by referring the con stitutional questions to a Constitution Bench for its opinion and then, after receipt of that opinion, disposing of the rest of the case on merits in conformity with such opinion, a Constitution Bench of five or more Judges before which the case happened to be posted in the first instance could not split up the case by deciding the constitutional questions and leaving the rest of the case to be dealt with and disposed of by a Division Bench of less than five Judges on merits in conformity with the opinion of the Constitution Bench thus saving the time of the Constitution Bench.
Reference may also be made to article 228 which authorises the High Court, if satisfied that a case pending in a Court subordinate to it involves a substantial question of law as to the interpretation of the Constitution the determination of which is necessary for the disposal of the case, to withdraw the case and either to dispose of the case itself or determine the said question of law and return the case to the Court from which it has been so withdrawn so as to enable the said Court to proceed to dispose of the case in conformity with the judgment of the High Court.
Here again learned counsel 's argument leads us to hold that while the High Court can split up a case involving a substantial question of law as to the interpretation of the Constitution a Constitution Bench of this Court cannot do so.
Apart from these provisions of the Constitution there are provisions made by procedural statutes which result in a case being partly heard by one Judge and partly by another Judge.
To cite only a few instances, reference may be made to section 24 and Order 18, rule 15 of the Code of Civil Procedure and sections 350, 526, 528 and 556 of the Code of Criminal Procedure.
The argument of Sri Purshottam Trikumdas, pushed to its logical conclusion, must amount to this that although Courts operating under the ordinary procedural code may split up cases into different stages for the purpose of hearing and decision) a Constitution Bench of this Court cannot do so if a case involving substantial questions of law as to 215 the interpretation of the Constitution happens to be posted before it in the first instance.
Learned counsel for the petitioner recognises the incongruity that results from his argument but contends that it cannot be helped because the relevant provisions referred to above expressly sanction the splitting up of cases whereas the body of clause (3) of article 145 does not.
His argument is that in the cases mentioned above splitting up of cases has to be allowed because the special provisions of the Constitution or other statutes provide for such splitting up in those cases.
He contends that the very fact that these provisions had to be made clearly indicates that but for them there could not have been any splitting up of the case.
It is said that these provisions are exceptions to the general rule of indivisibility of a case.
We are unable to accept this reasoning as correct.
In the first place the proviso to article 145(3), article 228 and the other provisions of the Codes referred to above quite clearly indicate that the splitting up of cases into different stages for bearing and decision is not repugnant to the Constitution or the general principles of procedural law.
The underlying principle of the Constitution is clear and all that it insists upon is that all constitutional questions should be heard and decided by a Bench of not less than five Judges.
As long as this requirement is fulfilled there can be no constitutional objection to the rest of the case being disposed of by a Division Bench of less than five Judges, so as to save the time of the Constitution Bench of five or more, Judges.
In the next place we are not aware of any such general rule of indivisibility as is being insisted upon by learned counsel.
There is nothing in principle which requires that a case,must always be decided in its entirety by one Judge or one set of Judges even though such a case may conveniently be dealt with in two or more stages.
Indeed, in Maulvi Muhammad Abdul Majid vs Muhammad Abdul Aziz(1) the Privy Council pointed out that where a Judge had before (1) L.R. 24 I.A. 22.
216 him a case consisting of two parts, a question of title and an incidental question of account depending on title, it did not require any provision of the Civil Procedure Code to authorise him to decide the first question and reserve the second for further investigation and that to treat such a proceeding as beyond the power of the Court and as an error which barred the proceedings reserved for further decision was a serious miscarriage of justice.
Indeed, the Court often exercises its inherent power, if it thinks fit to do so, to decide questions of jurisdiction or limitation or the like as preliminary questions reserving other questions of fact for future investigation.
The decision of a case at two or more stages may and often does result in the case not being decided by the same Judge, for the Judge who decided at the first stage may, by reason of death, retirement or transfer, be not available for deciding the case at the later stages, it follows, therefore, that no argument can be founded on any supposed general rule of indivisibility of a case for the purpose of its hearing and decision.
The consideration that there is no such general rule as is relied on by learned counsel and that the splitting up of cases is not generally repugnant to law and in particular to the Constitution, leads us to the conclusion that in construing clause (3) of article 145 no quality of indivisibility need be attributed to the words "the case" used therein.
A case may, to begin with, involve a substantial question of law as to the interpretation of the Constitution, but it may cease to do so at a later stage.
Suppose a case which involves a constitutional question is placed before a Constitution Bench but learned counsel appearing in support of the case intimates to the Bench that he does not press any constitutional point, surely he can not, in that situation, insist that the time of a Bench of five or more Judges should be spent on the determination of a case which, by his own election, has ceased to involve any constitutional question.
Likewise, when the constitutional questions involved in the case are disposed of by a Constitution Bench what 217 remains of the case cannot properly or appropriately be described as still a "case involving a substantial question of law as to the interpretation of this Constitution".
It should be borne in mind that when a case or appeal is properly admitted to this Court all that the parties are entitled to is a decision of this Court and not of any Particular Bench.
So long as the minimum number of Judges which the Constitution and the rules framed by this Court prescribe are present to hear and decide the questions raised from stage to stage, they represent the Court for the purpose of giving decisions on its behalf and the parties get all that they are entitled to under the law.
If a Court is entitled to decide a case in stages, as the Privy Council has held it can, there is no reason why article 145(3) should be so construed as to deprive this Court of that inherent power.
It will involve no violation of any principle of natural justice or of any legal principle if we construe clause (3) of article 145 as requiring only that the minimum number of five Judges must sit for the purpose of deciding any case in so far and as long as it involves a substantial question of law as to the interpretation of this Constitution.
We find nothing in the language of clause (3) of article 145 which militates against this interpretation of that clause.
Indeed, it is on this interpretation that the practice has grown up in this Court for a Constitution Bench to dispose of all constitutional questions and to leave the other subsidiary questions for disposal by a Division Bench of less than five Judges in conformity with the opinion of the Constitution Bench.
There is nothing that we find in the body of clause (3) of article 145 which compels us to depart from the famous maxim cursus curiae est lex curiae which was laid down by Lord Coke in Burrowes vs High Commission Court(1) and which was quoted with approval in Habibar Rahman vs Saidannessa Bibi(2).
For reasons stated above we consider that a good and valid return has been made by the respondents to the rule nisi issued to them and this application must be dismissed.
We order accordingly.
(1) 3 Bulst.
48, 53.
331, 335.
218 SINHA J. I regret to have to differ from my learned brethren on the construction of article 145(3) of the Constitution which is the main question in controversy in this case.
Clause (3) of article 145 is in these terms: "The minimum number of Judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of this Constitution or for the purpose of hearing any reference under article 143 shall be five: Provided that, where the Court hearing an appeal under any of the provisions of this Chapter other than article 132 consists of less than five Judges and in the course of the hearing of the appeal the Court is satisfied that the appeal involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the appeal, such Court shall refer the question for opinion to a Court constituted as required by this clause for the 'Purpose of deciding any case involving such a question and shall on receipt of the opinion dispose of the appeal in conformity with such opinion".
It is noteworthy that the Constitution has not vested this Court with complete power to make rules as to the constitution of Benches for hearing matters coming before this Court in its Original, Appellate or Advisery Jurisdiction.
Clause (2) of article 145 has invested this Court with power to make rules fixing the minimum number of Judges who are to sit for any purpose and for defining the powers of single Judges and Division Courts.
But this power is expressly made subject to the limitation laid down in clause (3) quoted above; that is to say, where any case involves a substantial question of law as to the interpretation of the Constitution (omitting the words not material for our present purpose) the minimum number of Judges prescribed by the Constitution to decide such a case is five.
A case may involve questions of law as to the interpretation of the Constitution, as also other questions.
In this case we have to determine whether clause (3) contemplates the whole case or a part of a 219 case.
In my opinion, the Constitution while laying down clause (3) of article 145 contemplates the whole matter in controversy arising in a case which may include substantial questions of law as to the interpretation of the Constitution as also other questions.
The main clause (3), excepting cases coming within the purview of the proviso does not contemplate a splitting up of a case into parts, one part involving substantial questions of law as to the interpretation of the Constitution and another part or parts not involving such questions.
My reasons for coming to this conclusion are as follows: Clause (3) itself read along with the proviso makes a distinction between a "case" and a "question" of the nature indicated in the proviso to the clause.
The Constitution has clearly indicated that cases coming within the purview of the proviso may be split up so as to admit of the questions of constitutional importance being determined by a Bench of at least five Judges who may be described for the sake of convenience as "Constitution Bench" in contradistinction to a Division Court consisting of less than five Judges, as is contemplated in the proviso.
The main clause (3) requires a case of the description therein set out to be heard and decided by a Constitution Bench, whereas the proviso contemplates that only the question of constitutional importance (using a compendious phrase) has to be decided by a Constitution Bench and the case out of which such a question arises remaining in the seisin of the Division Court before which the case was originally placed for hearing.
The Constitution has placed cases involving substantial questions of law of constitutional importance on a special footing.
If the framers of the Constitution had intended that not the whole case but only particular questions of the nature indicated had to be heard by a minimum number of five Judges, they would have used words similar to those used in the proviso making it permissible for the Constitution Bench to give its opinion for the decision of the case by a Division Court in conformity with that opinion, 220 A reference to the terms of article 228 of the Constitution would also show that the framers of the Constitution were fully alive to the difference between the decision of the "case itself" and a "question of law" of constitutional importance involved in that case.
It has made clear in that article that the High Court shall either decide the whole case including the question of law as to the interpretation of the Constitution which was necessary for the disposal of the case or determine only such a question or questions and return the case to the original court for disposal in conformity with the judgment of the High Court on such question or questions.
The Constitution made these specific provisions to emphasize that there is a distinction between determining the case itself and determining a substantial question of law of constitutional importance.
Can it be said that if clause (3) of article 145 had been enacted without the proviso, a case could be heard piecemeal first by a Constitution Bench which would determine only questions of law as to the interpretation of the Constitution, and then the residue of the case being heard and determined by a Division Court? That, in my opinion, would not be in compliance with the imperative provisions of the main clause (3).
The framers of the Constitution therefore enacted the proviso in the nature of an exception to the general rule laid down in the main clause (3).
It has to be observed that the proviso is limited to appeals only, subject to the further exception that such appeals should not have come up to this Court through the process laid down in article 132 of the Constitution.
It is thus clear that not all cases contemplated in the main clause (3) but only appeals of a particular description would come within the qualifying provisions of the proviso.
The word "case" has not been defined but it may be taken as settled law that it is much wider than a "suit" or an "appeal".
Hence whereas the proviso would apply to appeals brought up to this court, except those under article 132 of the Constitution, the main clause (3) would apply to all appeals and all 221 other matters coming up to this Court in its Original, Appellate and Advisory jurisdictions.
In my opinion, there cannot be the least doubt that the main provisions of clause (3) are all embracing, and contemplate all cases coming up to this Court.
It has not been contended that the present case comes within the purview of the proviso but it has been said that if it is open to a Division Court to refer a question of constitutional importance to a Constitution Bench, why should not a Constitution Bench be competent to refer questions other than those of constitutional importance to a Division Court? The answer is that whereas the former is contemplated by the Constitution in terms, the latter is not.
Nor are there any rules to that effect.
But it has been further observed that the splitting up of a case into parts, one involving questions of constitutional importance and the remaining part not involving questions of that kind, is not against the provisions of the Constitution.
But, in my opinion, if the Constitution has made a specific provision as to the splitting up of a case into parts, one cognisable by a Court of higher jurisdiction like a Constitution Bench and the rest by a court of lower jurisdiction like a Division Court, the argument is not available that a splitting up of a case apart from those specific provisions is also permissible.
In this connection reference was made to certain provisions of the Code of Civil Procedure as also of the Code of Criminal Procedure to show that those Codes do contemplate hearing of the same case in part by different courts, but those are all courts of co ordinate jurisdiction in which the question of the power of the court itself relatively to the subject matter of the case is not in question.
The court which originally dealt with the case and the court which finally came to hear and determine the matter were each one of them competent to deal with the whole matter or any part of it.
That is not the position here.
In this case the argument on behalf of the petitioner is that as admittedly his appeal involved substantial questions of law as to the interpretation of the Constitution and as it did not come 222 within the purview of the proviso to clause (3) of article 145 of the Constitution, it should have been dealt with throughout by a Constitution Bench.
It was suggested in answer to this argument that after the questions of law of constitutional importance had been dealt with by the Constitution Bench the case ceased to be one involving such questions and therefore could have been heard by a Division Court.
But the difficulty in accepting this argument is that once a Constitution Bench was seized of the case, it could not transfer it to another Bench for sharing the decision of that case with it.
That Bench should have heard out the whole case and it had not the power to direct, and it did not so direct, that the remaining part of the case should be heard by a Division Court.
Once a Constitution Bench is seized of the case, it has to hear the case to its conclusion.
There was no process known to the rules framed under the rule making power of this Court by which a case once it came before a Constitution Bench could get transferred from that Bench to a Division Court either automatically or by orders of any authority.
But it has been suggested that it may happen that a Constitution Bench may start the hearing of the case, and before the hearing is concluded one of the Judges is by reason of death or otherwise disabled from hearing out the case and in that event the Chief Justice has the power to constitute another Bench.
But that is quite a different matter.
In that case the hearing by the previous Bench comes to nothing and the Bench constituted afresh by the Chief Justice has to hear out the whole case afresh.
It has also been suggested on the other side that a "case" may mean a part of a case.
In my opinion, that submission is not well founded; because, if that argument were accepted and pushed to its logical conclusion, it may make the provisions of the main clause (3) of article 145 nugatory.
Article 132 of the Constitution has been, as indicated above, excepted from the operation of the proviso to clause (3).
Suppose an appeal is brought to this Court under article 132 of the Constitution as the case involved substantial 223 questions of law as to the interpretation of the Con stitution.
That case besides involving questions of that character, may also involve other questions.
If the argument that a "case" includes part of a case were accepted, then it will be permissible for a Constitution Bench to hear the questions of constitutional importance and leave the rest of the case to be determined by a Division Court, though such a case is expressly excluded from the operation of the proviso and thus is directly within the terms of the main clause (3).
Hence every case coming before this Court involving a question of constitutional importance may be dealt with in part in so far as it relates to that question by a Constitution Bench and the remaining part by a Division Court.
That, in my opinion, was not intended by the framers of the Constitution.
The term "case" therefore must mean the whole matter in controversy before this Court.
Such a matter may relate to one of several questions in controversy in the original court, if the determination of that question is sufficient to dispose of the case within the meaning of the Explanation to article 132 of the Constitution.
It was further argued by the learned Attorney General that the whole clause (3) of article 145 along with the proviso must be read together.
But even so read, the language of clause (3) does not warrant the hearing of the case piecemeal by different Benches unless it comes within the purview of the proviso.
The proviso is meant to cover only a limited class of cases which otherwise would have come within the purview of the main clause (3).
But the proviso cannot have a larger effect than is justified by its language, viz., that only a question of that description has to be referred for the opinion of the larger Bench, the case itself remaining on the file of the smaller Bench.
The proviso thus makes a clear distinction between a "case" and a "question".
It has also been said there is an inherent power in the court to transact its business according to its established practice.
In the first place, this Court is still in its formative stages and it cannot be said to 224 have an "established practice".
Secondly, it cannot establish a practice in the teeth of the provisions of the Constitution which it is pledged to uphold.
The reference to the decision of the Privy Council in Moulvi Muhammad Abdul Majid vs Muhammad Abdul Aziz(1) is not apt because in that case the hearing at the two stages of the trial was to be done by a court of coordinate jurisdiction; that is to say, a court which could hear and determine the whole case or each of the two parts of the case taken separately by itself, unlike the present case in which the two parts of the hearing have been done by two courts of unequal power.
Similarly the reference to the maxim " cursus curiae est lex curiae" of Coke C. J. in Burrowes vs High Commission Court(1), referred to in Habibar Rahman vs Saidannessa Bibi(3) and to the other cases all proceed on the assumption that there is nothing in the statute law against such a course being taken.
But, in my opinion, such a nebulous practice is opposed to the positive provisions of clause (3) of article 145.
In my opinion therefore, the present case comes directly within the main clause (3) of article 145 of the Constitution and is admittedly not covered by the proviso to that clause.
That being so, the petitioner 's appeal to this Court has not been heard and determined in accordance with the procedure established by this Constitution and therefore the petitioner is entitled to the benefit of the protection afforded by article 21 of the Constitution.
His appeal, therefore, has got to be heard and determined in accordance with the procedure laid down in article 145(3) of the Constitution.
I would therefore allow the petition to this extent only that the appeal be heard by a Constitution Bench on a declaration that the judgment of the Division Court dated the 5th March 1954 is not that of a competent court.
BY THE COURT: In accordance with the judgment of the majority, the petition is dismissed.
(1) L.R. 21 I.A. 22.
(2) 3 Bulst.
48, 53.
(3) I.L.R. , 335.
| IN-Abs | Held (Per MUKHERJEA C.J., DAS, VIVIAN BOSE, and IMAM JJ.
SINHA J. dissenting) that a Constitution Bench of five or more Judges before which a case happens to be posted in the first instance 207 is competent to split up the case by deciding the constitutional questions and leaving the rest of the case to be dealt with and disposed of by a Division Beach of less than five Judges on merits in conformity with the opinion of the Constitution Bench.
The splitting up of cases into different stages for hearing and decision is not repugnant to the Constitution or the general principles of procedural law.
The underlying principle of the Constitution is clear and all that it insists upon is that all constitutional questions should be heard and decided by a Bench of not less than five Judges.
As long as this requirement is fulfilled there can be no constitutional objection to the rest of the case being disposed of by a Division Bench of less than five Judges, so as to save the time of the Constitution Bench of five or more Judges.
There is no general rule of indivisibility of a case for the purpose of its hearing and decision: vide.proviso to Article 145(3) and Article 228 of the Constitution, section 24 and Order 18, Rule 15 of the Code of Civil Procedure and sections 350, 526, 528 and 556 of the Code of Criminal Procedure.
Article 145(3) of the Constitution cannot be so construed as to deprive the Supreme Court of the inherent power of splitting up a case for the purpose of hearing and decision .
Per SINHA J. The Constitution while laying down clause (3) of Article 145, contemplates the whole matter in controversy arising in a case, which may include substantial questions of law as to the interpretation of the Constitution as also other questions.
The main clause (3), excepting cases coming within the purview of the proviso, does not contemplate a splitting up of a case into parts, one part involving substantial questions of law as to the interpretation of the Constitution and another part or parts not involving such questions.
The language of clause (3) of Article 145 does not warrant the hearing of a case piecemeal by different Benches unless it comes within the purview of the proviso.
The proviso is meant to cover only a limited class of cases which otherwise would have come within the purview of the main clause (3).
But the proviso cannot have a larger effect than is justified by its language, viz., that only a question of that description has to be referred for the opinion of the larger Bench, the case itself remaining on the file of the smaller Bench.
The proviso thus makes a clear distinction between a "case" and a "question".
Maulvi Muhammad Abdul Majid vs Muhammad Abdul Aziz (L.R. 24 I.A. 22), Burrowes vs High Commission Court (3 Bulst.
48) and Habibar Rahman vs Saidannessa Bibi (I.L.R. , referred to.
|
Civil Appeals Nos.
1152, 1153, 1268, 1708, 1733 & 2539 of 1969.
From the judgment and decree dated the 23rd January 1968 of the Andhra Pradesh High Court in A.A.O. Nos. 210 and 374/67.
M. C. Bhandare, A. V. Rangam and A. Subhashini, for the appellant (In C.As.
1152 1153) & respondent No. 2 (in C.A. 1709/69).
B. D. Bal and P. P. Rao, for the appellants (in C.As.
1268 and 1733) and respondents Nos. 11 (in C.A. No. 1152), 11 and 12 (in 1153) .
S V. Gupte, A. Adil and K. J. John, for the appellants (In C.As.
1708 & 2539 and respondents 2 10 in C.As.
1152 1153, and for respondents 1 9 in C.A. 1268/69).
V. V. Nair, for the respondent No. 11 in C.A. 1733.
161 The Judgment of the Court was delivered by RAY, C. J.
These six appeals are by certificate from the judgment dated 23 January, 1968 of the High Court of Andhra Pradesh at Hyderabad in C.M.A. No. 210 and 374 of 1967 in that High Court.
Two questions arise for decision in these appeals.
First, whether in the circumstances of the case, there was any property of the Hyderabad Co perative Commercial Corporation Ltd. hereinafter referred to as the Co operative Society.
Which could be attached by the decree holders, the appellants in Civil Appeal No. 1708 of 1969 and Civil Appeal No. 2539 of 1969 in the hands of the Director of Civil Supplies.
Second, whether the dissolution of the Hyderabad Cooperative Commercial Corporation Ltd. by the Registrar of Co operative Societies was competent.
Syed Mohiuddin Khadri, hereinafter referred to as the decree holder, obtained on 24 August, 1959 a decree from the City Civil Court, Hyderabad against the Co operative Society for a sum of Rs. 6,91,293 11 Ps.
with interest.
On 23 November, 1959, the decree holder filed an Execution Petition before the City Civil Court against the Co operative Society for attachment inter alia of a sum of Rs. 4,50,000/ belonging to the Co operative society and in the custody of the ' Commissioner of Civil Supplies and the Accountant General, Hyderabad.
On 27 November, 1959, the City Civil Court issued a prohibitory order to the Commissioner of Civil Supplies to hold the said sum until further orders.
Pursuant to 'the order, on 2; December, 1959, the accountant General wrote to the Commissioner of Civil Supplies that in view of the order of the Court, no payment relating to the Co operative Society would be made by his office without the concurrence of the Court.
The decree holder contends that the attachment is valid.
The State contends that there was no debt due to the Co operative Society and therefore, there was no valid attachment.
The facts and circumstances under which the City Civil Court made an order for attachment are these.
The State budget for 1959 60 provides for payment of Rs. 4,50,000/ to the Co operative Society.
In the Execution Application, the decree holder stated that the sum of Rs. 4,50,000/ mentioned in the budget was a debt due to the Co operative Society.
The decree holder further alleged that the sum Of Rs. 4,50,000/ belonging to the Co operative Society was in the custody and control of the Commissioner of Civil Supplies and the Accountant General, Hyderabad as evidenced by the budget provision and a letter dated 12 June, 1959 issued by the Commissioner of Civil Supplies to the District Treasury officers.
The letter dated 12 June, 1989 written by the Assistant Chief Accounts officer and approved by the Commissioner and addressed to District Treasury officers stated that "the fol lowing provisions for the Civil Supplies department are made under the above major head (meaning thereby Trading Civil Supplies) in ' the budget estimates for the year 1959 60: (1) payment to Hyderabad Co 162 operative Commercial Corporation Rs.
4,50,000/ .
You are requested to kindly make the payments under the above heads as per rules and intimate to this office the full particulars of the amounts and expenditure incurred in your district every fortnight on the 5th and 20th of the succeeding month to which they relate for watching the expenditure as a whole against the above provision".
The City Civil Court on these facts issued a prohibitory order on 27 November, 1959 directing the Commissioner of Civil Supplies to hold the sum until further orders.
The Accountant General, pursuant to the said prohibitory order, wrote to the Court on 2 December, 1959 that no payment relating to the Co operative Society would be made by his office without the concurrence of the Court.
The High Court held that the mere fact that the Commissioner of Civil Supplies directed the Treasury officer to make payments to the Co operative Society as and when occasion arose did not mean that the amount as a whole became the property of the Co operative Society in the hands of the Disbursing officer namely, the Commissioner of Civil Supplies.
The High Court held that the provisions of order 21, Rule 52 of the Code of Civil Procedure did not apply and the attachment affected and the prohibitory order made by the City Civil Court and the directions to deposit the amount were not valid.
It may be stated here that the State filed a suit C. section No. 1 of 1962 under order 21, Rule 63 of the Code of Civil Procedure challenging the order of attachment.
The suit was withdrawn by the Government.
The High Court held that the withdrawal of the suit did not preclude the Government from questioning the validity of the attachment.
On behalf of the State, it was contended that the budget appropriation of Rs. 4,50,000/ for the financial year 1959 60 did not make the sum the property of the Co operative Society in the custody of the Public officer.
It was also contended by the State that the said sum was not a debt due to the Co operative Society.
The State also contended that the rules require claim being made, bill being processed, scrutinity as to whether there is sufficient fund credited to the appropriation for payment and in the present case, there was no order for actual payment.
Another contention on behalf of the State was that even if the attachment was legal, it would cease to be so by the end of the financial year because the property was not brought into Court and the amount lapsed.
The documents in the present case and in particular the letter dated 12 June, 1959 and the letter dated 2 December, 1959 written by the Accountant General to the Court establish that there was a debt due to the Co operative Society and the attachment was validly made.
The letter dated 12 June, 1959 provided for payment and the payment was approved by the Commissioner.
The officers disbursing the amount were to pay in accordance with the rules and inform the Department about the expenditure incurred in that behalf.
There is intrinsic evidence in the letter dated 12 June, 1959 that the approval by the Commissioner is not only sanction of the payment but also approval of the same.
Payment in accordance with rules means that documents are to be 163 vouched and there should be particulars of payment and identification of the persons to whom payment is to be made.
The letter dated 2 December, 1959 written by the Accountant General to the Court is tantamount to the money being nationally brought to the Court.
The Accountant General said that the payment was not to be made except with the concurrence of the Court.
Thus it came into the control of and was held on behalf of the Court.
The amount of Rs. 4,50,000/ was not a mere budget provision but the documents show that the amount had ripened into a debt and an order for payment to the Co operative Society.
The sum of Rs. 4,50,000/ was impressed with the character of a debt due to the Co operative Society and it was validly attached.
The contention on behalf of the State that the amount was not brought into Court and therefore, the provision lapsed is devoid of substance.
The letter dated 12 June, 1959 provided for payment of the sum of Rs. 4,50,000/ .
The letter of the Accountant General dated December 2, 1959 indicated that the Accountant General pursuant to the order of the Court dated 27 November, 1959 brought the money to the Court.
Attachment of debts is a process by means of which a judgment creditor is enabled to reach money due to the judgment debtor which is in the hands of a third person.
These are garnishee proceedings.
To be capable of attachment, there must be in existence at the date when the attachment becomes operative something which the law recognises as a debt.
So long as there is a debt in existence, it is not necessary that it should be immediately payable.
Where any existing debt is payable by future instalments, the garnishee order may be made to become operative as and when each instalment becomes due.
The debt must be one which the judgment debtor could himself enforce for his own benefit.
A debt is a sum of money which is now payable or will become payable in the future by reason of a present obligation (See Webb vs Stenton(1).
In the present case, the letter dated 12 June, 1959 proves that there is an obligation to pay the specified sum of Rs. 4,50,000/ to the Co operative Society.
The budget provision fastened on to the claim of the Co operative Society against the State and it ripened into a debt payable to the Co operative Society.
Therefore, in the circumstances, the attachment levied by he City Civil Court was perfected by bringing money to the Court.
The second question which falls for determination is whether the dissolution of the Co operative Society by the Registrar of Co operative Societies was competent.
The State Registrar of Co operative Societies on 6 September, 1960 cancelled the registration of the Co operative Society under section 53 of the Hyderabad Co operative Societies Act, 1952 and appointed a liquidator.
The decree holder filed Writ Petition No. 763 of 1960 on 2 November, 1960 before the High Court and impugned the validity of the order of liquidation.
The High Court on 19 September, 1961 dismissed the writ petition and upheld the order of liquidation.
164 Though the High Court dismissed the writ petition, the High Court had to deal with the question of liquidation of the Co operative Society in C.M.A. No. 210 of 1967 and C.M.A. No. 374 of 1967.
These two out of the order of the City Civil Court dated 11 July, 1967 in the decree holder 's Execution Petition No. 95 of 1959.
The City Civil Court held that the judgment of the High Court upholding the validity of the order of dissolution and appointment of the liquidator in Writ Petition No. 763 of 1960 did not prevent the decree holder from contending that the State Registrar had no jurisdiction to pass the order of liquidation.
The High Court in the appeal in C.M.A. No. 210 of 1967 and C.M.A. No. 374 of 1967 held that though the High Court had decided in Writ Petition No. 763 of 1960 upholding the validity of the liquidation yet the order of liquidation could not be sustained because the delegation made under section SB of the Multiunit Co operative Societies Act, 1942 was incompetent.
The liquidator in Civil Appeal No. 1268 of 1969 and Civil Appeal No 1733 of 1969 submitted that the liquidator was interested only in sustaining the validity of the order of liquidation.
The liquidator is not interested in the dispute between the State and the decree holder in regard to the order of attachment.
In order to appreciate the rival contentions of the decree holder and the liquidator on the validity of the order of liquidation, it is necessary to refer to the provisions of Multi unit Co operative Societies Act, 1942.
The 1942 Act applies to Co operative Societies registered before the commencement of the Act and also to Societies which became registered after the commencement of the Act of 1942.
The Co operative Society was a Society registered before the Reorganisation of the States in 1956.
As such the Society is a Multi unit Society governed by the 1942 Act.
The decree holder did not challenge this position.
The contention of the decree holder is that under section 4 of the 1942 Act, the Central Registrar of Co operative Societies shall exercise in respect of any Co operative Society and to the exclusion of State Registrar, the powers and functions exercisable by the Registrar of Cooperative Societies of the State in which such Society is registered.
Section 5B of the 1942 Act which speaks of delegation of any power or authority exercisable by Central Registrar to be exercisable by Registrar of Co operative Societies of a State is contended by the decree holder to exclude the State Registrar from acquiring any power by delegation.
The decree holder contended that the power of delegation contemplated in section SB was confined only to matters mentioned in section 5A of the 1942 Act.
Under the 1942 Act Multi unit Co operative Societies whether registered before or after the coming into force of the Act were governed by the Co operative Societies Act of the States in which they were registered.
Under the 1942 Act and in particular sections 2 and 3 thereof, some powers like those of inspection, audit were given to Registrars of other States where such Societies had branches.
Under section 4(1) of the 1942 Act, the Central Government may, if it thinks fit, appoint a Central Registrar of the Co operative Societies.
165 Section 4(2) of the 1942 Act provides that the Central Registrar of Co operative Societies, if appointed, shall exercise in respect of any co operative society to which the 1942 Act applies, to the exclusion of State Registrars, the powers and functions exercisable by the Registrar of Co operative Societies of a State in which such Society is actually registered.
The powers which the Central Registrar is to exercise under the 1942 Act are powers under the Co operative Societies Act of the State where a particular Society is registered.
The powers exercisable by the State Registrar under the Co operative Societies Act are by reference under section 4(2) of the 1942 Act incorporated into the 1942 Act and exercisable by the Central Registrar where the Central Registrar is appointed by the Central Government.
The State Registrar was admittedly competent to exercise hl respect of the Co operative Society all powers under the Hyderabad Co operative Societies Act, 1952 referred to as the 1952 State Act.
Under the 1952 State Act, the State Registrar had the power to dissolve the Cooperative Society and appoint a liquidator.
The Central Government appointed a Central Registrar of Co operative Societies for the first time on 29 December, 1956.
If the matters had rested there, the State Registrar would have been divested of his powers over the Society under the State Act as from that date.
The matters, however, did not rest there.
Section 5B of the 1942 Act empowers the Central Government to delegate any power or authority exercisable by the Central Registrar under the Act to State Registrars and certain other officers by a Notification published in the official Gazette.
Simultaneously with the appointment of the Central Registrar, the Central Government published a Notification on 29 December, 1956 delegating the powers or authority under the 1942 Act in relation to certain, matters including dissolution to the State Registrars and other officers mentioned in the Notification in respect of Societies registered in their respective States.
The Registrar of Societies, Andhra Pradesh was specifically mentioned in the Notifications The result of the Notification was that the powers under the State Act of 1952 of which the State Registrar was divested by the appointment of the Central Registrar were immediately restored to him.
[t is in exercise of these powers under the State Act of 1952 which were restored to the State Registrar that he passed the order of dissolution of the Society and appointed a liquidator on 6 September, 1960.
Section 5B of the 1942 Act empowers the Central Government to Delegate "any power or authority exercisable by the Central Registrar of Co operative Societies under this Act" (meaning thereby the 1942 Act) to the State Registrars and other officers.
The language in section 5B of the 1942 Act is plain.
There are no words of limitation or reservation.
The expression "any power or authority exercisable by the Central Registrar of Co operative Societies under this Act" takes in all powers under the ]942 Act including those under section 4(2) which are the powers under the State Act embodied by reference in that section.
The simultaneous introduction of section 5A and section 5B into the 1942 Act in the year 1956 with effect from 1 November, 1956 point 166 to the fact that section 5B follows section SA but does not confine section SB only to matters mentioned in section 5A of the 1942 Act.
The contention on behalf of the decree holder that the expression "any power or authority exercisable by the Central Registrar of Co operative Societies under this Act" in section SB means only powers or authority under section 5A of the Act is unsound.
Section 5A of the 1942 act is a transitional provision regarding certain Cooperative Societies affected by the Reorganisation of States.
The provisions contained in section 5B of the 1942 Act do not have any words of restriction in their application only to Section 5A of the 1942 Act.
on the contrary, the provisions in section 5B of the 1942 Act speak of delegation of power or authority exercisable by the Central Registrar under the 1942 Act.
Whatever powers are exercisable by the Central Registrar by reason of section 4(2) of the 1942 Act are capable of being delegated by reason of provisions contained in section SB of the 1942 Act.
The delegation by the Central Government of the powers exercisable by the Central Registrar to be exercised by the State Registrar is supported by the provision of the 1942 article The order of delegation being valid, the State Registrar was competent to dissolve the Co operative Society by the order dated 6 September, 1960.
It is, therefore, not necessary to express any opinion as to whether the contention of the decree holder challenging the validity of the order of dissolution of the Co operative Society and appointment of liquidator is barred by reason of constructive resjudicata on account of the dismissal of the Writ Petition No. 763 of 1960 filed by the decree holder in the High Court.
For these reasons, the judgment of the High Court is set aside.
The attachment of the sum of Rs. 4,50,000 is upheld.
The order of dissolution of the Co operative Society and appointment of the liquidator are held to be valid.
The High Court stated that "it will be open to the decree holder to take up execution against the Government.
for the amount due to him from the Co operative Society on the ground that the Government has taken over the entire assets and liabilities of the Co operative Society. ' We affirm that finding of the High Court.
Under the interim order of this Court, the liquidator deposited an amount of Rs. 90,000/ in the Court.
That amount was allowed to be withdrawn by the legal representative oil the decree holder on furnishing bank guarantee.
The liquidator asked for refund of that amount to the liquidator to enable him to discharge his duties according to law.
The decree holder will prefer the claim on account of attachment of Rs. 4,50,000/ before the Liquidator.
If in liquidation, it will appear that there are prior claims or that the decree holder will be entitled to any rateable distribution out of Rs. 4,50,000/ , the liquidator will make appropriate orders for payment of appropriate amount to the decree holder.
We make it clear that after payment by the liquidator to the decree holder whatever amount will remain due to the decree holder, it will be 167 open to the decree holder to take up execution against the Government for the amount due by the Co operative Society on the ground that the Government has taken over entire assets and liabilities of the Co operative Society subject, of course, to such contentions as the Government may have.
The appeals filed by the State are dismissed.
The decree holder will be entitled to costs in these appeals to be paid by the State.
The liquidator will retain costs out of the assets in his hands.
The amount of Rs. 90/ which has been withdrawn by the decree holder will now be refunded to the liquidator.
There will be one set of costs for the decree holders.
There will be similarly one set of costs for the liquidator.
P.B.R. Appeals dismissed.
| IN-Abs | The appellant was a multi unit co operative society governed by the Multi Unit Co operative Societies Act, 1942 Section 4(1) of the Act confers on the Central Government power to appoint a Central Registrar of Co operative Societies.
According to section 4(2) the Central Registrar, if , appointed, shall exercise, in respect of any co operative society to which the Act applies to the exclusion of State Registrars, the powers and functions exercisable by the Registrar of Co operative Societies of a State in which such society is actually registered.
In 1952 the Hyderabad Co operative Societies Act was passed which provides that the State Registrar had the power to dissolve a co operative society and appoint a liquidator. 'I he Central Registrar of Co operative Societies was appointed in 1956.
Section 5B of the 1942 Act empowered the Central Government to delegate "any power of authority exercisable by the Central Registrar under the Act" to State Registrars by a notification.
In pursuance of this power the Central Government published a notification in 1956 delegating the powers (under the 1942 Act) to the State Registrars, one of which was the power to dissolve a co operative society.
The notification specifically mentioned the Registrar of Co operative Societies of the State of Andhra Pradesh.
As a result of this notification the powers of the Registrar of Co Operative Societies under the State Act of 1952, which were divested by the appointment of the Central Registrar. were immediately restored to him.
In 1960, the State Registrar of Co operative Societies passed an order of dissolution of the Society under section 53 of the 1952 Act and appointed a liquidator.
In the State budget for.
the year 1959 60 provision was made for payment of certain sums of money to the appellant society.
The respondent, a decree holder of the Co operative Society, in an execution petition sought attachment.
Out of the sum provided in the budget, a certain sum due to him from the appellant society contending that the sum mentioned in the budget was a debt due to the appellant society.
The execution court issued a prohibitory order to the Commissioner of Civil Supplies and the Accountant General to hold the said sum until further orders.
On appeal the High Court held that the mere fact that the Commissioner of Civil Supplies, in whose custody the money was, directed the concerned officials to make payments to the co operative society as and when occasion arose did not mean that the amount became the property of the Society.
It further held that the attachment and prohibitory order were invalid.
As regards the order of liquidation the High Court held that it could not be sustained because the delegation made under section 5B of the 1942 Act was incompetent. ^ HELD: The budget provision fastened on to the claim of the co operative society against the State and it ripened into a debt payable to the Co operative Society.
(a) Attachment of debts is a purpose by means of which a judgment creditor is enabled to reach money due to the judgment debtor which is in the hands of a third person.
These are garnishee proceedings.
To be capable of attachment 160 there must be in existence at the date when the attachment becomes operative something which the law recognises as a debt.
So long as there is a debt in existence it is not necessary that it should be immediately payable.
Where any existing debt is payable by future instalments, the garnishee order may be made to become operative as and when each instalment becomes due.
The debt must be one which the judgment debtor could himself enforce for his own benefit.
[163D F] The facts in present case establish that there was a debt due to the cooperative society and the attachment was validly made.
The amount in dispute was not a mere budget provision bull the documents show that the amount ripened into a date and an order for payment to the co operative society.
The sum was impressed with the character of a debt due to the co operative society and it was validly attached.
[163 F G] (b) The contention that the amount was not brought t into court and, therefore the provision lapsed is devoid of substance.
The letter written by the Accountant General to the court is tantamount to the money being nationally brought to the court. 'the Accountant General said that the payment was not to be made except with the concurrence of the court.
Thus it came into the control of and was held on behalf of the court.
[163A B] 2(a) The order of delegation is valid and the State Registrar was competent to dissolve the co operative society.
The contention of the decree holder that the expression "any power or authority exercisable by the Central Registrar of Co operative Societies under this Act` in section 5B means only powers or authority under .
5A of the Act is unsound.
That expression takes m all powers under the 1942 Act including those under section 4(2) which are the powers under the State Act embodied by reference in that section.
[165F 166B] (b) The provisions contained in section 5B of the 1942 Act do not have any words of restriction in their application only to section 5A of the Act.
On the contrary, the provisions in section 5B of the Act speak of delegation of power or authority exercisable by the Central Registrar under the 1942 Act.
Whatever powers are exercisable by the Central Registrar by reason of section 4(2) are capable of being delegated by reason of provisions contained in section 5B of the 1942 Act.
The delegation by the Central Government of the powers exercisable by the Central Registrar to be exercised by the State Registrar is supported by the provisions of the 1942 Act.
[166B D] (c) The decree holder could, therefore prefer the claim on account of attachment before the liquidator who would make appropriate orders for payment of appropriate amount to the decree holder.
[166G H]
|
Civil Appeal No. 1330 of 1969 Appeal by special leave from the Award dated the 5th March, 1969 of that Fifth Industrial Tribunal.
West Bengal, in Case No. 26 of 1967.
V section Desai and R. B. Dater, for the appellant.
A. K. San and Sukumar Ghose, for respondent No. 1.
C The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal by special leave filed by Hindustan Aeronautics Ltd. from the award dated 8 3 1969 made by the Fifth Industrial Tribunal, West Bengal.
The Governor of West Bengal made the reference under section 10(1) of the Industrial Disputes Act, 1947 hereinafter called the Act, for adjudication on the following 5 issues: "(1) Allowance for the education of employees ' children, (2) House Building loan; (3) Free conveyance or conveyance allowance; (4) Revision of Lunch allowance; (5) Whether the following canteen employees should be made permanent" the names of 10 employees given.
The Tribunal granted no relief to the workmen on issues 2 and 3, allowed their claim in part in respect of issues 1, 4 and section Feeling aggrieved by the said award the appellant which is a Government company constituted under section 617 of the Companies Act, the shares of which are entirely owned by the Central Government, has filed this appeal.
The dispute relates to about 1,000 workmen working at the Barrackpore (West Bengal) branch of the Company 's repairing workshop represented by the Hindustan Aeronautics Workers ' Union, Barrackpore.
The competency of the Government of West Bengal to make the reference was challenged before the Tribunal as also here.
Mr. V. section Desai, learned counsel for the appellant, submitted that the appropriate government within the meaning of section 2(a) of the Act competent to make the reference was the Central Government, or, if a State Government, it was the Government of Karnataka where the Bangalore Divisional office of the Company is situated and under which works the Barrackpore branch.
Counsel stressed the point that the Central 233 Government owned the entire bundle of shares in the company.
It appoints and removes the Board of Directors as well as the Chairman and the Managing Director.
All matters of importance are reserved for the decision of the President of India and ultimately executed ill accordance with his directions.
The memorandum and articles of association of the company unmistakably point out the vital role and control of the Central Government in the matter of carrying on of the industry owned by the appellant.
Hence, counsel submitted that the industrial dispute in question concerned an industry which was carried on "under the authority of the Central Government" within the meaning of section 2(a) (i) of the Act and the Central Government was the only appropriate Government to make the reference under section 10.
The submission so made was identical to the one made before and repelled by this Court in the case of Heavy Engineering Mazdoor Union vs The State of Bihar & ors.(1) wherein it has been said at page 1,000) "It is true that besides the Central Government having contributed the entire share capital, extensive powers are conferred on it, including the power to give directions as to how the company should function, the power to appoint directors`and even the power to determine the wages and salaries payable by the company to its employees.
But these powers are derived from the company 's memorandum of association and the articles of association and not by reason of the company being the agent of the Central Government.
The question whether a corporation is an agent of the State must depend on the facts of each case.
Where a statute setting up a corporation so provides, such a corporation can easily be identified as the agent of the State as in Graham v Public Works commissioners (1901) 2 K.B. 781 where Phillimore, J. said that the Crown does in certain cases establish with the consent of Parliament certain officials or hodies who are to be treated as agents of the Crown even though they have the power of contracting as principals.
In the absence of a statutory provision, however.
a commercial corporation acting on its own balefully even though it is controlled wholly or partially by a Government department.
will be ordinarily presumed not to be a servant or agent of the State.
The fact that a minister appoints the members or directors of a corporation and he is entitled to call for information, to give directions which are binding on the directors and to supervise over the conduct of the business of the corporation does not render the corporation an agent of the Government.
(see the State Trading Corporation of India Ltd vs The Commercial Tax officer.
Visakhapatnam) (1964) 4 S.C.R. 99 at 188 per Shah J. and Tamlin vs Hannaford (1950)1 K.B. 18 at 25, 26.
Such an inference that the corporation is the agent of the Government may be drawn where it is performing in substance govern mental and not commercial functions.
London Country 234 Territorial and Auxiliary Forces Association vs Michale) Mr. Desai made a futile and unsubstantial attempt to distinguish the case of Heavy Engineering Mazdoor Union on the ground that was the case of a Government company carrying on an industry where Private Sector.
Undertakings were also operating It was not an industry, as in the instant case, which the Government alone was entitled to carry on to the exception of the private operators.
The distinction so made is of no consequence and does not affect the ratio of the case in the least We may also add that by amendments in the definition of appropriate Government" in section 2(a)(i) from time to time certain statutory corporations were incorporated in the definition to make the Central Government an appropriate Government in relation to the industry carried on by them.
But no public company even if the shares were exclusively owned by the Government was attempted to be roped in the said definition.
The other leg of the argument to challenge the competency of the West Bengal Government to make the reference is also fruitless.
It may be assumed that the Barrackpore branch was under the control of the Bangalore division of the company.
Yet it was a separate branch engaged in an industry of repairs of air crafts or the like at Barrackpore.
For the purpose of the Act and on the facts of this case the Barrackpore branch was an industry carried on by the company as a separate unit.
The workers were receiving their pay packages at Barrackpore and were under the control of the officers of the company stationed there.
If there was any disturbance of industrial peace at Barrackpore where a considerable number of workmen were working the appropriate government concerned in the maintenance of the industrial peace was the West Bengal Government.
The grievances of the workmen of Barrackpore were their own and the cause of action in relation to the industrial dispute in question arose there.
The reference.
therefore, for adjudication of such a dispute by the Governor of West Bengal was good and valid.
The facts of the case of M/s Lipton Limited and another vs Their employees(1) cited on behalf of the appellant are clearly distinguishable.
The ratio of that case was pressed into service in vain on behalf of the appellant.
The first demand on behalf of the workmen as respects the education allowance of the children was chiefly based upon the educational facilities said to be available to the workmen of Bangalore.
On behalf of the management it was pointed out that certain educational facilities were given to the employees living in the township of Bangalore out not in the city of Bangalore.
The workmen working at Barrackpore had also been provided with certain educational facilities.
We, however, do not propose to go into the merits of the rival contentions.
In our opinion the award directing the company 235 to pay Rs. 12/ per month to each employee to meet educational expenses of their children irrespective of the number of children a particular workman may have is beyond the scope of the issue referred for adjudication.
The Tribunal while discussing this issue felt constrained to think that strictly speaking claim for allowance for the education of employees ' children could not form a subject matter of industry.
dispute.
Really it was a matter to be taken into consideration at the time of fixing their wages.
In substance and in effect the directions given by the Tribunal is by way of revision of the pay structure of the Barrackpore employees.
No such reference was either asked for or made.
The Tribunal, therefore, had no jurisdiction to change the wage structure in the garb of allowing educational expenses for the employees ' children.
We may add that on behalf of the appellant it was stated before us that the latest revised wage structure has taken the matter of education of the employees ' children into consideration, while, Mr. A. K. San, appearing for the workmen, did not accept it to be so.
If necessary and advisable a proper industrial 1) dispute may be raised in that regard in future but the award as it stands cannot be upheld.
Apropos issue No. 4 it was stated on behalf of the appellant that all staff and not only the supervisory staff were getting Rs. 1.50 as lunch allowance under circumstances similar to the ones under which the employees belonging to the supervisory staff were getting Rs. 1.50 as lunch allowance.
The award of the tribunal, therefore, was unnecessary and superfluous in that regard.
If that be so, the award may be a surplusage as it is conceded on behalf of the appellant that under the existing service conditions every employee eligible to get a lunch allowance was getting at the rate of Rs. 1.50 .
The 10 workmen sought to be made permanent under issue No. 5 were casual workmen before 4 1 1967 within the meaning of clause (b) (d) of Standing order I headed "Classification of workmen".
They were appointed as temporary workmen within the meaning of clause (b)(b) of Standing order I on and from 4 1 1967.
The 'Tribunal 's direction to make them permanent on and from 4.1.1968 treating them as probationers appointed in permanent vacancies was not justified.
The Tribunal did not go into the question as to whether more permanent workmen were necessary to be appointed in the canteen over and above the existing permanent strength to justify the making of the of workmen as permanent in the canteen where they II were working.
No direction of creation of new posts was given.
the evidence as adduced before tic Tribunal and on the basis of the 236 findings recorded by it, it is plain that the 10 workmen or ally of them could be made permanent only against the permanent vacancies and not otherwise.
On behalf of the appellant it was stated before us that all of them have been made permanent against such vacancies, while, on behalf of the workmen the assertion was that none of them has been made permanent so far.
The management has no objection 13 in absorbing, the 10 workmen concerned in permanent vacancies as and when they occur if any of the has not been already absorbed.
The workmen want nothing more than this.
In the result the appeal is allowed and substantially the award of the Tribunal is set aside but subject to the clarifications and observations made above.
In the circumstances, there will be no order as to costs.
V.P.S. Appeal allowed.
| IN-Abs | The Government of West Bengal referred under section 10(1) of the , five issued for adjudication by the Industrial Tribunal.
The dispute was between the respondents workmen working at the Barkeeper branch of the appellant company 's workshop.
All the shares of the appellant are owned by the Central (Government.
and its Memorandum and Articles of Association point out the vital role and control of the Central Government in the matter et carrying on of the industry.
The Tribunal granted relief with respect to three issues.
In appeal to this Court, the competency of the Government to make the reference was challenged on the ground that the appropriate Government to make the reference was either the Central Government, because the industry was under the authority of the Central Government, or the State of Karnataka, since the works of the Barkeeper branch is under the Banglore Divisional office of the Company.
Rejecting the contention, but allowing the appeal to this Court on merits, ^ HELD: l (a) the submission regarding the competency of the Central Government is identical to the one made before this Court and repelled by this Court in the case of Heavy Engineering Mazdoor Union vs The Sate of Bihar [233C] (b) The fact that the Government company in the Heavy Engineering Mazdoor Union ease was carrying on an industry where Private Sector Undertakings were also operating, whereas, in the instant case, the Government alone was entitled to carry on to the exclusion of private operators.
would not make any difference.
[234B] (c) The definition of "appropriate Government" in section 2(a)(1) of the his been amended from time to time and certain statutory corporations were incorporated in the definition to make the Central Government the appropriate Government ' in relation to the industry carried on by them.
But no public company, even if the shares were exclusively owned by the Government, was brought within the definition.
[234C] (2) Assuming that the Barkeeper branch was under the control of the Bangalore Division of the Company, it was a separate branch working as a separate unit.
The workers were receiving their pay at Barkeeper, were under the control of the officers of the Company stationed there, their grievances were their own and the cause of action in relation to the industrial dispute arose there.
If there was any disturbance of industrial peace at Barrackpore, the appropriate Government concerned in its maintenance was the West Bengal Government, [234D F] M/s. Lipton Limited and another vs Their employees ; distinguished.
(3) On the first issue relating to allowance for the education l employees ' children the Tribunal directed the appellant to pay Rs. 12/ per month to each employees to meet the educational expenses of his children.
This direction is in elect a revision of the pay structure of the Barrackpore employees and the Tribunal had no jurisdiction to change the ware structure in the garb of allowing educational expenses, [235A C] 232 (4) On the issue regarding revision of lunch allowance, the award of the Tribunal was unnecessary because all members of the staff were getting such lunch allowance.
[235E F] (5) As regards the directions of the Tribunal that certain canteen employees should be made permanent.
it was not justified because those workman were casual workmen appointed temporarily.
The workmen could be made permanent only against permanent vacancies and not otherwise, and there was no direction by the Tribunal for the creation of any new post.
[235 H]
|
Civil Appeals Nos.
1213 1220.
1353, 1354, 1385 1386, 1387 1388, 1564, 1566 1567, 1579 1581.
1608, 1622, 1623 1624, 1626, 1630, 1647, 1764, 1862, 1432, 1433 & 1871 of 1974.
from the judgment and Order dated the 9th day of May 1974 of the Rajasthan High Court in W.P. Nos.
1497 1503 & 1505/1971.
221 A. K. Sen and B. D. Sharma, for the appellts (In C.A. Nos.
1213 1220 & 1862).
B. D. Sharma, for the appellants (In C.A. Nos. 1353, 1354 and 1647) .
Badri Das Sharma and section R. Srivastava, for the appellants (In C.A. Nos. 1623, 1432, 1433 and 1871).
D. V. Patel and section section Khanduja for the appellants (In C.A.No. 1385) .
S.S. Khanduja, for the appellants (In C.A. Nos.
1386 1388, 1530, 1564, 1566, 1567, 1579, 1580, 1581, 1606, 1622, 1624, 1626, 1630 & 1764).
L. M. Singhvi and section M. Jain, for the respondents (In all the appeals).
The Judgment of the Court was delivered by RAY C.J.
These appeals by certificate turn on the question as whether the excise license granted to the appellants rendered them lube to pay the stipulated lump sum mentioned in the licence.
These appeals relate to country liquor licences (a) for the years 1962 63 and 1963 64; (b) for the years 1967 68 and (c) for the years 1968 69, 1469 70 and 1970 71.
For the years 1962 63 and 1963 64 licences for sale of country liquor were given to contractors under a guaranteed system.
There was a total guaranteed amount.
Where the contractors failed to fulfil the guaranteed amount and there was a short fall,, demand notices were issued for the total short fall.
For the years 1967 68, 1968 69 and 1969 70 the liquor contractors obtained licences for sale of country liquor at a stipulated amount of license fee under the exclusive privilege system.
Where the contractors failed to pay the guaranteed amount there was a demand for a short fall.
The appellants who were the liquor contractors challenged the demand for short fall of the guaranteed amount.
The liquor contractors contended that what was being demanded as short fall amounted to levy of excise duty.
The State, on the other hand, contended that what was being realized from the liquor contractors was the guaranteed amount in the licence for the exclusive privilege of selling country liquor.
It may be stated here that there was no levy of excise duty prior to 6 March, 1964.
After the imposition of excise duty, the licences during the year 1967 68 and thereafter were issued for guaranteed sum under the exclusive privilege system.
The State contended that what was being demanded as short fall was the stipulated guaranteed amount which was excise revenue.
222 The licenses granted upto the year 1967 68 contained the following principal conditions (1) The licensee guarantees to the Governor of Rajasthan State that he, in the year concluding on. March . shall receive from the Government and sell such quantity of wine of which issue price shall not be less than Rs. (hereinafter known as the guaranteed price which are prevailing on . March. ) (2) The liquor shall be supplied to the licensee at the prevailing issue price, but the difference between such issue price and the issue price calculated at the prevailing rate on 31 March. shall not be included in the guarantee amount.
(3) The licensee will have to pay the shortfall, if any, between the price of the liquor obtained by him upto the end of any month at the issue price of 31 March . and the amount of guarantee multiplied by the months which have passed and divided by eleven at the godown by the tenth of the next month.
(4) In case of non payment, the licence will be cancelled and when cancelled this way, the above mentioned difference shall be recovered from security, cash deposits and remanant, if any, shall be recovered from the licensee and surety jointly and severally.
From 1968 69 the licences contained, inter alia, the following principal conditions: (1) The licensee will have to deposit Rs. as licence fee under section 24 of the Rajasthan Excise Act 1950 for his exclusive privilege as fixed by the Excise Commissioner.
From it the amount of excise duty will be adjusted towards the payment of the amount for the exclusive privilege but this adjustment will be limited to the payment of the amount for the exclusive privilege.
The licensee will have to deposit the aforesaid amount in 12 equal instalments and will have to deposit the monthly instalments by the 10th of the next month in Government Treasury.
The fees deposited by the license holder in that month in the form of the component of the issue price will be treated as excise duty under the instalment of the license fee.
(2) If the licence holder does not deposit the instalments for any two months as laid down in the aforesaid condition within the prescribed period then the officer issuing the license will have the right to realise the 223 amount of that instalment from the cash security of the licence holder or from his surety.
In addition to this, he will also have the right to cancel the licence of the licensee.
The appellants repeated the contention which had been advanced before the High Court that when the State Government wanted to enforce the guaranteed sum it amounted to recovery of excise duty by licence.
The appellants contended that the issue prices in the licence are exclusive of prices of container but inclusive of excise duty levied under the Government notification and therefore, enforcement of the guaranteed amount meant realisation of excise duty.
The appellants contended that unfulfilled guarantee amount which is sought to be recovered from the appellants is not balance of lump sum payment as price of exclusive privilege because the Government licence sanctioning guarantee system stated "that the licensee shall guarantee in respect of the year. income to the Government on account of the issue price of country liquor issued for sale at his shop during the year. " It was, therefore, said by the appellants that a promise to give income to the Government by purchasing a minimum quantity of liquor from the Government ware house was not equivalent to the payment o sum of money in consideration of grant of such privilege within the meaning of section 30 of the Rajasthan Excise Act.
The appellants contended that the amounts of money sought to he recovered from the licensee under the exclusive privilege system introduced from the year 1968 as well as under the guarantee system prevalent prior to the year 1968 are nothing but demands for excise duty on unlifted liquor.
The reasons advanced by the appellants are that under the exclusive privilege system of licensing introduced in 1968 the amount was agreed to be paid and deposited specifically towards excise duty given as a component of the issue price for the supply of country liquor and was agreed to be adjusted in the amount of the exclusive privilege.
The appellants also submitted that the word 'issue price ' was a composite name for 'cost price of liquor ' and 'excise duty leviable thereon ' and therefore, an agreement by the licensees under the guarantee system to pay 'issue price ' was tantamount to an agree not pay 'cost price ' and 'excise duty ' as distinct items though described as issue price.
The appellants contended that licences under both systems of Guarantee and Exclusive Privilege contain a term about the payment and adjustment of excise duty and under both systems 'excise duty ' is a distinct item agreed to be paid as such in terms of the licences.
The licences were granted under the Rajasthan Excise Act, 1950 (referred to as the Act.) Section 24 of the Act confers power on the Excise Commissioner to grant any person a license for the exclusive privilege.
224 (1) of manufacturing or supply by wholesale, or of both, or (2) of selling by wholesale, or by retail, or (3) of manufacturing or of supplying by wholesale, or of both, and of selling by retail, any country liquor or intoxicating drug within any local area of those parts of the State of Rajasthan to which the Act extends.
Section 28 of the Act provides that an excise duty or a countervailing duty, as the case may be, at such rate or rates as the State Government shall direct, may be imposed either generally or for any specified area, on any excisable article imported or exported, or transported or manufactured, cultivated or collected under any licence granted under the Act, or manufactured in any distillery, pot still or brewery established or licensed under the Act.
The Explanation to section 28 provides that duty may be imposed under this section at different rates according to the places to which any excisable article or intoxicating drug is to be removed for consumption or according to the varying strength and quality of such article.
Section 29 of the Act provides that subject to such rules regulating the time, place and manner of payment, as the State Government may prescribe such duty may be levied in such one or more ways as the State Government may by notification in the official Gazette direct.
Section 30 of the Act provides that instead of or in addition to any duty leviable under Chapter V which contains Sections 28, 29 and L 30), the Excise Commissioner may accept payment of a sum in consideration of` the grant of the licence for exclusive privilege under section The Rajasthan Excise Rules, 1956 provide in rule 67 I, 67 J, 67 K and 67 L the different forms of procedure for grant of exclusive privilege Rule 67 I provides that licence for exclusive privilege of selling by retail of country liquor within any local area under section 24 of the Act may be granted on condition of payment of such lump sum instead of or in addition to excise duty, as may be determined by the Excise Commissioner and subject to such other terms and conditions as may be laid down by him.
Rule 67 J provides that a licence under rule 67 I may be granted by way of allotment by negotiation in accordance with the procedure laid down in sub rules 2 to 4 of rule 67 J. Rule 67 K provides that subject to such general or special directions as may be issued by the Excise Commissioner from time to time, the District Excise officer may put the licence under Rule 67 I to action for any area.
In such an auction the Presiding officer shall call upon for lump sum payment for exclusive privilege payable instead of or in addition to excise duty as may be directed by the Excise Commissioner.
Rule 67 L provides that the Excise Commissioner may at his discretion grant licence under rule 67 I for any area by negotiation with any third party.
There is a proviso that highest 225 bidder or highest tenderer if any shall be given a chance to make higher offer unless he has been debarred from holding licence or has rejected the offer under Rule 67(2).
The license fee stipulated to be paid by the appellants is the price or consideration or rental which the Government charges from the licensees for parting with its privilege in stipulated lump sum payment and is a normal incident of a trading or business transaction.
This Court in the recent decision in Nashirwar and Ors.
vs State of Madhya Pradesh and ors.(1) and in the unreported decision Hari Shanker vs Deputy Excise and Taxation Commissioner(2) held that the State has exclusive right to manufacture and sell liquor and to sell the said right in order to raise revenue.
The nature of the trade is such that the State confers the right to vend liquor by farming out either by auction or by private treaty.
Rental is the consideration for the privilege granted by the Government for manufacturing or vending liquor.
Rental is neither a tax nor an excise duty.
Rental is the consideration for the agreement for grant of privilege by the Government.
The licences in the present case are contracts between the parties.
The licensees voluntarily accepted the contracts.
They fully exploited to their advantage the contracts to the exclusion of others.
The High Court rightly said that it was not open to the appellants to resile from the contracts on the ground that the terms of payment were onerous.
The reasons given by the High Court were that the licensees accepted the licence by excluding their competitors and it would not be open to the licences to challenge the terms either on the ground of inconvenient consequence of terms or of harshness of terms.
The legal position is also correctly stated in Madhavan vs Assistant Excise Commissioner, Palghat and ors.(3) where it is said that the rental charged by the State for licences is the consideration for the privilege of vending liquor.
The licenses in the present appeals voluntarily contracted to pay the guaranteed sum of the stipulated lump sum for the exclusive privilege to vend liquor.
In the Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act 1938 case,(4) it has been said that in several Acts by which excise duties are imposed it is provided that duty is able articles from the place of manufacture or production and there is no provision for the imposition of an excise duty on retail sales.
Many Acts provide for lump sum payments in certain cases by manufacturers and retailers, which may be described payments either for privilege or as consideration for the temporary grant of a monopoly, but these are clearly not excise duties or anything like them.
(Sec at pp.
53 and 54).
This Court in M/s. Guruswamy & Co. etc.
vs State of Mysore & ors.(5) considered the question whether the payment of shop rent 226 for the exclusive privilege of sale of liquor in a specified shop is an excise duty.
In Guruswami 's case (supra) the petitioners paid shop rent or the 'kist ' for a group of toddy shops amounting to Rs. 3,61,116 a month.
This 'kist ' amount was determined at the auction sale of exclusive privilege of vending toddy in the shops.
The notification for auction mentioned rates of duty, price, etcetera on the several kinds of excisable articles.
The notification also mentioned that health cess at a certain rate shall also be payable on the shop rent and tree tax on toddy and other duties of excise levied.
The petitioners challenged the authority of the State to levy and collect health cess.
The main ground was that the health cess was hl reality a tax and not a mere cess.
This Court said that the true character or nature of levy in Guruswami 's case (supra) was that it was a payment for the exclusive privilege of selling toddy.
The payment had no close relation to the production or manufacture of toddy.
The only relation the levy had to production or manufacture was that it enabled the licensee to sell it.
The excise duty is paid on toddy in the form of tree tax.
He who keeps toddy pays tree tax.
The privilege of selling toddy was auctioned well before the goods came into existence.
In view of these characteristics the health cess was found not to be excise duty.
The taxable event in regard to the health cess was not the manufacture or production of goods but the acceptance of the licence to sell the goods.
A Bench decision of this Court in State of Orissa and ors vs Harinarayan Jaiswal and ors.
(1) considered the grant of exclusive privilege of manufacture and sale of country liquor by licensees.
This Court held that the power given to the Government to sell the exclusive privilege in such manner as it thinks fit is a very wide power.
In Coverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer and ors.(2) this Court held that an 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 ' State revenues.
The power of the Government to sell the exclusive privilege is by public auction or by negotiation.
The fact that the 1. price fetched by the sale of country liquor is an excise revenue does not change the nature of the right.
The sale is a mode of raising revenue.
The decisions of this Court establish that the lump sum amount voluntarily agreed to by the appellants to pay to the State are not levies of excise duty but are in the nature of lease money or rental or lump sum amount for the exclusive privilege of retail sales granted by the States to the appellants.
There is no levy of excise duty in enforcing the payment of the guaranteed sum or the stipulated lump sum mentioned in the licences, for these reasons.
First, the licenses were granted to the appellants after offer and acceptance or by accepting their tenders or auction bid.
I 227 The appellants stipulated to pay lump sum amounts as the price for the exclusive privilege of vending country liquor.
The appellants agreed to pay what they considered to be equivalent to the value of the right.
Second, the stipulated payment has no relation to the production or manufacture of country liquor except hat it enables the licensee to sell it.
The country liquor is produced by the distilleries.
Under section 28 of the Act and under the relevant duty notifications he excise levy is on the manufacture and not on the sale or retail of liquor.
Under the duty notifications no excise duty is levied or collected from the liquor contractors who are liable only to pay the price of liquor.
The taxable event is not the sale of liquor to the contractors but the manufacture of liquor.
What the liquor contractors pay in consideration of the license is a payment for the exclusive privilege for selling country liquor.
The liability for excise is on the distillery and the liquor contractors are not concerned with it.
Before 1965 there was no excise duty.
The appellants were required to pay the guaranteed amount.
After the imposition of excise duty the position is not altered because the privilege of selling is granted by section or by offer and acceptance before the goods came into existence.
Excise contracts are settled in the preceding year.
Third, the stipulated 1) amounts payable by the appellants have relation only to what the appellants foresaw they could recoup by the sale of country liquor from the liquor shops licensed to them.
There are several varieties of country liquor and rates of excise levy on these varieties are different.
The appellants are not bound to take any particular quaintly or any particular quality of any variety.
Without reference to any quantity or quality, it is impossible to predicate the alleged levy of excise duty.
Before imposition of excise duty in 1965, the issue price did not have even a notional component of excise duty under Issue Price Rules.
Therefore, no excise duty could be attributed to the contractual amounts payable by the appellants.
The references to excise duty in licences under the guarantee system or exclusive privilege system prevalent subsequent to the year 1965 are only for the purposes of adjustment or concession as a unit of measure.
It is not all excise duty currently imposed or levied in the year of the licence that is being collected with regard to undrawn liquor because the adjustment of issue price is with reference to the issue price prevailing in the preceding year.
Rule 67 A of the Rajasthan Excise Rules, 1966 defines value as the price current on the 1st January preceding the financial ye`ar to which the guarantee relates.
Under Rule 67 A licences for retail shops of country liquor under the guarantee system may be granted to persons guaranteeing to draw from a Government warehouse and sell in a financial year or part thereof, country liquor of a specified value, called the ` 'amount of guarantee. ' The explanation to Rule 67 A is that 'value ' for the purpose of that rule shall be the total issue price at Government warehouse calculated at the rate of such price current on.
the I first day of January preceding the financial year to which the guarantee relates.
The licences under the guarantee system are granted either by inviting tenders or by auction or by negotiation.
The amount of 228 guarantee under Rule 67 A be (a) where a licence is granted by invitng tenders the amount of the tender accepted for the grant of the licence; (b) where a licence is granted by auction the amount of the bid accepted for the grant of the licence; and (c) where a Licence is granted by auction or negotiation, the amount of guarantee shall be the amount determined by the Excise Commissioner and accepted by the licensee.
The lump sum amount stipulated under the agreement is not to be equated with issue price.
The issue price is payable only when the contractors take delivery of a particular quantity of specified value of country liquor.
The issue price relates only to liquor drawn by the contractors and does not pertain to undrawn liquor.
No excise duty is or can be collected on undrawn liquor.
The issue price is the price at which country liquor is sold to the liquor contractors.
So far as the liquor contractors are concerned, they pay the price of the liquor even though the price may include the component of excise duty in respect of which they have no direct liability.
Illustrations may be found in case of a person buying a match box or a motor car or a refrigerator.
When the purchaser pays the price of match box, or a motor car or a refrigerator the price includes excise duty Levied and collected on the manufacture of these goods.
The price of goods necessarily includes different components but the price a buyer pays is different from duties and taxes paid or payable by the manufacturers.
The incidence of all the components of cost and taxes is inevitably passed on to the consumer.
What the consumer pays is the price of the goods and not the antecedent components as such.
The licences after stipulating an agreed sum of money which is payable by The licences under the licences provide a scheme of remission.
The liquor contractor is given a remission in the matter of his obligation to pay the stipulated amount to the extent of the excise duty component of The issue price paid by him.
The excise duty component of the issue price is, therefore, only a measure of the quantum or extent of the concession or the remission to be given to the liquor contractor.
The concession is not what is paid by the contractor to the State but it is a remission or a reduction in the stipulated amount for exclusive privilege allowed by the State to the contractor.
The lump sum amount payable for the exclusive privilege is not to be confused with the issue price.
In essence what is sought to be recovered from the liquor contractors is the shortfall occasioned on account of failure on the part of liquor contractor to fulfil the terms of licence.
The contractual obligation of the appellants to pay the stipulated amounts is Not dependent on the quantum of liquor sold by them which is relevant only for the purpose of remission to be earned by them under the licence.
No excise duty is charged or chargeable on undrawn liquor under the licence.
To suggest that the licence obliges the contractors to pay excise duty on undrawn liquor is totally mis 229 reading the conditions of the licence.
The excise duty is collected only in relation to the quantity and quality of the country liquor which is drawn.
No excise duty can be predicated in respect of undrawn liquor.
Adjustment by way of reduction in the contractual liability of the appellants to the extent of a specific and quantified portion of the issue price is purely a measure of concession or remission and is a method of calculation.
The question of adjustment arises only when liquor is drawn, otherwise the formula of remission does not come into the picture at all.
The appellants relied on the decision of this Court in Bimal Chandra Banerjee vs State of Madhya Pradesh(1) in support of the contention that the attempt on the part of the State to enforce the full guaranteed amount or stipulated sum is collecting excise duty.
In Bimal Chandra Banerjee 's case (supra) a levy of excise duty on undrawn liquor was imposed in terms by the State Government by a notification amending the Rules and by an alteration in the conditions of the license.
It was provided that certain minimum quantity of liquor would have to be withdrawn by each contractor who was to be liable to make good every month the deficit monthly average of the total minimum duty on or before the 10th of each month following the months to which the deficit duty relates.
The decision there was that in imposing the excise duty on undrawn liquor by the impugned notification, the State Government was exercising powers which it did not possess.
In the present case, the State Government has not imposed any excise duty on the licensee.
On the contrary, the licence only takes into account the excise duty component of the issue price for the purposes of giving a concession or remission to the contractors.
In Bimal Chandra Banerjee 's case (supra), the impugned notification was assailed on the ground that it exceeded the Legislative competence of the State.
No such question arises here.
The scheme or remission in the present case is that if the liquor contractor purchased liquor of the value, the excise duty whereof equalled the price of the exclusive privilege, the; liquor con tractor is to be given credit therefor.
The agreements give the liquor contractors an exclusive privilege to sell country liquor in a specified area for the period fixed for a stipulated sum of money for enjoying the privilege.
If the contractors do not sell any liquor they arc yet bound to pay the stipulated sum.
IF they sell liquor they are given the benefit of remission in the price of the exclusive privilege.
The measure for this remission is the excise duty leviable to the extent that the liquor contractors can neutralise the entire amount of exclusive privilege in the excise duty payable by them.
If the contractors fail to lift adequate quantity of liquor and thereby fail in neutralising the entire price of exclusive privilege the contractors are not called upon to pay excise duty.
For these reasons the contentions of the appellants fail.
The ap peals arc dismissed save what follows hereinafter in Civil Appeal No. 230 1433 of 1974 and Civil Appal No. 1871 of 1974.
Parties to pay and bear their own costs as they did in the High Court.
In Civil Appeal No. 1433 of 1974 there is a short supply of liquor in respect of the year 1963 64.
In Civil Appeal No. 1871 of 1974 there is a short supply of liquor in respect of the year 1967 68.
In these appeals for these two years, the order will be the same as order dated 29 August, 1974 in Civil Appeals No. l 170, 1171 and 117 of 1974, with the modification that if there has been any interim stay in these matters, the interim stay will stand vacated.
V.M.K. Appeals dismissed.
| IN-Abs | The licenses for sale of country liquor were granted under the Rajasthan Excise Act, 1950.
For the years 1962 63 and 1963 64 licenses for sale of country liquor were given to contractors under a guaranteed system.
There was a total Guarantee amount.
Where the contractors failed to fulfil the guaranteed amount and there was a short fall, demand notices were issued for the total short fall.
There was no levy of excise duty prior to 6 March, 1964.
For the years 1967 68, 1968 69 and 1969 70 the liquor contractors obtained licences for sale of country liquor at a specified amount of licence fee under the exclusive privilege system.
Where the contractors failed to pay the guaranteed amount there was a demand for a shortfall.
The appellants who were the liquor contractors challenged the demand for short fall of the guaranteed amount by way of writ petitions in the High Court.
Their contention was that what was being demanded as short fall amounted to levy of excise duty. 'the State on the other hand, contended that what was being realised from the liquor contractors was the guaranteed amount in the licence for the exclusive privilege of selling country liquor.
The State further contended that what was being demanded for the year 1967 68 and thereafter as short fall was the stipulate guaranteed amount which was excise revenue.
The High Court accepted the contentions of the State and dismissed the writ petitions.
These appeals have been preferred on the basis of the certificate granted by the High Court.
It was contended for the appellants: (i) The issue prices in the licence are exclusive of prices of container but inclusive of excise duty levied under the.
Government notification and therefore, enforcement of the guaranteed amount meant realisation of excise duty.
(ii) A promise to give income to the Government by purchasing a. minimum quantity of liquor from the Government were house was not equivalent to the Payment of sum of money in consideration of grant of such privilege within the meaning of section 30 of the Act; (iii) 'The amounts of money sought to be recovered from the licensee under the exclusive privilege system introduced from the year 1968 as well as under the guarantee system.
prevalent prior to the year 1968 are nothing but demands for excise duty on uplifted liquor; (iv) 'the word 'issue price ' occurring in the conditions attached to the licences granted upto the year.
1967 68 was a composite name for 'cost price of liquor ' and 'excise duty leviable thereon ' and therefore an agreement by the licensees under the guarantee system to pay 'issue price ' was tantamount to an agreement to pay 'cost price ' and 'excise duty ' as distinct items though described as issue price; (v) 'the licences under both system of Guarantee and Exclusive Privilege contain a term about the payment and adjustment of excise duty and under both systems 'excise duty ' ii a distinct item agreed to be paid as such in terms of the licences.
Rejecting the contentions and dismissing the appeals (except C.A. No. 1433.
of 1974 and C.A. No. 1871 of 1974).
^ HELD: (1) Provisions of section 24, 28, 29 and 30 of the Act and rules 67 A, 67 I, 67 S, 67 K and 67 L of Rajasthan Excise Rules, 1956, clearly established that the licence fee stipulated to be paid by the appellants is the price or consideration or rental which the Government charges from the licensees for parting with its privilege in stipulated lump sum payment and is a normal incident of trading or business transaction.
[225A B] 220 Nashirwar and Ors.
vs State of Madhya Pradesh and ors.
[1975] Vol.
I S.C.C. 29, Hari Shanker V. Deputy Excise and Taxation Commissioner decided on 21 January, ]975 in Civil Appeal No. 365 of 1969, Madhavan V. Assistant Excise Commissioner.
Palghat and ors.s.
Kerala 71, Central Province Barer sale of Motor Spirit and Lubricants Taxatation Act 1938.
case reported in 11939] F.C.R. 18, M/s. Guruswaamy & Co. etc.
vs State of Mysore & ors,. , State of Orissa and ors.
vs Harinarayan Jaswal and ors.
[1972]3 S.C.R. 784 and Coverjee B. Bharuchua vs The Excise Commissioner and the Chief Commissioner, Ajmer.
and ors.
; , referred to.
(2) The licences in the present case are contracts between the parties.
The licensees voluntary accepted the contracts.
They fully exploited to their advantage the contracts to the exclusion of others.
The High Court rightly said that it was not open to the appellants to resile from the contracts on the ground that the terms of payment were onerous.
[225D] (3) There is no levy.
Of excise duty in enforcing the payment of the guaranteed sum or the stipulated sum mentioned in the licenses.
Because, (1) The licences were granted to the appellants after offer and acceptance or by accepting their lenders or auction bid.
The appellants stipulated to pay lump sum amount.
as the price for the exclusive privilege of vending country liquor.
they agreed to pay that they considered to be equivalent of the right; (ii) The liability for excise is on the distillery and the liquor contractors are not concerned with it.
Before: 1965; there was no excise duty.
After the imposition of excise duly: the position is not altered because the privilege of selling is granted 'by auction or by.
Offer and acceptance before the goods came into existence.
and (iii) 'The stipulation, amounts payable by the appellants have relation only to what they foresaw they could recoup by the sale of country liquor from the liquor shops licensed to them.
There are several varieties of country liquor and rates of excise levy on these varieties are different.
The appellants are not bound to take any particular quantity or any particular quality of any variety.
Without reference to any quantity or quality, it is impossible to predicate the alleged levy of excise duty.
[226G 227 E] (4) The lump sum amount stipulated under the agreement is not to 'be equated with issue price.
The issue price is payable only when the contractors take delivery of a particular quantity of specified value of country liquor.
the issue price relates only to liquor drawn by the contractors and does not pertain to undrawn liquor.
No excise duty is or can be collected on undrawn liquor.
The issue price is the price at which country liquor is sold to the liquor contractors.
So far as the liquor contractors are concerned, they pay the price of the liquor even though the price may include the component of excise duty in respect of which they have no direct liability.
[228B D] (5) In the present case, the State Government has not imposed any excise duty On the licensee.
On the contrary, the license only takes into account the excise duty component of the issue price for the purpose of giving a concession or remission to the contractors.
The scheme of remission is that is the liquor contractor purchased liquor of the value, the excise duty whereof equalled the price of the exclusive privilege, the liquor contractor is to be given credit therefore.
The question.
Of adjustment arises only when liquor is drawn, otherwise the formula of remission does not come into the picture at all.
In essence what is sought to be recovered from the liquor contractor is the shortfall occasioned on account of failure on the part of liquor contractor to fulfill the terms of license.
[228G;229BC, F H] Bimal Chandra Banerjee vs State of Madhya Pradesh ; , referred to.
|
Civil Appeal No. 795 of 1975.
Appeal by special leave from the Judgment and order dated the 7th December, 1973 of the Allahabad High Court (Lucknow Bench) in special appeal No. 189 of 1969.
B. Sen, B. P. Maheshwari and Suresh Sethi, for the appellant.
252 J. P. Goyal, D. P. Mukherjee and Reghunath Singh, for respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal by special leave.
It is said that by a notification dated 27 4 1961 issued under section 3(b) of the U P Industrial Disputes Act U.P. Act XXVIII of 1947 herein after called the Act, the recommendations of the first Sugar Wage Board were directed to come in force with effect from November 1, 1960.
Certain Sugar Mills including the appellants are said to have refused to implement the provisions of the notification dated 27 4 1961.
This gave rise to an industrial dispute.
Eventually the State Government of Uttar Pradesh by its order dated 22 9 1966 refused to make a reference for adjudication of the dispute under section 4K of the Act.
Respondent No. 1 filed a writ application in the Allahabad High Court under Article 226 of the Constitution of India asking for a writ of certiorari to quash the order of the government dated 22 6 1966 and a writ of mandamus directing them to make a reference.
A learned single Judge of the High Court dismissed the writ application.
But the same was allowed in a Special Appeal by a Bench of the High Court.
The two appellants approached this Court 1 for grant of special leave.
It was granted "limited to the question as to whether the High Court was justified in giving directions to respondents 1 and 2 to refer the dispute of the workmen for adjudication under section 4K or the U.P.
" In the Special Appeal the High Court has taken the view following the decision of this Court in State of Uttar Pradesh and others vs Basti Sugar Mills Co. Ltd.(1) that when action was taken under section 3(b) of the Act it was obligatory for the State Government to make a reference under section 4K for adjudication of the Industrial dispute raised in relation to the said action.
The High Court on a consideration of the entire facts and circumstances of the case allowed the writ petition and quashed the order the State Government dated 22 6 1966 by grant of a writ of certiorari.
In this appeal since the special leave was granted on a limited question we are not called upon to interfere with the said portion of the order of the High Court.
But it further directed the State Government and the Labour Commissioner to refer the dispute for adjudication in exercise of their power under section 4K of the Act.
It seems to have been so done on the view that it was obligatory for be State Government to do so 11 after the issuance of the notification under section 3(b) of the Act.
In our opinion this was not correct.
The decision of this Court in the case of Basti Sugar Mills (supra) was given with reference to clause (d) of section 3 of the Act as it stood prior to the amendment made by U.P. Act I of 1957.
By the said amending Act, clause (d) was dropped and substituted by another clause (d) with which we are not concerned and the provision 253 of making a reference was made in section 4K. Section 4K of the Act is in pari materia with section 10(1) of the Industrial disputes Act, 1947 central Act XIV of 1947.
It has been pointed out by this Court in the case of Bombay Union of Journalists & Ors.
vs The State of Bombay & Anr.(1) that the power of the Government under section 10(1) of the Central Act is discretionary and it is open to the Government under certain circumstances by taking into consideration the relevant factors to refuse to make a reference.
Section 4K of the Act divorced from the context and set up of section 3 stands on the same footing.
Clause (d) of section 3 as it stood in the Act before 1957 was so interwoven and inter connected with the exercise of the power in clause (b) that it led this Court to opine that a writ mandamus could be issued directing the State Government to make a reference under section 3(d) of the Act as it stood before the 1957 amendment.
In our judgment, however, the position has changed after the amendment brought about in the year 1957.
In the judgment of this Court delivered a few days ago, namely M/s Mahabir Jute Mills ltd.
Gorakhpore vs Shri Shibban Lal Saxena & Ors.(2) it has been held on a consideration of the provisions low contained in section 4K of the Act that after quashing the order of the Government refusing to make a reference the High Court could ask the Government to reconsider the matter but it could not give peremptory directions to make a reference.
We may, however, take note of a sentence occurring in the judgment of this Court in the case of Bombay Union of Journalists & Ors.(3) which reads thus: "If the appropriate Government refuses to make a reference for irrelevant considerations, or on extraneous grounds, or acts malafide, that, of course, would be another matter; in such a case a party would be entitled to move the High Court for a writ of mandamus.
" We think what was meant to be conveyed by the sentence aforesaid was that the party would be entitled to move the High Court for interfering with the order of the Government and not necessarily for the issuance of a writ of mandamus to direct the Government to make reference.
The mandamus would be to reconsider the matter.
It does not seem to be quite reasonable to take the view that after the refusal of the Government to make a reference is quashed a writ of mandamus to make a reference must necessarily follow.
The matter has still to be left for the exercise of the power by the Government on relevant considerations in the light of the judgment quashing the order of refusal.
For the reasons stated above we allow this appeal only to the extent that the order of the High Court made in the Special Appeal directing the Government of U.P. and the Labour Commissioner to 254 make a reference under section 4K of the Act is not sustainable and is set aside.
We were informed at the bar that two references have already been made in pursuance of the said direction.
It is plain that the said order made cannot hold good when we have set aside the order of the High Court giving the direction in pursuance of which the references have been made.
It will, however, be open to the State Government to reconsider the matter in the light of the judgment of the High Court and within the ambit of well settled principles of law for exercise of their power of reference and to take such decision in the matter as they may think fit and proper to take in accordance with law.
We shall make no order as to costs.
V.P.S. Appeal allowed.
| IN-Abs | Under section 3(b) of the U.P. , the State Government issued a notification directing that the recommendations of the First Sugar Wage Board were to come into force from November 1, 1960.
The appellant refused to implement the provisions of the notification.
There was, consequently in industrial dispute but the State Government passed an order refusing to refer the dispute for adjudication under section 4K of the Act.
In a writ petition filed by the respondent, the High Court, following the decision of this Court in State of U.P. vs Basti Sugar Mills Co. Ltd. ; , issued a writ of certiorari quashing the order of the State Government refusing to make a reference, and also, issued a writ of mandamus directing the State Government and the Labour Commissioner to refer the dispute for, adjudication under section 4 K.
Allowing the appeal to his Court against the issue of the writ of mandamus: ^ HELD: (1) 'The power of the Government under section 10 of the (Central Act) is discretionary and it is open to the Government, taking into consideration relevant factors, to refuse to make a reference that is, the High Court may, after quashing the order of the Government refuse to make a reference, ask the Government to re consider the matter but it could not give peremptory directions to make a reference.
Section 4 K of the U.P. Act, divorced from the context and setup of s.3 is in pari Materia with and stands on the same footing, as section 10(1) of the Central Act.
[253B] M/s Mahabir Jute Mills Ltd. Gorakhpore vs Shri Shibban Lal Saxena & Ors.
Civil Appeal No. 781 of 1973, followed.
(2) Section 3(d), as it stood in the U.P. Act before 1957, was so interwoven and inter connected with the exercise of the power in cl.
(b) that it led this Court in the Basti Sugar Mills case to opine that a writ of mandamus could be issued directing the State Government to make a reference.
The position, however, has changed after the amendments brought about in 1957 [253B C) (3) The observation that, if the Government refuses to make a reference on the basis of irrelevant considerations, the party may move the High Court for a writ of mandamus in the Bombay Union of Journalists case ; 35 only means that a writ of mandamus could be issued to the Government to re consider the matter.
[253F] (4) The reference of the dispute made by the Government in pursuance of the direction of the High Court cannot hold good, but the State Government may reconsider the matter and exercise its discretion either to refer the dispute or not within the ambit of well settled principles of law.
[254A B]
|
Civil Appeals Nos.
493 495 of 1 974 Appeals by special leave from the judgment and order dated the 9th August, 1973 of the Madras High Court in Civil Revision Petition Nos.
1470 to 1472 of 1973.
K. section Ramamurthi, T. N. Vallinayagam, R. N. Nath and V. Maya Krishnan, for the appellant.
M. Natesan, K. Jayaram and R. Chandrasekhar, for the respondent.
The Judgment of the Court was delivered by GOSWAMI, J.
These appeals by special leave are directed against the order of the High Court of Madras in three Civil Revision Petitions under section 25 of the Madras Buildings (Lease and Rent Control) briefly the (Act) whereby the High Court refused to interfere A with the orders of the appellate authority under the Act holding that the appellant (hereinafter to be described as the landlord) has no right to evict the respondents (hereinafter to be described as the tenants) from the premises in question on the ground of demolition and reconstruction.
The tenancy under the landlord is admitted by the tenants there is also no question with regard to validity of the notice of eviction.
The only questions in controversy in these appeals are whether the landlord in this case, who is the holder of life interest in the property, is entitled to evict the tenants under section 14(1) (b) of the Act on the ground that the building is bona fide required by the landlord for demolition and for reconstruction.
The second question raised` in one of the appeals is whether a single petition is maintainable to evict the tenants from two different tenancies one for residential purpose and the other for non residential purpose.
The latter point has been held by the High Court in favour of the landlord but the tenants are raising it in seeking to support the earlier order of the appellate authority.
The premises are situated at Anna Pinai Street, Madras.
Originally the premises belonged to late section Manicka Chettyar, father of section M. Gopalakrislina, the present landlord.
By virtue of a Deed of Settlement executed by section Manicka Chettyar on May 9, 1934, possession of the premises was delivered to his wife, Manoranjithammal, as trustee and guardian an of his three minor children, section M. Gopalakrishna then aged 13` years, and his two minor daughters, Indrani Ammal and Palani Ammal.
We are not concerned with the various directions in the Deed of Settlement except to note the admitted position that Manoranjithammal was allowed to enjoy the rents and profits of the property for her life time subject to certain charges mentioned in the Deed.
After the life time of the settlor 's wife, his son, section M. Gopalakrishna (appellant) shall enjoy the rents and profits of the said property. for his life time" subject lo certain charges on account of his two sisters.
It is further mentioned in the Deed that after the life time of Gopalakrishna, his son and son 's heir of any predeceased son living at that time shall enjoy the property subject to identical charges as absolute owners, with right of sale, gift, etc.
There are further directions in case of other contingencies with which we are not concerned.
We may, however, note that section M. Gopalakrishna is issueless.
From the above terms of the Settlement it is contended by the tenants that the landlord has only a life interest in the premises in question and that it is inherent in such a life interest that it is not permissible for the landlord to invoke section 14(1) (b) as grounds for eviction of the: tenants by demolition of the property for the purpose of reconstruction.
It is emphasised that since the interest of the remainder man may be prejudiced? the landlord with a life interest in the premises cannot evict the tenants on these grounds.
The Rent, Controller held that the requirement of the landlords bona fide and ordered for eviction of the tenants.
The Court of Small Causes, 275 which is the appellate authority, allowed the appeals lodged by the tenants against the orders of eviction and set aside the orders of eviction.
As noticed earlier the High Court refused to interfere in revision.
The High Court agreed with the! view of the appellate authority that the landlord had no right to ask for eviction of the respondents on the ground of demolition and reconstruction, he admittedly having only a life interest or right to enjoy the property for his life.
The appellant sub mits that this view is not legally tenable.
Before we proceed to consider the point in controversy, we may read section 14(1)(b): 14.
"Recovery of possession by landlord for repairs or for reconstruction. (1) Notwithstandig anything contained in this Act, but subject to the provisions of section 12 and 13, on an application made by a landlord the Controller shall, if he is satisfied (b) that the building is bona fide required by the landlord for the immediate purpose of demolishing it and such demolition is to be made for the purpose of erecting a new building on the site of the building sought to be demolished, pass an order directing the tenant to deliver possession of the building to the landlord before a specified date".
The expression landlord is defined under section 2(6) as follows: " 'Landlord ' includes the person who is receiving or is entitled to receive the rent of a building, whether on his own ac count or on behalf of another or on behalf of himself and others or as an agent, trustee, executor, administrator, receiver or guardian or who would so receive the rent or be entitled to receive the rent, if the building were let to a tenant".
x x x x This inclusive definition o landlord would clearly take in its sweep the present landlord who holds a life interest in the premises and who admittedly has been on his own right under the Deed of Settlement as a trustee receiving rents of the premises from the tenants.
We are not even concerned with the question as has been sought to be established in the case by proving that there is no possibility or any objection from the daughters of the settlor or from any other remainder man.
It is sufficient to observe that the rights between section M. Gopalakrishna and the remainder man with regard to the terms of the Deed of Settlement win have to be worked out in appropriate proceedings, if necessary and the general law win govern the matter if any occasion arises.
On the other hand, the Act with which we are concerned is a self contained and complete code for regulation of the rights between landlord and tenants as defined in the Act (See M/s Raval and Co. vs K. G. 276 Ramachandra and others (1).
Thus a controversy that may arise between a landlord and others, who are not his tenants under the Act, is outside the ken of this Act.
Even a possible dispute, imaginary or real, between the landlord and the remainder man cannot affect adjudication of the claim of the landlord against his tenants under the provisions of the Act.
It win also not affect the efficacy of the nature of the plea of bona fide on the part of the landlord, if otherwise so.
Such questions as are raised in this appeal by the tenants are, therefore, irrelevant in a litigation between the landlord and tenants when a suit for eviction is instituted by the former on any of the grounds available to him under the Act.
It is clear that when the objection on the score of the landlord being a holder of life interest and hence incapable of invoking section 14 (1) (b) fails the suit must be decreed.
lt was strenuously submitted by Mr. Natesan that a tenant with a life interest cannot be allowed to demolish the property in order to reconstruct it as that action would, per se be not bona fide.
We are unable to accede to this submission.
A landlord has every right to demolish his property in order to build a new structure on the site with view to improve his business or to get better returns on his investment.
Such a step per se, cannot be characterised as mala fide on the part of the landlord.
There is therefore.
no merit in this contention.
Mr. Natesan faintly submitted that a single petition with regard to two different tenancies, although in the same premises, one for residential purpose and the other for non residential purpose, is not maintainable.
We do not find any substance in such a contention when the tenancy is one.
In the result the appeals are allowed and the order of the High Court as well as that of the appellate authority are set aside.
The order of the Controller allowing eviction of the tenants stands restored.
We win, however, allow time to the tenants upto 31st January, 1976, to vacate the premises on the distinct condition that they shall submit affidavits in this Court undertaking to vacate the premises by the aforesaid date within two weeks from to day.
The appellant win be entitled to his costs in these appeals.
One set of costs P.H.P. Appeal allowed.
| IN-Abs | The appellant landlord is a holder of life interest in the property in question He filed a suit against the tenant for eviction on the grounds of bona fide requirement by him for demolition and reconstruction.
The Rent Controller held the requirement of the landlord bona fide and ordered eviction of the tenant.
The appellant filed one petition for evicting the tenants in respect of two different tenancies, one for residential purpose and the other for non residential purpose.
The appellate Authority under the Madras Buildings (Lease and Rent Control) Act, 1960 dismissed the appellant 's application for eviction on the ground that a landlord having a life interest cannot seek eviction for bona fide requirement for demolition and reconstruction.
The High Court in Revision refused to inter fere with the order of the Appellate Authority under the Act.
On appeal by special leave, it was contended by the appellant that the land lord having a life interest is entitled to evict the tenant for bona fide requirement for demolition and reconstruction under section 14 of the Act.
The respondent contended that granting of the application of the landlord might prejudice the interest of the remainder man. ^ HELD: Allowing the appeal, (1) Definition of landlord under section 2(6) is wide enough to include the appellant who holds a life interest in the premises.
The right between the appellant and the remainder man with regard to the deed of settlement would have to be worked out in appropriate proceedings. 'The Act in question is a self contained and, complete Code for regulation of the rights between the land lord and tenants.
Even a possible dispute between the landlord and the remainder man cannot affect adjudication of the claim of the landlord against his tenants under the provisions of the Act.
[275F 276D] (2) A single petition with regard to two tenancies in the same premises is maintainable when the tenancy is one.
[276D E]
|
ivil Appeals Nos.
1266 & 1267 of 1969.
From the Judgment and order dated the 29th July, 1968 of the Patna High Court in Civil Writ Jurisdiction Case No. 61 of 1967 H. K. Puri and K. K. Mohan, for the appellant 264 D. Goburdhan, for respondent Nos. 1 and 2 (In both the appear) Respondent No. 21 (In C.A. No. 1266/69) and for respondent No. 60 (in C.A. No. 1267/69).
A. K. Nag, for respondent Nos. 3 19 (In C.A. No. 1266/69) and for respondent Nos, 4, S, 7 9, 11 32, 35 42, 44 52, 54 58 (In C.A. No. 1267/69).
The Judgment of the Court was delivered by ALAGIRISWAMI, J.
By two notifications dated 22 6 65 and 28 8 65 the Government of Bihar sent to the Labour Court, Chota Nagpur Division, Ranchi, applications in respect of 73 workers of the appellant for decision under section 33C(2) of the Industrial disputes Act for retrenchment compensation.
The employer contended that it was a case of closure for reasons beyond its control and that therefore the workmen were entitled to compensation under the proviso to subsection (1) of section 25FFF of the Act and not to retrenchment compensation workers contended, however, that they were entitled to retrenchment compensation under s.25F.
The Labour Court held that it was a case of retrenchment.
Two writ petitions filed by the employer before the High Court of Patna failed and these appeals have been filed in pursuance of a certificate of fitness granted by the High Court.
The argument on behalf of the appellant is that where there is a dispute before the Labour Court considering an application under section 33C(2) as to whether the workmen had been retrenched or the factory had been closed for reasons beyond the control of the employer, it was not a matter which the Labour Court was competent to decide and that it was a matter which only an Industrial Tribunal considering a reference under section 10 is competent to decide.
In particular Item 10 of the Third Schedule to the Act is relied upon to show that the matter relating to retrenchment and closure is one which only an Industrial Tribunal is competent to decide.
Reliance is placed upon a decision of this Court in U.P. Elect.
Co. vs R. K. Shukla(1) where it was held that the power of the Labour Court is to complete the compensation claimed to be payable to the workmen on the footing that there has been retrenchment of the workmen, that where retrenchment is conceded and the only matter in dispute is that by virtue of section 25FFF no liability to pay compensation has arisen the Labour Court will be competent to decide the question, that in such a case the question is one of computation and not of determination, of the conditions precedent to the accrual of liability, and that where the dispute is whether workmen have been retrenched and computation of the amount is subsidiary or incidental, the Labour Curt will have no authority to trespass upon the powers of the Tribunal with which it is statutorily invested.
In the U.P. Electric Company case (supra) the facts were somewhat different.
The Court in that case noticed at page 513 of the report that "The company had expressly raised a contention that they had not retrenched the workmen and that the workmen had 265 voluntarily abandoned the Company 's service by seeking employment with the Board even before the company closed its undertaking".
This Court emphasised at page 5l7 of the report that If the liability arises from an award, settlement or under the provisions of Ch.
V A or by virtue of a statute or a scheme made thereunder, mere denial by the employer may not be sufficient to negative the claim under section 33C(2) before the Labour Court".
We, therefore, do not see how the decision in the U.P. Electric Company 's case (supra) can come to the aid of the appellant in this case.
The said case is clearly distinguishable on the peculiar facts as noticed above.
In Central Bank of India Ltd vs P. section Rajagopalan(1) this Court considered the scope of section 33C(2) elaborately and it would be necessary to quote at some length from that decision.
In that case it was urged by the employer that section 33C(2) can be invoked by a workman who is entitled to receive from the employer the benefit there specified, but the right of the workman to receive the benefit has to be admitted and could not be a matter of dispute between the parties and that the only point which the labour Court can determine is one in relation to computation of the benefit ill terms of money.
This Court observed: "We are not impressed by this argument.
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 disputed, 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 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.
It seems to us that the opening clause of sub section
(2) docs not admit of the construction for which the appellant contends unless we add some words in that clause.
The clause "Where any workman is entitled to receive from the employer any benefit" does not mean "where such workman is admittedly, or admitted to be.
entitled to receive such benefit.
" The appellant 's constructional would necessarily introduce the addition of the words "admittedly, or admitted to be" in that clause, and that clearly is not permissible.
Besides, if seems to us that is the appellant 's construction is accepted it would necessarily mean that 266 it would be at the option of the employer to allow the workman to avail himself of the remedy provided by sub section (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 under section 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 s.(2).
As Maxwell in Interpretation of Statutes, p. 350, has observed 'where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution; we must accordingly hold that section 33C(2) takes within its purview case 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.
Incidentally, it may be relevant to add that it would be somewhat odd that under sub s (3), the Labour Court should have been authorised to delegate the work of computing the money value of the benefit to the Commissioner if the determination of the said question was the only task assigned to the Labour Court under sub section
On the other hand, sub s.(3) becomes intelligible if it is held that what can be assigned to the Commissioner includes only a part of the assignment of the Labour of Court under sub section
Further on this Court observed: "It is thus clear that claims made under s.33C(1), by itself can be only claims referable to the settlement, award, or the relevant provisions of Chapter VA.
These words of limitations are not to be found in s.33C(2) and to that extent, the scope of section 33C(2) is undoubtedly wider than that of section 33C(1).
It is unnecessary in the present appeals either to state exhaustively or even to indicate broadly what other categories of claims can fall under section 33C(2).
There is no doubt that the three categories of claims mentioned in section 33C (1) fall under section 33C(2) and in that sense, section 33C(2) can itself be deemed to be a kind of execution proceeding, but it is possible that claims not based on settlements, awards or made under the provisions of Chapter VA, may also be competent under section 33C(2) and that may illustrate its wider scope." This Court then went on to discuss some of the claims which would not fall under s.33C(2), which is not very relevant for the purposes of this case.
The present case stand on an even stronger footing.
Even the employer does not dispute that the workmen are entitled to compensation.
It only says that the compensation should be calculated on a particular basis different from the basis on which the workmen claim.
The claim also falls under Chapter VA. 267 In the decision in South Arcot, Elect.
Co. vs N. K. Khan(1) where a right had been claimed by the various workmen in their applications under section 33C(2), it was held that it was a right which accured to them under s.25FF of the Act and was an existing right at the time when these applications were made, that the Labour Court clearly had jurisdiction to decide whether such a right did or did not exist when dealing with the application under that provision, and that the mere denial of that by the company could not take away its jurisdiction.
We hold that in this case it was competent to the Labour Court to decide whether the case before it was a case of retrenchment compensation or the proviso to sub section
(1) of section 25FFF was attracted on closure of the establishment.
The question even according to the employer falls under section 25FFF and therefore in deciding that question the Labour Court has necessarily to decide whether the proviso has been satisfied.
We do not consider that the reference to item No. 10 of the Third Schedule to the Act can decide the matter one way or the other.
The item reads as follows: "10.
Retrenchment of workmen and closure of establishment It does not say that all questions arising out of retrenchment of workmen and closure of establishments have to be decided by Industrial Tribunal.
Logically if the contentions is to be accepted, even if the question of retrenchment is not disputed the Labour Court will not be competent to decide the question of compensation payable in a case of retrenchment because it raises a question of jurisdiction.
This entry should therefore be held to refer to cases where the right to retrench workers or to close an establishment is disputed and that question is referred for adjudication to the Industrial Tribunal.
In that case the Tribunal will be competent to decide whether the closure or retrenchment was justified and whether the retrenched workmen should be reinstated or the workers in the establishment purported to have been closed should be continued to be paid on the basis that the so called closure was to closure at all.
In the present case the workmen do not ask for reinstatement.
They accept the termination of their services and ask for compensation.
The only dispute is about the compensation whether it is to be paid under s.25F or 25FFF.
Item 10 of Third Schedule will not cover such a case.
We therefore uphold the decision of the High Court and dismiss these appeals with costs.
V.M.K. Appeals dismissed.
| IN-Abs | The Government of Bihar sent to the Labour Court, Chota Nagpur Division, Ranchi, application in respect of 73 workers of the appellant for decision under sec.
33C(2) of the for retrenchment compensation.
The contention of the appellant was that it was a case of closer for reasons beyond its control and that, therefore, the workmen were entitled to compensation under the proviso to sub section (1) of sec.
25FFF of the Act and not to retrenchment compensation.
The workers contended that they were entitled to retrenchment compensation under sec.
25F. The Labour Court held that it was a case of retrenchment.
The writ petitions filed by the employer in the High Court has failed and these appeals have been preferred to this Court on the basis of the certificate of fitness granted by the High Court.
Dismissing the appeals, ^ HELD : (i) It was competent to the Labour Court to decade whether the case before it was a case of retrenchment compensation or the proviso to sub sec.
(1) of section 25FFF was attracted on closure of the establishment.
Even the employer does not dispute that the workmen are entitled to compensation.
It only says that the compensation should be calculated on a particular basis different from the basis on which the workmen claim.
The claim also falls under Chapter VA of the Act.
[266H; 267B C] Central Bank of India Ltd. vs P. section Rajagopalan ; relied on.
U.P. Electric Company vs R. K. Shukla [1970] 1 S.C.R. 507 and South Arcot Elect.
Co. vs N. K. Khan [1969] 2 S.C.R. 902, referred to.
(ii) Item No. 10 of the Third Schedule to the Act does not say that all questions arising out of retrenchment of workmen and closure of establishment have to be decided by Industrial Tribunal.
This entry refers to cases where the right to retrench workers or to lose an establishment is disputed and that question is referred for adjudication to the Industrial Tribunal.
In that case the Tribunal will be competent to decide whether the closure or retrenchment was justified and whether the retrenchment workmen should be reinstated or the workers in the establishment purported to have been closed should be continued to be paid on basis that the so called closure was no closure at all.
In the present case the workmen do not ask for reinstatement.
They accept the termination of the services and ask for compensation.
The only dispute is about the compensation whether it is to be paid under section 25F or 25FFF.
Item 10 of Third schedule will not cover such a case.
[267D G]
|
Civil Appeal No. 1327 of 1973.
From the judgment and order dated the 21st July 1973 of the Madhya Pradesh High Court in Election Petition No. 36 of 1972.
N. M. Ghatate and section Balakrishnan, for the appellant.
247 section section Khianduja, for respondent No. 1.
The Judgment of the Court was delivered by KHANNA, J.
This appeal is directed against the judgment of Madhya Pradesh High Court whereby that court dismissed the section petition filed by the petitioner appellant to challenge the election of respondent No. 1 to Madhya Pradesh Legislative Assembly from Pandhurna constituency in Chhindwara district.
The election for Pandhurna constituency took place on March 8, 1972.
There were six candidates who contested the election.
The main contest was, however, between Madahavlal Dube respondent No. 1 and Dr. Ratanchand Mangalchand Sanghvi respondent No. 2.
Respondent No. 1 was declared elected.
The appellant, who was an elector in the above mentioned constituency, filed election petition to challenge the election of respondent No. 1 on various grounds.
It is not necessary to set out all the grounds because in the appeal before u, only one ground which is the subject matter of issue No. 10 has been pressed on behalf of the appellant.
The allegation which gave rise to issue No. 10 was contained in para 13 of the election petition.
The petition was, however, ordered to be amended because it did not contain full particulars.
The allegation with particulars was thereafter contained in para 13 of the amended petition.
According to the appellant, respondent No. 1 or his agent or any other person With his consent had got published and widely circulated a leaflet with the caption "Sawal Janta Ke" purporting to be on behalf of Pandhurna Matdar Sangh.
The aforesaid leaflet, according to the appellant seemed to have been drafted by respondent No. 1 and was full of defamatory and false averments calculated to prejudice the election prospects of respondent No. 2.
The leaflet was stated to have been very widely circulated and distributed throughout the consistency.
Every sentence of the leaflet, it was added, contained statement of fact about the personal character or conduct of respondent No. 2 which was false to the knowledge of respondent No. 1.
Respondent No. I and his friends were stated to have got the leaflet published under the psudonym of Pandhurna Matdar Sangh although there was no such Sangh in existence.
The name of the press and publisher ' s name was also not mentioned in the leaflet.
The appellant also mentioned the places where and the names of persons through whom the leaflets were alleged to have been distributed.
According to the leaflet which has been marked exhibit P4, respondent No. 2 was not a man of good character.
The said respondent was alleged to have committed rape upon a nurse while he was a government doctor.
He was also stated to be carrying on with another woman.
The activities of respondent No. 2 were stated to have driven his wife to insanity.
Reference was also made to some other shady and unethical activities in which respondent No. 2 was stated to he indulging Respondent No. 1 in his written statement denied that he, his agents or any other person with his consent had got published and circulated the leaflet in question.
It was also denied by respondent 248 No. 1 that he had drafted the aforesaid leaflet.
According to respondent No. 1, he had no connection with that leaflet and he was unable to make any statement about the truth or falsity of its contents.
It was denied that the said leaflet was widely circulated and distributed throughout the constituency.
The allegation that the leaflet was calculated to prejudice the election prospects of respondent No. 2 too was denied.
Likewise, respondent No. 1 denied that the different sentences of the leaflet contained statement of fact about the personal character or conduct of respondent No. 2 which was false to the knowledge of respondent No. 1.
According further to the respondent, he came to know of the said leaflet only some weeks after the election was over.
The said leaflet, it was added, appeared to have been got printed by someone interested in respondent No. 2 to create a ground for filing an election petition.
Issue No. 10 reads as under: "10(a) Whether the leaflet with the caption 'Sawal Janta Ke ' was published by respondent No. 1, his agents or any other person with his consent? (b) Whether the respondent No. 1 has any connection with the aforesaid leaflet? (c) Whether the material contained in the leaflet relates to personal character of respondent No. 2? (d) Whether the leaflet was widely circulated and distributed throughout the constituency and it was calculated to prejudice the election prospects of respondent No. 27 (e) Whether the leaflet was distributed at the places and by the persons named in paragraph 13 of the election petition? (f) Whether all persons named in the paragraph 13 except Shrimati Kamla Bai Mohogaonkar of Mohogaon were active supporters of respondent No. 2 ? Whether any corrupt practice under section 123(4) of the R.P. Act was committed in respect of the above '! Whether the allegations made in paragraph 13 make out a ground for challenging the election of respondent No. 1 under section 100(1) of the R.P. Act, 1951?" The High Court decided issues 10(a) and (b) against the appellant on the ground that no evidence had been led by him in this behalf.
On issue 10(c)? it was held, that though the material contained in leaflet P4 related to the personal character and conduct of respondent No. 2, the appellant had failed to prove that its contents were false to the knowledge of respondent No. 1 or that he did not believe them to be true.
No corrupt practice as defined in section 249 123(4) of the Representation of the People Act was held to have been proved issues 1(1) and (e) were held to be of no consequence in view of the fact that it was not proved that respondent No. 1 was guilty of corrupt practice.
In the result the election petition was dismissed.
In appeal before us Mr. Ghatate on behalf of the appellant has argued that the appellant wanted to file a photostat copy of the manuscript of leaflet P4 which, according to the appellant, had been written by respondent No. 1.
The High Court, it is pointed out, did not admit the aforesaid photostat copy in evidence on the ground that there was no sufficient reason for allowing the appellant to lead secondary evidence.
It is that order of the High Court which has been the main target of the criticism of Mr. Ghatate.
After hearing the learned counsel for the parties, we are of the opinion that the order of the High Court in this respect calls for no interference.
According to clause (a) of section 65 of the Indian Evidence Act, secondary evidence may be given of the existence, condition or contents of a document when the original is shown or appears to be in the possession or power of the person against whom the document is sought to be proved, or of any person out of reach of, or not subject to, the process of the Court, or of any person legally bound to produce it, and when, after the notice mentioned in section 66, such person does not produce it.
Clauses (b) to (g) of section 65 specify some other contingencies wherein secondary evidence relating to a document may be given, but we are not concerned with those clauses as it is the common case of the parties that the present case is not covered by those clauses.
In order to bring his case within the purview of clause (a) of section 65, the appellant filed applications on July 4, 1973, before respondent No. 1 was examined as a witness, praying that the said respondent be ordered to produce the original manuscript of which, according to the appellant, he had filed photostat copy.
Prayer was also made by the appellant that in case respondent No. 1 denied that the said manuscript had been written by him, the photostat copy might be got examined from a handwriting expert.
The appellant also filed affidavit in support of his applications.
It was, however, nowhere stated in the affidavit that the original document of which the photostat copy had been filed by the appellant was in the possession of respondent No. 1.
There was also no other material on the record to indicate that the original document was in the possession of respondent No. 1.
The appellant further failed to explain as to what were the circumstances under which the photostat copy was prepared and who was in possession of the original document at the time its photograph was taken.
Respondent No. 1 in his affidavit denied being in possession of or having anything to do with such a document.
The photostat copy appeared to the High Court to be not above suspicion.
In view of all the circumstances, the High Court came to the conclusion that no foundation had been laid by the appellant for leading secondary evidence in the shape of the photostat copy.
We find no infirmity in the above order of the High Court as might justify interference by this Court.
250 The matter may also be looked at from another angle.
There is no evidence on record to show that the contents of leaflet exhibit P4 were false.
Respondent No. 2 in relation to whose personal character and conduct statements were made in leaflet P4 was not examined as a witness.
No other evidence was also led of any person who knew about the character or conduct of respondent No. 2 to show that the statements contained in leaflet in question were false.
The High Court consequently arrived at the conclusion that on the material on record it could not be held that the contents of the said leaflet were false and that respondent No. 1 believed them to be false or did not believe them to be true.
As such, no corrupt practice as defined in section 123 (4) of the Representation of the People Act.
1951 was held to have been proved.
A corrupt practice, according to section 123(4), consists of the publication by a candidate or his agent or by any other person, with the consent of a candidate or his election agent, of any statement of fact which is false, and which he either believes to be also or does not believe to be true, in relation to the personal character or conduct of any candidate or in relation to the candidature, or withdrawal, of any candidate, being a statement reasonably calculated to prejudice the prospects of that candidate`s election.
Apart from the other requirements, it is of the essence of the matter that the impugned statement of fact in relation to the personal character or conduct of a candidate which is alleged to have been published should be false.
Unless the said statement of fact is shown to be false, its publication would not constitute corrupt practice as defined in clause (4) of section 123 of the Act.
When there is complete absence of any material on the record to show that the impugned statement of fact is false, no occasion would plainly alias for remanding the case to the High Court to enable the appellant to produce in evidence the photostat copy in question with a view to show that the original of that had been written by the respondent.
There is no merit in the appeal.
The same is accordingly dismissed with costs.
P.H.P. Appeal dismissed.
| IN-Abs | The election for Pandhurna Constituency for the M.P. legislative Assembly took place in March, 1970.
There were 6 candidates who contested the election.
The main contest was between respondents nos.
1 and 2.
Respondent No. 1 was declared elected.
The appellant, a voter, filed an Election Petition challenging the election on the grounds that respondent No. 1 published and circulated a leaflet containing defamatory and false averments against respondent No. 1 and it was calculated to prejudice the election prospects of respondent No. 2.
The leaflet it was alleged contained the statement of fact about the personal character or conduct of respondent No. 2.
In the leaflet it was mentioned that respondent No. 2 committed rape and he was carrying on with another woman.
The ties of respondent No. 2 were stated to have driven his wife into insanity.
Reference was also made to some other shady and unethical activities.
Before the High Court the appellant wanted to file a photostat copy of the manuscript of the leaflet which according to the appellant was written by respondent No. 1.
The High Court did not admit the aforesaid photostat copy in evidence on the ground that there was no sufficient reason for allowing the appellant to lead secondary evidence.
The High Court also held that though the material contained in the leaflet related to the personal character and conduct of respondent No. 2, the appellant failed to prove that its contents were false to The knowledge of respondent No. 1, and he did not believe them to be true and that, therefore, the corrupt practice defined in section 123(4) of the Representation of the People Act was not proved.
While dismissing the appeal this Court held: ^ Under section 65(a) of the Indian Evidence Act, secondary evidence may been of the existence, condition or contents of a document when the original is shown or appears to be in the possession or power of the person against whom the document is sought to be proved or when a person refuses to produce it.
There was no affidavit that the original document was in possession of respondent No. 1.
The photostat copy appeared to the High Court to be not above suspicion.
In view of all the circumstances, the High Court rightly came to the conclusion that no foundation was laid by the appellant for leading secondary evidence in the shape of photostat copy.
There is no evidence on record to show that the contents of the leaflet were false.
The respondent No. 2 was not examined as a witness.
No other evidence was also led of any person who knew about the character or conduct of respondent No. 2 to show that the statements contained in the leaflet in question were false.
Apart from the other requirements, it is of the essence of section 123(4) of the Representation of the People Act.
1951 that the impugned statement of fact in relation to the personal character or conduct of a candidate.
which is alleged to have been published should be false [249D, F 250D]
|
Civil Appeal No. 358 of 1973 Appeal by special leave from the Judgment and order dated the 6th February, 1967 of the High Court of Judicature at Bombay in Special Civil Application No. 1967 of 1965.
M. C. Bhandare, P. H. Parekh, section Bhandare, Manju Jaitley, for Respondents Nos.
1 4, 12, 15" 17, 24, 27 30, 35, 36, 47, 49, 54 63, 75, 80, 82, 86, 87, 89, 90, 94, 96 107.
The Judgment of the Court was delivered by ALAGIRISWAMI, J.
This appeal arises out of the judgment of the Bombay High Court in Special Civil Application No. 1967 of 1965.
The 118 respondents are workmen of the appellant company working in different departments of the company 's works.
Respondent I to 14 are Syphon Pumpers.
They filed 14 applications before the Additional Authority under section 15 of the Payment of Wages Act claiming overtime wages for the period February 1957 to January 1958 Respondents 15 to 80 are Mains workers.
They filed 66 applications before the same authority claiming overtime wages for the period December 1956 to November 1957.
Respondents 81 to 118 filed 38 applications before the Third Additional Authority claiming wages for weekly off days.
They belonged to the Mains, Heating Appliances and Fitting Departments.
They had joined the appellant company 1 after 1948.
The relevance of the reference to their having become workers of the company after 1948 will become clear when we deal with the facts of this case later.
293 Before the Authority under the Payment of Wages Act the company contended that all the claims were barred under an award of the Industrial Tribunal in Ref.
No. 54 of 1949, which was made on 30 3 1950 and published on 11 5 1950.
The Authority held that (1) the claims of the Booster Attendants for wages for overtime work and weekly off days were covered by the award, (2) the clams of applicants other than Booster Attendants were not covered by the award, and (3) the Bombay Shops & Establishments Act was not applicable to them, and dismissed the applications of respondents 1 to 80.
The applications made by respondents 81 to 113 were allowed by the Third Additional Authority holding that the award was no bar to those applications and that the provisions of the Bombay Shops & Establishments Act were applicable.
Appeals were filed by respondents 1 to 88 in the Court of Small Causes, Bombay.
The appellant company filed an appeal against the judgment in the applications of respondents 81 to 118.
The Court of Small Causes dealt with the appeals filed by the workmen as well as the appeal filed by the company and by a common judgment held that the claims of workers for overtime wages and wages for weekly off days were barred by the award.
The workmen appeals were therefore dismissed and the company 's appeal was allowed.
It was.
however, held that the appellant company was a commercial establishment within the meaning of that term under the Bombay Shops & Establishments Act.
All the workmen filed a writ petition, out of which this appeal arises, challenging the judgment of the Court of Small Causes.
High Court held that the claims of the respondents were not barred by the award and remanded the applications of respondents 1 to 80 to the Authority under the Payment of Wages Act for ascertaining and decreeing the Amount.
As regards respondents 81 to 118 the judgment of the Third Additional Authority under the Payment of Wages Act was restored.
As the award of the Industrial Tribunal, Bombay in Ref No. 54 of 1949 is the most important factor that has to be taken into account in considering this appeal it would be proper to refer to portions of that award which relate to this appeal.
About 23 demands covering variety of subjects were referred to the Tribunal.
The demands out of which this appeal arises were No. 11 and 12 dealt with in paragraphs 113 to 126 of the award.
Demand No. 11 was as follows: (a) Workers should get a paid weekly off.
(b) Workers of Mains, Services and District fittings departments and lamp repairers, who have been adversely affected in the matter of their earnings on account of closing down of the overtime and Sunday work should be compensated for the loss suffered by them.
compensation being the amount lost by them since e scheme was introduced.
" 294 Demand No 12 was as follows A All work extending beyond the scheduled hours of work should be paid for at overtime rate (i.e., double the rate of wages).
" In discussing demand No. 11 the Tribunal pointed out that what the workers were asking for was paid weekly day off for those workers who were actually getting a weekly day off, though without pay.
It appears that in this company prior to 1946 most of the workers used to work for all the seven days of the week.
By about August 1946, however, weekly days off were enforced upon the major section of the workmen.
The company and the union had entered into an agreement about June 1946 as regards wage scales of various categories of workers.
The Tribunal, therefore, assumed that in respect of most of the daily rated workers the wages must have been fixed on the basis of what their monthly income would be for 26 working days In the cases of the classes of workers specifically mentioned in demand 11(b) a weekly day off was enforced some time in the year 1949, while in the case of lamp repairers the weekly day off was enforced from 1st April 1949.
Those categories of workers, therefore, used to .
work for all the 7 days of the week and earn wages for all the days till a short time before the reference.
The Tribunal, therefore, proceeded on the basis that in their case it cannot be said that daily rates of wages were fixed with reference to a month of 26 working days and therefore with the introduction of the weekly day off the wages of these workers were reduced, and that the concession of a weekly off would be a very doubtful benefit if as a result the monthly income of these E, workers was to go down.
The Tribunal granted the demand under demand No. 11 (b) in respect of workers who had been working on Sundays also till 1948.
Some doubts having arisen in respect of this portion of the award a reference was made to the Tribunal under rule 20A of the Industrial Disputes (Bombay) Rules for clarification.
The doubt raised was whether the company was bound to give a paid weekly day off to the workers of the Mains Department and to pay them compensation for the loss suffered by them.
It appears that the company gave a paid weekly day off to all personal mentioned in demand No. 11 except workers of the Mains on the ground that they were not persons who were till 1948 required to work on Sundays and in respect of whom a weekly day off was introduced thereafter.
The Tribunal pointed out that the paid weekly day off was given only to people who till recently used to work on all the seven days of the week and that it was unfortunate that the company had not at the hearing of the main adjudication specifically drawn attention to the fact that the workers of the Mains were not till recently required to work for all the seven days of the week.
The Tribunal, however, held that it was clearly a condition laid down for the grant of this benefit that the person concerned must be one who till 1948 was required to work on Sundays and in respect of whom a weekly day off was introduced thereafter.
295 The importance of the year 1948, to which we have referred m earlier part of the judgment, would now become apparent.
Respondents 81 to 118 who joined the company after 1948 contended that the award did not bind them.
In this they are manifestly wrong.
An award of an Industrial Tribunal in a reference under section 10 of the industrial Disputes Act binds not only persons who were the workmen of the employer at the time the award was made but also workmen who came to work under the employer after the award.
it would not be correct, therefore, to hold that they would be entitled to be paid separately for the weekly day off.
It must be presumed that their scales of pay were the same as for the workmen who were working before 1948 also.
There was no averment to the contrary.
They cannot, therefore, be allowed an extra benefit which would not be available to the same category of workmen who were working under the employer since before 1948.
The High Court seems to have been of the impression that these workmen were entitled to be paid for the days off either under the award or under s 18(3) of the Bombay Shops and Establishments Act.
It seems to have assumed that there was a scale of wages for weekly off days under the award.
That this is an obvious mistake would be apparent from a reading of paragraphs 114 and 115 of the award to the following effect: "114.
It must be remembered that the wages of daily rated workers are ordinarily fixed with reference to what their monthly income would be on the basis of a month consisting of 26 working days.
This undoubtedly secures to them the benefit of holidays with pay.
The company and the union have entered into an agreement about June 1946 as regards wage scales of various categories of workers that in respect of most of the daily rated workers the wages must have been fixed on the basis of what their monthly income would be for 26 working days.
Some difference must however be made in the case of the classes of workers specifically mentioned in demand 11(b).
Until recently these categories of workers used to work for all the 7 days of the week and earn wages for all the days.
Certainly it cannot be said in their case that their daily rates of wages were fixed with reference to a month of 26 working days.
Time demand in respect of workers of the Mains Services and District Fittings Departments and lamp repairers and others who were till l 948 required to work on Sundays and in respect of whom a weekly day of was introduced thereafter without any corresponding increase in their wages is granted.
" The matter would be further clear when paragraph 14 of the award is read, wherein the Tribunal has observed: "While therefore, I approve of Rs. 30 as the minimum wage for male mazdoors (coolies) which is at present given 296 to the workers in this Company, I think both the maximum and the increments provided are rather low when compared to what is now a days awarded even in the case of some of the smaller concerns in the engineering industry.
I, therefore, award to the unskilled workers (male coolies) a wage scale of Rs. 1 2 6 to Rs. 1 10 6.
If they are monthly paid their monthly wages should be arrived at by multiplying the daily wages by 26.
" The total wages for 26 days at Rs. 1 2 6 a day is Rs. 30/ .
it is not said that the categories of workers mentioned in demand No. 11(b), who were covered by the award, are paid separately for the days off.
it is not contended that their wage scales have not been refixed in pursuance of the direction given in the award, except of course in the case of persons who even before 1948 were not working on Sundays also Nor is it alleged that pre 1948 and post,l948 workers arc paid differently.
The reasoning of the High Court cannot, therefore, be supported and the company is entitled to succeed on this part of the case.
Coming now to the question of overtime, the demand before the Tribunal was that overtime rates should be double the rate of wages.
That demand was rejected in the general form.
The demand seems to have been made on the analogy of the provisions of the Factories Act.
The Tribunal pointed out that there would be no justification in making a distinction between workers covered by the Factories Act and workers not covered by that Act in respect of overtime payment if the workers were doing the same or similar work but that the same cannot be applied in respect of all types of work particularly where the work was of a very intermittent nature, and that where the nature of the work itself was such that.
regular overtime becomes necessary the deterrent element must not enter in determining the rate of overtime.
The union pointed out several specific categories in respect of whom injustice was done.
One of these instances was that of booster attendants and their case was specifically dealt with and provided for.
The grievance of the workers of the Mains department was that they were made to work till 1.30 p.m.
On Saturdays while factory workers were let off at 1 p.m. and that 47 1/2 hours a week has bean a very long standing privilege of the workmen of this company and that if they are required to work for half an hour more on Saturdays the should be paid overtime at double the rate.
After discussing this question the Tribunal specifically came to the conclusion that no directions in that respect were necessary.
We cannot therefore agree with the respondents that the sentences at the end of paragraph 126 to the following effect: "I however recommend that where overtime work is given to workers not covered by the Factories Act, the rate should at least be the single basic wage plus dearness allowance.
I do not however desire to give any general directions without knowing the nature of the work.
" 297 would cover these cases.
Demand No. 12 is in respect of all workers of the company.
The specific case of workers in the Mains department has been dealt with and rejected; so also in the case of coke supply coolies and motor drivers.
The workmen concerned here being all workmen of the Mains department, the question of their being paid overtime wages under the provisions of the award does not arise.
The question however remains whether they are entitled to be paid overtime wages under the provisions of section 12(3) of the Bombay Shops & Establishments Act.
That Act was in force when the award under consideration was given.
It is not correct to say that the workers are entitled to overtime payment by virtue of an amendment made to the Act in 1970.
The 1970 amendment had nothing to do with the right of payment of overtime wages.
The contention on behalf of the company is that the right to overtime wages based on any ground what soever should he deemed to have been dealt with and rejected by the Tribunal which gave the award in 1 950.
Though the demand for overtime wages was in general terms it could have been or it ought to have been supported either as one of the items of industrial dispute or as flowing from out of the provisions of the Factories Act or flowing from the provisions of the Bombay Shops and Establishments Act.
It was the duty of the party making the demand, who tried to justify the demand, to support it on any one of the alternative basis.
They could not have been ignorant of the provisions of the Bombay Shops & Establishments Act.
(Incidentally, though in this case it seems to have been conceded on behalf of the company that the workers are governed by the Bombay Shops & Establishments Act, it is contended on behalf of the. company that the concession should be deemed to have been made only for the purpose of this case and not for all purposes).
It is further contender that the demand for overtime were under the provisions of the Bombay Shops & Establishments Act should be deemed to be barred on principles analogous to those of the rejudicata.
Reliance is placed upon the decision of this Court in Bombay Gas Co. vs Shridhar Bhau(1).
But in that case the question whether the workmen should get overtime wages in the same way as the workmen governed by the Factories Act had been considered in the reference which resulted in the award of 1953 and before the Tribunal it was conceded by the workmen that they were not governed by the Factories Act and the claim for the same overtime wages as those Payable to workers under the Factories Act was based on the ground that there was no reason for any distinction between the two sets of workmen.
It was.
therefore, held that 'so long as the award remains in force it must be held that these workmen are not governed by the Factories Act and are not entitled to the benefits thereof '.
In the present case also the question under the Factories Act had been considered but not the question whether they are entitled to overtime 298 wages under the provisions of the Bombay Shops & Establishments Act.
We consider that the workmen could and ought to have raised the question that even if they were not entitled to claim overtime wages at the same rate as payable to workers governed by the Factories Act, they should at least be paid the same rate as those payable to persons governed by the Bombay Shops & Establishments Act.
The workers neither put forward the contention that they were entitled to the benefit of the Bombay Shops & Establishments Act nor even that on considerations similar to those applicable to the persons governed by the Bombay Shops & Establishments Act they should also be paid overtime wages under the provisions of that Act.
Incidentally it shows that the question as to whether the Bombay Shops & Establishments Act is applicable to those workmen has been raised for the first time in these proceedings.
The doctrine of res judicata is a wholesome one which is applicable not merely to matters governed by the provisions of the Code of Civil Procedure but to all litigations.
It proceeds on the principle that there should be no unnecessary litigation and whatever claims and defences are open to parties should all be put forward it the same time provided so confusion is likely to arise by so putting forward all such claims.
It was observed by this Court in Devilal Modi vs Sales Tax Officer: "The general principle underlying the doctrine of res judicata is ultimately based on considerations of public policy.
One important consideration of public policy is that the decisions pronounced by courts of competent jurisdiction should be final, unless they are modified or reversed by appellate authorities; and the other principle is that no one should be made to face the same kind of litigation twice .
over, because such a process would be contrary to considerations of fair play and justice, vide: Daryao and Others vs The State of U.P & Others v The State of U.P & Others ; We are therefore of opinion that the question of overtime wages should be deemed to have been dealt with and disposed of by the Tribunal on whatever the basis of the claim for overtime wages may be.
The disputes between this company and its workers quite often come to this Court.
The case in Bombay Gas Co. v Shridhar Bhau (supra) is one such.
The other cases are found in Bombay Gas Co. Ltd vs Gopal Bhiva (2) and Ramlanshan Jageshwar vs Bombay Gas Co. (3) 299 If the workers are dissatisfied with any of the items in respect of which their claim has been rejected it is open to them to raise a fresh industrial dispute.
The award has stood the test of time for 25 years a very rare occurrence indeed these days.
| IN-Abs | The 118 respondents are workmen of the appellant company`working in different departments of the company 's works.
Respondents 1 to 14 are Syphon Pumpers.
They filed 14 applications before the Additional Authority under s 15 of the Payment of Wages Act claiming overtime wages for the period February 1957 to January 1958.
Respondents 15 8 are Mains workers.
They filed 66 applications before the same authority claiming overtime wages for tho period December 1956 to November 1957.
Respondents 81 to 118 filed 38 applications before the Third Additional Authority claiming wages for weekly of days.
They belonged to the Mains, Heating Appliances and Fitting Department 'they had joined the appellant company after 1948.
Before the Authority under Payment of Wages Act the company contended that all the claims were barred under an award of the Industrial Tribunal in Ref.
No. 54 of 1949, which was made on 30 3 1950 and published on 11 5 1950.
The Tribunal held that workers of Services and District fittings departments and lamp repairers who used to work till 1948 on all the seven days of the week, would be entitled to be paid weekly day off.
The Authority held that (1) the claims of the Booster Attendants for wages for overtime work and weekly off days were covered by the award, (2) the claims of Applicants other than Booster Attendants were not covered by the award, and (3) the Bombay Shops and Establishments Act was not applicable to them, and dismissed the applications of respondents I to 80.
The applications made by respondents 81 to 113 were allowed by the Third Additional Authority holding that the award was no bar to those applications, and that the provisions of the Bombay Shops and Establishments Act were applicable.
The Court of Small Causes, Bombay, which dealt with the appeals filed by the workmen and the company held that the claims of workers for overtime.
wages and wages for weekly off days were barred by the award.
It also held that the appellant company was a commercial establishment within The meaning of that terms under the Bombay Shops and Establishments Act.
All the workmen filed a writ petition challenging the judgment of the Court of Small Causes.
The High Court held that the claims of the respondents were not barred by the award and remanded the applications of respondents I to 80 to the Authority under the Payment of Wages Act for ascertaining and decreeing the amount.
As regards respondents 81 to 118 the judgment of the Third Additional Authority under the Payment of Wages Act was restored.
This appeal is preferred on the basis of the special leave granted by the Supreme Court.
Dismissing the appeal, ^ HELD: (1) An award of an Industrial Tribunal in a reference under section is of the binds not only persons who were the workmen of the employer at the time the award was made but also workmen who came tc.
work under the employer after the award.
It would not be correct.
therefore, to hold that they would be entitled to be paid separately for the weekly day off.
It must be presumed that their scales of pay were the same as for the workmen who were working before 1948 also.
There was no averment to the contrary.
They cannot, therefore, be allowed an extra benefit which would not be available to the same category of workmen who were working under the employer since before 194&.
[295B C].
(ii) The reasoning of the High Court that the workmen are entitled to be paid for the days off either under the award or under section 18(3) of the Bom 292 bay Shops and Establishments Act, is not correct.
The High Court seems to A have assumed wrongly that there was a scale of wages for weekly off days under the award [295C D] (iii) The specific case of workers in the Mains Department has been dealt with and rejected; so also in the case of coke supply coolies and motor drivers The Workmen concerned here being all workman of the Mains department, the question of their being paid overtime wages under the provisions of the award does not arise.
[297A B] (iv) The doctrine of res judicata is a wholesome one which is applicable not merely to matters governed by the provisions of the Code of Civil Procedure but to all litigations.
lt proceeds on the principle that there should be no unnecessary litigation and whatever claims and defences are open to parties should all be put forward at the same time provided no confusion is likely to arise by so putting forward all such claims.
[298D] Devilal Modi vs Sales Tax officer ; relied on Bombay Gas Co. vs Shridhar Bhau A.I.R. 1961 SC 1196 referred to.
(v) The workmen could and ought to have raised the question that even if they were not entitled to claim overtime wages at the same rate as payable to workers governed by the Factories Act, they should at least be paid the same rates as the payable to persons governed by the Bombay Shops and Establishments Act.
The workers neither put forward the contention that they were entitled to the benefit of the Bombay Shops and Establishments Act nor even that on considerations similar to those applicable to the persons governed by the Bombay Shops and Establishments Act they should also be paid overtime wages under the provisions of that Act.
[298A C]
|
Civil Appeals Nos. 1461 to 1468 of 1 974.
From the Judgment and order dated the 14th April, 1974 of the Disciplinary Committee of the Bar Council of India, New Delhi.
in C. Appeals Nos. 15 to 19, 21, 22 and 25 of 1973 respectively.
H V. section Desai, Vimal Dave and Kailash Mehta, for the appellant (in all the appeals).
309 M. V. Dabolkar, for the respondent (In C. A. No. 1461/74).
Z. F. Bootwala and Urmila Sirur, for the respondent (In C. A. Nos. 1462 64/74) .
V. N. Ganpule and V. H. Dixit, for the respondent (In C. A. No. 1465/74).
K. G. Mandalia, for the respondent (In C. A. No. 1466/74).
E. Udayarathallam and A. K. Doshi, for the respondent (In C.A. No. 1467/ 74).
D. K. Raisinghani, for the respondent (In C.A. No. 1468/74).
K. K. Sinha and section K. Sinha, for the Bihar State Bar Council.
D. V. Patil and K. Hingorani, for the Bar Council of India.
The Judgment of A. N. RAY, C.J., H. R. KHANNA, K. K. MATHEW, A. C. GUPTA AND section M. FAZAL ALl, was delivered by A. N. RAY, C.J., M. BEG and V. R. KRISHNA IYER, JJ.
gave separate opinions.
RAY, C.J.
These appeals were placed before this Bench for consideration of the question whether the Bar Council of a State is "a person aggrieved" to maintain an appeal under section 38 of the hereinafter called the Act.
The Bar Council of Maharashtra on 8 August, 1964 considered a complaint received from the High Court against the respondents and resolved that the complaint received from the High Court against the respondents be referred to the disciplinary committee.
Another resolution was passed by the Bar Council of Maharashtra on the same day whereby Messrs Hotchand Advani, R. W. Adik and section C. Chagla were elected as members of the disciplinary committee to enquire into the complaints.
The aforesaid disciplinary committee met on 19 March, 1965 and heard the advocates for the Bar Council of the State of Maharashtra.
After considering the papers placed before the committee, it directed the Registrar to issue notices under section 35(2) of the Act to the "parties concerned including the Advocate General".
The committee also expressed the opinion that "there is a prima facie case of professional misconduct".
The Bar Council of Maharashtra on 18 May, 1965 issued notices under section 35 of the Act to the respondents.
The notice was described as a suo motu inquiry against the respondents.
The notice proceeded with the recital that it came to the notice of the Bar Council of Maharashtra that the respondents stood at the entrance of the Court House at the Presidency Magistrate 's Court, Esplanade, Fort Bombay and solicited work and generally behaved at that place in an undignified manner and the said acts amounted to professional and/or other misconduct and the Bar Council constituted disciplinary committee and the inquiry was entrusted to the committee consisting of Messrs H. G. Advani, R. W. Adik and section C. Chagla.
310 The said disciplinary committee heard evidence upto 31 August, 1968.
On 14 June, 1969, the Bar Council of Maharashtra passed a resolution requesting the aforesaid disciplinary committee to proceed with the inquiry which was pending before them prior to 31 March, 1969.
The disciplinary committee of the Bar Council of Maharashtra on 27 June, 1973 found the respondents guilty of conduct which seriously lowered the reputation of the Bar in the eyes of the public.
The disciplinary committee directed that the respondents would stand suspended from practising as advocates for a period of three years.
The suspension orders were to be operative from 1 August 1973.
The respondents preferred appeals before the Bar Council of India.
In these appeals, the respondents impleaded the Bar Council of Maharashtra as respondents.
The disciplinary committee of the Bar Council of India on 14 April, 1974 allowed the appeals and set aside the orders of the disciplinary committee of the Bar Council of Maharashtra.
While setting aside the orders of the disciplinary committee of the Bar Council of Maharashtra, the disciplinary committee of the Bar Council of India stated as follows: "The Bar Council of Maharashtra has not appeared even though they started the proceedings suo motu and we do not pass any orders as to costs and we direct each party will bear their costs.
However, we have gone through the evidence ourselves and also the same has been placed in detail by the appellants.
All that we can say is that we expected the Bar Council of Maharashtra to be represented in the ap peal because proceedings were started suo motu" These statements of the disciplinary committee of the Bar Council of India indicate that the Bar Council of Maharashtra should have appeared before the disciplinary committee of the Bar Council of India.
The scheme of the in short is as follows: There are State Bar Councils.
There is Bar Council of India Every Bar Council is a body corporate.
The functions of a State Bar Council are inter alia to entertain and determine cases of misconduct against advocates on its roll and to safeguard the rights, privileges and interests of advocates on its roll.
The functions of the Bar Council of India are inter alia to lay down standards of professional conduct and etiquette, to lay down the procedure to be followed by its disciplinary committee and the disciplinary committee of State Bar Councils, to safeguard the rights, privileges and interests of advocates and to exercise general supervision and control over State Bar Councils Disciplinary committees are constituted by each Bar Council.
A Bar Council is required to constitute one or more disciplinary committees each of which shall consist of three persons of whom two shall 311 be persons elected by the Council from amongst its members and the other shall be A person co opted by the Council from amongst advocates who possesss the qualifications specified in the proviso to section 3(2) of the Act and are not members of the Council, and the senior most advocate amongst the members of a disciplinary committee shall be its Chairman.
When the Executive Committees of a State Bar Council and of the Bar Council of India and an Enrolment Committee of a State Bar Council and the legal education committee of the Bar Council of India are to consist of members erected by the Council from amongst its members, it is noticeable that the disciplinary committees of Bar Council of State as well as of Bar Council of India shall consist of three persons of whom two shall be elected by the Council from amongst its members and the other shall be a person co opted by the Council from advocates who are not otherwise members of the Council.
Chapter V of the Act relates to the Conduct of Advocates.
Chap ter V contains sections 35 to 44.
Section 35 states that where on receipt of a complaint or otherwise a State Bar Council has reason to believe that any advocate on its roll has been guilty of professional other misconduct, it shall refer the case for disposal to its disciplinary committee.
The State Bar Council may, either of its own motion or on application made to it by any person interested, withdraw a proceeding pending before its disciplinary committee and direct that inquiry to be made by another disciplinary committee of the State Bar Council.
The disciplinary committee of a State Bar Council shall fix a date for the hearing of the case and shall cause a notice to be given.
to the advocate concerned and to the Advocate General of the State.
The disciplinary committee of the State Bar Council may make any of the following orders namely, (a) dismiss the complaint, or where the proceedings were initiated at the instance of the State Bar Council, direct that the proceedings be filed, (b) reprimand the advocate, (c) suspend the advocate for such period as it may deem fit, (d) remove the name of the advocate from the state roll of advocates.
Section 36 speaks of disciplinary powers of the Bar Council of India and provides that where on receipt of a complaint or otherwise the Bar Council of India has reason to believe that any advocate whose name is not entered on any State roll has been guilty of professional or other misconduct, it shall refer the case for disposal to its disciplinary committee.
The disciplinary committee of the Bar Council of India may either of its own motion or on a report by any State Bar Council or on an application made to it by any person interested, withdraw for inquiry before itself any proceeding for disciplinary action against any advocate pending before the disciplinary committee of any State Bar Council and dispose of the same.
Section 37 speaks of appeal to the Bar Council of India.
This section states that any person aggrieved by an order of the disciplinary 312 committee of a State Bar Council or the Advocate General of the state may, within sixty days of the date of communication of the order, prefer an appeal to the Bar Council of India.
Section 38 provides for appeal to the Supreme Court.
Section 38 states that any person aggrieved by an order made by the disciplinary committee of the Bar Council of India under section 36 or section 37 or the Attorney General of India or the Advocate General of the State, as the case may be, may prefer an appeal to the Supreme Court.
Section 49 of the Act provides that the Bar Council of India may make rules for discharging its functions under the Act and in particular such rules may prescribe inter alia the standards of professional conduct and etiquette to be observed by advocates.
The Bar Council of India in exercise of the rule making power under section 49(c) of the Act on 10 and l l July, 1954, approved the rules of standards of professional conduct and etiquette.
The standards of professional conduct and etiquette are described in five sections.
The first section deals with duty of advocates to the Court.
The second section speaks of duty of advocates to the clients.
The third section consists of rules regarding duty of advocates to opponent.
The fourth section prescribes duties of advocates to colleagues.
The fifth section lays down restrictions on advocates on other employments.
The present appeals touch on Rule 36 of the Rules of the Bar Council of India.
Rule 36 is in fourth section under the heading "duty to colleagues Rule 36 speaks that "an advocate shall not solicit work or advertise either directly or indirectly, whether by circular, advertisements, touts, personal communications, interviews not warranted by personal relations furnishing newspaper comments or procuring his photograph to be published in connection with cases in which he has been engaged or concerned.
The question for consideration is the meaning of the words any person aggrieved by an order made by the disciplinary committee of the Bar Council of India" occurring in section 38 of the Act.
It is noticeable that in section 37, the Advocate General of the State and in section 38, the Attorney General or the Advocate General of the State, as the case may be, have been given specific rights of appeal.
These rights were introduced into the Act by amendments made in the year 1974 by Amending Act 60 of 1973.
In Adi Pherozshah Gandhi vs H. M. Seervai, Advocate General of Maharashtra, Bombay(1), the question which fell for consideration was whether the appeal filed by the Advocate General of Maharashtra before the Bar Council of India was competent.
The majority view was that the Advocate General of the State was not competent to file an appeal to the Bar Council of India.
In the Maharashtra case (supra), the disciplinary committee of the State Bar Council was satisfied that that there was no reason to hold Adi Pherozshah Gandhi guilty of professional misconduct or other misconduct.
The Advocate General (1) 313 of Maharashtra filed an appeal before the Bar Council of India.
The appellant objected to the locus standi of Advocate General before the Bar Council of India.
That objection was overruled and the appeal filed by the Advocate General was accepted by the disciplinary committee of the Bar Council of India.
The disciplinary committee of the Bar Council of India held the advocate, Adi Pherozshah Gandhi guilty of misconduct and suspended him from practice for one year.
The advocate preferred an appeal under section 38 of the Act to this Court.
In view or majority decision, the appeal filed by Adi Pherozshah Gandhi was accepted by this Court on the ground that the Advocate General of Maharashtra was incompetent to file an appeal.
It is in this background that amendments have been introduced into sections 37 and 38 of the Act conferring right of appeal on the Advocate General of State and the Attorney General of India under sections 37 and 38 respectively.
The respondents contended on the ruling of this Court in Adi Pherozshah Gandhi s case (supra) that the Bar Council of the State is not a person aggrieved to maintain an appeal against a decision of its disciplinary committee for these reasons.
First, the Bar Council of a State is not an aggrieved person because Bar Council has not suffered ally legal grievance, and the decision of the Bar Council of India has not deprived the Bar Council of a State of anything.
Second, the allegation that order of the disciplinary committee of the Bar Council of India is wrongfully made does not by itself give any grievance to the Bar Council of a State.
The person must be aggrieved by the order and not by the consequences which ensue.
Third, it is not the duty of the State Bar Council to attempt to set right any alleged error of the disciplinary committee of the Bar Council of India.
The reason is that no such duty has been imposed or cast by law on the Bar Council of a State.
Fourth, a person can be said to be aggrieved by an order which is to his detriment, pecuniary or otherwise or causes him some prejudice in some form or other.
Fifth, the Bar Council of a State is subordinate to Bar Council of India and is, therefore, not competent to appeal against any orders of the superior body.
Finally, an appeal could have been filed by the Advocate General or the Attorney General of India who have the right to appeal but they have chosen not to do so.
The scheme and the provisions of the Act indicates that the constitution of State Bar Councils and Bar Council of India is for one of the principal purposes to see that the standards of professional conduct and etiquette laid down by the Bar Council of India are observed and preserved.
The Bar Councils therefore entertain cases of misconduct against advocates.
The Bar Councils are to safeguard the rights, privilege and interests of advocates.
The Bar Council is a body corporate.
The disciplinary committees are constituted by the Bar Council.
The Bar Council is not the same body as its disciplinary committee.
One of the principal functions of the Bar Council in regard to standards of professional conduct and etiquette of advocates is to receive complaints against advocates and if the Bar Council has reason to believe that any advocate has been guilty of professional or other misconduct it shall refer the case for disposal to its disciplinary committee.
The Bar Coun 314 cil of a State may also of its own motion if it has reason to believe that any advocate has been guilty of professional or other misconduct it shall refer the case for disposal to its disciplinary committee.
It is apparent that a State Bar Council not only receives a complaint but is required to apply its mind to find out whether there is any reason to believe that any advocate has ben guilty of professional or other misconduct.
The Bar Council of a State acts on that reasoned belief.
The Bar Council has a very important part to play first, in the reception complaints, second, in forming reasonable belief of guilt of professional or other misconduct and finally in making reference of the case to its disciplinary committee.
The initiation of the proceedings before the disciplinary committee is by the Bar Council of a State.
A most Significant feature is that no litigant and no member of the public can straightaway commence disciplinary proceedings against an advocate.
lt is the Bar Council of a State which initiates the disciplinary proceedings.
In finding out the meaning of the words "person aggrieved by an order made by the disciplinary committee of the Bar Council of India", two features are to be kept in the fore front.
First, there is no lis in proceedings before the disciplinary committee.
When the disciplinary committee exercises the power to reprimand the advocate, or suspend the advocate from practice or remove the name of the advocate, the committee does not decide a suit between the parties.
The Bar Council in placing a matter before the disciplinary committee does not act as prosecutor in a criminal case.
A complainant who prefers a complaint against an advocate is not like a plaintiff in a civil suit.
The complaint is examined by the Bar Council in order to find out whether there is any reason to believe that any advocate has been guilty of misconduct. 'The Bar Council may act on its own initiative on information which has come to its notice in the course of its duties.
Second, there is no party to the disciplinary proceedings.
It is because the Bar Council, the Attorney General, the Advocate General, as the case may be, all act in protecting the interests of advocates, the interests of the public.
In so acting there is no conflict between the advocate and another person.
The reason is that it is professional conduct, professional etiquette, professional ethics, professional morality, which are to be upheld, transgression of which results in reprimanding the advocate of suspending him from practice or removing his name from the roll.
With regard to the conduct of the advocates, the State Bar Council plays an important part, vis a vis the disciplinary committee constituted by the State Bar Council.
First, under section 35(1A) of the Act the State Bar Council may either of its own motion or on an application made to it by any person interested, withdraw a proceeding pending before its disciplinary committee and direct the inquiry to be made by ant other disciplinary committee of the State Bar Council.
This indicates the watch that the State Bar Council has to keep.
Its task does not cease on placing a matter before the disciplinary committee.
This provision shows on one hand the abiding interest of the State Bar Council in the matter and on the other the duty of guarding the professional ethics with which it is entrusted.
Second, under section 36(2) of the Act, a 'State Bar Council may make a report to the Bar Council of India to 315 withdraw before the disciplinary committee of the Bar Council of India any proceeding for disciplinary action against any advocate pending before the disciplinary committee of a State Bar Council.
These provisions indicate that after the State Bar Council has placed the matter before its disciplinary committee, the Bar Council continues its check on the proceedings.
These courses of action are procedural.
These steps do not give the State Bar Council any power to deal with the decisions of the disciplinary committee.
The reason why the State Bar Council is empowered under the Act to withdraw proceedings from one disciplinary committee and give it to another or to have the disciplinary proceedings withdrawn from the State for determination by the disciplinary committee of the Bal Council of India is that the State Bar Council is all the time interested in the task of preserving the profession against impurities in the standards of conduct.
The Bar Council is the collective representative of the lawyers, the public, in regard lo the observance of professional ethics by persons belonging to the noble profession.
The words `person aggrieved" are found in several statutes.
The meaning of the words "person aggrieved" will have to be ascertained with reference to the purpose and the provisions of the statute.
Some times, it is said that the words "person aggrieved" correspond to the requirement of locus standi which arises in relation to judicial remedies.
Where a right of appeal to Courts against an administrative or judicial decision is created by statute, the right is invariably confined to a person aggrieved or a person who claims to be aggrieved.
The meaning of the words "a person aggrieved" may vary according to the con text of the statute.
One of the meanings is that a person will be held to be aggrieved by a decision if that decision is materially adverse to him.
Normally, one is required to establish that one has been 'denied or deprieved of something to which one is legally entitled in order to make one "a person aggrieved".
Again a person is aggrieved if a legal burden is imposed on him.
The meaning of the words a "person aggrieved" is sometimes given a restricted meaning in certain statutes which provide remedies for the protection of private legal rights.
The restricted meaning requires denial or deprivation of legal rights.
A more liberal approach is required in the background of statutes which do not deal with property rights but deal with professional conduct and morality.
The role of the Bar Council under the is comparable to the role of a guardian in professional ethics.
The words "persons aggrieved" in sections 37 and 38 of the Act are of wide import add should not be subjected to a restricted interpretation of possession or denial of legal rights or burdens or financial interests.
The test is whether the words "person aggrieved" include "a person who has a genuine grievance because an order has been made which prejudicially affects his interests".
It has therefore, to be found out whether the Bar Council has a grievance in respect of an order or decision affecting the professional conduct and etiquette.
The pre eminent question is: what are the interests of the Bal.
Council? The interests of the Bar Council are the maintenance of standards of professional conduct and etiquette.
The Bar Council has 316 no personal or pecuniary interest.
the Bar Council has the statutory A duty and interest to see that the rules laid down by the Bar Council of India in relation to professional conduct and etiquette are upheld and not violated.
The Bar Council acts as the sentinel of professional code of conduct and is vitally interested in the rights and privileges of the advocates as well as the purity and dignity of the profession.
The interest of the Bar Council is to uphold standards of professional conduct and etiquette in the profession, which is founded upon integrity and mutual trust.
The Bar Council acts as the custodian of the high traditions of the noble profession.
The grievance of the Bar Council is to be looked at purely from the point of view of standards of professional conduct and etiquette.
If any decision of the disciplinary committee of the Bar Council of India is according to the State Bar Council such as will lower the standards and imperil the high traditions and values in the profession, the State Bar Council is an aggrieved person to safeguard the interests of the public, the interests of the profession and the interests of the Bar The Bar Council is "a person aggrieved" for these reasons First, the words "person aggrieved" in the Act are of wide import in the context of the purpose and provisions of the statute.
In disciplinary proceedings before the disciplinary committee there is no lis and there are no parties.
therefore, the word "person" will embrace the Bar Council which represents the Bar of the State.
Second, the Bar Council is "a person aggrieved" because it represents the collective conscience of the standards of professional conduct and etiquette.
The Bar Council acts as the protector of the purity and dignity of the profession.
Third, the function of the Bar Council in entertaining complaints against advocates is whn the Bar Council has reasonable belief that there is a prima facie case of misconduct that a disciplinary committee is entrusted with such inquiry.
Once an inquiry starts, the Bar Council has no control over its decision.
The Bar Council may entrust it to another disciplinary committee or the Bar Council may make a report to the Bar Council of India.
This indicates that the Bar Council is all the time interested in the proceedings for the vindication of discipline, dignity and decorum of the profession.
Fourth, a decision of a disciplinary committee can only be corrected by appeals as provided under the Act.
When the Bar Council initiates proceedings by referring cases of misconduct to disciplinary committee, the Bar Council in the performance of its functions under the Act is interested in the task of seeing that the advocates maintain the proper standards an(l etiquette of the profession.
Fifth, the Bar Council is vitally concerned with the decision in the context of the functions of the Bar Council.
The Bar Council will have a grievance if the decision prejudices the maintenance of standards of professional conduct and ethics.
For these reasons we hold that the Bar Council is an aggrieved person to maintain an appeal under the Act.
The appeals will now be heard on merits by a Division Bench.
317 BEG, J.
I not only concur with the conclusion reached by My Lord the Chief Justice and the reasons given to support it.
but I think that we can and should hold that there was actually a "lis" between tho Bar Council and the allegedly delinquent Advocates who were hauled up before its Disciplinary Committee, on complaints sent by the Executive Committee of the State Bar Council, for what were said to be acts of professional misconduct, The learned Chief Justice has very clearly and succinctly set out the reasons why a State Bar Council is a "person aggrieved" entitled to appeal against orders in disciplinary proceedings against members of the Bar of the State.
It represents the Bar of the State.
It is the "keeper of the conscience" and the guardian of the interests of members of the Bar.
It acts "as the protector of the purity and dignity of the (` profession." Its function in relation to disciplinary proceedings, is to entertain complaints against Advocates, and, when there is a prima facie case of misconduct, to initiate proceedings by sending the complaint to its Disciplinary Committee.
It has an interest in seeing that correct decisions are given upon matters involving allegations of misconduct against members of the Bar of the State.
My learned brother Krishna Iyer has indicated the wide range and the social significance and dimensions of this interest.
A State Bar Council is composed primarily of members elected from amongst Advocates of a State.
Its statutory functions are given in Section 6 of the (hereinafter referred to as 'the Act ').
Amongst these, we are especially concerned here with clauses (c) and (d) of Section 6(t) of the Act, which read as follows: (c) to entertain and determine cases of misconduct against advocates on its roll; (d) to safeguard the rights, privileges and interests; of advocate on its roll;" Under Section 9 of the Act, the State Bar Council constitutes its Disciplinary Committee consisting of "three persons of whom two shall be persons elected by the.
Council from amongst its members and the other shall be a person elected by the Council from amongst Advocates who possess the qualifications specified. ".
Under Section 10 it elects an Executive Committee of five members and an Enrolment Committee of three members.
Thus, the State Bar Council operates through its Committees.
Each Committee has distinct and separable functions.
Each could, therefore, be said to have a "persona" and an identity of its own which is distinguishable from that of the Bar Council as a whole.
Each Committee, no doubt, acts for the Bar Council, but its members are likely to be different although this is not necessarily so.
In any case, when the State Bar Council has sent a case to its Disciplinary Committee, under Section 35 of the Act, that Committee proceeds as an independent and impartial authority which tries a complaint and either dismisses lt or directs proceedings to be filed, or, upon finding an advocate guilty, punishes him by either reprimanding him, suspending him from practice for a specified period, or orders removal of his name 7 L 839 Sup CI/75 318 from its roll of advocates.
Indeed, Section 42(1) of the Act gives the Disciplinary Committee the powers of a Civil Court under the Civil Procedure Code; and, Section 42(2) enacts that its proceedings shall be "deemed" to be judicial proceedings for the purposes mentioned there.
At the trial of a complaint, opportunities to be heard must be given to the Advocate General and to the Advocate who is tried by it.
This has to be done because there are disputes and conflicting interests and points of view on which the Disciplinary Committee has to give its decisions.
Tho Advocate General can appear either personally or through an Advocate representing him.
He presumably represents public interest as well as the interests of the legal profession of which he is the formal head in the State.
It is true that there is no provision in Section 35 of the Act for impleading the State Bar Council which, on its executive side, initiates the proceedings by sending the case to its Disciplinary Committee.
But, if the Bar Council has a separable interest, as a guardian of the rights and privileges of the members of the Bar specifically mentioned by Section 6(1)(d) of the Act, there is no reason why I right to represent this interest before its on Disciplinary Committee well as before the Bar Council of India, on an appeal under Section 37 of the Act, or, on the further appeal to this Court under Section 38 of the Act, should be denied to it.
Neither Section 37 nor Section 38 of the Act mention the State Bar Council as a separate entity.
Nevertheless if, as we are holding, it can have the locus standi and rights of "person aggrieved", affected by the results of such proceedings, I see no reason why we should not say that in tho position of a party to a "lis" or a dispute between itself and the allegedly delinquent Advocate towards the decision of which the proceedings are directed.
The term "lis" is not confined to litigation by means of a suit in a Court of law.
In Butler vs Mountgarret it was held that a "suit is not necessary to constitute lis".
It was pointed out there that "a family . controversy capable of being litigated is a lis mota '.
In B. Johnson & Co. (Builders) vs Minister of Health(2), Lord Greene, M.R. said: `"Lis implies the conception of an issue joined between two parties, The decision of a lis. is the decision of that issue".
If the State Bar Council, acting through its through it Executive Committee, has found a prima facie case to be send and tried by its Disciplinary Committee, it performs the functions of a prosecuting agency.
lt does so i the discharge of its duty to safeguard '`the rights, privileges and interests ' of advocates as a whole on its roll which are affected by the misconduct of an advocate.
There arc, therefore, triable issues between it and the; (, individual Advocate accused of misconduct.
lt seems to mc that we could and should, therefore, hold that the State Bar Council, in its executive capacity, act as the prosecutor through its Executive Committee There is no incongruity in its Disciplinary Committee, representing is judicial want" functioning as an impartial Judge whose decisions ar. binding upon the State Bar Council.
If are were holding that Bar Council, dissatisfied with a decision of its Disciplinary Committee, can appeal against it, we her to, I think, as its logical corollary, also hold that it is (1) 7 H. L. Ca. 641.
(2) ; At 399. 319 a party to a "lis".
Our` opinion that it is a 'person aggrieved", within the meaning of that expression as used in Sections 37 and 38 of the Act, necessarily implies that.
The point of view stated above rests upon the distinction between the two different capacities of the State Bar Council; an executive capacity, in which it acts as the prosecutor through its Executive Committee, and a quasi judicial function, which it performs through s Disciplinary Committee.
If we can make this distinction, as I think we can, there is no merger between the prosecutor and the Judge here.
If one may illustrate from another sphere, when the State itself gets through it executive agencies to prosecute and then though its judicial wing to decide a case there is no breach of a rule of natural justice.
The prosecutor and the Judge could not be said to have the some personality or approach just because both of them represents different aspects or functions of the same State.
For the reasons given above, I do not see any objection to a participation of State Bar Council in its executive capacity, in a disciplinary proceeding against an Advocate on its roll, either at the initial or the appellate stages.
Before it can become a person aggrieved" by an order against which it could appeal, there must have been a "lis" or a dispute to be decided which gives rise to the order complained of.
To such a "lis" the State Bar Council, in its executive capacity must be deemed to be a party.
Apparently, its interests are presumed to be sufficiently represented by the Advocate General.
Hence, it was not considered necessary to provide for its separate representation by a notice to be given by its Disciplinary Committee; is provided for in the case of the Advocate General But, their seems to me to be no legal obstacle in the way of its separate representation, if.
it so desires, even before its own Disciplinary Committee.
It certainly has notice of every complaint whenever it send it to its Disciplinary Committee.
Its right to appeal in any event, as a "person aggrieved", seems squarely covered by the provisions of Sections 37 and 38 of the Act.
It may be mentioned here that the respondents themselves treated the Bar Council as a party interested in a "list", so that it could become a "person" aggrieved" by the setting aside of the orders against respondents, when they impleaded the State Bar Council as a respondent in their appeals to the Bar Council India.
Its statutory right to appeal to this Court under Section 38 is not affected by the mere fact that it did not put in appearance before the Bar Council of India.
KRISHNA IYER, J.
My concurrence the opinion which has been handed down by the learned Chief Justice is ordinarily dissuasive of a separated long note, save when a fresh perspective is to be presented or new frontiers are to be drawn by doing so.
Partially, my supplementary has this apology.
The tow day long arguments in this case have been devoted to a construction of two simple words in common use forming the 320 expression 'person aggrieved '.
Precedential erudition and traditional approaches not withstanding, the key to tho meaning of the expression in question lies in plain English plus the social fell of the Status and the public commitment of the legal profession, the regulation on which has been achieved by the (for short, the Act) wherein the above words occur.
Legal scholarship, to be fruitful, must focus on the life style of the law without getting lost in mere logomachy.
The short question is as to whether the State Bar Council is a person aggrieved ' within the meaning of section 38 so that it has locus standi to appeal to this Court against a decision of the Disciplinary Tribunal of the Bar Council of India which, it claims, is embarrassingly erroneous and, if left unchallenged, may frustrate the high obligation of maintaining standards of probity and purity and canons of correct professional conduct among the members of the Bar on its rolls.
I skip the facts as they have been 5 out in the judgment of the armed Chief Justice, except to state.
that a number of advocates, who are ranged as respondents, had been found guilty by the Disciplinary Tribunal of the State Bar Council of unseemly soliciting but,.
On appeal.
the disciplinary body of the National Bar Council, exonerated them on certain view of 'professional conduct ' which disturbed the State Bar Council and even the All India Bar Council, with the result that the former came upto this Court in appeal and.
the latter activity supported this stand.
The hackneyed phrase, 'person aggrieved is not merely of frequent occurrence m statutes and in the writ jurisdiction but has come up for judicial consideration in Anglo American and India courts in a variety of situations and legislative settings.
Notwithstanding the slippery semantics of such legalese, the Indian legislative draftsmen have continued to use them, out of linguistic allegiance to the British art, and Indian Judges have frequently sought interpretative light from English authorities of ancient vintage.
These 'borrowed ' drafting and interpretative exercises arc sometimes inept when time and country change and the context and text of the statute vary.
I stress this aspect since much of the time of the Courts in India is consumed by massive, and sometimes mechanical, reliance on exotic constructions and default in evolving legislative simplicity and avoiding interpretative complexity.
At a time when our Courts are on trial for delayed disposals and mystifying processes, this desideratum becomes all the more urgent.
Otherwise, why should decoding a single expression 'person aggrieved ' take two days of learned length ? Even.
in England, so well known a Parliamentary draftsman as Francis Bennion has recently pleaded in the Manchester Guardian against incomprensible law forgetting 'that it is fundamentally important in a free society that the law should be readily ascertainable and reasonably clear, and that otherwise it is oppressive and deprives 321 the citizen of one of his basic rights '.
It is also needlessly expensive and wasteful.
Reed Dickerson, the famous American Draftsman. said: 'lt cost the Government and the public many millions of dollars annually '.
The Renton Committee, in England, has reported on drafting reform but it is unfortunate that India is unaware of this problem and in a post Independence statute like the legislators should still get entangled in these drafting mystiques and judges forced lo play a linguistic game when the country has an illiterate laity as consumers of law and the rule of law is basic to our constitutional order.
Back to the issue.
Is the State Bar Council a 'person aggrieved '? No narrow.
pedantic, technical or centenarian construction can be blindly applied.
On the other hand, a spacious construction, functionally informed by the social conscience and the salutary purpose of the enactment must illumine the judicial effort.
So viewed, the ample.
import and breath of meaning of the words 'person aggrieved ' will .
embrace the State Bar Council,for reasons which 1 shall presently set out.
Each statute has a personality and a message.
Judicial interpretation is not bloodless and sterile exercise in spinning subtle webs sometimes cobwebs, out of words and phrases otherwise simples.
but to unfold the scheme of the Legislation insightfully, sense its social setting and read the plain intendment.
This living approach can do justice to law, We arc here concerned with a legislative outfit for a national Bar, organising and prescribing its statutory autonomy, elective structure, public functions, internal regulation and ultimate appeal to the Supreme Court where canons of good conduct have been allegedly breached by delinquent lawyers.
This conspectus will show what a vibrant and responsible role the Bar Council has to play at the State and national levels and any interpretation which will detract from this supervisory status of the Bar Council will be incongruous with the founding creed of the institution.
The paramount concern of the Bar Councils is the lawyer, the public and professional responsibility.
Anything that hurts the health of this system is a social trauma, a legal grievance, a special injury, for them.
After all, 'lawyer power ' lasts not through peak incomes of a few and security of statutory monopoly, but by the high comport and ethics of the many, screening and weeding deviants and delinquents.
Let us get a glimpse of the great expectations about The legal profession in society.
Long ago, De Toqueville trenchantly remarked that the profession of law.
"is the only aristrocratic element which can be amalgamated without violence with natural elements of democracy.
I cannot believe that a Republic could subsist if the influence of lawyers in public business did not increase in proportion to the power of the people.
" He rightly stressed that 'lawyers belong to the people by birth an.
interest, to the aristocracy by habit and taste '.
Thus the profession is 322 the connecting link between the community and the Administration given an enlightened, goal oriented group outgrowing its elitist mores indeed today lawyers are recruited also from the lower brackets.
India has huge number of law men who can be a force.
What Prof. Brabanti observed about the Pakistan Bar has some, only some though, relevance to India, and I quote: "The sheer size of the legal community, strongly organised into bar associations and closely allied with equally strong courts has not only been a major source for the diffusion and regeneration of norms generally, but by weight of numbers has enabled the courts to remain strong and has prevented the rise of administrative lawlessness.
There is s curious anomaly here.
The legal community, while often antagonistic to government and constraining executive action, is nevertheless closely identified normatively and culturally with the bureaucratic elite.
This identification curiously coupled with health antagonism actually enhances the strength of the legal community.
It derives popular support from its ostensible opposition to Government and at the same time elicits bureaucratic support in the community at large.
It has a net work of relationships in rural areas and the cities.
In short, the legal community is a force to be, reckoned with.
It has challenged the executive during and after martial law, it has defined efforts to restrict court jurisdiction, it has compelled justiciability of fundamental rights, it has forced abrogation of several restrictive enactments.
Is this law as an impendiment to political development ? Is this misallocation of scarce resources in the system? Is this unproductive use of non productive man power ? On the contrary, it seems to us that this is the Very genius of political development." Michael Hager, after quoting Prof. Brabanti, comments (in his article in the American Bar Association Journal, January 1972, Vol. 58, on .The Role of Lawyers in Developing Countries ') "The legal profession has a unique opportunity to effect change from within the political elite, to exert pressure from without and to win over the general public to development policies.
And as Mihaly and Nelson observed with respect to legal education, 'law graduates usually fan out not only into legal practice but also into responsible positions in business, government and politics '.
" The Bar is not a private guild, like that of 'barbers butchers and candlestick makers ' but, by bold contrast, a public institution committed to public justice and pro bono publico service.
The grant of monoply licence to practice law is based on three assumptions There is a socially useful function for The lawyer to perform.
(2) The lawyer is a professional person who will perform that function, and (3) His performance as a professional person is regulated by himself and more normally, by the profession as a whole.
The central function 323 That the legal profession must perform is nothing less than the administration of justice ( 'The Practice of Law is, a Public Utility ' `The Lawyer, The Public and Professional Responsibility ' by F. Raymond Marks et al Chicago American Bar Foundation, 1972, p.288 289).
A glance at The functions of the Bar Council, and it will be apparent that a rainbow of public utility duties, including legal aid to the pour, is cast on these bodies in the national hope that the members of this monopoly will serve society and keep to canons of ethics befitting an honourable order.
If pathological cases of member misbehaviour occur, the reputation and credibility of the Bar suffer a mayhem and who, out the Bar Council, is more concerned with and sensitive to this potential disrepute The few black sheep bring about? The official heads of the Bar i.e., the Attorney General and the Advocates General too are distressed if a lawyer 'stoops to conquer ' by resort to soliciting, touting and other corrupt practices.
I may now refer to A. P. Gandhi vs H. M. Seervai (1) where diver gent opinions were delivered but all concurred in treating the Bar Council as an 'aggrieved person '.
The earlier decision in Bhataraju (2) strikes a note in consonance with this view.
No hesitancy inhibits me from hazarding the opinion that the social canvas must be spread wide when making out the profile of a statute like the for the good reason that the Bar has a share in being the sentinel on the qui vive when the legal dykes of Right and justice are breached by authoritarianism or citizen wrong doing.
Nor do I conceal my halfhorror at any professional tribunal glossing over 'snatching briefs ' and 'dragging clients ' provided they are proved as less than gross misconduct.
If the salt lose their savour, wherewith shall they be salted ? However, I hasten to make it plain, to avoid prejudice to the parties.
that I totally desist from pronouncing on the merits of tho evidence in this case.
One more point.
A case of professional misconduct is not a lis in the British sense nor a case and controversy in the American meaning.
It is a public investigation about misconduct by one belonging to public profession where every member of the Bar with a reputation to lose has a stake and every one concerned with the justice administration is interested.
Traditionally used to the adversary system, we search for individual persons aggrieved.
But a new class of litigation public interest litigation where a section or whole of the community is involved (such as consumers ' organisations or NAACP National Association for Advancement of Coloured People in America), emerges.
In a developing country like ours, this pattern of public oriented litigation better fulfils the rule of law if it is to run close to the rule of life.
The Bar Council clearly comes within this category of organisations When a lawyer is involved.
I derive support for this philosophy of approach from academic and judicial opinion in England and America.
A question arose whether a railroad company BAR (Bangor and Aroostook Railroad) could bring an action against the stockholders for having drained BAR (1) [197] I S C. R. 863.
(2) [1955] 1 section C. R. 1055,1064.
324 improperly.
Although an academic critic took the view that the District Court was incorrect in its view that BAR was the 'sole beneficiary ', he went on to state that the public 's interest in the financial health of BAR provided a separate interest in bringing the action.
The learned author wrote: "It would seem to be incontestable that the public has a very n real interest in rail roads.
Railroads have been found vital to a healthy national economy; any such factor must.
a priori, be deemed a potent component of the public welfare.
As such, it is evident that a financially healthy railroad is of concern not only to its stockholders, but to the public as well Finding that the management of a railroad has obligations running to the public as well as fiduciary duties owing to the corporation 's stockholders, the Court concluded that, of these two responsibilities, tho public interest is paramount.
"It must be remembered," the Court cautioned, "that railways are public corporations organized for public purposes.
They all primarily owe duties to the public of a higher nature even than that of earning large dividends for their shareholders." (Review by James 1;.
Simon of Bangor & Aroostook R. R vs Bangor Punta operations, Inc (Bangor & Aroostook), ; Cir. 1973), cert.
granted, 94 S.Ct.
863 (1974) Columbia Law Review Vol.
74 No. 3, April 197 p. 528 at pp.
531 532).
Similarly, the American Supreme Court relaxed from the restrictive attitude towards 'standing ' in public action in Baker vs Carr ; (1962), vide Maryland Law Review, Vol.
XXXIII 1973 p.506: "In Baker, voters challenged the failure of the Tennessee legislature to reapportion itself since 1901; the plaintiffs lived l. in countries which had become under represented under the old law.
The Supreme Court held that these voters had the requisite standing to challenge the inaction of the legislature The Court expanded the notion cf direct injury to include mere 'debasement ' of a vote, rather than the total deprivation which had previously been required." American jurisprudence has recognised, for instance, the expanding importance of consumer protection in the economic system and permitted consumer organisations to initiate or intervene in actions, although by the narrow rule of 'locus standi ', such a course could not have been justified (see p. 807 New York University Law Review.
46. 1971).
In fact, citizen organisations have recently been Campaigning for using legal actions for protection of community interest, broadening the scope of 'standing ' in legal proceedings (see p.403 Boston University Law Review, Vol.
51, 1971).
325 In the well known case of Attorney,General of the Gambia vs Pierr sarr N. 'Jie(l), Lord Denning observed about the Attorney General 's standing thus: ".
The words 'person aggrieved ' are of wide import and should not be subjected to a restrictive interpretation.
They do not include, of course, a mere busy body who is interfering.
in things which do not concern him; but they do include a person who has a genuine grievance because an order has been made which prejudicially affects his interests.
Has the Attorney General a sufficient interest for this purpose ? Their Lordships think that he has.
The Attorney General in a colony represents the Crown as the guardian of the public interest.
It is his duty to bring before the judge any mis conduct of a barrister or solicitor which is of sufficient gravity to warrant disciplinary action.
" Ray, J (as he then was) crystallised this ratio in A.P. Gandhi (supra) thus: "The Judicial Committee construed the words 'person aggrieved ' to include the Attorney General of Gambia as representing the public interest." (p.927) "The profession touches the public on the one hand and the courts on the other.
On no other basis could the presence of J., the Advocate General be explained." (p.928) Although not strictly confined to 'standing ' with reference to suits jurists have thrown some light on this subject.
Professor S.A de Smith has observed: "All developed legal systems have had to face the problem of adjusting conflicts between two aspects of the public interest the desirability of encouraging individual citizens to participate actively in the enforcement of the law, and the undesirability of encouraging the professional litigant and the meddlesome interloper to invoke the jurisdiction of the courts in matters that do not concern him." (Quoted ill 'Standing Justifiability ' by V. section Deshpande Journal of the Indian Law Institute April June 1971 Vol. 13, No. 2, p. 174) Professor H.W.R. Wade has observed: "In other words, certiorari is not confined by a narrow conception of locus standi.
It contains an element of the actio (1) 326 popularis.
This is because it looks beyond the personal rights A of tho applicant; it is designed to keep the machinery of justice in proper working order by presenting inferior tribunals and public authorities from abusing their powers." (Standing and Justiciability bid, p. 175) The possible apprehension that widening legal standing With a public connotation may unloose a flood of litigation which may overwhelm the judges is misplaced because public resort to court to suppress public mischief is a tribute to the justice system.
In this very case, to grant an exclusionary windfall on the respondents is to cripple the Bar Council in its search for justice and insistence on standards.
I have been long on a short point, but brevity, where there is some thing to speak, is not the soul of wit but a sign of something different.
| IN-Abs | The State Bar Councils created by the have been entrusted with the functions inter alia of entertaining and determining cases of misconduct against advocates on their rolls and to safeguard their rights, privileges and interests.
The Bar Council of India which is a national body created by the Act is entrusted with the work of laying down standards of professional conduct and etiquette and overseeing the functioning of the State Bar Councils.
Under section 35 of the Act, if a State Bar Council, either on receipt of a complaint or otherwise has reason to believe that any advocate on its roll has been guilty of professional or other misconduct, it shall refer the case to its Disciplinary Committee which, after due inquiry may impose certain penalties.
An appeal from the decision of the State Bar Council lies to the Bar Council of India.
Any "person aggrieved" by an order of the Disciplinary Committee of the Bar Council of India may, under section 38, appeal to the Supreme Court.
In exercise of the Powers conferred by the Act the Bar Council of India framed rules relating to professional conduct and etiquette, r. 36 of which says that advocates shall not solicit work or advertise themselves.
The State Bar Council, in the present case, issued notices to the respondents suo motu alleging that they stood at the entrance of the court house at the Presidency Magistrate 's Court, Fort Bombay and solicited work etc., and that the said act amounted to professional and/or other misconduct. 'the Disciplinary Committee of the State Bar Council found the respondents guilty of conduct which absolutely lowered the reputation of the Bar in the eyes of the public and suspended them from practising as advocates.
The respondents ' appeal to the Bar Council of India having been allowed, the State Bar Council has come up in appeal to this Court under section 38.
Before the Bar Council of India the State Bar Council had not appeared.
F On the question whether the State Bar Council is a "person aggrieved," Allowing the appeals, Held: ^ [By the full Court], The State Bar Council is an "aggrieved person" to maintain an appeal under the Act.
per Ray, C.J., Khanna, Mathew, Gupta and Murtaza Fazal Ali, JJ): (1) The Bar Council is a "person aggrieved" because (i) the words "person aggrieved" in the Act are of wide import in the context of the purpose and provisions of the statute and should not be subjected to a restricted interpretation of possession or denial of legal rights or burdens or financial interests.
In disciplinary proceedings before the Disciplinary Committee there is no lis and there are no parties.
The word 'person ' will embrace the Bar Council which represents the Bar of the State; (ii) the Bar Council represents the collective conscience of the standards of professional conduct and etiquette.
The Bar Council acts as the protector of the purity and dignity of the profession; (iii) the function of the Bar Council in entertaining complaints against advocates indicates that the Bar Council is interested in the proceedings for the vindication of discipline.
dignity and decorum of the profession; (iv) when the Bar Council ini 307 tiates proceedings by referring eases of misconduct to the Disciplinary Committee, the Bar Council, in the performance of its function under the Act, is interested in the task of seeing that the advocates maintain proper standards and etiquette of the profession and (v) the Bar Council is vitally concerned with the decision, in the context of its functions.
The Bar Council will have a grievance if the decision prejudices the maintenance of standards of professional conduct and ethics.
[315G: 316D G] (2) (a) The Bar Council acts as the sentinel of professional code of conduct and is vitally interested in the rights and privileges of the advocates as well as the purity and dignity of the profession.
[316A B] (b) The grievance of the Bar Council is to be looked at purely from the point of view of standards of professional conduct and etiquette.
If any decision of the Disciplinary Committee of the Bar Council of India is according to the State Bar Council such as will lower the standards and imperil the high traditions and values in the profession the State Bar Council is an "aggrieved person" to safeguard the interests of the public, the interests of the profession and the interests of the Bar.
[316B C] (3) The most significant feature in the matter of initiation of proceedings before the Disciplinary Committee is that no litigant and no member of the public can straightaway commence disciplinary proceedings against an advocate It is the Bar Council of a State which initiates the disciplinary proceedings.
There is no lis in proceedings before the Disciplinary Committee The Bar Council, in placing a matteu.
before the Disciplinary Committee, does not act as a prosecutor in a criminal case.
A complainant who prefers a complaint against an advocate is not like a plaintiff in a civil suit.
The Bar Council may act on its own initiative on information which has come to its notice in the course of its duties.
There is no party to the disciplinary proceedings because the Bar Council, the Attorney General, the Advocate General act in protecting the interests of advocates and the interests of ' the public.
In so acting there is no conflict between the advocate and any other person because it is professional conduct, professional etiquette, professional ethics, professional morality, which are to be upheld.
transgression of which results in reprimanding the advocate or suspending him from practice or removing his name from the roll.
[314B F] Adi Pherozshah Gandhi vs H. M. Seervai, Advocate General of Maharashtra.
Bombay [1971] I S.C.R. 863, referred to Beg J. (concurring): (1) There is no objection to a participation of a State Bar Council in its executive capacity in a disciplinary proceeding against an advocate on its roll either at the initial or at the appellate stages.
Before it can become a "person aggrieved" by an order against which it could appeal, there must have been a lis or a dispute to be decided which gives rise to the order complained of.
To such a "lis" the State Bar Council, in its executive capacity, must be deemed to be a party.
There seems to be no legal obstacles in the way of its separate representation even before its own Disciplinary Committee.
Its right to appeal as a "person aggrieved" is squarely covered by the provisions of sections 37 and 38 of the Act.
In the present case the respondents themselves treated the Bar Council as a party interested in the lis when they impleaded the State Bar Council as a respondent in their appeals to the Bar Council of India.
Its statutory right to appeal under section 38 is not affected by the mere fact that it did not put in appearance before the Bar Council of India.
[319D G] (2) The State Bar Council operates through its committees.
Each committee has distinct and separable functions.
Each could be said to have a "persona" and an identity of its own, which is distinguishable from that of the Bar Council as a whole [317G] 3 (a) If the Bar Council has a separable interest as a guardian of the rights and privileges of the members of the Bar, specifically mentioned by section 6(1)(d) of the Act.
there is no reason why a right to represent this interest before its 308 own Disciplinary Committee as well as before the Bar Council of India, on an A appeal under section 37 of the Act, or., on further appeal to this Court under section 38 of the Act should be denied to it.
[318C D] 4(a) When the State Bar Council can have locus standi and rights of a "person aggrieved" affected by the results of such proceedings there is no reason why it should not be in the position of a party lo a lis or dispute ' between itself and the allegedly delinquent advocate.
[318D E] (b) The term 'lis ' is not confined to litigation by means of a suit in a court of law.
[318E] Butler vs Mountgarret 7 H.L. Ca.
641 and B. Johnson & Co. (Builders) vs Minister of Health 399, referred to.
The State Bar Council in its executive capacity acts as the prosecutor through its Executive Committee.
There is no incongruity in its Disciplinary Committee representing its judicial wing, functioning as an impartial judge whose decisions are binding upon the State Bar Council.
It is a "person aggrieved" within the meaning of that expression used in sections 37 and 38 of the Act.
[318G H] Krishna Iyer, J. (concurring): (1) The Bar is not a private guild, like that of 'barbers, butchers and candlestick makers ' but, a public institution committed to public justice and pro bono publico service.
The grant of a monopoly licence to practice law is based on three assumptions; (i) there is a socially useful function for the lawyer to perform; (ii ) the lawyer is a professional person who will perform that function; and (iii) his performance as a professional person is regulated by himself and more formally, by the profession as a whole.
The central function that the legal profession must perform is nothing less than the administration of justice.
[322G H] (2) In a developing country the pattern of public oriented litigation better fulfils the rule of law if it is to rule close to the rule of life.
The Bar Council clearly comes within this category of organisations when a lawyer is involved.
(3) A case of professional misconduct is not a lis in the British sense nor a case and controversy in the American meaning.
It is a public investigation about misconduct by one belonging to a public profession where every member of the Bar with a reputation to lose has a stake and everyone concerned with the justice administration is interested. 'the Bar has a share in being the sentinel on the qui vive when the legal dykes of right and justice are breached by authoritarianism or citizen wrongdoing.
[323F Gl (4) The possible apprehension that widening legal standing with a public connotation may unloose a flood of litigation which may overwhelm the judges is misplaced because public resort to court to suppress public mischief is a tribute to the justice system.
In this case to grant an exclusionary windfall on the respondents is to cripple the Bar Council in its search for justice and insistence on standards.
[326B] G A. P. Gandhi vs H. M. Seeravai, [1971] 1 S.C.R. refered to.
|
Civil Appeal No. 254 (N) of 1974.
Appeal by special leave from the judgment and order dated the 30th November, 1972 of the High Court of Orissa in O.J.C. No. 129 of 1970.
Gobind Das and B. Parthasarathi, for the appellant.
B. P. Maheshwari and Suresh Sethi, for respondent No. 1.
The Judgment of the Court was delivered by UNTWALIA, J.
The State of Orissa has preferred this appeal by special leave from the judgment and order of the High Court passed in Writ Petition filed by respondent No. 1.
Respondent No. 2 was appointed by promotion to the post of Joint Director of Industries, Government of Orissa in supersession of the claim of respondent No. 1.
The High Court has quashed the said order and directed the appellant to consider the case of respondent No. 1 for promotion to the post of Joint Director according to his seniority in the combined cadre formed by Resolution dated 2 10 1967.
Rule 3(1) (ii) of the Orissa Industries Service Rules, 1971 has been struck down as being violative of Article 16 of the Constitution of India.
Respondent No. 1 was appointed as a lecturer in Mining in the Orissa School of Mining Engineering? Keonjhargarh on 6 2 1960.
The said School was brought under the administrative control of the Industries Department of the Government of Orissa in pursuance of a Resolution dated 18 2 1960.
The service of respondent No. 1 thereupon stood transferred under the administrative control of the Industries Department with effect from 21 3 1960.
The post of the lecturer in the Mining Engineering School was upgraded by order of the State Government made in August, 1960.
The petitioner was brought into the common cadre of the Industries Department of Government of Orissa and while he was so continuing, he was appointed as Principal of the Mining Engineering School.
The provisional appointment made was regularized by the Industries Department by a notification dated 19 12 1962, a copy of which was Annexure D/2 to the Writ application.
This notification clearly shows that at that time respondent No. l was treated as an officer of the Industries Department.
Then came a Resolution of the Government dated 21 4 1964.
The common cadre of the Industries department was bifurcated into two.
A separate cadre was created for teaching posts of Engineering Schools in Orissa including the Mining Engineering School.
Respondent No. 1 exercised his option to remain in the teaching cadre of the Industries Department.
As per Resolution of the Government dated 2 10 1967 the two separate cadres in the Industries Department were again amalgamated and merged into one.
Consequently the cadre of the teaching staff of the Engineering Schools including the Mining Engineering School and that of the administrative state became a single combined cadre.
6 L 839 Sup Cl/75 302 Even then respondent No. I was not considered for promotion to the post of Joint Director when respondent No. 2 who was junior to him was promoted to the post.
Feeling aggrieved by the non consideration of his case for promotion, respondent No. 1 filed the writ application in the year 1970.
During the pendency of the writ application, the Governor of Orissa framed the orissa Industries Service Rules, 1971 hereinafter called the Rules, under proviso to Article 3()9 of The Constitution.
Respondent No. 1 amended his writ application, 1 made out a case of discrimination in the framing of the Rules and attacked them as being violative of Articles 14 and 16 of the Constitution.
In paragraph S of the counter filed by the appellant the formatio of a combined cadre by Resolution dated 2 10 1967 was admitted.
But it was asserted that in spite of the merger of the two cadres into one the intention of the Government was to treat the post of the Principal cf a Mining Engineering School as an ex cadre post under the Industries Department.
The Mining Engineers were excluded from the junior grade of service under the Industries Department in accordance with the Rules of 1971.
Earlier also, respondent No. 1 got class I post out of turn treating him as belonging to ex cadre post.
The High Court has come to the conclusion that before 21 4 1964 there were no separate cadres for the teaching and the administrative staff of the Industries Department.
The cadre was one.
It was bifurcated in 1964 and the two bifurcated cadres were again united and merged into one on and from 2 10 1967.
There was, therefore, no justification at all in not considering the case of respondent No. 1 for promotion to the post of Joint Director as all persons in the combined cadre eligible for promotion had to be considered.
Respondent No. 1 was senior to respondent No. 2 in the combined cadre and yet his claim was ignored on a ground which was not substantiated.
The relevant rule was discriminatory and had no reasonable nexus with the object of the Rules.
The judgment of the High Court was handed down on the 30th November, 1972 long before the issuance of the notification dated 27th June, 1975 by the President of India under Article 359(1) of the Constitution.
The rule was declared ultra vires on the ground of J violation of Articles 14 and 16.
The State of orissa was the appellant before us.
It was, therefore, agreed on all hands that this appeal was not a proceeding pending in this Court for the enforcement of the right under Article 14 of the Constitution and was, therefore, not suspended.
The enforcement of the right was made by the delivery of the High Court judgment and the State merely wanted in this appeal a deletion of that enforcement.
Mr. Gobind Das, learned counsel for the appellant, submitted that the posts of the teachers in the Mining Engineering School in Orissa including the posts of the Principal have always been treated as ex cadre posts in the Industries Department.
The teachers and the Principal of the Mining Engineering School were not considered for promotion to the posts of Administrative Department because few persons 303 were available to man the posts in the Mining Engineering School.
It was because of this reason that the case of respondent No. 1 was not considered and the Rules were also framed with that object in view.
In any view of the matter, counsel submitted, that the whole of Rule 3(1) (ii) ought not to have been declared as void and only the offending portion ought to have been struck down.
The main part of the argument put forward on behalf of the appellant does not stand scrutiny and must be rejected.
It could not be seriously disputed that respondent No. 1 was an officer of the Industries Department and appointed to the post of the Principal of the Mining Engineering School in that Department.
There is nothing to indicate that the post of the Principal or of the teacher of any Engineering School or of the Mining Engineering School was an ex cadre post.
Then came the Resolution date(l 21st April, 1964.
The new scales of pay were fixed for the teachers in Engineering in The Engineering Schools including the Mining Engineering School in the State of Orissa The contention of Mr Das that this fixation of scales was only for the Engineering Schools and not for Mining Engineering School is not correct.
Clearly all Engineering Schools were placed on the same looting and paragraph 3 of` this Resolution runs as follows: "The teaching posts in Engineering Schools which till now were included in common cadre with other posts in the Directorate of Industries will be placed in a separate cadre to which the above scale of pay will apply.
Then came the merger resolution after about three years on the 2nd October, 1967 a copy of which was Annexure I to the writ application.
The subject of the notification, Annexure l, is ' 'formation of a combined cadre for the officers of the Industries Department".
It was clearly mentioned hl This notification that after the teaching posts were placed in a separate cadre "it was felt that the promotion prospects would be bleak due to the formation of a separate cadre for teachers in view of the limited posts available for promotion".
Hence formation of separate cadre for teachers was considered not to be beneficial to them.
So the combined cadre was brought into force with effect from the date of the issue of the Resolution dated 2nd October, 1967 in supersession of the earlier decision to have a separate cadre for teachers.
Lastly it was stated in this Resolution "The conditions of service of all the officers will be governed by a set of cadre rules to be framed later on".
No rules were framed until the framing of the Rules in 1971.
As against a categorical statement in the Resolution dated 2 10 1967 there was nothing whatever to show that the post of a teacher or the Principal in the Mining Engineering School was treated as an ex cadre post and on a separate footing for the purpose of promotion to the administrative posts.
The non consideration of the case of respondent No. 1 at the time respondent No. 2 was promoted to the post of Joint Director in or about the year 1969 was wholly arbitrary, unjustified and illegal.
The High Court was right in making the order which it did on the writ application of respondent 304 As against the purpose and object of the merger of the cadre mentioned in the Resolution dated 2 10 1967 we find Rule 3 of the Rules going contrary to them.
Rule 9(1) of the Rules says: "Promotions to the posts of Senior grade in Class I shall be made from among the members of the Junior grade in Class I :" Constitution of the service is provided in Rule 3.
We are concerned with Rule 3(1).
It reads as follows: "3 ( 1 ) The cadre of the service shall consist of two branches, viz., Class I and Class ii, the former comprising two grades, viz., the Senior grade and the Junior grade, as indicated below: (i) The Senior grade shall include posts of Joint Directors and officers of equivalent status as may be declared by Government from time to time.
(ii) The Junior grade shall include the posts of Deputy Directors, Senior Lecturers in Engineering Schools and such other posts as may be declared by Government from time to time to be of equivalent status, besides the posts of Principal.
Engineering Schools (except Mining Engineering) and Polytechnics which carry a special scale of pay.
Clause (ii) of the Rules when it says in the first part that the "junior grade shall include the posts of Deputy Directors, Senior Lecturers in Engineering Schools" it means clearly Senior Lecturers in Engineering Schools not excluding Mining Engineering School.
But in the last part when in the junior ;grade were included the posts of Principals, Engineering Schools by the words "except Mining Engineering" given in the parenthesis, the post of the Principal of the Mining Engineering School was excluded.
It was so done during the pendency of the writ application of respondent No. 1 and without any reasonable and sound basis for making a discrimination a propos the post of the Principal of the Mining Engineering School.
We find no justification for making the distinction in the junior grade of Class I service in the case of the Principal of Mining Engineering School.
The rule in that regard has rightly been held to be violative of Articles 14 and 16 of the Constitution by the High Court.
But striking down of the whole of clause (ii) of Rule 3(1) of the Rules was not necessary.
Only the words in parenthesis had to be deleted and struck down on that account.
That would serve 305 the purpose of making the posts of Principal of all Engineering Schools including the Mining Engineering School being the posts in the junior grade, Class I.
For the reasons stated above, we find no merit in this appeal.
It is accordingly dismissed but subject to the clarification made above with costs payable to respondent No. 1.
V.P.S. APPeal dismissed.
| IN-Abs | Rule 3(1)(ii) of the Orissa Industries Service Rules, 1971, provided that the junior grade of the service shall include the posts of Deputy Directors, Senior lecturers in Engineering, Schools etc.
besides the posts of Principal, Engineering Schools (except Mining Engineering) and Polytechnics which carry a special scale of pay.
The 1st respondent was appointed a lecturer in a Mining Engineering School.
In 1960, the School was brought under the administrative Control of the Industries Department of the State Government, and the respondent became an officer of the Industries Department.
Later.
he was appointed Principal of the School.
In 1964, there was a bifurcation of the common cadre of the Department, and a separate cadre for teaching posts of Engineering Schools in the State was created.
In 1967, the two cadres were again merged forming a combined cadre for the officers of the Industries Department.
The reason given for the merger was that the separate cadre for teachers was not beneficial to them because, promotion prospects for them were bleak in view of the limited posts available for promotion.
After the merger, in 1969, even though the 1st respondent was senior to the 2nd respondent, the latter was promoted as Joint Director superseding the former.
The High Court quashed the order and struck down r. 3(1)(ii) as violative of article 16.
Dismissing the appeal to this Court, ^ HELD: (1) In the resolution of 1967 merging the two cadres it was stated that the conditions of service of all the officers will be governed by a set of cadre rules to be framed later, but no such rules were framed at the time of promotion of the 2nd respondent.
The 1971 rules were framed during the pendency of the writ application, filed by the 1st respondent, in the High Court.
There was, therefore, at the time of promotion of the 2nd respondent, nothing to show that the post of a teacher or the Principal of a Mining Engineering School WAS treated as an ex cadre post and on a separate footing for the purpose of promotion to the administrative posts.
[303G H] (2) Rule 3(1)(ii) when it says in the first part Senior lecturers in Engineering Schools, it includes senior lecturers of Mining Engineering School also.
Even when the two cadres were separated, all Engineering Schools including Mining Engineering Schools were placed on the SAME Footing.
But, in the last part of the rule when referring to the post of Principal, the Principal of a Mining Engineering School is excluded.
The exclusion is without any justification or reasonable basis.
[304E H] Therefore, the rule is violative of articles 14 and 16 and the non consideration of the case of the 1st respondent at the time of promotion of the 2nd respondent was wholly arbitrary and illegal.
[33H; 304H] (3) It is however not necessary to strike down the entire rule 3(1)(ii).
It is sufficient if the words 'except Mining Engineering ' are struck down and deleted.
[304H]
|
In the matter of Petition for Special Leave to Appeal No. 230 of 1953.
Rajinder Narain for the Respondents.
N. C. Chatterjee (Sukumar Ghose with him) for the Appellants.
April 5.
The Order of the Court was delivered by MUKHERJEA C.J. This is an application by the respondents in Special Leave Petition No. 230 of 1953, praying for summons to the appellants to show cause why the special leave obtained by the latter should not be rescinded in accordance with the provision of Order XIII, rule 13 of the Supreme Court Rules.
The appeal is directed against a judgment of a Division Bench of the Calcutta High Court affirming, on appeal, a decision of a single Judge sitting on the Original Side of that Court.
The appellants, having been refused certificate by the High Court, presented before us an application under article 136 of the Constitution and special leave to appeal was granted to them by an order of this Court dated the 25th May 1954.
By that order the appellants were required to furnish security for costs amounting to Rs. 2,500 within six weeks and the enforcement of the award, which was the subject matter of the appeal, was stayed on condition that the appellants deposited in Court a sum of Rs. 28,000 within four weeks from the date of the order.
On the 15th of June 1954 the Registrar of this Court transmitted to the Original Side of the Calcutta High Court certified copies of the order granting special leave and also of the special leave petition with a request that these documents might be included in the printed records of the case.
It is not disputed that in pursuance of the directions given 246 by this Court the appellants did deposit the amount required as security for costs and also the sum of Rs. 28,000 within the time mentioned in the order.
On the 29th November 1954 the respondents ' Solicitors in Calcutta wrote a letter to the Registrar of the Original Side of the Calcutta High Court complaining of delay on the part of the appellants in prosecuting the appeal.
It was stated inter alia that although six months had elapsed since special leave was granted by this Court, the respondents were not served with notice of the admission of the appeal and no steps were taken by the appellants to get the records printed or transmitted to this Court.
In reply to this letter the Registrar informed the respondents ' Solicitors that according to the practice of the Calcutta High Court it was incumbent on the appellants to make a formal application to the Appellate Bench of the Court for declaring the appeal finally admitted, and this was to be done on notice to the other parties under Order XLV, rule 8 of the Civil Procedure Code and on filing in Court a copy of the order of the Supreme Court granting special leave to appeal as well as the application upon which such order was made.
Unless and until an order was made by the High Court declaring the appeal to be admitted, no action could be taken by the office in the matter.
Thereupon on the 11th of January 1955 an application was filed by the appellants praying that leave might be given to them to file the certified copy of the special leave petition and also that of the order passed upon it and that the appeal might be finally admitted.
This application came up for hearing before the learned Chief Justice and Lahiri, J. of the Calcutta High Court and on the 20th of January 1955 the learned Judges made the following order: "In this matter special leave to appeal to the Supreme Court was granted by that Court on the 25th May 1954.
On the 21st June following, the Appellant furnished the necessary security.
It was then the duty of the Appellant to take the necessary steps for the final admission of the appeal in order that the preparation of the Paper Book might thereafter be 247 undertaken.
Under the Rules and practice of this Court the step to be taken is that the Appellant to the Supreme Court should make an application for leave to file the certified copy of the petition for Special Leave and also a certified copy of the order granting Special Leave which have been filed along with the present application. . . . ." When the matter came up for hearing on the last occasion we enquired whether the Appellants had any explanation to give for the delay which bad occurred.
It was said that the certified copy of the application for Special Leave had been obtained only recently.
It was however not explained why when an application for a certified copy of the order was made a similar application for a certified copy of the petition also could not be made.
In all the circumstances we consider it right that the disposal of the present application should stand over for a month in order that the respondents may take such steps as they desire to take before the Supreme Court".
The above facts and order of the High Court were communicated to the Registrar of this Court by Shri Rajinder Narain, Advocate for the respondents, by his letters dated the 17th and 31st of January 1965 and on the basis of the facts stated above, he requested that action should be initiated by the Registrar against the appellants for non prosecution of the appeal.
The Registrar told the learned Advocate that he had not received any report from the High Court regarding any laches on the part of the appellants and without any such report, it was not possible for him to take any action in the matter.
The Advocate himself, it was said, was quite at liberty to make a formal application to the Court in such way as he considered proper.
The views thus expressed by the Registrar of this Court were communicated by him to the Registrar of the High Court, Original Side, Calcutta.
On the 4th March 1955 Shri Rajinder Narain filed a formal petition addressed to the Registrar alleging inordinate delay on the part of the ap pellants in filing in the High Court certified copies of 248 the Special Leave petition and the order made by this Court thereupon and praying that summons might be issued to the appellants to show cause why the appeal should not be dismissed for non prosecution.
Before the Registrar could take any further steps in the matter, the application of the appellants for final admission of the appeal made in the High Court came up for further consideration before the Appellate Bench consisting of the Chief Justice and Mr. Justice Lahiri and on the 7th March, 1955 the learned Judges made an order directing, for the reasons given therein, adjournment of the application for admission of the appeal before them, sine die pending orders which this Court might pass on the application of the respondents.
The application of the respondents which purports to have been made under Order XIII, rule 13 of the Supreme Court Rules was referred by the Registrar for orders to the Court and it has now come up for hearing before us.
Shri Rajinder Narain appearing in support of the petition has Contended before us that the appellants were guilty of serious laches inasmuch as they did not file in the High Court, till 8 months after the special leave was granted, copies of the special leave petition as well as of the order passed upon it; nor did they make an application to the Appellate Bench for admission of the appeal without which no further steps could be taken in the matter of printing and transmission of the record.
As the appellants could not give any satisfactory explanation for this inordinate delay on their part, the special leave, it is argued, should be rescinded.
Mr. Chatterjee, who appeared for the appellants, has contended @n the other hand that in a case like the one before us where the appeal has come up to this Court by special leave and not by a certificate granted by the High Court, there was no duty cast upon the appellants to make a formal application in the High Court for final admission of the appeal or to file therein certified copies of the special leave petition and the order made thereupon.
His argument is that under Order XXXII, rule 9 of the Original Side Rules of the Calcutta High Court, a 249 Supreme Court appeal must be deemed to have been admitted by the very order of this Court granting special leave and as soon as the appellants have carried out the directions of the Supreme Court regarding furnishing of security or making of other deposits as the case may be, it is incumbent upon the Registrar to issue a notice of the admission of the appeal for service upon the respondents.
Such notice indeed has got to be served by the appellants ' attorney; but as no notice was at all issued by the Registrar in the present case as is contemplated by rule 9 of Order XXXII of the Original Side Rules of the Calcutta High Court, no blame could attach to the appellants for not taking further steps in the matter.
The contention of Mr. Chatterjee appears to us to be wellfounded and as it seems to us that doubts have arisen at times regarding the precise procedure to be followed in cases where an appeal comes to this Court by special leave granted under article 136 of the Constitution, it is necessary to examine the provisions bearing upon it as are contained in the Rules of the Supreme Court or of the High Court concerned read along with the relevant provisions of the Civil Procedure Code.
Ordinarily when a High Court grants a certificate giving leave to a party to appeal to this Court, it is ,that Court which retains full control and jurisdiction over the subsequent proceedings relating to the prosecution of the appeal till the appeal is finally admitted.
It is for the High Court to see that its directions are carried out regarding the furnishing of security or the making of deposit and when these conditions are fulfilled, it has then to declare the appeal finally admitted under Order XLV,rule 8 of the Civil Procedure Code.
The jurisdiction of the Supreme Court begins after the appeal is finally admitted.
When however the appeal comes to this Court on the strength of a special leave ' granted by it, the position is different.
In such cases the order of the Supreme Court granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to fur 250 nishing of security or making of a deposit are complied with.
That this is the true position will be clear from the procedural provisions contained in the Rules of the Supreme Court as well as of the Original Side of the Calcutta High Court.
Order XIII, rule 8 of the Supreme Court Rules lays down: "After the grant of special leave to appeal by the Court, the Registrar shall transmit a certified copy of the order to the court or tribunal appealed from".
Rule 9 then says: "On receipt of the said order, the court or tribunal appealed from shall, in the absence of any special directions in the order, act in accordance with the provisions contained in Order XLV of the Code, so far as applicable".
It is to be noted here that although this rule does refer to the provisions of the Order XLV of the Civil Procedure Code, these provisions are to be followed only so far as they are applicable.
It is surely the duty of the High Court to see that security is furnished or a deposit is made in accordance with the directions of the Supreme Court and these directions are to be found in the order of the Supreme Court which the Registrar is bound to transmit to the High Court under Order XIII, rule 8 of our Rules.
We do not think it is necessary for the appellants to file afresh a copy of the Supreme Court order or the petition upon which it was made in order that they may form part of the record of the Supreme Court appeal.
They would come in the record as soon as they are transmitted by the Registrar in accordance with the rule of our Court mentioned above and would have to be included in the Paper Book when it is printed.
The Registrar of the High Court undoubtedly took these orders as part of the record without the appellants ' filing them afresh, for he accepted the security and deposit of other moneys from the appellants on the basis of these orders.
If there was any failure on the part of the appellants to furnish the security or to make the deposit in the way indicated in the order of the Supreme Court, it would have been the duty of the Registrar of the High Court to intimate these 251 facts to the Registrar of the Supreme Court and the latter thereupon could take steps for revoking the special leave as is contemplated by Order XIII, rule 12 of our Rules.
In our opinion, it is also not necessary for the appellants to make a formal application for admission of the appeal in cases where special leave has been granted by the Supreme Court; and this appears clear from the provision of Order XXXII, rule 9 of the Original Side Rules of the Calcutta High Court which runs as follows: "9.
On the admission of an appeal to the Supreme Court whether by the order of this Court under Order XLV, rule 8 of the Code, or by an order of the Supreme Court giving the appellant Special Leave to Appeal, but subject in the latter case to the carrying out of the directions of the Supreme Court as to the security and the deposit of the amount re quired by rule 5, notice of such admission shall be issued by the Registrar for service on the respondent on the record, whether be shall have appeared on the hearing of the application for a certificate under Order XLV, rule 3 of the Code, or not.
Such notice shall be served by the attorney for the appellant and an affidavit of due service thereof shall be filed by such attorney immediately after such service".
The opening words of this rule plainly indicate that there could be admission of appeal either by order of the High Court under Order XLV, rule 8 of the Civil Procedure Code or by the order of the Supreme Court itself giving special leave to appeal.
(As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents).
This notice is to be served by the attorney for the appel lants and an affidavit of due service shall be filed by him immediately after the service is effected.
In the present case the Registrar, Original Side of the, Calcutta High Court should have issued a notice of 252.
the admission of the appeal to be served upon the respondents as soon as the security for costs and other deposits of money were made by the appellants.
This was not done as the procedure to be followed was not correctly appreciated.
It is true that the appellants remained idle for a considerable period of time even after they furnished security and did not take any steps towards printing of the record.
But as there was an initial irregularity in the matter of issuing a notice under.
Order XXXII, rule 9 of the Original Side Rules of the Calcutta High Court, we are unable to hold that the appellants were guilty of any laches for which the special leave deserves to be rescinded.
The result is that the application of the respondents is dismissed.
The Registrar, Original Side of the Calcutta High Court, will now issue a notice under Order XXXII, rule 9 of the Original Side Rules and prompt steps should be taken by the appellants towards printing and transmission of the record to this Court.
We make no order as to costs of this application.
| IN-Abs | By an order dated May 25, 1954, the Supreme Court granted the petitioners in the case special leave to appeal against the judgment and order of the High Court at Calcutta.
In accordance with the order, the petitioners furnished the security amounts directed to be deposited within the time specified in the order.
The Registrar of the High Court did not issue any notice of admission of 'appeal to be served by the Appellant 's Solicitor on the Respondents as envisaged in rule 9 of Order XIII, S.C.R. Nor did the Appellant following the practice of the High Court, move that Court for It admission" of the appeal until January 11, 1955.
The Respondents first moved the High Court complaining of default on the part of the appellants in due prosecution of the appeal and latter moved the Supreme Court for action under rule 13 of Order XIII of the Supreme Court Rules.
The application in the High Court was therefore kept pending.
Held: After the grant of special leave under article 136, the Registrar of the Supreme Court transmits, in accordance with the 244 provisions of rule 8 of Order XIII of the Supreme Court Rules, a certified copy of the Supreme Court 's order to the Court or tribunal appealed from, Rule 9 of Order XIII of the Supreme Court Rules enjoins upon the Court or tribunal appealed from to act, in the absence of any special directions in the order, in accordance with the provisions contained in Order XLV of the Civil Procedure Code, so far as they are applicable.
Accordingly the Court or Tribunal to which the order is transmitted receives deposits on account of security for the Respondents ' costs, printing costs, and any other deposits if so ordered by the Supreme Court, and sets about preparing the record of the appeal for transmission to the Supreme Court.
Therefore, action under rule 13 of Order XIII, S.C.R., for rescinding the order granting special leave cannot be initiated unless the Court or tribunal appealed from reports to the Supreme Court that the appellant has not been diligent in taking steps to enable that Court to carry out the directions, if any, contained in the order of the Supreme Court and to act in accordance with the provisions of Order XLV of the Civil Procedure Code so far as applicable to appeals under Article 136 of the Constitution.
In view of rule 9 of Order XIII of the Supreme Court Rules, the application of Order XLV of the Code of Civil Procedure to appeals under Article 136 of the Constitution is restricted.
The Court or tribunal appealed from, no doubt, has to carry out the directions contained in the order granting special leave, and to receive the security for the Respondents ' costs and other necessary deposits, but once the security is furnished and the other deposits are made, the formality of "admission" envisaged by rule 8 of Order XLV of the Civil Procedure Code is unnecessary, because in such cases the order .granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to the furnishing of security or making of deposits are complied with.
Appeals under Article 136 thus stand on a different footing from appeals on grant of certificate by the High Court itself.
In the letter case, the High Court has exclusive jurisdiction over the matter until it admits the appeal under rule 8 of Order XLV of the Civil Procedure Code.
Rule 9 of Chapter 32 of the Original Side Rules of the Calcutta High Court envisages "admission" of appeals to the Supreme Court whether by an order of the Supreme Court or under Order XLV of the Civil Procedure Code.
And when an appeal arising from an order made by the Supreme Court under Article 136 of the Constitution, has been so "admitted", the said rule enjoins upon the Registrar to issue notice of such admission for service by the appellant on the Respondents.
In cases where special leave has been granted by the Supreme Court, it is not necessary for the appellant to move the High Court appealed from for the formal admission of his appeal.
As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as 245 soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents.
In default of the issue of such notice, the appellant cannot be held responsible for laches in the prosecution of his appeal with regard to the steps required to be taken after the admission of his appeal.
|
Civil Appeal No. 104 of 1975 Appeal by special leave from the judgment and order dated the 12th December, 1974 of the Allahabad High Court in Application Paper No. A 53 in Election Petition No. 30 of 1974.
Yogeshwar Prasad and Rani Arora, for the appellant K C. Agarwala and K. M. L. Srivastava, for respondent No. 1.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave involves an interpretation of the scope and ambit of section 87 of the Representation of the People Act, 1951, as amended by Act 47 of 1966.
The short point that fails for determination in this appeal is as to whether or not the provision of O. XI of the Code of Civil Procedure can be applied to the trial of election petitions in the High Court by force section 87 of the said Act.
For the purpose of brevity, the Representation of the People Act, 1951 shall be referred to as the Act of 1951 shall the Representation of the People Act as amended by Act 47 of 1966 as 'the Act '.
The circumstances under which this appeal arises may be succinctly stated as follows.
An election for the U.P. Legislative Assembly for 275 Allahabad North Assembly Constituency was held on February 6, 1974 In this election the appellant was a candidate put up by the Congress Ruling party and his election was contested by the first respondent Ram Adhar Yadav who was set up by the Samukta Socialist party.
The appellant was declared duly elected in the said election and the respondent No. 1 was defeated.
The respondent No. 1 filed an election petition being Election Petition No. 30 of 1974 in the High Court of Allahabad some time in April 1974 challenging the election of the appellant on various grounds.
The appellant filed a detailed written statement denying all the allegations made by the first respondent in his petition.
The election petition was assigned to J. M. L,.
Sinha, J. who framed a number of issues on October 4, 1974.
In October 1974 respondent No. 1 filed all application being Paper No. A/53 under O. XI, r. 1 of the Code of Civil Procedure for grant of leave to respondent No. 1 to deliver interrogatories in writing for the examination of the appellant and filed certain interrogatories along with his application.
The appellant filed her objections being Paper No. A/54 to the said application contending, inter alia, that the procedure prescribed under O.XI relating to interrogatories was not applicable to the trial of election petitions in the High Court and was not covered by section 87 of the Act.
The application filed by the first respondent and the objections of the appellant came up for consideration before the learned Single Judge who by his order dated December 12, 1974, held that the provisions of O.XI fully applied to the election petitions and accordingly rejected the objections filed by the appellant.
Hence this appeal by special leave.
257 It appeals that under the Act of 1951 the power to try election petitions was conferred on the Tribunal and section 92 of that Act expressly conferred powers under O.XI of the Code of Civil Procedure on the Tribunal.
The relevant portions of section 92 of the Act of 1951 may be extracted thus: The Tribunal shall have the powers which are vested in a court under the Code of Civil Procedure, 1908 (Act V of 1908), when trying a suit in respect of the following matters: (a) discovery and inspection; x x x x (g) issuing commissions for the examination or witnesses, and may summon and examine suo motu any person whose evidence appears to it to be material; and shall be deemed to be a civil court within the meaning of sections 480 and 482 of the Code of Criminal Procedure, 1898 (Act V of 1898).
" By the Amendment Act 47 of 1966 this section was, however, deleted and section 90 of the Act of 1951 was replaced by section 87 of the Act which was the same as section 90 of the Act of 1951.
Mr. Yogeshwar Prasad counsel appearing for the appellant has submitted two points before us.
In the first place he contended that the provisions regarding inspection and discovery and interrogatories as contained in O.XI of the Code of Civil Procedure are not an integral part of the procedure in a civil suit but are special powers contained in the Code and cannot, therefore, be made applicable to election petitions which are proceedings of a special nature.
In simplification of this argument it was argued that the history of the English Law as also the Election Law of our country before independence would show that the procedure contained in O.XI of the Code of Civil Procedure was not made applicable to the trial of election petitions.
It is, however, not necessary for us to examine the history of this matter because the Act of 1951 settles the issue.
When the Parliament expressly conferred powers contained in O.XI on the Tribunal under the statutory provision of section 92 of the Act of 1951, it must he presumed to have made a drastic departure from the old law on the subject and particularly the English Law.
In view of this enactment, therefore, it cannot be said that the provisions of our Election Law, particularly in regard to section 92 of the Act of 1951 were in pari materia with the provisions of the English Law on the subject.
In fact section 92 incorporating the entire provisions of O.XI of the Code of Civil Procedure was expressly enacted so that the elected representatives also may be subjected to the same law of the land such as the Code of Civil Procedure as any other citizen.
In these circumstances, we are unable to apply the English Law to the Act in order to hold that the principles contained in O. XI of the Code of Civil Procedure are excluded from the trial of election petitions.
The first contention put forward by counsel for the appellant must, therefore, fail.
258 It was then contended that even though express powers for inspection and discovery were conferred on the Tribunal under section 92 of the Act of 1951, yet by virtue of the amendment under Act 47 of 1956 this express provision was deliberately deleted, which shows that the Parliament intended to give special protection to the elected representatives so as not to compel them to answer interrogatories.
This is no doubt an attractive argument, but on closer scrutiny it does not appear to be tenable.
The argument completely overlooks the object of the Amendment Act 47 of 1966.
By virtue of this enactment a basic change in the trial of election petitions was sought to be introduced.
Before 1966 the power to try election petitions was conferred on the Tribunal which was not a civil court and, therefore, special powers had to be conferred on it.
fact clause (g) of section 92 of the Act of 1951 extracted above clearly shows that the Tribunal was deemed to be a civil court hence there was the necessity of conferring special powers contained in O.XI of the Code of Civil Procedure on the Tribunal to avoid further doubts.
After the amendment of 1966 as the election petitions were to be tried by the High Court, section 87 of the Act which is based on section 90 of the Act of 1951 was considered sufficient to contain the entire procedure to be adopted by the High Court in trying the election petitions which were to be in accordance with the Code of Civil Procedure as far as applicable.
Since the High Court is a court of record and a civil court is not, it was not at all necessary for the Parliament to have enacted a separate section like section 92 of the Act of 1951 and that is why section 92 was considered to be unnecessary in view of the change of forum and was deleted under the amended Act.
From this it cannot be contended that the Parliament intended that the provisions of O. XI of the Code of Civil Procedure 1 should not apply to the election petitions tried by the High Court under the Act.
Counsel for the appellant was unable to cite any authority directly in point.
On the other hand, the view which we have taken in this case, is amply supported by number of authorities of this Court as well as other High Courts.
To begin with, this Court as far back as 1951, while considering sections 90 and 92 of the Act of 1951 observed in Harish Chandra Bajpai vs Triloki Singh(1) thus: "The second contention urged on behalf of the appellants is that if the provisions of the Civil Procedure Code are held to be applicable in their entirely to the trial of election petitions, then there was no need to provide under section 92 that the Tribunal was to have the powers of courts under the Code of Civil Procedure in respect of the matters mentioned therein, as those powers would pass to it under section 90(2).
But this argument overlooks that the scope of section 90(2) is in a material particular different from that of section 92.
While under section 90(2) the provisions of the Civil Procedure Code are applicable only subject to the provisions of the Act and the rules made thereunder, there is no such limitation as regards the powers conferred by section 92.
It was obviously the intention of the legislature to put the powers of the Tribunal in respect of 259 the matters mentioned in section 92 as distinguished from the other provisions of the Code on a higher pedestal, and as observed in Sitaram vs Yograjsingh (A.I.R. , they are the irreducible minimum which the Tribunal is to possess.
(3) It is then argued that section 92 confers powers on the Tribunal in respect of certain matters, while section 90(2) applies the Civil Procedure Code in respect of matters relating to procedure, that there is a distinction between power and procedure, and that the granting of amendment being a power and not a matter of procedure, it can be claimed only under section 92 and not under section 90(2).
We do not see any antithesis between 'procedure ' in section 90(2) and 'powers ' under section 92.
When the respondent applied to the Tribunal for amendment, he took a procedural step, and that, he was clearly entitled to do under section 90(2).
The question of power arises only with reference to the order to be passed on the petition by the Tribunal.
Is it to be held that the presentation of a petition is competent, but the passing of any order thereon is not ? We are of opinion that there is no substance in this contention either.
" The Court pointed out that the object of section 92 was merely to secure powers of the Court in respect of the matters mentioned therein and that there was no antithesis between sections 90(2) and section 92 of the Act of 1951.
Similarly in Sitaram Hirachand Birla vs Yograjsingh Shankarsingh Parihar and others,(1) Chagla, C.J., clearly pointed out that the distinction between the power and procedure was completely artificial and a distinction without any difference.
The learned Chief Justice speaking for the Court observed as follows: "In our opinion, Mr. Kotwal is right, because on principle it is difficult to make a distinction between procedure and the powers of a Court as suggested by Mr. Patwardhan.
The whole of the Civil Procedure Code, as its very name implies, deals with procedure.
In the course of procedure the Court always exercises powers and when the Court is exercising its powers, it is exercising them in order to carry out the procedure laid down in the Code.
Therefore procedure and powers in this sense are really interchangeable terms and it is difficult to draw a line between procedure and powers.
The powers conferred under section 92 is not any substantive power, it is procedural power, a power Intended for the purposes of carrying out the procedure before the Tribunal.
" In a recent decision of the Full Bench of the Allahabad High Court in Duryodhan vs Sitaram and others(2) the Court held that the matters mentioned in section 92 appertain to the procedure for trial, and are also attracted by virtue of section 90(l).
The Court observed as follows: 260 "In my opinion, the matters mentioned in Section 92 appertain to the procedure for trial, and are also attracted by virtue of Section 90(1).
They were separately stated in Section 92 to make them operate inspite of any provision to the contrary in the Act or the Rules, and not with a view to curtail the amplitude of Sec.
90(1).
The provisions of O.9, Rr. 8 and 9, Civil P.C. even if they deal with powers, would be procedural powers and be attracted by virtue of Section 90( 1 ) .
" While dealing with the scope and ambit of s.90 of the Act 1951 this Court in Dr. Jagjit Singh vs Giani Kartar Singh and others(1) observed as follows .
"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.
" A Full in Bench of the Punjab High Court in Jugal Kishore vs Dr. Baldev Prakash,(2) while construing the provisions of section 87 of the Act clearly pointed out that the High Court was a Court of record and possessed all inherent powers of a Court while trying election petitions.
In this connection, Grover, J., observed as follows: "It is quite clear that there is no distinct provision in the Act laying down any particular or special procedure which is to be followed when the petitioner chooses to commit default either in appearance or in production of evidence or generally in prosecuting the petition.
The provisions of the Code of Civil Procedure would, therefore, be applicable under Section 87 of the Act.
I am further of the opinion that any argument which could be pressed and adopted for saying that the inherent powers of the Court could not be exercised in such circumstances would be of no avail now as the High Court is a Court of record and possesses all inherent powers of a Court while trying election petitions.
" We fuly approve of the line of reasoning adopted by the High Court in that case.
The Rajasthan High Court in Keshari Lal Kavi and another vs Narain Prakash and others(3) followed the Punjab case and has taken the same view.
Some reliance was placed by the learned counsel for the appellant on the decision in Inamati Mallappa Basappa vs Desai Basavarai Ayyappa and others,(4) where this Court held that the procedure contained in O. 23, r. 1 of the Code of Civil Procedure did not apply to election petitions and, therefore, on a parity of reasoning O. C.P.C. also could not be applicable to the trial of election petitions.
261 We are, however, unable to agree with this argument.
The provision contained in O. 23 r. 1 cannot be equated with the provisions of o. XI because the election petition being a matter of moment and concerning the entire costituency there could be no question of the election petition being withdrawn by the petitioner who had filed the same.
This was highlighted by this Court in that case when the Court observed as follows: "Order 23, r.1, sub rule (2), provides for liberty being given by the Court to a party withdrawing or abandoning a part of his claim to file a fresh suit on the same cause of action, if so advised.
in the very nature of things such liberty could not be reserved to a petitioner in an election petition.
x x x x x x On a due consideration of all these provisions, we are opinion that the provisions of o. 23, r. 1, do not apply to the election petitions and it would not be open to a petitioner to withdraw or abandon a part of his claim once an election petition was presented to the Election Commission.
" Having regard to the nature of the election Petition, the notion of abandonment of the claim or withdrawal is absolutely foreign to the scope of such proceedings and must, therefore, be held to be excluded by necessary intendment of section 87 of the Act itself.
This authority therefor, does not appear to be of any assistance to counsel for the appellant.
The matter, however, seams to be concluded by a recent decision of this Court in Virendra Kumar Saklecha vs Jagjivan and others(1) where the Chief Justice speaking for the Court interpreted section 87 of the Act and observed as follows: "Under Section 87 of the Act every election petition should be tried by the High Court as nearly as may be in accordance with the procedure applicable under the Code of Civil Procedure to the trial of suits.
Under Section 102 of the Code the High Court may make rules regulating their own procedure and the procedure of the Civil Courts subject to their super vision and may by such rules vary, alter or add to any of the rules in the First Schedule to the Code.
" The relevant part of section 87 runs thus : "(1) Subject to the provisions of this Act and of any rules made thereunder, every election petition shall be tried by the High Court, as nearly as may be, in accordance with the procedure applicable under the Code of Civil Procedure, 1908 to the trial of suits :" A bare perusal of this section leads to the irresistible conclusion that election petitions shall have to be tried in accordance with the proce 262 dure applicable under the code of Civil Procedure to the trial of suits.
In other words, election petitions would be tried like ordinary civil suits.
We are unable to agree with counsel for the appellant that O. XI does not form part of the trial of suits but is a special procedure.
This is repelled by a oreference to O. XI of the Code of Civil Procedure itself.
It will appear that O. X relates to the procedure for examination of parties by the Court and O. XI is a part of that procedure, because it provides that where witnesses are not able to appear before the Court personally they are examined through interrogatories.
In these circumstances, therefore, O. XI is as much a part of the procedure as O. X relating to trial of suits in matters regarding summoning of witnesses, documents etc.
In these circumstances it cannot be said that section 87 of the Act either expressly or impliedly excludes the application of O. XI of the Code of Civil Procedure.
In fact we are clearly of opinion that section 87 of the Act is of the widest amplitude so as to cover the entire procedure mentioned in the Code of Civil Procedure with only two exceptions (i) where the Act contains express provision for certain matters which are inconsistent with the procedure prescribed by the Code; and (ii) where a particular provision of the Code of Civil Procedure is either expressly or any necessary intendment excluded by the Act.
Subject to these two exceptions, section 87 is very wide in its connotation We, therefore, agree with the learned Single Judge who was trying the election petition that the application for interrogatories was one of the logical steps in aid of the prosecution of the petition and was fully covered by section 87 of the Act.
The second contention raised by counsel for the appellant thus fails.
For the reasons given above, there is no merit in this appeal which fails and is accordingly dismissed with costs.
V.P.S. Appeal Dismissed.
| IN-Abs | An application for delivery of interrogatories is one of the logical steps in aid of the prosecution of an election petition and is fully covered by section 87 of the Representation of the People Act, 1951.
C(1) (1) Order XI, C.P.C., forms part of the trial of suits and is not a special procedure.
Order X relates to the procedure for examination of parties by the Court and o. XI, is a part of it, because, it provides for examination through interrogatories, when personal appearance is not possible.
[262A B] (2) Before Act 47 of 1966 amended the Representation of the People Act, 1951, the power to try election petitions was conferred on the Erection Tribunal.
That Tribunal was not a Civil Court but was deemed to be a Civil Court.
Though section 90, as it then stood, provided that every election petition shall be tried, as nearly as may be, in accordance with the procedure under the C.P.C., in order to avoid doubts, the special powers under O. Xl, C.P.C., were conferred on the Tribunal by section 92.
When Parliament has expressly conferred the powers contained in O.XI on the Tribunal, it could not be contended that the principles contained therein are excluded from the trial of election petitions, on the basis of English Law.
[257F H] (3) After the amendment of 1966, as election petitions are to be tried by the High Court, a Court of Record, section 87, which is based on the repealed section 90, is sufficient to contain the entire procedure to be adopted by the High Court in trying election petitions.
Section 87 is of widest amplitude so as to cover the entire procedure mentioned in the Code of Civil Procedure with only two exceptions, (a) when the Act contains express provision for certain matters which are inconsistent with the procedure prescribed by the Code; and (b) when a particular provision of the Code is either expressly or by necessary intendment excluded by the Act.
That is why a provision like the repealed section 92 is unnecessary; and it cannot be contended that since Parliament repealed that section, Parliament intended that the provisions of O. XI, C.P.C., should not apply to election petitions tried by the High Court.
[258A E; 269C D] Sitaram Hirachand Birla vs Yograisingh Shankarsingh Parihar and others, AIR 1953 Bom.
293, Durvodhan vs Sitaram and others AIR 1970 All. 1; Jugal Kishore vs Dr. Baldev Prakash AIR 1968 Punj. 152 (F.B.) and Keshari Lal Kavi and another vs Narain Prakash and others, AIR 1969 Raj. 75, referred to.
Dr. Jagjit Singh vs Giani Kartar Singh and others A.I.R. 1966 S.C. 773, and V. K. Sakleha vs Jagjiwan ; , followed.
(4) Merely because in Inamati Mallappa Basappa vs Desai Basavaraj Ayyappu and others ; it was held that the procedure contained in O. 23, r. 1 C.P.C. does not apply to election petitions it could not be contended that O. XI: C.P.C., would not also be applicable to election petitions.
Order 23, r. 1 cannot be equated with the provisions of O. XI.
Having regard to the nature of an election petition which is a matter of moment and concern to the entire constituency the notion of abandonment of the claim or withdrawal is absolutely foreign to the scope of such proceedings and must, therefore, be held to be excluded by the necessary intendment of section 87 itself.
[260H 261 B, D E] 256 ^
|
Civil Appeals Nos. 1656 to 1659 of 1973.
Appeal by special leave from the judgment and order dated the 29th September, 1972 of the Madras High Court in Writ Appeals Nos. 191, 23, 24 & 190 of 1968 respectively.
section Challaswamy and K. Hillgorani, for the appellant.
8 L839SupCI/75 334 A. K. Sen, A. V. Rangam` and A. Subashini, for the respondents.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The die hard 'tax ' 'fee ' dilemma survives, as these appeals, by special leave, attest, long after this Court has dispelled the fiscal legal confusion on the point in a series of rulings.
The cases before us were provoked by a sudden escalation of licence 'fee ' imposed on all homelier by the common appellant, the Maduari Municipal Council (now it is a Corporation, but that makes no difference) (Council, for short).
The scale of fees which, perhaps, merely defrayed the cost of issuing the licence, was moderate to begin with and paid periodically by the respondents who run hotels within the municipal limits; but their present grievance is that the resolution of December 28, 1965, whereby a sharp spurt in the rates of fee was Cr brought about, has been tainted with 'unconstitutionality '.
The authority, to justify the levy qua fee, must render some special services to the category from whom the amount is exacted and the total sum so collected must have a reasonable correlation to the cost of such services.
Where these dual basic features are absent, you cannot legally claim from the licensee under the label 'fee '.
D This Court has, as late as the Salvation Army Case(l) set out the tests beyond doubt.
When the respondents (writ petitioners) challenged the fee raise, the plea in defence first was that the impost was a fee strictly so called, that it was requited by adequate benefits and that the larger lay out on the inspecting staff and allied items, both necessitated and validated the new increase.
However, on later and better reflection, may be, the inspirational source for which was stated to be this Court 's pronouncement in the Liberty Cinema Case(2), the Council rightly abandoned the fee cum quid pro quo formula and anchored itself on the right to exact the higher rate as a 'tax on land and building ' under Entry 49 of List II, in the Seventh Schedule, read with section 321(2) of the Madras District Municipalities Act, 1920 (for short, the Act).
This volte face as it were, was not objected to by the opposite party and the writ petitions and writ appeals were disposed of on that footing.
The learned Single Judge upheld the levy but the appellate Bench upset it.
The appellant Council has journeyed to this Court to repair the blow on its revenue since there are 1,200 and odd hotel keepers similarly situated in the Madurai Municipal limits, although only four have figured as respondents here.
The financial dimension of the decision is, indeed, considerable.
Shri Chellaswamy, counsel for the Council, has been refreshingly fair in his submissions and consistently with the case urged in the High Court to support the levy, has grounded his defence of the 'feehike ' on the taxing power of the municipal body under the Act.
The core of the matter, therefore, is whether the context and text of the statute and other surrounding circumstances warrant the validation of the levy as a tax in essence, be its name what it may.
(1) ; (2) [1965] 2 section C. R. 477.
335 Let us formulate the problems for facility of logical handling.
Agreed, as both parties now are, that this licence fee stands or falls as a tax, the principal question is whether the 'fee ' provided for in section 321(2) of the Act, under which it is collected, is a tax at all, having regard to the anatomy of the Act.
If it can be so regarded, the next point is whether Entry 49 of List II can bring within its constitutional compass the licence fee for running a hotel trade.
Thirdly, if that is permissible, are there other incurable infirmities ? These apart, some matters of subsidiary moment do arise and may be considered in the appropriate sequence.
The initial terminological hurdle in the way of the appellant is that section 321(2) of the Act authorizes the collection of a licence fee in contra distinction to property tax in section 78 of the Act.
Ajoy Kumar vs Local Board(l).
Naturally, Shri A. K. Sen, counsel for the con testants, insisted that the Act had made a deliberate dichotomy between the two types of levy, placed them subject wise in different parts of the statute and meaningfully referred to them as 'tax ' and 'fee ' in sections 78 and 321(2), respectively.
Counsel for the appellant, relying on certain passages in Liberty Cinema, (supra) desired us to slur over the verbal error.
True, mere nomenclature cannot, without more, lead to rejection of the plea of tax, though it is a relevant factor, since, to some extent, Liberty Cinema (supra) has whittled down the efficacy of this circumstance.
This Court there observed, at p. 483: "Now, on the first question, that is, whether the levy is in return for services, it is said that it is so because section 548 (of Calcutta Municipal Act 33 of 1951) uses the word 'fee '.
But, surely, nothing turns on the words used.
The word 'fee ' cannot be said to have acquired a rigid technical meaning in the English language indicating only a levy in return for services.
No authority for such a meaning of the word was cited.
However that may be, it is conceded by the respondent that the Act uses the word 'fee ' indiscriminately.
It is admitted that some of the levies authorised are taxes though called fees.
Thus, for example, as Mitter J (in the High Court, Division Bench) pointed out, the levies authorised by sections 218, 222 and 229 are really taxes though called fees, for no services are required to be rendered in respect of them.
The Act, therefore, did not intend to use the word fee as referring only to a levy in return for services. " (emphasis, ours) We have therefore to have a view of the concerned parts of the Act with a comparative eye on the Calcutta Municipal Act which fell for decision in Liberty Cinema (supra).
Every local authority, under the relevant statute, has the power to tax, so as to finance the various welfare activities it is expected to fulfil.
Similarly such local bodies also exercise the police powers of the State to the extent they are vested (1) ; 336 in them by the State law for the purpose of controlling, regulating and proscribing operations of individuals which may need to be conditioned by licences and permissions or prohibited in public interest because they are noxious or dangerous.
Towards these ends, licences and fees for services, if any, rendered may be prescribed.
The Madras Act, like other similar statutes, embraces both types of activities in a systematized way.
Thus Taxation and Finance are covered by Part 1 III while Public Health Safety and Convenience, comes under Part IV, Procedure and Miscellaneous, which include general provisions regarding licences and permissions, are clubbed together in Part Vl.
Section 78, empowering property tax levy, falls in Part III (Taxation and Finance), while section 321, relating to licence fees, is located in Part VI.
The scheme thus separates issue of licences and levy of licence fees from taxes on property and other items.
Prima facie, in the absence of other compelling factors, to lug in a taxing provision into Part VI may, therefore, lead to obscurity and confusion.
The Calcutta Municipal Act, 1951, also has some scheme of sorts and deals with Finance in Part III, Taxation in Part IV and Public Health, Safety and Convenience in Part V.
In the same Part, Chapter XXVI deals with a miscellany of matters like Inspection and Regulation of Premises, and of Factories, Trades and Places of Public Resort.
Section 443 deals with licensing and control of theatres, circuses and places of public amusement.
Strangely enough, section 548(1) which relates to 'licence and written permission ' also empowers in addition to any other matter required to be specified under any other Section of this Act (a) * * * * (b) * * * * (c) * * * * (d) * * * * (e) the tax or fee, if any, paid for the licence or written permission.
" F There is thus in section 548 an extra power specifically conferred to levy tax or fee, which is significantly absent in the Madras Act (We are aware there is some obscurity here because cinema licensing is provided for earlier in section 443).
It is this provision of the Calcutta Act (section 548) which fell for construction before this Court in Liberty Cinema (supra).
While one may discern a broad scheme in that Act, there is some wobbling in the sense that a power to tax is oddly placed in a Chapter primarily concerned with licences and permissions.
The Madras Act, on the other hand, speaks with more precision and relegates licences and licence fees to a Part different from Taxation and Finance.
The procedure for each is also delineated separately.
For these reasons we refuse to aceede to the contention that 'fee ' in section 321 (2) is a tax.
Shri A. K. Sen has cited a catena of Madras cases, spread over several decades, where, under this very Act, fee has been interpreted as fee with a tag of special services in lieu of such payment.
He has 337 further pressed the drafting indifference while using the words 'fee ' and 'tax ' in s.548 of the Calcutta Act to repel the application of the observations in Liberty Cinema (earlier quoted) to the provisions of the Madras Act.
In the latter, the contrast is boldly projected not only in the phraseology but in the chapter wise dealing with the two topics.
We feel the force of this submission.
Shri Chellaswamy sought to counter the contention based on the location of s.321 in a Part which has nothing to do with taxation.
In Liberty Cinema (supra) this Court had occasion to warn against reaching any conclusion, when there is a tax fee conflict based on the col location of subjects in a statute or the placement of a provision under a certain rubric as clinching.
What is telling is the totality, not some isolated indicium.
A short cut is often a wrong cut and a fuller study of the statute to be construed cannot be avoided.
Sarkar, J. (as he then was), in Liberty cinema (supra), observed at p. 488: "It was also contended that the levy under s.548 (of the Calcutta Municipal Act) must be a fee and not a tax, for all provisions as to taxation are contained in Part IV of the Act, while this section occurred in Chapter XXXVI headed 'Procedure ' in Part VIII which was without a heading.
It was pointed out that Part V dealt with 'Public Health Safety and Convenience ' and section 443 which was included in Chapter XXVI contained in this Part was headed 'Inspection and Regulation of Premises, and of Factories, Trades and Places of Public Resort '.
A cinema house, it is not disputed, is included in the words 'Places of public resort '.
It was, therefore, contended that a levy outside Part IV could not be a tax and hence must be a fee for services.
This contention was sought to be sup ported by the argument that s.443 occurred in a Part concerning Public Health, Safety and Convenience and therefore the intention was that the levy authorised by the section would be in return for work done for securing public health, safety and Convenience and was hence a fee.
We are wholly unable to accept this contention.
Whether a particular levy is a fee or tax has to be decided only by reference to the terms of the section as we have earlier stated.
Its position in the Act cannot determine its nature; an imposition which is by its terms a tax and not a fee, which in our opinion the present imposition is, cannot become a fee by reason of its having been placed in a certain part of the statute.
The reference to the heading of Part V can at most indicate that the provisions in it were for conferring benefit on the public at large.
The cinema house owners paying the levy would not as such owners be getting that benefit.
We are not concerned with the benefit, if any, received by them as members of the public for that is not special benefit meant for them.
We are clear in our mind that if looking at the terms of the provision authorising the levy, it appears that it is not for special services rendered to the person on whom the levy is imposed, it cannot be a fee wherever it may be placed in the statute.
A consideration 338 of where ss.443 and 548 are placed in the Act is irrelevant for determining whether the levy imposed by them is a fee or a tax.
" So we do not rest our conclusion solely on the location of section 321 in a different Part from Taxation, while we recognise it as an indicator, among a variety of considerations of course, when drafting precision is absent, judicial caution has to be alerted.
To recapitulate, in the Madras Act, Chapter VI of Part III is devoted to Taxation and Finance.
Section 78(1)(a) authorizes levy of property tax.
The section sets out the other taxes a Municipal Council may levy Section 78(3) together with a proviso, contains the procedural prescriptions for imposing taxes.
Admittedly, there has been no compliance with this procedure and, if such conformance is mandatory, as it is, the case of tax set up by the appellant collapses (Vide: Atlas Cycle Industries vs Haryana(1).
Whether some minor defect or deficiency will defeat the validity of the tax is moot but since here there is a total failure to adhere or advert to the procedure in s.78, we need not consider hypothetical shortfalls and their impacts.
Counsel for the appellant resourcefully urged that when two constructions are possible, we should opt in favour of validity since law leans towards life and must sustain, not stifle it.
The statute, other things being equal, must be interpreted us res magis valeat gaum pareat("): see Broom 's Legal Maxims ( 10 ed. ) p. 361, Craies on Statutes (6th ed.) p. 95 and Maxwell on Statutes (11th ed.) p 221 In his submission it is possible to uphold the 'levy ', miscalled 'fee ', on the basis that it is a tax.
The argument is that ignoring the placement of section 321 (2) in Part VI and blurring the precision of the word 'fee ' used, we can still look at the pith and substance of the matter and regard it as a 'tax on land and buildings ' provided for in Entry 49, List II of the Seventh Schedule.
He relied on Ajoy Kumar (supra) where also a landholder who was holding a market on his land was directed to take out a licence and pay Rs. 600/ per year as licence fee, challenged the validity of the claim on the score that the State had no power to tax markets.
Repelling this contention, this Court held that the use to which the land was put furnished sufficient nexus for the Legislature to impose a tax on land.
In that connection, the following observations lay down the guide lines: "It is well settled that the entries in the three legislative lists have to be interpreted in their widest amplitude and there fore if a tax can reasonably be held to be a tax on land it will come within entry 49.
Further it is equally well settled that tax on land may be based on the annual value of the land and would still be a tax on land and would not be beyond the com petence of the State legislature on the ground that it is a tax on income: (See Ralla Ram vs The province of East Punjab: It follows therefore that the use to which the land is put can be taken into account in imposing a tax (1) ; (2)Quoted in Liberty cinema: P. 484. 339 on it within the meaning of entry 49 of List II, for the annual value of land which can certainly be taken into account in imposing a tax for the purpose of this entry would necessarily depend upon the use to which the land is put." (p. 49).
x x x x x x "It will be seen from the provisions of these three subsections (sub sections
(1) to (3) of section 62 of the Assam Local self Government Act l953 Act 25 of l953) that power of the board to impose the tax arises on its passing a resolution that no land within its jurisdiction shall be used as a market.
Such resolution clearly affects land within the jurisdiction of the board and on the passing of such a resolution the board gets the further power to issue licences for holding of markets on lands within its jurisdiction by a resolution and also the power to impose an annual tax thereon." (p.49) x x ".
x x x x x ".
section
62(2) which used the words 'impose an annual tax thereon, clearly shows that the word 'thereon ' refers to any land for which a licence is issued for used as a market and not to the word 'market '.
Thus the tax in the present case being on land would clearly be within the competence of the state legislature." (p.5l) Generously following the line of thinking presented by Shri Chellaswamy, based on Ajoy Kumar (supra) we find difficulty in applying its ratio to section 321 (2).
There the tax was on land and the expression 'thereon ' underscores this idea.
Once the tax is on land, the link between the tax and the land user like running a market or hotel based on the let ting value is good, but in the present case there is nothing to indicate that it is a tax at all.
Secondly, the phraseology does not suggest that it is a tax on the land or the building.
, on the other hand.
it is on the licence fee for plying a particular trade.
It is not possible to blink at this vital distinction between Ajoy Kumar (supra) and the persent case.
Maybe that the Madurai Municipality is perfectly within its competence in imposing a property tax at any particular rate it chooses.
The user of the land or building as a restaurant or hotel being the link as explained above, the fact that there is a tax on all property within the municipality does not mean that this local body cannot levy an additional tax or surcharge on the land or building if put to a particular specialist use.
We see no impediment in the municipal authority taxing hotels at a certain rate exercising its power to impose property tax provided there are no other legal impediements in the way.
We are not pursuing the existence or otherwise of other impediments because that does not fall for our consideration in this case.
Shri A. K. Sen is right is his submission that unlike in the Assam Act considered in Ajoy Kumar (supra) in the present case we do not even find the expression 'tax ' used.
The Municipal resolution might have been saved had we been able to spell out a taxing power on property from s.321 (2) of the Act.
For, there is no gainsaying the state 's right to tax land and buildings 340 and the nexus between the tax and the power may be land use.
Since A running a restaurant or cinema house is clearly a use of building, a tax thereon, based on such user, is constitutionally impeccable.
Such is not the case here.
Thus the plea that section 321 (2) lends itself to being regarded as a tax, indifferently described as fee, breaks down for two reasons.
When the Legislature has carefully provided in s.78 (3) for previous invitation and consideration of objections to enhancement of tax levies, resort to the device of tax disguised as fee, under s.321 (2), may not require any such procedural fairness and discipline and thus will frustrate the processual protection written into the law in regard to fiscal measures.
Secondly, Schedule V, with which s.321 is directly linked, sets out a host of petty and lucrative ventures all of which, theoretically, cannot be carried on except on land or buildings.
Can it be that some flimsy or casual connection with terra firma will furnish the legal nexus between the tax imposed and the land on which the work is done ? For example, washing soiled clothes is an item in Schedule V.
It is straining judicial credulity to snapping point to say that such trivial user justifies a tax on the land when washing is done.
Running a hotel or market or permanent circus or theatre may stand on a different footing.
The com monsense of the common man is the best legal consultant in many cases and eschewal of hyper technical and over sophisticated legal niceties helps the vision.
We cannot list out what, in law, will serve as a nexus between land and tax thereon but, in a given case like in a hotel business, land use may easily be discerned.
The snag is that in the present appeals the levy is not on land but on the licence for business and bearing in mind the identity of the legal concept, we reject the contention that the impugned resolution was an innocent tax on property.
The case falls between two stools.
It is not a fee ex concessionis it is not a tax ex facie.
We further repel the request to read licence fee in section 321 (2) as land tax into every item of activity set out in Schedule V, from washing soiled clothes on a broad stone to using a central place as a posh restaurant.
The cumulative result of the multiple submissions we have been addressed is that the impugned resolution is invalid.
We do not bar the door for the Municipality or the State to pursue other ways to tax hotel keepers, acting according to law and under the power to tax in Entry 49, List II, of the Seventh Schedule, while dismissing the appeals The legal controversy in this case is stricken with more than marginal obscurity and indeed, has exercised our minds on the diverse aspects of law considerably.
Moreover, the battle is between a local authority which is in need of financial resources to fulfil its functions and a host of hoteliers who flourish in private business.
Bearing in mind the conspectus of circumstances, we regard this case as one where the proper order will be that parties do bear their own costs throughout.
V.P.S Appeals dismissed.
| IN-Abs | The appellant increased the licence fee imposed on hoteliers respondents under s.321 (2), Madras District Municipalities Act, 1920, and they challenged the increase.
The appellant justified the increase on the basis that the fee under the section is a tax and falls under "tax on land and building ' in Entry 49, List II, VII Schedule of the Constitution.
The High Court held in favour of the respondents.
^ Dismissing the appeal to this Court, HELD: (l) The appellant would be competent to impose a property tax at any Particular rate it chooses.
the user of the land and building as a restaurant or hotel furnishing sufficient nexus for the legislature to impose a tax.
[339H, 340A] Ajoy Kumar vs Local Board ; , referred to.
(2) But the fec imposed under section 321(2) in this ease is not a tax.
[336G] (a) Section 321(2) authorises the collection of a fee in contradiction to tax.
1335B] (b) Section 321 is in a part of the Act different from the part dealing with taxation.
While the nomenclature of the levy or the location of a section in the Act is not conclusive.
they are relevant factors.
for deciding whether the fee imposed is a tax or not.
[335 CD] Liberty Cinema Case ; , referred to.
(c) Section 78(1A) authorises the levy of property tax.
Section 78(3) contains the mandatory procedural prescriptions for imposing taxes.
When the legislature has carefully provided in the sub section for previous invitation and consideration of objections to enhancement of tax levies, resort to section 321(2) to impose a tax as a fee would frustrate the processual protection written into the law in regard to fiscal measures, [338 BCE] (d) Schedule V with which section 321 is directly linked sets out a number of ' petty occupations all of which, theoretically cannot be carried on except on land or in buildings.
If the licence fee in section 321(2) is read as land tax the fee in relation to every item of activity set out in the Schedule would be tax on the basis of the trivial activity furnishing the legal nexus between the tax and the land.
But, it would be straining the language to justify the imposition of a tax on the land, on the basis of such a flimsy or casual connection
|
N: Criminal Appeal No. 119 of 1971.
Appeal by Special Leave from the Judgment and Order dated the 17th February, 1971 of the Bombay High Court in Criminal Appeal No. 1371 of 1969.
F. section Nariman, K. J. John and Shri Narain of M/s J. B. Dadachanji & Co. for the appellant.
section B. Wad and M. N. Shroff for the respondent.
The Judgment of the Court was delivered by BEG, J.
The appellant was charged in the Court of Presidency Magistrate of Bombay as follows: "That you on 3 12 1968 at 8 a.m. at Bandra, in contravention of provisions of Section 2(1)(f) and 7(i) of the Prevention of Food Adulteration Act, sold 450 grams of Til seeds to the Food Inspector and that the Til seeds were unfit for human consumption, and thereby committed an offence under sec. 16(1)(a)(1) of the same Act and within my cognizance".
The two witnesses produced to support this charge were D. P Tambe and section P. Gaydhani.
D. P. Tambe (P.W. 1), a businessman, said that he had gone.
to "a shop to make purchases", without giving either the name of the shop or approximate date or time of his visit.
Under cross examination, he said that he did not know whether it was a foodgrain shop.
He said that he saw the complainant pick up a jar, open it.
and look at its contents.
He deposed that there was "some talk" between the complainant and the accused The complainant was 329 then said to have come up to and told this witness that he would be taking "some commodity from the jar" which would be sent for analysis.
After that, the complainant, it was alleged, asked for some Til seeds.
Thereupon, according to this witness, "some persons in the shop found Til seeds in three plastic bags and gave the bags to the Inspector".
He said that the Inspector (i.e. the complainant) sealed the packets and that the witness signed the packets.
He deposed: "Cash Memo was prepared by some persons in the shop.
Inspector paid money to accused No. I. Accused No. I was with the Inspector all the while".
His cross examination showed that he could remember nothing material.
He did not even remember who made the cash memo and whether anyone signed it in his presence.
He said he only thinks that he signed it.
To almost every question under crossexamination his answer was that he does not remember.
Even after making every possible allowance for a memory which could fade with lapse of time, his version was extra . ordinarily nebulous and noncommittal.
The principal witness in the case was section P. Gayadhani, P.W 2 the prosecuting Food Inspector? who stated that, after having gone into the grocery shop at 731 Hill Road, Bandra, he disclosed his identity to the accused and demanded 450 grams of Til seeds for which he paid Rs. 1.35.
He said that he himself divided this quantity into 3 parts each of which was put into a separate plastic bag and then sealed and labelled by him.
He claimed to have obtained the signatures of the accused in the presence of Tambe whom he described as "the independent witness Tambe".
Under crossexamination.
He said that he took the signatures of Tambe on the cash memo but not on the packets, although he had deposed in his examination in chief that Tambe had signed the sealed packets also Incidentally, the seals of the packets were found broken due to what the Inspector described as 'handling".
He admitted that no signature of the witness was obtained on the counterfoil of the cash memo.
He stated: "Black Tils can be used for human consumption.
It is not correct to say they are used only for Pooja.
It is not true that the accused told me that he had only black Tils used for Pooja.
It is not true that the accused told mc that he will write on the cash memo the purpose for which black Tils are sold".
The accused appellant denied the presence of Tambe and asserted that the had clearly told the Food Inspector that the black Tils in his shop were only meant for Pooja and not for human consumption.
Apparently, as the Inspector wanted to buy these til seeds despite this information given to him, the accused sold them to him and signed the necessary papers.
The accused produced no witness in defence.
The real dispute on facts revolves round the question whether the black Tils were sold to the Food Inspector specifically for the purpose of Pooja after the accused had told him that they were not meant for human consumption, or, they were sold without giving such information to the Food Inspector.
In order to judge whether the 330 Food Inspector 's version or the accused 's explanation was more credible, it became necessary to examine the evidence of the only witness produced to corroborate the food Inspector.
We have considered the question whether it actually corroborates or contradicts the Food Inspector 's account.
It seems to us that there is such vagueness and apparent contradiction in the pictures conveyed by Tambe and the Food Inspector that Tambe 's testimony tends to demolish more than to corroborate the version of the Food Inspector on points of fact in issue.
k indicates that Tambe was probably not present at the time when the seeds were sold by the appellant to the Food Inspector.
The Presidency Magistrate, after examining the whole evidence,had concluded that the version of the appellant, that there was a tall; about the actual purpose for which the Til seeds at his shop were meant, was more probable because it was supported by what the appellant had written on the cash memo when he sold these Til seeds 'o the Food Inspector.
After all, the appellant, who had a grain shop, must have known that the Food Inspector could prosecute him if he kept adulterated foodstuffs for sale for human consumption.
If, as the analyst 's report showed, these black Til seeds were full of cocoons, visible to the naked eye, nobody could be expected to purchase them for consumption as food.
The learned Magistrate, after finding that it was more probable that there was talk about the purpose for which the Til seeds were kept in the accused 's shop.
despite the Food Inspector 's denial about such talk, held that the purpose for which the.
Til seeds were kept was quite immaterial.
It is true that mens rea in the ordinary or usual sense of this term is not required for proving an offence defined by Section 7 of the hereinafter referred to as 'the Act ').
It is enough if an article of adultered food is either manufactured for sale, or stored, or sold or distributed in contravention of any provision of the Act or of any rule made there under.
Nevertheless, the prosecution has to prove, beyond reasonable doubt, that what Was stored or sold was `food '.
The charge was that the Til seeds sold were unfit for human consumption.
This necessarily meant that it was part of the prosecution case that the Til seeds with which we are concerned were meant for human consumption.
Recently, this Court has held in Bhagwan Das vs Delhi Administration,(1) that, although mens rea, in the ordinarily understood sense, may not be needed to be proved in such cases, yet, the purpose for which articles of food covered by the Act are manufactured, distributed or sold was that they `.should reach the consumer to be used as food".
Thus, the use` the article sold was not entirely irrelevant.
It is more correct to say that it is presumed from the nature of the article itself or the circumstances and manner of offering it for sale.
Where circumstances raise a genuine doubt on the question whether what was kept by a seller was "food" at all, this must be resolved (1) A. 1.
R. # 1318 331 by evidence in the case.
After all, if what is stored or sold in a shop was neither "food" nor meant to be so used could a person be prosecuted on the ground that he sold it in an adulterated condition ? It was contended on behalf of the appellant that the whole object of the Act was to prevent adulteration of "food" meant for Human consumption.
Our attention was invited to a passage from Pyare Lal etc.
v, New Delhi Municipal Committee & Anr(1), where this Court said: ``The object of this Act WAS to ensure that food which the public could buy was inter aha prepared, packed, and stored under sanitary condition so as not to be injurious to the health of the people consuming it".
Section 2.
sub.s.(v) of the Act lays down: "(V) 'food ' means any article used as food or drink for human consumption other than drugs and water and includes (a) any article which ordinarily enters into,or is used in the composition of preparation of human food, and (b) any flavouring matter or condiments"; Hence, where Section 7 prohibits manufacture,sale or storage or distribution of certain types of food` ', it necessarily denotes articles intended for human consumption as food.
It becomes the duty of the prosecution to prove that the article which is the subject matter of an offence is ordinarily used for human consumption as food whenever reasonable doubts arise this question.
It is self evident that certain articles, such as milk, or bread, or butter, or foodgrains are meant for human consumption as food.
These are matters of common knowledge.
Other articles may be presumed to be meant for human consumption from representations made about them or from circumstances in which they are offered for sale.
What is the position in this respect about black Til seeds with which we are concerned here? It is submitted that it is a matter of common knowledge that black Til seeds are not used as food.
Even if this be true, it is not so widely known a fact that we could take judicial notice of it.
It is also urged that, when the case of the appellant, supported by his cash memo, is that the particular black '`Til" seeds where meant to be sold only for pooja for being burnt like incense or thrown into fire in the course of pooja.
it cannot be said that this case had been repelled by the mere statement of the Food Inspector that they can be used as food also.
Such a statement amounted at least to a partial admission that they arc used for Pooja.
Therefore, it is urged, they could have been kept for the purpose of being sold 11 only as a substance used for pooja and not as human food.
It is pointed out that there is nothing in evidence on this .question, to (1) ; @ 755.
332 dislodge the statement of the accused.
We find no evidence on record to show the actual manner in which such seeds are used in the course of Pooja.
Therefore, the view of the High Court that they could be consumed by people after the performance of pooja rests on bare conjecture.
There had to be credible evidence to show that black; til seeds are ordinarily used as food.
If that were so, the burden would have shifted on to the shoulders of the accused to prove that what he had stored was not really food meant for human consumption but an article kept for a special use.
We are left in doubt on this question on the evidence in this case.
We think that the appellant must get the benefit of that doubt.
As already indicated above, we are not impressed by the nature of the evidence led by the prosecution.
We cannot entirely ignore the fact that the signatures of Tambe are absent on all those documents on which they would have been present if Section 10(7) of the Act had been strictly complied with.
We think that it is more likely, for the reasons already given by us, that Tambe was not there ll at all to witness the occurrence.
If that be so, the evidence of the prosecuting Food Inspector, who said that Tambe was there, cannot be implicitly relied upon in this case.
It is quite unsafe to base the appellant 's conviction on such shaky foundations.
Accordingly, we allow this appeal, set aside the conviction and sentence of six months ' rigorous imprisonment and fine of Rs. 1,000/ , and in default, further rigorous imprisonment for two months, imposed upon the appellant.
the appellant who is on bail need not surrender.
His bail bonds are discharged.
The fine, if realised.
shall be refunded to him.
P.M.P. Appeal allowed.
| IN-Abs | The appellant was charged under section 16(1)(a)(1) of the Prevention of food Adulteration Act, for contravening section 2(1)(f) and 7(1) of the said Act The Food Inspector purchased black Tils from the appellant.
P.W. 1 Tambe was unable to give either the name of the shop or approximate date modity by the Food Inspector from the appellant and taking of the sample.
Tambe was unable to give either the name of the shop or approximate date or time of his visit.
He WAS also unable to say whether the shop of the appellant was a foodgrains shop.
Timbe was unable to remember who made the cash memo and whether any one signed the cash memo in his presence.
Tambe could remember nothing material and he was non committal.
The Food Inspector in his deposition stated that the signature of Tambe was taken on the cash memo but not on the packets although in the examination in chief he stated that Tambe had signed the sealed packets also.
The seals of the packets were found broken due to what the Inspector described as "handling".
He admitted that no signature of the witness was obtained on the counterfoil of the cash memo.
He stated that black; Tils can be used for human consumption and further stated that it is not correct to say that it is used only for Puja.
The appellant denied the presence of Tambe and asserted that he clearly told the Food Inspector that the black; Tils in his shop were meant for Puja and not for Human consumption.
The Presidency Magistrate after examining the whole evidence held that the version of the appellant that there was a talk about the actual purpose for which the Til seeds at his shop were meant was more probable because it was supported by what the appellant had written on the cash memo when he sold the Til seeds to the Food Inspector.
The Magistrate also held that the Analyst 's report showed that the black til seeds were full of cocoons visible to the naked eye and nobody could be expected to purchase them for consumption as food.
However, the Magistrate held that the purpose for which the Til seeds were kept was quite immaterial.
Tho appellant was convicted by the Magistrate and the conviction was confirmed by High Court.
On appeal to this Court by Special leave it was contended by the appellant.
(1) That black Tils were sold to the food Inspector specifically for the purpose of Puja and that he was told by the appellant that these were not meant for human consumption.
(2) It is the duty of the prosecution to prove beyond reasonable doubt that what was sold was food.
The whole object of the Act is to prevent adulteration of food meant for human consumption.
(3) It is a matter or common knowledge that black Til seeds arc not used as food.
^ HELD: Allowing the appeal: 1.
It is true that mens rea in the ordinary or usual sense of this Word is not required for proving an offence defined by section 7 of the Act.
Nevertheless, the prosecution has to prove beyond reasonable doubt that what was stored or sold was food.
The use of the article sold was not entirely irrelevant.
In many eases, it can be presumed from the nature of the article itself or the circumstances 328 or manner of offering it for sale whether the food was for human consumption Where circumstances raise a genuine doubt on the question whether what was kept by a seller was food at all this must be resolved by evidence in the case Where section 7 prohibits manufacturer, sale or storage or distribution of certain types of food, it necessarily denotes articles intended for human consumption as food.
It is the duty of the prosecution to prove that the article which is the subject matter of an offence is ordinarily used for human consumption is food whenever, reasonable doubts arise on this question.
It is self evident that certain articles such as milk, or bread or butter or foodgrains are meant for human consumption as food.
There are matters of common knowledge.
Other articles may be meant for human consumption from representations made about them `from circumstances in which they are offered for sale.
[330 E H, 331 D F] 2.About the use of black Tils no judicial notice can perhaps be take of its special purposes in Gujarat.
The Statement of tile Food Inspector that the can be used as food also amounted at least to a partial admission that they are used for Puja.
There is nothing in evidence to dislodge the statement of the accused.
[331 F H, 332A] 3.
The view of the High Court that the Tils could be consumed after the performance of Puja rests on bare conjectures.
[332A] ^ HELD FURTHER : We are not impressed by the nature of evidence led by the prosecution It is Likely that Tambe was not present to witness the occurrence.[332C]
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